The Internet and Globalization: Ten Tips to Building an Effective Digital Strategy for Global Success

2011 Winner of the Graziadio Student Paper Competition

2011 Volume 14 Issue 4

What does the Internet, globalization, and digital media have in common and why does it matter to global organizations? This article evaluates the relationship.

[powerpress: http://gsbm-med.pepperdine.edu/gbr/audio/fall2011/LucBerlin_Article.mp3]


The Internet and Globalization: A Love Story

Global digital strategyAs economic uncertainty seems to be growing in the evolving business world, two things can be certain besides taxes and death—the Internet and globalization. These two trends are not only here to stay, but both may very well be two of the most influential commanding heights of modern business economics. A quick test of this theory would be to answer the question: “What would be the cost of globalization for a business without the Internet?” or vice versa,What impact would the Internet have on the world without the urgent push for organizations to globalize and continually seek value in foreign markets?”

If we define globalization as the ability for a firm to seek value outside of its home country, a good metric would be the historical change in global export value as a percentage of gross domestic product (GDP). According to the World Bank, exports of goods and services as a percentage of GDP grew from 21 percent in 1995 (when the Internet started gaining popularity), to its peak of 29.3 percent in 2008 before dropping to 24.2 percent in 2009 because of the recession—an 8.4 percentage point jump in just 13 years.[1] To put this in perspective, in the pre-Internet era, it took 27 years from 1968 to 1995 for global exports to grow by about the same percentage point (see Fig. 1).

Fig. 1. Global Exports of Goods & Services (1960 to 2010)

Exports of Goods and Services

Interestingly, Internet usage around the same time shows a very similar trend. For the past 15 years, the Internet adoption rate among American adults (age 18+) has grown from 14 percent in 1995 to 74 percent in 2008, and over 78 percent in 2011.[2] Globally, the numbers are even more astounding. Internet usage as percentage of population has grown from 0.8 percent in 1995 to 27.1 percent in 2009, a 26.3 points jump in 14 years (see Figure 2).[3]

Fig. 2. World Internet Users (per 100 people)

World Internet Users

There is still hope for organizations just entering the digital market. Based on the World Bank’s data cited above, nearly 73 percent of the world population has no Internet access. Global Internet growth is projected to quadruple by 2015 with the Asia Pacific region leading the pack.[4] Presently many of these regions are economically challenged, but the Internet provides a gateway to the world’s market. That, combined with firms wanting cheaper production and new buyers, will create new economic opportunities in these parts of the world. Now, there is the digital gold mine.

As the graphs above show, there exists a clear and direct correlation between globalization and the Internet. Yet despite these staggering numbers, many global organizations either lack an effective digital strategy or are still relying on obsolete digital solutions, thus jeopardizing their future online success. This article explains the importance and benefits of digital media in global markets and provides 10 strategic tips on how businesses can leverage the power of web technologies to create value domestically and internationally.

Digital Media: Definition, Application, and Delivery

Digital media is the technology that ties together globalization and the Internet. It is the unifying language by which organizations use the web to reach and communicate with their global audience, while keeping the cost of production and delivery lower than it would be by utilizing other media or communication channels.

Digital media can be defined as digitized content (text, graphics, audio, and video) that can be transmitted over the Internet or any computer networks.[5] Digital media enables businesses to use the Internet as a cost-effective and measurable means to build a global brand. With the rise of the Internet, digital media is continually pushing the boundaries of human imagination, evolving from simple text or images to interactive content such as animated banners or videos that can be targeted to a specific behavior or audience.

The Web Delivered by Us

The application of digital media to generate a response from a Web user is known as interactive marketing. Digital media has a wide array of applications, ranging from text ads to targeted banner displays and videos. The growing attraction toward digital media lies in the ability to easily track its effectiveness. Unlike traditional communication channels like radio, print, or television, organizations can measure and optimize their digital campaigns from the single source of action to the desired goal. The ability to accurately measure the return on investment (ROI) and its cost effectiveness, usually a fraction of traditional media cost, makes digital media the most appealing communication channel for many organizations.

Social Media: “WE think, therefore WE are”

The emergence of social media as a tool for businesses to develop or strengthen relationships with their audience further proves the value of digital media in the context of the Internet and globalization. Social media enables companies to leverage web and mobile technologies to create real-time, multilateral interactions with web users. This has given rise to the concept of “social collaboration.” The power of social collaboration is increasingly evident as more platforms are built to facilitate “crowdsourcing”—the act of using groups of people to achieve a task or solve a problem. One such platform is www.miigle.com, a social collaboration site that allows people and organizations to discover, share, and foster ideas or projects that match their interests.

Ipad and iphone on a deskThe Death of PCs and the Rise of Mobility

Back in the early stages of the Internet, often referred to as Web 1.0, a website’s sole purpose was to share information with Internet users. With Web 2.0, websites are evolving to become two-way channels where users can directly interact with organizations. This activity can provide valuable web data that marketers can dissect with a web analytics platform and use to measure improvement of future Web Experience and User Engagement initiatives. In this new era, content is no longer simply shared, but can be tested, targeted, and optimized for the benefit of both the web visitor and the organization.

In the recent past, User Engagement coupled with the rapid innovation of mobile technology from simple cell phones to Smartphones has given rise to Mobile Media. Mobile now has the fastest adoption rate of any web-influenced technology. There are currently 5.3 billion mobile subscribers or 77 percent of the world population.[6] In its report, Global Mobile Data Traffic Forecast Update 2010 to 2015, CISCO predicts that mobile traffic (using a mobile device to access the Internet) will grow 131 percent in 2011, compared to 2010, with Asia Pacific leading the charge.[7] Mobile Internet is also projected to overtake Desktop Internet in 2014 (see Fig. 4).[8]

Fig. 3. Global Mobile Data Traffic Forecast by Region

Data Traffic Forecast by Region

Fig. 4. Mobile Users Will Overtake Desktop Internet Users Within 5 Years

Mobile Users Will Overtake Desktop Users in 5 Years

The rise of mobile technology is practical evidence of the importance of digital media today and in the foreseeable future. The digital world offers a wealth of opportunities, but only organizations with a clear and on-going digital strategy today will stand to reap its benefits.

Ten Strategic Tips for Organizations to Achieve Digital Globalization and Become an Online Success Story

Building an effective digital strategy is a critical business requirement for any organization seeking to leverage the power of the Internet and digital media to reach foreign markets. Eight years ago, launching a website and running ads on Google AdWords might have been enough for a business to start generating revenues online. Today, the Internet has evolved into a highly competitive environment where a website and ads may not even guarantee visibility. To succeed online, organizations must be willing to invest in resources that strengthen their understanding and adoption of digital media and web technologies. Highlighted below is a list of 10 tips on how organizations can build a successful digital strategy to support their globalization efforts, culled from the author’s experience in engineering and testing different digital media strategies to help leading companies in industries (ranging in industry from e-commerce to software) build or improve their digital presence domestically and internationally.

  1. Understand Your Business’ Strengths and Weaknesses. The Internet is not the real world. Understanding your business and its application online is the first step to building a successful digital strategy. It also helps you define your key performance indicators so you can track your milestones. A company that has used this strategy to successfully transition a traditional brick-and-mortar service to the Internet is LegalZoom.com, a U.S. based legal document preparation services provider. LegalZoom.com founders, two of them lawyers, took a slow, cumbersome, and expensive offline practice into a simple, quick, and affordable online process by understanding parts of the legal sector that could most benefit from the accessibility of the Internet and its technology without committing unauthorized practice of law. LegalZoom.com now has over 1 million customers in the U.S. and is using the same approach to expand into Canada.
  2. Have Clear Goals. What are your desired end results and how can the Internet help you? Goals that you set in the real world might not necessarily translate online.
  3. Set Reasonable Expectations. Be conservative until your decisions are data-driven rather than opinions. Setting reasonable expectations ensures that you are not left disappointed and achieving them will only help build your confidence.
  4. Develop YOUR Digital Strategy. Strategies are rarely uniform. Although the temptation to copy what is working for others can seem irresistible and might occasionally work, you should always develop a strategy unique to YOUR objectives.
  5. Evaluate Web Technologies That Fit YOUR Needs. The Web has an overwhelming plethora of “shiny” tools, many of which you don’t need. Developing a digital presence is time-intensive, so invest your resources smartly. Be willing to be the sheep that does not follow the herd.
  6. Build an Engaging Website. Your website is your portal to the world and your most important digital asset. According to a recent Nielsen study, the average page load time for a website is 6 seconds.[9] That is less than six seconds to make a great first impression, so make it count. Visually appealing websites help, but your messaging is more important. Your value proposition should be clearly asserted on the home page. After the tragic oil spill caused by British Petroleum (BP) in 2010, BP used its website skillfully and speedily as a hub of information for the public.[10] Resources included up-to-date information on clean-up efforts, a claim form in multiple languages for fishermen, information on seafood safety, and how to treat affected animals. A year later, the homepage conveys a very strong message of safety: “We are making BP stronger and safer. Our aim is to embed safety and risk management at the heart of the company, build trust and grow value for our shareholders.”[11]
  7. Own Your Web Content: Find a good web content management system (CMS). A CMS allows you easily update and publish content to your site, hence increasing your relevancy to your audience and web crawlers that index your site for ranking. There are different types of content management systems, each with its benefits and drawbacks:
    • On-Premise or Installed CMS such as Autonomy WCM (formerly Interwoven) or Microsoft SharePoint require you to buy and manage the software.
    • OpenSource CMS like WordPress or Drupal are free to access but might require a lot of customization, for which the costs can quickly add-up.
    • Software-as-a-Service (SaaS) also called Cloud CMS such as CrownPeak are service driven and can be accessed via a web browser, thus saving you the cost of buying and managing software. Cloud-based solutions are gaining popularity due to their global speed, agility, and cost effectiveness. Companies such as Skype (recently acquired by Microsoft), MetLife, EMI, Eli Lilly, and Nissan are a few examples of organizations that invest heavily in ensuring the delivery of their digital content, and have adopted a Cloud Content Management System to manage many of their websites. To further emphasize the impact Cloud or SaaS technologies will have in the business world, in its “Sizing the Cloud” report published in April of this year, the analyst firm Forrester Research predicted the market for Cloud solutions to grow from $25.1 billion in 2011 to $159.3 billion in 2020.
  8. Stay Abreast of Industry Trends. Acquiring knowledge still remains a worthy investment. Its value does not fluctuate with the stock market. Digital media conferences in Search (SMX), Digital Advertising (AdTech), and Mobile (MWC) are great sources of information and talent to help sharpen your strategy.
  9. Think Global, Act Local. The web’s future is all about customer experience management (CXM); make your audience feel at home. Yahoo pioneered this strategy by creating country-specific portals for their users, so a French person in the U.S. could share a similar experience browsing Yahoo.fr as someone in France. With the recent advances in web translation and localization technologies, other global companies, especially business-to-consumer companies such as retail giants Carrefour, Wal-Mart, and Tesco are providing localized user web experience to their diverse consumers without diluting their overall branding strategy.
  10. Implement, Test, Learn, and Optimize. Then Do It Again. A piece of hard data is worth more than a thousand opinions. Depending on your goals and audience size, it can take time to have enough information to reach statistical significance. Start early, diversify your campaigns, and let data drive your decision-making.

Conclusion

Similar to the Industrial Revolution that propelled the world to our modern state, the Internet has become an invaluable catalyst in the human progress equation. An increasing number of individuals are turning to the web for their daily consumption of news, entertainment, and search for opportunities. As Internet access spreads worldwide, most notably in emerging and developing economies, doing business via digital media will be critical to an organization’s success both online and offline. Given the speed of technology and innovation, organizations must make strategic decisions on their digital investments today to ensure their relevance or maintain their competitive advantage. The Internet provides lower barriers of entry, lower cost, and faster and greater return on investment than any other communication channel in human history. That is the power of digital media.



[1] “Exports of Goods and Services (% of GDP).” Chart. The World Bank. Accessed August 13, 2011. http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS/countries?cid=GPD_35&display=graph.

[2] “Internet adoption, 1995-2011.” Chart. Pew Internet & American Life Project (2011). Accessed August 13, 2011. http://www.pewinternet.org/Trend-Data/Internet-Adoption.aspx.

[3] “Internet Users (per 100 people).” Chart. The World Bank (2011). Accessed August 13, 2011. http://data.worldbank.org/indicator/IT.NET.USER.P2/countries/1W?cid=GPD_44&display=graph.

[4] “2015 State of the Internet projection – Infographic.” GeohMedia (2011). Accessed August 14, 2011. http://www.geohmedia.com/2011/07/11/2015-state-of-the-internet-projectioninfographic/.

[5] Ibid.

[6] “Global Mobile Statistics 2011.” MobiThinking. April 2010. Accessed August 8, 2011. http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats.

[7] “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010-2015.” White paper. CISCO (2011). Accessed August 14, 2011. http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html

[8] Ingram, M. (2010). GigaOm. Mary Meeker: Mobile Internet Will Soon Overtake Fixed Internet. Retrieved on August 14, 2011 from http://gigaom.com/2010/04/12/mary-meeker-mobile-internet-will-soon-overtake-fixed-internet/

[9] New Relic (2011). New Relic RUM data shows it takes 6 seconds of average for a page to load! What’s taking so long? Retrieved on October 29, 2011 from http://blog.newrelic.com/2011/06/16/new-relic-rum-data-shows-it-takes-6-seconds-on-average-for-a-web-page-to-load-whats-taking-so-long/

[10] Bowen, D (2011). Forbes.com. The Companies With The Most Effective Websites of All. Retrieved on October 29, 2011 from http://www.forbes.com/2011/05/12/companies-with-most-effective-best-websites.html

[11] British Petroleum Global Homepage (2011). A Stronger, Safer BP. Retrieved on October 28, 2011 from http://www.bp.com

About the Author(s)

Luc Berlin, is a Digital Globalization Strategist and a Social Netrepreneur. He has held critical business roles and consulted with innovative technology and e-commerce organizations in Southern California on developing global digital strategies. He is also the founder and CEO of MIIGLE (www.miigle.com), a global collaboration platform that allows people to share, discover, and fund ideas while socially networking. A passionate globetrotter, Berlin speaks fluent French, English, moderate Spanish, and is learning Mandarin. He has been a recipient of the American Chemical Society scholar award and a finalist at the 2011 American Business Awards for Best Marketing Campaign in Computer Software. Berlin is a graduate of Pepperdine University’s Graziadio School of Business and Management and a 2012 MBA candidate in Global Management.