timone NetMarketing
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Marketing in the Internet - as seen from Italy

by Giancarlo Livraghi



No. 29 - December 18, 1998

  1. Editorial: A strange honeymoon
  2. New numbers in Italy and Europe
  3. A candid opinion
  4. Don't believe the hype
  5. Using a corporate mailbox

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1. Editorial: A strange honeymoon
Mainstream media in my country seem suddenly in love with the internet. They are still printing and broadcasting lots of nonsense, but now there’s more hype than horror. They are telling us that christmas shopping this year will be all electronic; gifts will be not only videogames and cellular phones, but also computers and net connections (only after the holiday season we shall know if any of that is actually happening). One of the main tv networks, in peaktime news, said that this year people are doing most of their shopping online – forgetting that "electronic commerce" in Italy is in its infancy, if born al all. Major newspapers and newsmagazines are publishing weekly supplements about the internet (threatening the survival of specialized magazines, of which there were too many – and some have disappeared).

All this is probably due to the convergence of several factors, including a recognition of the importance of the internet by several authorities – even the Pope, who a while ago was warning against the dangers of modern technologies, now is "blessing" the net as s tool for knowledge and education.

Another influence, with less solemnity but considerable impact, is the intense advertising campaign launched by Telecom Italia (especially in television) to sell internet connections. Like other European telcoms, our national telephone company (recently privatized, but still holding a dominant position) is also an ISP, holding over 50 percent of the market and determined to increase its share. Its position has come under attack by the other ISPs and is being examined by the antitrust authority; its advertising has been found misleading. Telecom’s activities are, indeed, questionable. However this surge of communication (advertising end editorial) may help to spread the use of the net (especially at home) and reduce the still wide gap between Italy and the other major European economies.

Unfortunately all of this hype is very simplistic and superficial. Newcomers will have to do a lot of work on their own to find the real values of the net – at least until the media, and the educators, will begin to do their job a little better.

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2. New numbers in Italy and Europe
Recent hostcount data aren’t encouraging. Italy seemed to be catching up earlier this year but in recent months has been losing ground as compared to the rest of Europe. Short-term data aren’t very relevant; we shall need a few more months to understand the trend.

This analysis is based on the data reported by RIPE (Réseaux IP Européens) on December 7, for 22 countries in the Europe-Mediterranean area.


% change in 12 months

% of European total

United Kingdom 1,430,494 + 42.7 18.3
Germany 1,429,538 + 31.3 18.3
Netherlands 611,957 + 60.2 7.8
France * 489,834 + 41.4 6.3
Finland 460,414 – 2.4 5.9
Sweden 417,894 + 21.1 5.4
Italy 370,242 + 31.3 4.7
Norway 319,628 + 9.8 4.1
Spain 298,730 + 53.8 3.8
Denmark 293,927 + 78.4 3.8
Switzerland 231,842 + 26.1 3.0
Belgium 203,660 + 92.7 2.6
Russia 193,837 + 59.7 2.5
Austria 164,803 + 57.2 2.1
Poland 125,317 + 45.8 1.6
Israel 107,522 + 30.5 1.4
Hungary 89,830 + 48.3 1.2
Czech Republic 78,175 + 38.1 1.0
Ireland 54,555 + 40.0 0.7
Portugal 54,049 + 29.1 0.7
Greece 49,455 + 88.0 0.6
Turkey 45,602 + 43.7 0.6
Europe (& Mediterranean) 7.815.458 + 38,5

* Note: in the case of France, minitel is not considered in these figures.

Northern Europe is becoming more balanced, with slower growth in high-density countries such as Finland and Norway and other countries catching up. Southern Europe remains weak, but France, Spain and Greece are growing faster than Italy.

This is an updated graph of hostcount growth in Italy compared to Europe:


Internet hosts in Italy and in Europe

August 1997 = 100
Analysis on RIPE data


The trend is unstable. Italy’s share of the net in Europe (now 4.7 percent) is still below the "peak" (5.2 percent) that was reached in August 1997.

Here is an updated graph of internet density in 24 countries in the Europe-Mediterranean area.

Internet hosts per 1000 inhabitants

24 countries (of 100 in the RIPE area) with over 20,000 hosts and density above 1


The green section of bars is growth in a year – from November 1997 to November 1998.

The yellow section on the bar for France is a rough estimate of the minitel factor.

The general pattern remains the same as we had seen in past months. Germany remains below the European Union average and the United Kingdom holds its lead among the large European countries. Denmark, the Netherlands and Belgium show considerable growth. Spain has overtaken (once again) Italy and now is also ahead of the Czech Republic. Hungary is ahead of France if we don’t consider minitel.


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3. A candid opinion
As I mentioned in issue 28, there’s much more to be learnt from the candid comments of people actively working in the field and facing the realities than from most of the hype-driven articles, books, lectures and conferences. It’s not always easy to have such comments in writing and to be allowed to quote them. I am grateful to Nicola Salvi for his permission to publish his interesting remarks.

1998: the year of the Web explosion in Italy. 1999: the year of the Web explosion in Italy. 2000: the year of the Web explosion in Italy. Time Zero: the year of trying to understand what’s going on.

I have no pretense of being exhaustive, I don’t want to be polemic; but I do intend to be controversial with my opinion about the frequent wails of internet netmarketers about companies and the market. I would like to invite all of us to consider the competence level of the average webmarketing consultant: low.

He (or she) has no experience; is inventing from scratch, with passion; has no qualified know-how; is "re-cycled" from other communication jobs or is a computer hacker; takes decisions lightheartedly, in front of a glass of wine. In fact webmarketing consultants don’t exist, except for self-teaching and entrepreneurial spirit.

On the other side... let’s look at Italian companies. There are, more or less, three million of them. They export consumer or industrial goods worldwide. They’ve sold "Made in Italy" even to people who wouldn’t be able to find our peninsula on a map. They’ve been on the market for half a century and doing very well. Their technological levels are so high that Bill Clinton came to Italy to study our quality standards. They know how to manage very well even though they are strangled by red tape.

See where the confrontation is? If I were an entrepreneur I wouldn’t even want to talk to someone like me, a webmarketing consultant. Who am I to tell an entrepreneur what to do? The answer is: nobody. Or just someone trying to sell him brushes (with all respect for brush salesmen, who know their trade better than we do).

I don’ want to say more; just that before we try to have a dialogue with a company we should lean to know it and understand its priorities. Otherwise we are peddlers of useless standardized formulas, nor providers of innovation.

I am inventing my work as I go – and trying to learn. What are you doing?

I have little to add. It’s quite obvious that nobody has "experience". This is all too new (and changing) for anyone to be an "expert". The solution is to admit the lack of expertise – and therefore work with all the patience, and willingness to experiment, that we need in a new environment. If companies are confused and skeptical, that’s because too many people are trying to sell them simplistic and repetitive formulas that don’t fit their needs; and also because too many self-appointed "teachers" are making promises that no one can keep.

The only way out from the vicious circle is to start from scratch. Which are the company’s needs and objectives? Which are the opportunities of improving its efficiency and competitive edge with new communication tools? Which service values can be improved or enhanced? Where are the synergies? This analysis is much less complex in practice than in theory (the number of variables can be theoretically infinite, but in the reality of a single case it boils down to a few specific factors). The bewildering fact is that this is hardly ever done. Companies are told that "they should have a website" with no definition of why and how; and then those sites are filled up with "just about anything" to justify their existence. The obvious result is that entrepreneurs hesitate; or, if they do it, the results are disappointing. To follow the right course (which is exactly the opposite) we don’t need an expertise that nobody has; nor complex technological solutions . The basic ingredient is a strong dose of common sense.

I don’t think anyone should be doing business on the net without a clear understanding of objectives, a willingness to experiment and an idea of how results are to be evaluated.

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4. Don't believe the hype
This is the subject of an interesting article by Clay Shirky. It’s worth reading in full; but here are some of his comments.

One of my responsibilities ..... is to evaluate new networking technologies ..... in order to determine where my company should be focusing its energies in the distant future. (Like May.) The good part of that job is free t-shirts. The bad part is having to read the press releases in order to figure out what’s being offered:

"Our company has a totally unique and unprecedentedly original proprietary product which will transform the Internet as we know it. If you don’t get in on the ground floor, you will be tossed into the nether darkness of network anachronism where demons will feast on your flesh. Expected out of alpha in the mumbleth quarter of next year ..... "

Faced with the growing pile of these jewels of clarity on my desk, I realized that I could spend all my time trying to evaluate new technologies and still only be making (barely) educated guesses. What I needed was a set of principles to use to sort the wheat from the chaff, principles which take more account of what users on the network actually spend their time doing instead of what new media marketers want them to be doing. So, without further ado, I present my modest little list, "Clay Shirky’s Five Rules For Figuring Out When Networking Marketers Are Blowing Smoke."

RULE #1: Don’t Believe the Hype

This could also be called the "Everything New is Old Again." rule. The network we know and love is decades old, and the research which made it possible is older still. Despite the cult of newness which is surrounding the Internet, the Web, and all their cousins right now, the engines which drive the network change very slowly. Only the

dashboards change quickly.

Changing the way networking works is a complex business. Events which alter everything which comes after them (a paradigm shift, to quote Thomas Kuhn) are few and far between. The invention of DARPANet was a paradigm shift. The deployment of TCP/IP was a paradigm shift. The original NCSA Mosaic may even turn out to be a paradigm shift. The launch of Netscape Navigator 4.0 for Macintosh will not be a

paradigm shift, no matter how many t-shirts they give out.

Right now, the only two big ideas in networking are the use of a browser as an interface to the network, and the use of distributable object-oriented programs on virtual machines. Everything else is a detail, either some refinement of one of those two ideas ..... or a refinement of something that has gone before .... We will spend the next few years just digesting those two big ideas – everyone else, no matter what their press releases say, is just helping us color inside the lines.

RULE #2: Trust the "Would I use it?" Test

The first question to ask yourself when looking at new technology is not "Will it run on my server?" but rather "Would I use it?" .....

We already know what people using networks want: they want to do what they do now, only cheaper, or faster, or both. They want to do more interesting stuff than they do now, for the same amount of money. They strongly prefer open systems to closed ones. They strongly prefer open standards to proprietary ones. .....

Beware any product which claims that people would prefer information to communication, any service which claims that people will choose closed systems over open ones, and any protocol which claims that people will tolerate incompatibility to gain features. Any idea for a networking service which does not satisfy some basic desire of network users is doomed to fail.

RULE #3: Don’t Confuse Their Ideas With Your Ideas

A time-honored marketing tool for sidestepping criticism is to make ridiculous assertions with enough confidence that people come to believe them. The best possible antidote for this is to simply keep a running rebuttal going in your head while someone is telling you why network users are going to flock to their particular product.

What follows is a list of things I have actually heard marketers say to me in all seriousness. ......

"The way we figure it, why wouldn’t users adopt our .... ?" (Same reason they don’t use LotusNotes.)

"We’re a year ahead of the competition.." (Nope.)

"The way we figure it, why wouldn’t users be willing to register a name and password with us?" (Because they already can’t remember their other 17 8-character-mix-of-letters-and-numbers passwords.)

"We don’t have any competition.." (Then you don’t have a market.)

"The way we figure it, why wouldn’t users subscribe to .... ?" (Because they can get better for free elsewhere.)

"If you get everyone in your organization to adopt our product all at once, then you won’t need compatibility with your current tools.." (That’s the way Communism was supposed to work, too.)

RULE #4: Information Wants to be Cheap

Information has been decoupled from objects. Forever. .... Like the rise of written text displacing the oral tradition, the separation of data from its containers will never be reversed.

With the internet, the incremental cost of storing and distributing information is zero. .... Network users recognize this, even if they can’t articulate it directly, and behave accordingly.

Anyone who is basing their plans on the willingness of network users to pay for electronic information in the same way that they now pay for physical objects like CDs and books will fail. ..... People will pay for point of view, timely information, or the imprimatur of expertise. They will not pay for simply repackaging information from other sources (they can now do that themselves) or for the inefficient business practices bred by the costs of packaging.

RULE #5: It’s the Economy, Stupid.

The future of the network will be driven by the economy – not the economy of dollars and cents, but the economy of millions of users acting to maximize their preferences.

Technology is not the network, technology is just how the network works. The network itself is made up of the people who use it, and because of its ability to instantly link up people separated by distance but joined in outlook, it is the best tool for focusing

group endeavors the world has ever seen.

This ability of groups to form or change in a moment creates a fluid economy of personal preference. Individual choices are featherweight when considered alone, but in cumulative effect they are an unstoppable force. Anyone trying to control people’s access to information these days has learned this lesson, often painfully. .....

The economics of personal preference will shape the network for the foreseeable future. Online services will wither unless they offer some value over what the internet itself offers. ..... The economics which will guide the network will be based on what users want to buy, not on what marketers want to sell.

I find these observations quite stimulating. In my view, there are three key points. Many technical "innovations" are useless, if not harmful. Open solutions are much better than closed or proprietary systems. And, above all, the net is made of people; technologies and services are meaningful only when they satisfy people’s needs and desires.

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5. Using a corporate mailbox
"Should people use a corporate mailbox for their private correspondence?" I must admit I had never given much thought to this matter, until the question was asked by an executive who is following closely the development of internet activity in his company. He made me understand that the question is quite relevant. And the answer, I think, is no.

People are normally allowed to use the office phone for private calls. But e-mail is mail. Using a corporate mailbox is like using the company’s letterhead. Each person should have two mailboxes. This, by the way, solves also a privacy problem: a company can legitimately inspect office papers, including mail, but should not be allowed to spy on the private correspondence of its employees.



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