Komatsu, like dozens of other b-to-b companies, is looking at the technology of Webcasting as a more sophisticated way to market its wares and potentially save a few dollars in the process.
Production costs for streaming video promotions aren’t insignificant—Komatsu spent about $30,000 shooting and producing its first one, said Keith Sanderson, director of e-business strategic planning for Komatsu. A manufacturer of construction equipment based in Vernon Hills, Ill., the company is a subsidiary of Komatsu Ltd., Tokyo. But once a packaged Webcast is completed, it can be used over and over, unlike traditional direct mail campaigns. Also, response rates can be significantly higher than typical direct mail marketing, which garners a response rate closer to 2% or 3%.
"I was ecstatic about the response rate, but as we get smarter and target our audience better, there’s potential for a much higher response rate," Sanderson said.
The target audience for Komatsu’s first Webcast of a new state-of-the-art wheel loader included contractors, quarries, and both small and large companies that distribute or buy construction equipment. So the company bought a 9,000-person mailing list from Cahners Business Lists. The e-mails and Webcast replaced the direct mail brochures Komatsu would normally use for a new-product launch, Sanderson said.
Although Komatsu’s first foray into Webcasting is a far cry from the glitz of a Victoria’s Secret fashion show on the Internet, its Webcast employed a handful of sophisticated features, said Tom Croak, a senior account manager at Studio North, a Web developer and new media company in North Chicago, Ill. Studio North oversaw production of the Webcast after Komatsu gathered the raw video footage.
Unlike a traditional video that can only be viewed start to finish, Komatsu’s Webcast was intentionally segmented into five pieces so viewers could pick and choose the portions they wanted to watch, Croak said. At the end of each segment, viewers were asked to rate, on a scale of one to five, how helpful the information was to them.
In addition, links were built into each piece for anyone who wanted more details about specific areas. For example, a viewer could click on a link offering an animated tour of the wheel loader. The video is put on hold and resumes after the link is closed,Croak said.
When it came time to launch the Webcast, Komatsu handed over the task of archiving and transmitting the streaming video to iBeam Broadcasting Corp., a Sunnyvale, Calif., company that specializes in Webcasting. The video actually runs off iBeam’s servers and therefore doesn’t tie up any space on Komatsu’s system.
"Our servers probably could have handled the traffic of viewers to the Webcast, but we’re a manufacturing company and this kind of technology isn’t our business," Sanderson said.
Not for everyone
Industry analysts caution that not everyone with an Internet connection is capable of viewing Webcasts.
For some, performance of the video stream may suffer if their connection isn’t fast enough or if they don’t have the time to download the required software to run it, said Trish O’Shea, a senior analyst at Jupiter Research. Moreover, some companies may actually block their employees from receiving streaming video or audio on computers in the workplace because of fears that it ties up too much bandwidth and may overload the network’s infrastructure.
"Video streaming can be a great tool, but it should be part of a company’s overall bag of marketing tricks, instead of dropping all other avenues in favor of Webcasting," O’Shea said.
Streaming video technology generally doesn’t work well on Macintosh computers, and Komatsu’s Webcast was no exception, Croak said. PC users, on the other hand, had virtually no problems viewing the Webcast, as long as they made the correct selection for their modem speed at the outset and downloaded the video software if they didn’t already have it, he said.
Responses into sales
It’s too early to know how many of the responses to the Webcast will turn into actual sales of Komatsu’s new wheel loader, Sanderson said. That’s because selling large pieces of equipment—the wheel loader has a price tag of about $125,000—is a multi-step process and can take a month or longer.
In the meantime, a second Webcast is in the works at Komatsu and planned for release in early spring. Next time around, Sanderson said, he plans to promote the Webcast more aggressively, perhaps with a few more advance promotions in e-mails to those who might be interested. And he intends to make some improvements in the techniques already used, such as creating more links for viewers to pause the Webcast and visit other sites. What’s more, Sanderson is exploring the possibility of passing along copies of the Webcast to Komatsu’s equipment distributors to run on their Web sites, boosting the number of potential buyers that might see it.
"We want to use Webcasting to create a buzz and an opportunity," Sanderson said. "We’re hoping Webcasts give the company good exposure and create enthusiasm among distributors and customers."