Around 30% of UK-based dotcoms were in profit last year, with over 50% expecting to be in profit this year, according to the findings of a new NOP survey.
Contrary to the recent adverse publicity surrounding dotcoms, the first wave of NOPÂ’s recently established DotCom Panel paints a picture of entrepreneurs as relatively optimistic about their long term prospects. Only one of the 102 members of the Panel was pessimistic when asked of the chances of being in business in a yearÂ’s time. Recent research suggests that around 50% of US-based dotcom ventures are in profit and given that the US market currently is viewed as analogous to the UK market in 12 monthsÂ’ time, their expectations of future profit may be wholly realistic.
Despite to fierce criticism of the naivety of dotcom marketing strategies, the survey indicates that dotcoms are learning fast. Marketing will increasingly rely on targeted campaigns with direct response measurement – direct mail and trade press – and e-marketing initiatives – generally banners and hyperlinks. However, UK dotcoms are budgeting for levels of marketing spend which, in relation to expected turnover, may be unsustainable in the medium-long term (marketing spend in the last 12 months having been in the region of 40%+ of turnover).
The challenge facing many dotcoms remains converting registered users to customers. In light of the threat posed by the Â’clicks and mortarsÂ’, expectations of new customer growth should be tempered, says NOP.
