The ins and outs of Webcasting

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Researchers at consultancy Gartner Group Inc. predict that by 2004, 90% of Global 2000 companies will regularly use Webcasting to broadcast live events such as shareholders meetings, financial announcements and CEO addresses.

"It’s a very effective means for communicating corporate strategy," said Lawrence Orans, senior analyst, Gartner Networking Services.

Beyond corporate communications applications, Orans believes Webcasting will be used increasingly for marketing purposes. He cites retailer Victoria’s Secret’s live online event last May, which reportedly reached 2 million people in 140 different countries. Online sales increased significantly during that period and the days following, when viewers could access the archived Webcast on the Victoria’s Secret Web site.

Though selling underwear is far different from selling a business product or service, the event clearly demonstrated the power of the Webcast, Orans said. "I could easily see that being duplicated in the business-to-business world," he said. "It’s hard for most companies to generate the type of buzz that Victoria’s Secret did—but I think the point is that not only did they generate the buzz, but the video was an effective way for them to show their product."

Why Webcast?

Though many say Webcast technology has a long way to go, marketers who have been successful using the Net as a broadcast medium say the benefits include:

•Â Lead-gathering. Bedford, Mass.-based SupplyWorks Inc., a b-to-b supply chain e-procurement solutions provider, hosts monthly Webcast seminars on a variety of topics. Last fall, SupplyWorks began using the Webcasts as a way to introduce the company to potential clients, said VP-marketing Michael Mitsock. This month the company will make its sixth broadcast. The return on investment: publicity, and leads and information gleaned from registered attendees.

•Â Convenience. Webcasting can be significantly more convenient than traditional events. It’s easier to get busy CEOs to speak via a Webcast than at an in-person seminar, said Bill Reinstein, president-CEO of Webcast producer Inc., a unit of International Data Group, Boston. "When was the last time you saw a face-to-face seminar where the CEO traipsed from Boston to New York to Chicago to San Francisco?" he said. "It just doesn’t happen."

But with a Webcast event, he said, video crews can tape speakers where they work or at a nearby studio, thus enabling companies to engage the highest-level executives.

•Â Efficiency. Face-to-face seminars require significant preparation, from arranging venues and travel to coordinating printed materials, Reinstein said. The time frame on his last in-person event was about 12 to 14 weeks from contract signing to seminar. "On the Web side," he said, "from point of contract to point of delivery, it’s six weeks."

•Â Cost. Webcast customer leads cost less than those generated at in-person seminars and trade shows, Reinstein said. A typical Webcast event produced by ITworld may cost anywhere from $40,000 to $100,000 and generate from 500 to 1,000 leads. Taking a midrange cost of $70,000 and an expected 750 leads, the cost per lead is about $93. For a face-to-face event, Reinstein said, the cost is typically about $150 to $250 a lead.

•Â Archives. Both in-person and Webcast events have significant no-show rates, Reinstein said. "The difference is that [with] those people that don’t show up for a face-to-face event, it’s over. ... With a Webcast, it is available on demand almost immediately after the live event."

Getting started

Marketers interested in Webcasting must consider content preparation; audio/video and slide production; registration, measurement and audience interactivity capabilities; event, archive and back-up hosting; and marketing.

One-stop shops such as ITworld can do it all. About 90% of the company’s Webcast work is comprehensive; the client essentially just needs to describe what they want included in the Webcast. Webcasting costs vary widely depending on what a client needs, Reinstein said, but most of the cost involves a one-time fee for the event. There is also a monthly fee of $2,000 for ITworld to host the archived event for on-demand use.

SupplyWorks does some of the production for its Webcasts but hires a Webcast provider, of Highlands Ranch, Colo., for service and support. "They handle a lot of the administrative stuff. They deal with the phone lines and all of the technical elements," Mitsock said. "And that lets us concentrate on the content and the delivery."

Another provider, StarBak Communications Inc., Columbus, Ohio, offers the Torrent 100, a $7,000 plug-in appliance about the size of a pizza box that allows users to deliver audio and video directly to Internet-enabled PC users via Windows Media Player, QuickTime and MPEG1 file formats.

At a minimum, Webcasters using the unit must provide their own bandwidth, which, for a T3 line, can run about $20,000 a month, said Ray Harris, StarBak president.

Still, most companies are not yet racing to set up Webcasting studios; most today are using a service, Gartner’s Orans said. "I think that with the unpredictability of the [online] traffic, it makes more sense to go with a third party where they can add bandwidth more easily and adapt to flash crowds more quickly," he said.


Every type of event comes with its problems, Reinstein said. Those include the unexpected, such as the day ITworld was running a Webcast and some construction workers nearby accidentally cut the fiber-optic line that was sending the signal to its distribution point. Luckily, ITworld had satellite backup and was able to switch the signal from the nationwide fiber-optic network to the satellite network within moments.

Also, viewer experiences can differ from city to city depending upon the Internet service providers in major metropolitan areas, Orans said. "There is much room for improvement in quality," Reinstein said.

And yes, a Webcast can be a brand enhancer, but it can also be a brand detractor if not done properly. "[Especially] if you do it yourself, you have to make sure you have got the infrastructure to support it," he said.

Orans’ advice to marketers regarding Webcasts is simple: "Start thinking about it," he said. "The Victoria’s Secret thing was no fluke. It generated substantial revenues for them. It helped build their brand. It is consumer-oriented, but still all of those things would apply in the b-to-b world."

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