Kodak sees millions in Web site savings

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"Our orders were to create a business strategy and a marketing channel," "If it was just going to be a public relations vehicle for the company, we wouldn't have invested this amount of resources." Kodak Web managers: Wayne Neale (l.), Mike Pagano and Suzanne Welch. Even as she is reeling off the numbers -- an average of 275,000 page views a day, a tenfold increase in traffic in just the last year -- Suzanne Welch waits for the inevitable question.

"They always want to know if the Web site is making any money," said Ms. Welch, the general manager for Internet Marketing at Eastman Kodak Co., the giant Rochester, N.Y.-based photo concern.

Her answer is yes. And at Kodak, she said, the amounts are significant.


In 1996, customers made 175,000 downloads of software drivers for Kodak's digital equipment from Kodak's Web site, saving the company more than $4 million, Ms. Welch said.

"We don't need to maintain an 800 number for questions, we don't need employees to take shipment orders, we don't need to pay to send the software out overnight," she said.

Because the site has more than 10,000 pages of information about 600 Kodak products, Ms. Welch said, the company essentially stopped publishing its product catalog last year. While a limited number of catalogs are still printed on paper for longtime business customers, for the most part Kodak is pushing people to the Web for catalog information.


The estimated savings for Kodak: "A couple of hundred thousand dollars a year," Ms. Welch said.

Of course, it costs money to start building this kind of savings. Kodak employs between 20 and 30 people on its Internet team, said Wayne Neale, the Web site's manager. Other divisions in the company also contribute significant resources, he said.

Mr. Neale couldn't put a dollar figure on what it cost to achieve those savings, but conceded "it's moved from the thousands annually into the millions."

Ms. Welch said Kodak officials are comfortable with that level of investment because the company's chief executive, George Fisher, refused to green-light the site until employees produced a business plan that convinced him it would create value. The site went on-line in February 1995.

"Our orders were to create a business strategy and a marketing channel," said Mike Pagano, manager of Internet communications. "If it was just going to be a public relations vehicle for the company, we wouldn't have invested this amount of resources."


The initial goal, according to Mr. Neale, "was to figure out how to represent the depth and breadth of Kodak on a 13-inch screen."

Recent traffic counts indicate they found an answer. Daily traffic has more than doubled since December, when a free application allowing people to send "photo-realistic" multimedia postcards around the world was made available. Company officials say more than 250,000 people have used the application.

But Ms. Welch remains frustrated with the "value-creation" side of the equation. She said she knows it's happening, but the company's Internet team is struggling to come up with a way to quantify the impact of 1 million hits a day.

"We know we're populating the store, giving us the opportunity to predispose people to buy our products," she said.

Helping customers get answers about Kodak products creates value, she said, and she is intrigued by an element she calls "level of involvement."

"You might watch a TV ad for a minute. You might look at a print ad for 30 seconds. But people are staying in our site for 30 minutes and longer," Ms. Welch said. "How do you measure the value of that?"

Her question is not meant to be rhetorical. Ms. Welch said the company is working on theoretical models to determine the value created by such factors, and expects to have something concrete by the end of 1997.


Meanwhile, Mr. Neale said, the company will continue adding to the site, which is designed, programmed and hosted in-house.

The company is paying particular attention this year to generating more electronic commerce, Ms. Welch said. She said it hasn't been easy going.

"We have learned you can't just put something up and expect it to sell," she said. "You have to make it a compelling experience."

That's a lesson for all companies with Web sites, Mr. Neale said.

"The industry is learning you have to bring the same kind of vigor to the Internet that you bring to other aspects of your business," he said.

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