When E-Brands FAIL: Building New Brand Value with Old Brand Tricks.

Quick, name a top-of-mind Internet brand. Okay, now how about nine more? Sure, there's Yahoo and AOL, and maybe Amazon.com--if that dicey order-fulfillment problem hasn't blackened its name--but it's not an easy top-10 list to make. In fact, a recent Accenture study reports that user satisfaction levels in both B2B and B2C markets are downright appalling--with only 40 to 50 percent of buyers being "very satisfied."

Yet, in the past two years, millions of dollars have been thrown at e-brand-building programs. So how is it that so many did so much only to gain so little? The need for sheer speed was one factor, suggested CEOs at this roundtable, which was co-sponsored by Accenture. Several participants voiced frustration with the brand-building exploits--and lack of patience--of new-economy firms.

As John Castle of Castle Harlan noted, "Creating a great product is very, very hard to do and frequently the result of some level of serendipity. You do a whole bunch of things and then one day, boom, you get something that works. But the first generation in the e-commerce world forgot about the product. And if you don't have a great product, then you're going to spend a lot of money on marketing and advertising and you won't get a good result."

In the race to build a better Internet brand, marketers were also all too quick to embrace flawed logic or mythical assumptions about the ever-elusive e-shopper. "The myths that were out there and the notion that you needed to throw out the old rules basically moved people away from good common sense--from strategic, or market-driven, thinking," said Mark Wolfe of Accenture. "Now that a lot of myths have been debunked, there's a big opportunity to rethink the way you deliver value to the customer."

In discussing that opportunity, CEOs expressed concern about the many and varied challenges that accompany it-from the heavy investment required to the continued risk of alienating existing distribution channels. But most prevalent of all was the desire to get a definitive handle on just what constitutes value for online customers.

In the wake of the deaths of dotcoms--Buy.com, Brandwise.com, and Valueamerica.com among them- that had banked on the theory that online shoppers were extremely price sensitive, new data suggests that the price sensitivity assumption is unfounded. In fact, Accenture's study shows that pricing constitutes no more than 10 percent of online customers' buying needs.

Clearly, as we move along the e-brand learning curve, more debunked myths will litter the roadside. The trick will be in filtering facts from mythology--and using the former to create and grow value online.

-Jennifer Pellet 

Brand New Vision

Mark Wolfe (Accenture): What we're seeing as we talk to clients about brands and e-brands is a lot of frustration, a belief that this is hard to do and costly for the organization. The people you have to bring in don't have a lot of experience, don't know your business, and don't necessarily fit into your organization. The profitability or the return on the effort in terms of attracting new customers is largely unknown, unproven, and more speculative than demonstrated. The measurements for understanding what's going on, what's wrong and what's right, are ambiguous at best. The whole environment we ye come through has exacerbated the need for speed--get there first, grab eyeballs. A lot of myths have been embraced, for lack of real knowledge and understanding about how to succeed in this new world. People really don't know how to use a tool as powerful and complex as the Internet to translate brand.

We decided to ask end customers what's important to them when they buy online and what they really value in the total Web experience. In our Web-based conjoint study, [Beyond the

Blur: Correcting the Vision of Internet Brands, published by Accenture in November 2000], we asked 2,000 customers across 17 different B2C industry segments and 250 buyers in eight B2B industry segments to "trade off" their preferences for particular attributes, such as site speed, price, etc. When you go out to customers and do market research, the problem is that everybody wants everything--low price, high quality, broad selection, personal service--you can't understand how people make fundamental decisions. Where does marginal utility really operate, when people are choosing one brand or one offering vs. another?

Using conjoint analysis allows us to understand what motivates customers, what values drive their perception. And if you know that, then there's an opportunity to build customer preference because you can position or communicate a brand to echo that brand promise, that set of values that motivates customers.

In the CRM world, technology has been tracking not so much what customers want and how they make decisions, but inferring from what they did or bought yesterday what they're likely to do or what is important to them. Millions and millions of dollars have been invested in sales forces and call center channels, e-mail channels, and other digital platforms to try to crunch terabytes of data. At the same time, no one is really listening or asking in a controlled way what customers really want.

It's our hypothesis in doing this work across B2C and B2B that there is some basic marketing discipline missing. Part of the issue in terms of e-brands or brick-and-mortar brands not translating well or achieving objectives in the Internet space is that companies just don't take the time, in a disciplined way, to figure out what is important to a customer, Everything we've learned about target marketing somehow has been missed or ignored. Some of the reason for that has to do with speed and the myths about what's really important on the Internet. As we look at a lot of the Web sites, such as the pure plays that are failing and the brick-and-mortar brands that are struggling with some of these issues, the basic premise obtructing their success is that they're approaching this in a one-size-fits-all model. And it's not a one-size-fits-all world.

For example, there's a cherry-picker market segment of astute brand-oriented shoppers who pick the best value based on high quality and reputable brand at the lowest possible price. There's another group that's all about functionality. They want speed and convenience, rich functionality, and interactivity. These are two very different sets of needs. But if you think about Web sites you've been on or ones you've been building, has anyone stopped and asked the technologists exactly who they're targeting?

There's an opportunity to pick a segment, a niche, and love it to death. Or, alternatively, if there are multiple segments, know who they are, how attractive they are, who your competition is in each, and how easily you might be able to attract and serve them. With technology it may be possible to have people self-select the kind of Web experience they want. You can learn about who they are based on how they behave on your Web site and actually transform their experience without asking them explicitly.

Peter Nauert (Ceres Group): The bottom line of why Southwest Airlines has the best Web site in the airline industry--last year I think they sold something like 85 or 95 percent of their tickets on the Web--is very easy access to information. We're certainly not as creative as Southwest, but we started remaking our consumer Web sites to make it all very simple: Here are three products you can have--high cost, medium cost, and low cost--which do you choose? And then go to the benefit structure. We've changed our entire thinking of how we present our Web site to the consumer.

John Castle (Castle Harlan): In the old economy you always started with a great product, and somehow a great product or service ultimately became a great brand. In the online world, people decided to create a great brand, but nobody thought about what the product was. Coca-Cola, McDonald's, Ethan Allen--they started with a great product at a price point that made sense to the consumer.

Wolfe: I agree. I can't tell you how many different conversations I've had with people about their business models. And afterward I would scratch my head and say, "Okay, is that the same thing as their product, or their product strategy, or their market strategy? What is this business model about?" The business model was typically portrayed in many different ways--as a way to configure in a virtual world, a way to create a virtual supply chain, or a way to create a group of alliances or partnerships--but there was never really explicit discussion around "how am I different, how am I better in a way that's relevant to a group of buyers?"

Castle: Creating a great product is very hard to do and is frequently the result of some level of serendipity. There was this notion that we'll get in a room and we'll come up with a product, maybe not a great product, but an acceptable product, and then we'll build a brand. And you know, the world just doesn't work that way.

Wolfe: Michael Dell built a great product before he decided he was going to sell anything on the Internet.

Ronald DeFeo (Terex): The product is fundamental to any business' success; unfortunately, the technology was viewed as the product itself. Technology is an enabler, but you have to enable it with some fundamental benefit that the user or owner is going to enjoy. Technology companies or e-business companies try to develop a new channel of distribution as if people are unhappy with the current channels of distribution. But they have to fill a need. If the technology allows delivery of a unique benefit that you can't get without it, then you have the opportunity to develop a product that has sustainability.

What we're trying to do is level the playing field against Caterpillar. Caterpillar is a $20 billion company, Terex is a $2 billion company. Caterpillar has distribution as its point of differentiation. We hope to establish our brand as a way of attacking a very traditional machinery sector, where distribution is obsolete, where the end user pays too much. I believe technology will allow me, in a few years, to access Caterpillar parts, create a market for them, and deliver those parts to end users who couldn't get them otherwise.

John Brandt (CE): You're already changing your business model from a maker of a product to being a service provider--or maker of markets.

DeFeo: If I don't do that, my growth is limited. What am I going to do? Come up with a new bulldozer? Fundamentally there's a commoditization of our equipment. So how am I going to differentiate myself? What's the most important feature? Swing speed? Is it 4.3 seconds or 4.2 seconds? Industry people and engineers think that's a point of differentiation. We have engineers seeking to create their own legacies as opposed to people trying to solve needs.

Alexandra Lebenthal (Lebenthal & Co.): There's a commoditization in every product, essentially. Our brokerage firm, which is 75 years old and specializes in municipal bonds, has the same bonds that Merrill Lynch has. It comes down to whether I provide the service. I think a lot of companies have forgotten to give the end user the ease of obtaining what they need and not get caught up in the marketing, the branding, and the technology. Any company making it easy for end users has a greater ability to succeed. Those of us running companies have to think of ourselves as consumers of our own product.

Jeffrey Kiesel (GE Capital): One of the things that we found out launching GE Capital Small Business Solutions in January of 2000 is that once we had a Web site up and running, it accelerated the interpretation of the brand. So if people thought GE was hard to do business with, it accelerated that view. If people came away thinking, "there's a ton of information here," all of a sudden GE seemed like more of an expert than they thought we were. As we did our research and continued to refine our model, we found that for an old-economy company in the new economy, the Web's more of an accelerator of strengths. You have to aggressively work on your weaknesses.

Pacing the Climb

Farooq Kathwari (Ethan Allen): In the past two years or so, a lot of mistakes have been made. People have tried to climb too fast. Mountain climbers know if you go too fast, you just don't reach the top, you get water in your lungs at 13,000 or 14,000 feet. There are two options--come down or you die. Most folks don't like to come down. All this death in the tech sector today is because they tried to climb too fast.

We're a vertically integrated company. We have a national network of stores, 100 warehouse service centers, we manufacture our products, and we run our own truck fleet. Our brand is about 100-percent known, so we were probably the best qualified to market online successfully. We were under a lot of pressure from all kinds of experts who said, "If you don't get those eyeballs fast you'll be dead." I said, "Well let somebody else get the eyeballs--I don't need them. We're going to do it slowly." The bankers told us it was a fantastic opportunity to create a separate entity, spin it off, and make lots of money. A lot of companies made that mistake. I think they're still trying to recover.

About a year and halfback, Amazon.com said it didn't care how much inventory it bought, it wanted to service those customers. And when a company says, "I don't care, I'm going to fill my warehouse with inventory," I say they're going to be in big, big trouble. It has been a great learning experience. It has helped us create an attitude that you've got to do things faster. It has improved all our systems and brought us information that we didn't have before doing e-commerce. We've found that consumers still want to go to our stores. It's taken them 70 years to get comfortable in our stores. Over time they're going to get comfortable with e-commerce, but they're not there yet. Expecting them to get there in six to nine months is a mistake.

Arnold Pollard (CE): What most surprised you as you were methodically entering that world?

Kathwari: All the technology experts misjudged how much effort and time it would require. The first mistake was we believed they could do it. Everybody's expectation was that it would be easy, but to convert our whole system to e-commerce compatibility is a pretty tough job. We also have independent retailers and licensees. Convincing them that they would benefit was the next challenge.

John Reed (Mestek): If you have a unique product, a niche product that has a relatively high unit value but that would only appeal to a small group of people, and if that group of people doesn't know about it, then you have a marvelous opportunity. We have a central air conditioning system that can be installed in an old house without tearing it apart. We've done reasonably well with it--a 10 percent growth rate. It has to go through two levels of distribution: distributors and then to an installing contractor.

One of the big problems has been that the installing contractors are lethargic. So we prepared a rather elaborate Web site. After that, we were inundated by inquiries from potential customers who qualified themselves. Our sales of that product were 80 percent higher in 2000. It's an extremely low-cost way of bringing something to somebody's attention. There're only a certain number of people with those kinds of houses in those kinds of neighborhoods who can afford to put in a $12,000 to $15,000 system. You can't go in on a mass basis, but if you've got that thing that is just right, the Web is about the fastest, lowest cost way you can get to the market.

Stephen Dull (Accenture): One thing I want to raise: "Ease of use" is a dilemma, because it's relatively easy to imitate, We all know that you don't want something to be hard to use, but there must be other points of difference.

Here's an open question to the group: How do you think about different consumer needs--being older, less online, not a single group of people? How do you pull them apart and say these people want this experience, these people want this other experience?

Robert Prieto (Parsons Brinckerhoff): The construction business in the U.S. is the second-largest market segment after consumer retailing. It's about $1 trillion a year, is highly fragmented, and has marginal differentiation and high commoditization. We're the oldest U.S. engineering firm, founded in 1885. And e-business actually is probably affecting us more than most other trends out there because of the compression of time in delivering our services. Looking at how the Web is moving into that market, I see four areas: The first use was in marketing, basically being able to reach out much farther. Today, you're finding that Web sites are increasingly providing more content because you have an educated, technically oriented buyer. The second use is buying for catalog-type items. Consumers like being able to go see what's available in the marketplace. The third area is project collaboration. The project-oriented teams need to be able to communicate efficiently to operate--that's the area that we've targeted in our external Web environment. We've put in place about $40 billion worth of constructed projects using major collaboration tools. The fourth area is enabling internal processes and systems. But what we're finding also is that those first three areas are demanding a much stronger tie-in to those internal processes.

In terms of our client base, we've taken this 116-year-old brand and combined it with this new technology. We've enabled ourselves to deliver the old brand in a more efficient way. But we've also discovered a segment in the market, and that's our competitors--competitors who don't have the brand and need the technology. We've set up a separate e-business with a different name, without our brand name, specifically targeted at servicing the back-end to get a bigger share of that emerging e-market.

Richard Clarke (Nash Engineering): I'm not sure the e-branding has failed so much as the old economy brands have succeeded. There's tremendous erosion in Coke, in a lot of names that many of us grew up with. It's happening faster than we think. I would suggest that we're in a highly confusing transition period. Brands in the past were owned by the companies. Brands today are owned by consumers, who do more than just decide whether they will buy them. If they don't like the fact you broke your promise, they're going to tell people about it so they'll de-brand you.

The rules of branding also used to be owned by the companies; they're now owned by the consumers. And they'll let you know when you have a good one or a bad one. They'll even indicate the half life of your brand. I think our society views buying as a form of entertainment. A lot of us like to buy because of the perception we give to others. By knowing your customer and being able to do it for them, whether it's e-commerce or it's knocking on the door, you better deliver a brand that reflects exactly what your customer thought you promised.

Prieto: One of the first uses of the Internet was marketing to clients. We would set up a Web site for a specific client, and it would have a set of information and features that we could bring to it. We would provide that before we went in to make the formal presentation. One of the things we would do is monitor who from the client side visited the Web site and how many times. Then, when we went in to make that presentation we knew what was important to them. If they kept going back to our cost offering, cost was important. Same for our experience or tools. We were able to go to that client and close the sale because we had a better understanding of what the client wanted from us and a better understanding of how he was willing to be serviced.

If the CEO of that client never bothered to look at the Web site, then there was a good chance that this was not how we were going to communicate with them. But when we were dealing with the telecom firm with a 29-year-old kid running it and saw that he would only take the information off the Web site, then we knew that was how we were going to communicate with him. It gave us more information about our client faster, at a higher level of detail than anything we had before.

Wolfe: It wasn't too long ago that consultants like Stephen and myself worked with sales organizations with paper and pencil; we sat them down with a set of questions about what their customers wanted. We'd take those piles of paper over to the finance organization and try to figure out which customers were worth what to the organization and try and come up with some way to make the sales investment more productive. And if you compare that to what you just described about understanding what your customer wants--this old-line world of knocking on doors, so to speak-it's like night and day.

Prieto: I'll put a number on it. Over about the past six years our success rates went from one Out of three, which is not bad for a consultant organization, to one out of two--and we had a well-established brand in our sector already. That's because our customers are telling us exactly what they want.

The first applications outside the marketing process where we used the Web sites were in large public works projects. We set up community participation Web sites in which we let our client go out and ask the general public what it wants. We brought in design scenarios where a local community is able to go in and pick the features they want in a transit station. When the architects do their job, the community feels ownership. You don't see the opposition. You see them saying, "Don't change it, we like it."

Rick Hadala (AKQA): This is a perfect example of how technology, as a delivery mechanism, can unwrap a unique benefit. You can use the Web to accomplish what Mark's describing--talking to people and writing it down on paper. With the Web you can engage people in these conversations and feed back to your company invaluable insight into what makes customers tick. You can empower your marketing and sales organizations to go out and differentiate themselves against your competitors, if you just listen to your customers.

John Shalam (Audiovox): In consumer electronics we view the Web site as an extension of our way of doing business. It's just another channel of distribution besides selling to wholesalers and retailers, but we have to be very careful not to upset our existing distribution network. We've started by offering a limited number of products, mostly accessories and replacement parts. As an example, for cellular phones we offer a spare battery, or a cigarette-lighter charger, or a leather case. Most of our retailers welcome this because they don't want to be bothered with stocking the very large number of SKUs that may be needed for the consumer.

In terms of building our Web site, initially the expectations were that it would be a fairly simple job. It took much longer and cost 10 times what anybody thought it would. Initially there were some executives in my company who were not really tuned into the Internet and e-mail, who wer very negative about spending money t build a Web site. But even with limited offerings, it was successful beyond any of our expectations, and the volume, profitability, and gross profit mar gins compared to our normal channels have converted all of these people into true believers. We continue to build up our Web site as an extension of the brand franchise.

You can create demand by publicizing the features of your different products, and eventually people on the Web site will go to a store with a printout of what they downloaded and say, "This is what I want to buy." J

James Williams (Great American Knitting Mills): You can read article after article and book after book on what went wrong and find out that we know that everything's commoditizing. So I'm using the Web as another way to go to market. I also don't believe the Web is a place people just troll through. The days of the lonesome students are over-people are looking for something today and you need them to find your Web site. That has to do with conventional advertising, public relations, and things other people have stated.

Lebenthal: You also need to be able to know, though, at what point you transition with your customers. One size really doesn't fit all. We've created something on our Web site called the "MuniProfiler" where you go on and answer nine or 10 very basic questions about your lifestyle. From that, you get a portfolio of bonds tailored to those answers, and you get it with the face and voice of one of our account executives because bonds, like insurance, really are sold, not bought. But the dilemma is, at what point do customers want to transition from c-mailing back and forth? At what point do they really need that person and at what point are we supposed to put on our traditional roles as salespeople and get on the phone and sell them?

I think that that's part of the issue with the whole downfall in the Internet industry. So many companies, particularly the new ones that didn't have the experience that old-line companies had, thought to themselves, just give them the service and we'll grow and everything will be terrific.

Prieto: That's not the service they want. The service they want is to be able to touch that expert person, touching at exactly the time that they want to. Technology helped us better qualify that customer, because by the time we were dealing with him he had already educated himself and we got past some of the fundamentals of what it is we offered and what we could do. He had a better set of questions. So we're being smart with that customer. We'll get a certain number of fairly qualified e-mails that will come in that are saying I'm interested in more beyond what your Web site has. These are walk-ins, in a consulting business where you don't get walk-ins. That is not the traditional model; this is the guy you would never even have thought of marketing to or calling up. That's very powerful.

Clarke: We found the growing perception that the e-commerce world is cheaper. In the consumer's mind and in the business mind there's the concept that the e-commerce world will provide a less expensive food chain.

Kiesel: We integrated on and offline marketing more intimately. I can get onto the Web site, register, and get information pushed to me; I can call and have someone on the phone with intimate knowledge of what I'm talking about. Technology enables you to do that, but the biggest battle is cultural. Integration is really the secret to the Web and if you're just going to hold off to the side with different products, I don't think you're looking at your business holistically enough to really capture the value.

Brand Importance: Rising or Sinking?

John Whiteside (netASPx): I have a question for those of you who've succeeded in this space, who have done that re-engineering and tied it back to your core channel distribution. I'd be interested in knowing who it is in your organization who owns this.

Who makes this work? Is it your chief operations person? Your CIO? Your CFO?

Williams: We make it the CIO's job to put in an infrastructure, but there's a lot of discussion on this now. Brand is almost a CEO problem, not a marketing guy's problem anymore. Let me throw something out: Regis McKenna is now saying brand is dead. There s a lot of us here that have put a lot of money in brand, and he is saying it's access now. As an example, Coca-Cola could advertise its socks off, but if it didn't have plants in every location around the world it wouldn't sell a billion Cokes a day.

Hadala: Most of our clients don't talk to us about e-brands. They talk to us about brands-period. These past five years have been very interesting, almost a distraction to what real marketing is. Somebody said it earlier that this is an extension of your business. We view the Internet as an extension, just like television was a dislocation 50 years ago. People were advertising in newspapers and print and all of the sudden they have this new medium and nobody knew how to use it... it took 10 or 20 years for an infrastructure to develop so we could use it wisely. I think the same thing is happening right now with the Internet. From our perspective, the Web is the Great Equalizer.

I don't know that everything's a commodity yet, but it's moving in that direction. I would, for the sake of being provocative, actually take the opposite point and argue that brand is becoming much more important, is becoming much more of a chief executive issue than it ever was before. I think the boards are worried about the health of their brands and the way they're distinguished within the marketplace.

Ken Forster (Online Insight): How come brands can't become more important? You've got a rich interaction that touches everybody. You don't have some salesperson mediating that delivery of your value proposition and benefits. So your brand, and what you stand for, and how you deliver against it, become absolutely critical in whom you choose to do business with.

Hadala: Let me build on that. The number one issue that we get from our client organizations is that handing over Web site development to a bunch of 26-year-olds who have no idea what the Coca-Cola brand, for instance, really means to people is crazy. Our clients are truly looking for an integrated set of messages across any medium. They're looking for insight into the marketplace.

Forster: Two years ago, the experience we delivered in a sale online was completely different than what they got in the call center. Today, the call center, the store, the Web site--whatever your delivery channel--has to be integrated. So when we hand off a qualified lead from the sales interaction that we drive with our software, it has to be seen immediately from the call center because they want to maintain how we talk to, touch, and feel that customer.

Kathwari: Our whole strategy as a business of making our brand a preferred brand-name is not good enough. There are a lot of known brands that are dying. The Web site is tremendously important for us today. We are able to get our information to the consumers, and they are now also getting more and more comfortable in buying our product on the Internet. We don't want them to buy too fast because the returns on the Internet are a greater problem than business.

Nauert: How do we get people into our Web sites so that we can sell? How do you sell a home cooling product? We're not all going on the Super Bowl and spending huge amounts of money. So how can you go our, put your Web site out there, all of the sudden get 50,000 people coming to your site and then parcel out those leads to your distributors and installers and maybe get a higher margin?

Reed: You get some things if you just get active in the market. For example, this month you could go to public television and Bob Vila features this particular cooling apparatus on one of his shows.

Nauert: That's awfully limited, though.

Hadala: But isn't the point that one piece of communication builds on another? We did a Web site for Nissan Xterra, an SUV targeted to generation-X, and we allowed them to build their vehicle of choice from all the options that Nissan had available. They didn't know about that Web site, but they read about it in a print ad and they may have seen it in a TV commercial. The point is, the "viral" marketing built on itself so one message led to another, which led to the Web site. They didn't buy it on the Web site; they just finally got convinced. So 50 percent of the leads for the X-Terra came from the Web site directly.

Nauert: There you're building on a known brand, a Nissan, a Southwest Airlines, a P&G. I don't have a brand. No one knows Ceres. How do I drive people to my Web site?

Yousef Javadi (Primus Telecommunications): Increasingly, the Internet is becoming smarter and smarter. Search engines now are phenomenally powerful and you can find information on any subject. You want that extra benefit of making sure that your service provider is listing you in the right places.

Wolfe: One of the capabilities key to doing this effectively is to create a learning organization. A learning organization pays attention to customers--with every conversation you create a two-way communication and you capture appropriate or important information.

Pollard: So if you are super at giving value to the customer when he or she is online, that is going to enhance your brand image and become part of it.

Lebenthal: In terms of getting customers to your Web site, we tried banner ads and it was like driving down the highway, seeing a billboard, and stopping. It interfered with the process. So we've used a combination of traditional advertising on radio and television to drive people to our site. We are very specific about doing our Web site to use our MuniProfiler.

Dull: We know most people don't come to a Web site just because they've seen an ad. Most of it's from a friend, a search engine, a whole host of things. So you've got to use more tactics, and some are actually pretty cost effective.

John Harker (InFocus): Every piece of collateral, every advertisement, everything going out has the specific URL that we want them to go to. That way, we can track what this is worth.

Dull: If anything has been a failure in this marketplace, it's that people have failed to follow common sense. Marketing is asking people what they need, and then listening to them and making money at it. It behooves all of us to keep ourselves grounded for the next time we get swept up in some new revolution.

Prieto: We need to be sensitive to the change in media. Customer service has always been the key differentiator in building a successful brand. All that the Web and e-business have done is raise the importance of that and accelerate the time frame in which you must demonstrate you can provide superior service to your clients.

Hadala: The Web is recognized as a powerful enabling tool. It certainly has brought down competitive barriers, but it has led to a dramatic increase in intensity across markets. And while this tool has been useful in certain respects, from a communications standpoint it has actually been a distraction. Integration is going to be one of the compelling challenges for marketing organizations in the decade ahead.

Lebenthal: It's fascinating how quickly the Web moved for all of us. It's only been in the past two or three years that the Internet has become a part of our everyday lives; we are at the very beginning of this as a tool in our lives, in our companies, in our industries.

Javadi: The Web is a huge paradigm shift. You really have to look at your business and your business model and say, "How can I leverage the interactivity and the reach and the distribution of the Web to enhance my business?"

Clarke: It's yet to be determined whether e-commerce or e-brands are a phenomenally fast, convenient way to acquire information, or a place where you go to buy things. I would suggest it's mainly the former, a place where you go to find out things. That would tell me what direction to go.

Wolfe: It really is moving at warp speed in terms of change and learning in proportion to its power, its potential. The interactivity, content, capability, efficiency of reach, all of these dimensions have profound potential advantages for business. The whole notion of brands--way back when the first cobbler in the Dark Ages put his mark on a pair of shoes--was to create some kind of competitive advantage. Maybe his shoe was no better, but he wanted to create a difference by putting his mark on it and he wanted customers, over time, to trust it. The internet has the capability, potentially, of helping brands create entirely new sources of competitive advantage, whether it's content richness, interactivity, or the ability to spot somebody who really wants the cherry picker price on an airline ticket.

Pollard: In less than a year, it's all come full circle. The 29-year-old child CEOs with $100 million from some of John Castle's less intelligent competitors targeting you are not out there anymore. Common sense is back in.

Forster: I've got two comments. One, there's a disturbing prejudice against 29-year-old CEOs. [Laughter] And the other, the serious one, is that it's really good to see people thinking about using technology to deliver unique benefits around a core value proposition. You're looking at the Web and saying, "How do I use the Web intelligently to create competitive differentiation and secure an advantage against my competitors?"

Nauert: My problem is that I don't have a brand and I can't afford to spend the money on it. We started a division called Web Power to explode out the number of contacts that we have through affinity groups such as AAA. It's an eat-what-you-kill program, meaning I don't pay for somebody coming into my Web site until a sale is made. Will it ultimately be successful? Come by and see the next chapter in our book.

The other thing we're doing is enlisting our 300,000 insurance salespeople across the country, each of whom has 500 clients, to drive those clients to my Web site by giving the agent a stake in any sale made. So if you don't have a brand, and you don't have bucks to bring people in, you may want to give thought to how you can energize some of the contacts you have to bring people to your Web site.

Harker: What we did not talk about is that as this becomes more prevalent, more successful, pricing is going to be squeezed, margins are going to come down and that efficiency we're going to have to crank in is probably the most important thing.

Castle: Going back to the issue that I raised early on, I've spent most of my life working in LBOs and things of that nature and I also did spend some time in venture capital, funding the semiconductor business in its early phases. I learned early on when it came to evolving technologies that it's usually about the third generation of a technology that worked. In the case of semiconductors, the first generation all got wiped out. The second generation, by and large, got wiped out. It was the third generation that became the Intels.

So I know in the e-commerce world that we've now been through at least one generation and it got wiped Out. We're now looking at the second or third generation. There will be certain companies that develop because of the e-commerce connection, but it's going to take a long time. In the meantime, it's quite clear that the old rules apply even to the new world.

Who's [LU

* John K. Castle is chairman and CEO of New York City-based Castle Harlan, a private merchant banking firm.

* Richard Clarke is president of Trumbull, CT-based The Nash Engineering Company, a designer and supplier of engineered vacuum and compressed gas equipment.

* Ronald M. DeFeo is chairman and CEO of Westport, CT-based Terex, a $2 billion constructionand mining-related equipment manufacturer.

* Stephen Dull is a partner specializing in customer relationship management at Accenture, a $10 billion global management and technology consulting organization.

* Ken Forster is president and CEO of Atlanta, GAbased Online Insight, an eCRM technology company with integrated online guided selling.

* Rick Hadala is CEO of New York City-based AKQA, a technical communications and consulting company.

* John Harker is chairman, president, and CEO of Wilsonville, OR-based InFocus Corporation, a $390 million manufacturer of data and video projectors.

* Yousef B. Javadi is president and COO of McLean, VA-based Primus Telecommunications, an $832 million long distance and international phone service provider.

* Farooq Kathwari is chairman, president, CEO of Danbury, CT-based Ethan Allen Interiors, a $762 million manufacturer and retailer of home furnishings.

* Jeffrey Kiesel is CEO of Stanford, CT-based GE Capital Small Business Solutions, a financial services provider.

* Alexandra Lebenthal is president of New York City-based Lebenthal & Co., a brokerage firm specializing in municipal bond sales.

* Peter W. Nauert is chairman, president, and CEO of Chicago, IL-based Ceres Group, a $372 million insurance provider.

* Robert Prieto is chairman of New York Citybased Parsons Brinckerhoff, a $945 million planning, engineering, and construction management Company.

* John E. Reed is chairman and CEO of Westfield, MA-based Mestek, a $400 million manufacturer of heating, ventilating, and air-conditioning products and metal-forming machinery.

* John J. Shalam is chairman, president, and CEO of Hauppauge, NY-based Audiovox, a $1.1 billion marketer of cellular telephones and vehicle sound, security, and video systems.

* John Whiteside is president and CEO of Hemdon, VA-based netASPx, an application service provider.

* James Williams is president and CEO of New York City-based Great American Knitting Mills, a name-brand hosiery manufacturer.

* Mark Wolfe is a partner specializing in customer relationship management at Accenture, a $10 billion management and technology consulting organization.