Hints to hit your online target

Greg Muller started iFocus a number of years ago, built it to about a $5 million marketing and digital group, and then merged with Bullseye Digital. 

What has been created is what Greg describes as the largest independent digital services company in Australia, which is aiming for $14 million in revenue this year.

He talks about the merger, the strategy for the future, how he’s handling the downturn, and the new trends in the digital arena.

Amanda Gome: Bullseye Digital does the strategy and vision to help small, medium and large businesses plan what they should be doing online. What else do you do?

Greg Muller: We need to then help them execute on that roadmap. So we go into what we call digital experiences, which is about creating effective and engaging online experiences.

We think about some of the technical and infrastructure issues that organisations need to be thinking about. We look at concepts such as experience design and making sure that when customers go to a website, it’s a very positive experience.

You get some very advanced customers with very clear ideas of what they want online, to people who are really just beginning. Some of the early adapters go very far ahead of the inexperienced…

I think we’re seeing, with the take up of broadband and internet usage, statistics continuing to grow. The awareness is certainly growing and in many industries they’re experiencing continued growth in traffic. But there is still an education job to be done.

Industries are changing and businesses are now maturing to the use of digital, and they really need to be thinking strategically about digital from the perspective of the future of their business.

What percentage of budgets are spent online?

If you look at typical IT budgeting in contrast to what they might spend on digital, it is still a very small portion, and I would estimate to somewhere in that 10% to 20% mark to what they’re spending in traditional technology.

Given the migration from traditional technology to online, then that seems much slower than the readers who have moved over, doesn’t it? I mean you haven’t got 10% of readers who’ve gone from traditional to online have you?

No, but I think businesses are still grappling with how to make money online. With the advent of social communities, organisations are still grappling about how do they participate, how do they influence, how do they make a difference in those sort of communities, and get their product or services to those people.

What are some of the really innovative things that are you doing?

We were one of the first in Australia to launch a social networking practice and, just as I was saying, around social media and community engagement, and corporates. These environments, these tools, are helping to grow brands.

And we also advise and guide organisations and government bodies about how they should be listening into those conversations and participating and engaging. And how do they publish that information internally and how do they manage their external communications.

Do you tell them ever that they should be building their own forums? And who shouldn’t be doing that? A bank?

Sure we do. And in fact one of the major banks here in Melbourne, in order to get closer to their customers, is putting a lot of dollars into listening to their customers and providing an environment by which their customers can exchange between each other, effectively take learnings from each other.

How are they doing that?

There are elements of the forum that are open to entice new members I suppose, but it is via a membership. You need to be a customer of that institution in order to actually participate, and that’s a value add of being a customer of that financial institution in comparison to another. So it’s all about their value proposition.

Are you seeing the larger companies almost becoming mini-publishers as they build up the information, the social networking and other activities on their sites?

Absolutely, and if we look at where a lot of the mistakes have been made and where things are moving, effectively online marketing or digital very much means services or equal services.

You need to be providing a service of some sort online to your customer. Whether that’s information, whether that’s some sort of tool or value add, you need a reason why they want to come back and want to participate in your brand and get their eyes versus that of a competitor.

But if you’re not thinking about it that way, and just wanted to put your website up and hope that people will come and read about you, there might be bits and pieces of that but you certainly don’t look to build brands that way. You certainly don’t look to engage new audiences that way.

So there are great opportunities to be pushing information out, providing different services and, going back to your question, are these organisations becoming publishers? I think that in many ways that they are. But they’re not used to playing that model.

Being a publisher is a very difficult. What mistakes are you seeing?

It is so wide and varied. I think probably the number one is a lack of appreciation of how difficult it is. How much effort that needs to go on, because when you do provide a service and if it, for example, is about information delivery, you’ve got to keep it up. And regularly and it has to be useful and be valuable.

In some way it has to have some certain degree, if you like, of independence, and if it doesn’t have some certain degree of independence then it just sounds like you’re flogging your product.

So how do you get that when they’re not independent and not publishers? What do you advise them to do?

Try and be honest and be upfront. I think the death of many initiatives in the past and certainly a few slaps on the wrists of executives within organisations in the past has been when they haven’t been upfront and they haven’t been open and genuine about what they’re trying to do.

A lot of it though is about your brand proposition and being true to that brand, and it’s when you start to compromise that and hide things away is when people may turn against you.

It’s about linking your brand to, or your brand message, to the topic that’s important. So for example if you’re a health-based organisation then you may want to publish information about health matters and so forth.

You may hold a forum about health matters, but down the bottom it might be backed or supported by XYZ Corporation.

Be open and be true to those people and don’t try and hide it away. But at the same time, people appreciate you giving information to them, you’re giving tools to them, you’re supporting them. And if they think that’s a positive then they’ll associate your brand with that particular topic.

How’s the downturn changing the marketing and websites?

I think that change is fairly macro as we move away from the traditional broad based “spray and pray” type advertising to much more targeted advertising and communications with your customers. 

And digital is in the perfect place to take that on. So we are seeing a move away from traditional and in that way budgets and what they’re spending over to digital.

I think the financial crisis will see the momentum grow toward that move or the momentum will heighten. Certainly traditional marketing is under threat. I was only speaking with a senior fellow of a similar organisation earlier in the week and I was saying that that convergence between the traditional agency and an IT firm and a digital agency and a consulting firm is becoming much greater.

Digital relies on technology, businesses rely on technology, and therefore by nature it relies on integration, which is not traditionally the domain of an advertising company. 

Agencies are having to move that way and we’re seeing that type of move continuing to happen. Customers are also expecting to be able get information online about a brand or a product or whatever that might be. So again it’s certainly a move to online and we’ve got this amazing ability to target, to understand usage patterns and get to know the customer much better and then offer much more targeted campaigns to them.

What’s really hot? What are some really new things that maybe aren’t in operation yet but really excite you in this space?

There’s been a lot of talk about cloud computing, which is really just having software that’s available via the internet and using it via the internet. It has transformed the way in which we think about our own internal IT, the reliance we have on servers and desktops internally, and moving that to an organisation that can keep things up to date all of the time and provides a wonderful service that way. And ultimately a lot cheaper.

It’s not so good for SMEs at the moment, it’s still a bit expensive isn’t it?

Look there’s elements of that, but with a lot of the open source technologies out there and players in the marketplace, I think with a bit of a search you’d find a lot of products out there that are much more affordable. 

But yes, in comparison to some installed products that you can buy off the shelf, they tend to be more expensive. But it depends on your business, it depends how you’re thinking about your business and where you’re going forward.

Quite often these models are pay-as-you-use or you pay on a monthly subscription basis in contrast to buying upfront a server or whatever that might be or a bit of software.

That might help from a cashflow perspective. It’s a pain in the backside having to update your computer all the time and your servers and your software, and they keep your data secure so from a risk management perspective it’s better and you’re getting all the updates regularly, so for small businesses I think there’s lots of opportunity there as well to investigate that.

On your company, you built iFocus up to $5 million over how many years?

It was over seven and a half years.

How did that merger with Bullseye go and what did you learn from it?

Firstly, iFocus became as many of your readers would know quite a successful firm. We were a 30-40 some sized organisation, we’d grown fast through that period providing really good quality online services and solutions.

But many small businesses suffer that invisible ceiling, trying to push through, needing some cash to push through and really take off into the next level. So we knew that we needed to do that. 

Secondly from a geographic expansion point of view, we wanted to move more heavily into the Sydney market. Our initial venture there wasn’t so successful and it was incredibly costly. And we just realised that we weren’t quite ready for that as an organisation despite the fact that we had a very successful Brisbane and Melbourne presence.

Why was Sydney so hard?

We put a team of people into Sydney and I don’t think as a business we were quite ready for it both structurally and from a process and system point of view.

Did you try and run the Sydney office from here? It’s always the big question, isn’t it? Do you send people up from Melbourne or down from Sydney or do you hire up there?

We did a bit of both, and initially we hired up there, through respected and trusted colleagues I had in the industry. We had some success; in fact it did OK, but what it did in particular was it caused stress on the rest of the organisation.

So we decided to pull back on Sydney a little bit, refocus our attention, continue to build the foundations of Melbourne and Brisbane. Keep our toe into Sydney. So we did that and we retained a person in Sydney. But then we had to think: how do we get bigger into Sydney. By merger or acquisition?

That is acquiring another agency there or a firm there that is doing good stuff that aligns to us.

But hang on, it’s digital. Why is it so important to have a big presence on the ground?

We’re a professional services company, and we talk with senior management and often boards around where they’re going and taking their organisations. Having local people on the ground who can be there, it’s still very much, as any professional services firm will attest, it’s very much a relationship-based business.

Yes, we build technology and we build creative, innovative and engaging marketing campaigns and a lot of that’s done in our offices and we can do that anywhere in the world, but we’re still dealing, and the customers that buy our services are real people and they need to speak with us. So hence the need to be in Sydney, the biggest market in Australia.

So hence your reason to go in with Bullseye.

Bullseye Digital, yes that’s right. So what happened there very briefly was we’d worked with Bullseye Digital for many years in the past, regarded their work, had a good understanding of their culture. Jim McKerlie the CEO of Bullseye Digital and I got together mid last year, well actually not mid last year, mid 2007. That’s how quickly things are going and we talked about what the possibilities might be. At that time we’d also as the market was pretty hot at that time.

Did you mention the word downturn in 2007?

Back in 2007 it was pretty hot, and there was lots going on. But I knew I hadn’t finished at iFocus from a perspective of we had more to do. We had a market to get, which was Sydney, and to really get more people using our services. So we saw in Bullseye Digital an opportunity to expand our offering, we had the strategy pretty well covered off and the experienced design and solution development pretty well covered off, but we were lacking in the marketing arena. We saw that convergence as I was talking about earlier on.

What would you do differently next time?

We approached it in a very sensible way. We set 100 day plans from go to woe. There are always things in the area of internal communication that we probably could have done a little bit better. We did a restructure fairly early on and again it became more of a communication issue, so the staff really knew how the organisation was changing. 

We were also changing in that we were bringing one culture, or effectively what some would argue two cultures – that is, our Brisbane culture and our Melbourne culture. So we had to merge those and I think getting very clear on what our vision is, what we were all about as an organisation, what’s important to us, what our purpose is as a business was critically important and it worked out well.

So that’s all out of the way?

Yes I think it is. We’re continually evolving and still trying to understand how we can continue to optimise our business, but overall we are one company now. We speak as one company and really the iFocus name I used to say in the early days, but it’s very much naturally Bullseye now.

What are your plans? What’s happening with the downturn? It’s really starting to whack everybody over the head.

I think there’d be very few companies out in the market at the moment that would say they hadn’t been bitten by the financial crisis. We’re certainly experiencing it. Decision making time lines in particular. There’s plenty of work out there.

People are deferring decisions.

Deferring decisions is one of our keys. And through that we’re trying to ensure that we’re advising our customers, making sure there is good return on investment in terms of the investment that they are needing to make and give them the confidence to move forward and that they’ve got the right partner with them to support them.

What if they stop? What are the dangers for them? The firms that keep going are going to get a competitive edge, aren’t they?

Yeah, you should never stop. As soon as something gets hard you don’t just stop business and walk away. I think that this sort of time is about relying on people to have some foresight. Make sure your strategy is clear. And I see it as a time of opportunity, not so much a time of doom. Having said that though, it is a time of doom for some organisations and they’re feeling quite threatened.

Are people changing their strategies? Do they want to change strategy or are they merely saying ‘we’re just going to pull back on spending and stick to what we are doing’?

If I can think through some of the instances that we’re challenged with a lot of it is just pulling back on spending – it’s not necessarily a change in what they are doing. We’re lucky, we’re in the digital arena and a lot of marketing budget and technology budget is moving to that because they are realising that it’s such a cost-effective medium to market and communicate with your customers.

But having said that, there are broader issues that these organisations are grappling with. That is funding issues and cashflow issues and regardless of whether it is digital, regardless whether it’s a machine on the farm or a new sales team, everything is being impacted within these organisations.

The smarter organisations that have got good strong balance sheets are seeing this as an opportunity to reposition. So I would certainly counsel that unless the site or whatever you’ve got is not working at all, that needs to probably be addressed, and if it’s not delivering you any results then you may want to consider pulling it down because it’s not delivering anything.

But quite often you don’t know the impact that it is actually having on your business. Because quite often a lot of people use it to do research but purchase in the physical world, so sometimes you don’t know. So that’s why analytics and understanding about what’s happening on your site will help you become clear about what’s actually going on and whether your site’s working or not.

So you’re aiming to do $14 million revenue this year maybe, hopefully?

That’s what we’re shooting for. Our stretch target is a little bit higher than that. So that’s our base target at the moment.

See also Fine tuning the online marketplace