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International Online Business: Think Globally, Act Locally

  |  August 2, 2004   |  Comments

Steps for localizing a growing business.

When it comes to setting up shop and marketing to large volumes of online consumers, Americans have a distinct advantage over us Europeans. According to Jupiter Research's Online Population forecast, there were 171 million U.S. individuals online in 2003, representing 59 percent of the total population. To sell products or services in this marketplace, businesses need to set up one Web site (and carry out a marketing campaign or two). They can reach a potentially huge target audience, the majority of whom will understand what's on offer, even if English is not their first language.

Western Europe, comprising 17 countries (all with their own languages and/or cultures), had a total of 163 million individuals online in 2003. To reach and communicate with a target audience anywhere near the size of the U.S., businesses would, in theory, have to develop 17 different Web sites and 17 different online campaigns to get their message through to everyone.

The Internet holds the promise of 24/7, worldwide trading. Yet cross-border, cross-cultural online business, wherever the point of origin, is hard to achieve. To succeed, you must invest a considerable amount of time and money. You must localize an online business to regional tastes and sensibilities, and globalize to maximize revenue. Want to serve multiple online markets? Develop linguistically and culturally sensitive versions of your site and establish local support services and fulfillment operations.

Large companies and brands are well positioned to deal with the challenges and costs of localization on a grand scale. They have big budgets and resources, such as existing brick-and-mortar presences in multiple countries and globally networked agencies. Companies such Nike, Dell, and Oki demonstrate well-executed, multiple-language site localization.

For smaller businesses, localization must be developed in manageable steps. Create a road map of inflection points and trigger increased localization efforts as regional interest increases. As Web site traffic and activity in a specific country grow (measured initially through IP address analysis), step up localization accordingly.

Stage-by-stage localization may occur as follows:

  1. E-mail requests for information in German exceed 10 per month: Launch a limited, top-level German language site providing information on key offerings, company details, and so on.

  2. Page impressions exceed 100,000 per day: Host the site locally with a third-party provider to ensure optimized site performance and end user experience and to reduce pan-network outage risks.

  3. Page impressions exceed 250,000 per day: Invest in local equipment and expand the site to produce exclusive, local editorial content.

  4. Monthly German revenues exceed $X: Hire locally based phone support staff and implement local fulfillment.

  5. Monthly German revenues exceed $Y: Expand the product portfolio and open a local office.

As localization increases, control over the localized property must be relinquished. Brand and business owners must accept a level of decentralization and show a high degree of trust in those responsible for the localized site and operations.

With each new region, businesses must also consider the increased complexity of their marketing activities. Creative communications must be adapted to appeal to subtle cultural and linguistic nuances. Media planning and buying must be optimized across multiple media properties. Implementation and trafficking will need extra time and resources, and measurement and evaluation will need tighter management and coordination. As with Web site localization, pan-regional marketing should start centralized. As business takes off, it must become increasingly decentralized.

There's good news for those keen to develop international online marketing campaigns. Leading ad-serving technology providers, such as DoubleClick and 24/7 Real Media, are expanding their global presence. This enables advertisers to implement international campaigns faster and more efficiently.

Key online media owners, such as MSN, AOL, Yahoo, and Libero/Wanadoo in Europe, are facilitating purchase and implementation of pan-regional campaigns through dedicated international sales teams. Industry bodies, such as the Interactive Advertising Bureau (IAB) and the European Interactive Advertising Association (EIAA), are striving to produce standards to ease multisite campaign implementation. Increasing adoption of the Universal Ad Package (UAP) amongst European online media owners is testament to this.

Localization will becoming increasingly important as more online businesses want to trade internationally, to the benefit of those offering specialist translation services. Businesses without the internal resources to handle this significant task can look to providers such as WorldLingo and Blah Blah Marketing, or members of the Localization Industry Standards Association (LISA) for assistance.

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ABOUT THE AUTHOR

Julian Smith

Julian Smith conducts research and analysis on the European interactive marketing and advertising arena as an analyst with Jupiter Research, which shares a parent company with ClickZ.

His areas of expertise cover all aspects of the online advertising industry, e-mail marketing, mobile (SMS/MMS) marketing, search engine marketing, eCRM, online branding and Web site design. His particular area of interest is in the use of digital media for the acquisition, retention and development of customers.

Prior to joining Jupiter Research, Julian spent over six years working in a variety of interactive marketing agencies in London. These included Razorfish, Euro RSCG Interaction and TBWA/GGT where he worked in strategy and client service roles helping develop online solutions for leading blue chip clients. Most recently he assisted in the integrated marketing launch of 3, the new 3G video mobile phone, one of the largest new product launches in the UK in 2003.

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