Internet expectations far outstrip investment plans

UK firms’ expectations of returns from the Internet outpace the investment they are prepared to make, according to research by KPMG Management Consulting. The survey, of 100 UK marketing directors, showed that while they expected Internet sales to increase by 500 per cent, Internet budgets were only predicted to rise by 360 per cent during that period.

The marketing directors’ expectations suggest that by the year 2000 UK sales from the Internet will total #170bn, or nearly one in five of all transactions. However, only 59 per cent of companies had allocated a marketing budget to the Internet, and in 50 per cent of cases this was less than #10,000.

Paul Baker, KPMG partner in enabling technologies, said that companies’ expectations were unrealistic in view of their spending plans.

“The Internet is often perceived as a technology that is accessible to businesses for very little cost,” he said. “Our experience demonstrates that the investment requirement can be significant.”

The survey also revealed that 63 per cent of the marketing directors had never personally used the Internet. There was also a lack of awareness about external strategy and threats.