I ALWAYS find it mildly amusing how governments and giant corporations manage their finances. It seems they always have to allocate a purse for every identifiable class of expenditure, and as a general rule, the opportunity to move money from one purse to another is extremely limited. A recently reported case saw parts of a corporation getting upset with a quoted £50,000 spend to maintain its website, while the marketing department had just spent £250,000 on a short television advertisement.

At the same time its total advertising budget was well over £50 million and included radio, TV and press. But the IT department was struggling to find just a few thousand more to spend on the website. And it wasn't just the installation, maintenance, software and support of this website that was the key problem, it was the content. Incredibly, this company was simultaneously creating high-quality audio and video and stills material for the conventional media, while the Web content was being produced by a separate and much smaller group. Why not massage the conventional media material and put it on the website, and use it twice instead of once?

It would appear that in the minds of the individual department heads and senior staff of the company, the Internet is something separate and different. The cost of taking traditional material and putting it online is trivial but the impact can be great, so why miss this opportunity?

One of the most successful American Web businesses now spends more than $10 million on websites, including the content, hardware, connections and support. The sales of this company have now passed $1 billion, giving a nominal gain of one 100:1 on its web spend. Looking at many of our established businesses, this seems to be a good return on investment compared with the sales and marketing campaigns using traditional media.

Were it not enough that "webtising" (Web advertising) has fundamentally more leverage than conventional advertising, it also offers the opportunity for more linkages and concomitant sales than any previous mechanism. So the notional gain of 100:1 is almost certainly a gross underestimate of the final leverage realised, which will commonly exceed 1,000:1. But there is a further and even more powerful mechanism at work here. Once a customer has had a good experience on a website, he or she tends to bookmark it for later access. So from an initial low-cost investment for a modest website, a trader can expect to see many more orders of magnitude returned in sales.

Beyond all of this, the customer will also benefit from a lower price, an easier payment mechanism, and a faster delivery than ever before. It would be wrong to think that webtising is in anyway the same as advertising in the conventional media. It would also be a mistake to think in terms of money and sales alone, because the same mechanisms and advantages also apply in the world of information.

Organisations and governments have to recognise that the leverage of the browser-based world is something that benefits the user and provider, it is not a one-way relationship. Nor is it a singular or limited activity; it is necessary to think connectivity, networking, and leverage to get the most gain for any one investment. Produce once and sell two to 10 times or more really does work for everyone.

Peter Cochrane holds the Collier Chair for the Public Understanding of Science & Technology at the University of Bristol. His home page is:
http://cochrane.org.uk