I just flew in from Munich, and boy is my brain tired!
No, those are not the lingering effects from massive weissbier consumption. (I managed to stave that off with huge doses of vitamins and aspirin.) No, my head is hurting from the possibilities of doing business in the European market.
I just came back from a meeting of about 10 European ad agencies, featuring interactive folks representing those agencies. I was hired to speak to the group about US web trends and to explain how interactive can fit into their marketing mix.
The free airfare and accommodations were nice. But what really made the trip worthwhile was talking to my counterparts in Sweden, the Netherlands, Norway, Iceland, Switzerland, and Germany. Now that I’m back, I must admit: I’m pretty jazzed about the global interactive business and the possibilities for expanding more into Europe.
And I’m also a little worried that my company (and the rest of the US interactive marketing community) is going to be in for a big shock in the coming years.
Think about it: What are the traditional barriers for Europeans breaking into US business, and what are the traditional barriers for US folks going into the European markets?
In traditional industries that make money by moving, processing, and selling atoms (manufacturing, retail, and industrial companies), the biggest barrier is and has been the Atlantic Ocean. Modern jets or not, it’s still a hike. Add to that the time involved in crossing the ocean and the expense of making the crossing, and you’ve got a pretty big barrier for all but the biggest companies.
But the web is different. It doesn’t exist in a particular time and place. Cyberspace is open for business 24 hours a day, 7 days a week. And it’s located everywhere. Nearly every country in the world has web access now, and every industrialized nation has fast, reliable telecom service.
Time doesn’t matter as much as it did because bits move at the speed of light and are available any time to anybody who’s got a connection to the ‘net. You don’t have to put a web site on an airplane. They don’t get jetlag. And you don’t have to wait for them to get there. The ‘net’s offering us instantaneous communication everywhere.
So we’ve got an instantaneous global communications medium. So what? What’s to stop any US agency from competing on an even playing field with European agencies? Why should US companies be worried about expanding European interactive competition? Four words: language, culture, infrastructure, and attitude.
Language is a big issue. The 1990 census reported that 86 percent of Americans speak only English. Every single person I met at my meeting was fluent in English, and most had larger vocabularies than I did. (Though admittedly, that’s not saying much.)
Because of the many cultures and languages in Europe, English has become the language of business internationally, although most business within the country is conducted in the native language.
Culture is a big issue, too. While most Americans tend to think of themselves as living in the cultural and economic center of the world, Europeans are used to working together. Joint ventures and partnerships between geographically-close (but culturally-different) agencies are common. While an American agency might balk at combining forces with another agency a few hundred miles away, it’s not so uncommon within the group I spoke with in Europe.
Infrastructure changes have also put many European countries in a unique position. While much of the US has been wired for years and an appreciably large portion of the US population has computers, this isn’t necessarily true in Europe.
And while this may seem like a disadvantage at first, in the long term it means that the European interactive infrastructure won’t have to follow the “lowest-common -denominator” strategies that many American interactive firms do. While those of us in the US have to worry about all the consumers out there with 100 MHz, Windows 3.1, and 15″ monitors (or worse), countries that have populations just now getting computers have populations with more advanced computer systems.
Ditto for telecom infrastructure. ISDN is much more common, and I had several interesting conversations with Scandinavians who were involved with ADSL trials. How many people have you met who even know what ADSL is?
Finally, let’s talk attitude. Most of the people that I met reminded me of folks I met in the US several years ago as the internet was just catching on. They were excited about the possibilities, excited about the expanding market place, and excited about being at the forefront of a new industry.
But they’ve got one advantage that those of us in the US didn’t have several years ago: They’ve got the mistakes our industry’s made to learn from. Hindsight may be 20/20, but it’s telescopic when you can actually apply it to your own expanding marketplace.
Are there problems? Of course. I heard several.
Computers seem to be extremely expensive compared with US prices. Finding trained, experienced people seemed to be a common worry. The consumer marketplace is still small. In many countries, the proportion of population with internet access is far behind the 20 to 25 percent estimates of US households with ‘net access. And many of the people running European businesses still seem to be less than convinced about the importance of the web and other interactive media in their marketing mix.
But things are changing quickly. A recent Frost & Sullivan report estimates that by 2004, there will be almost 45 million European internet users, up from 9.9 million in 1997. E-commerce in Europe is expected to skyrocket from $35.8 million in 1997 (in US dollars) to over $8 billion in 2004.
The German consultancy GfK estimates that there are over 7.5 million Germans online alone, an appreciable percentage when compared with the 40 million or so US internet users. IBM and France Telecom are internet-enabling the aging French Minitel system, bringing another 35 million Europeans online.
And regardless of what the consumer market does, an IBM research report entitled “E-business is Europe Ready?” points out that many European businesses have decided to target the B-to-B trade, something I saw many times in the technology demonstrations I witnessed.
The bottom line? Europe’s entering cyberspace and it’s entering fast. And more than their US competitors, Europeans are already used to interacting in a global marketplace and have the tools and structures to easily move in. While the Big Pond may have been a barrier during the days of atoms, today’s digital economy isn’t based on moving physical good around. Bits don’t care what country you’re in.
My advice to y’all in the USA? Get global and get global now. Form partnerships. Make alliances with OUS agencies. Learn the market. The world is catching up.
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