£62m worth of advertising? LetsBuyIt, then slip up

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The Independent Online



Last week, LetsBuyIt.com, the hugely hyped co-buying site, was on the verge of bankruptcy after a rollercoaster few months, culminating in last-minute rescue talks with France's Dealpartners.com and Norwegian site CoShopper.

The concept of co-buying - if enough people want the same fridge or DVD player as you, you'll get it at a discount - is perfectly suited to the internet, where price consciousness and consumer control have been the order of the day. But it's taken a bit of a sticky turn. Despite raising £42m when it floated last July and receiving a £10m investment from BSkyB, LetsBuyIt.com spent a mighty £62m on advertising, with the unfortunate result that very few people (just 100,000 subscribers) knew what it actually did.

In light of this, it might seem somewhat foolhardy of Charcol, the independent mortgage adviser behind Charcol Online, to launch a co-buying mortgage scheme, offering customers up to £400 cashback and a 5 per cent cut in interest rates. Perhaps not, say Dealpartners.com, which sells its co-buying service to third parties across Europe. It believes that the success of co-buying lies in supplying already well-known brands such as Charcol with the tools to lure customers in with the promise of "people power". LetsBuyIt.com slipped up by trying to build a new e-commerce platform and a brand at the same time.

iTVs design flaws

If anything can be salvaged from the smouldering embers of so many once-bright dot.com ideas, then the biggest vultures swooping down to pick over the carcass might come from the interactive television industry. According to a report issued by Shelley Taylor and Associates last week, iTV has a lot to learn about design, and where better than from those who have won and lost on the PC screen.

The study, which covered seven US and 19 UK iTV services including ONdigital, WebTV, AOLTV, MSN Interactive and Telewest, as well as the iTV efforts of retailers such as Marks & Spencer, suggested that ONdigital and Bloomberg are among the most poorly designed interactive TV services, while M&S, SceneOne and MSNBC are the best. The report also criticised Telewest's interactive platform and Open for inconsistent navigation.

It was sponsored by the Telewest-backed iTV consultancy Smashed Atom, which is to set up a cross-industry design forum to tackle the problems, claiming that we'll see 90 per cent of iTV companies collapse unless they learn from dot.com mistakes. They need to take on board the fact that, as well as the champagne-sozzled Concorde flights that led to Boo.com's collapse, there was an irritating, frustrating and mind-boggling user interface.

This, if iTV designers aren't careful, can lead to what Smashed Atom calls "mad couch disease", the causes of which are flashing colours, jumbled text and too many choices on your television screen.

The disease is set to spread, with ONDigital having just released results showing that it has broken the one million subscriber barrier.

Teen-age clicks

Never have teenagers been more misunderstood. Not only by the world at large, but by the corporate giants, who must have known all along that marketing to teens is hard enough offline let alone online. Just two months after the Unilever-backed teen girl site Wowgo slammed its bedroom door for the last time, Proctor & Gamble has grounded its teen girl site, Swizzle.com.

P&G wanted the site to act as a showcase for brands such as Tampax, Clearasil, Max Factor, Cover Girl and Pringles, and put a heavy emphasis on chat rooms and discussion boards. P&G simply seemed to get cold feet in the light of the recent slump, but said that it does intend to press ahead with its branded websites such as Pampers.com, as well as partnerships with other sites. including successful teen website Bolt.co.uk and women's site BeMe.com.

It's a sobering thought that even the greatest amount of understanding and experience of marketing needs an awful lot of fine tuning to work on the Web, and that teens remain as elusive online as off. Once someone has come up with a good alternative to credit card payment on the Net for the teen market, things might look different.

The Swizzle closure leaves just one major UK player in the teen girl space in the form of BSkyB and Freeserve-backed site mykindaplace.com, which has just renewed its sponsorship deal with Accantia Health and Beauty's brand Lil-lets for another 12 months and is launching a £3m ad campaign. But the bedroom door is still wide open for US companies such as Bolt.

Will travel take off?

In the light of so many offline tour operators bringing their experience online, the most successful so far being Thomas Cook, the question is whether pure play dot.com travel companies can survive.

Most recent to join the battle is Cosmos, which is to sell its package holidays on its own website, in addition to supplying third parties. This brings the question of loyalty to the fore. Who will win holidaymakers' trust? The name that's been around for years on the high street, or the dot.coms who have pioneered the idea of buying travel online?

A recent report by the Henley Centre found people equate the word trust with brands such as Virgin and the BBC far more than techie companies such as Microsoft, AOL and Freeserve. With Virgin's new Travelstore enjoying the busiest time of the year for holiday bookings, the future of online travel is wide open, but it's likely that the market will eventually fall into the hands of the big high street suppliers, non-travel companies such as Virgin, and one or two dot.com survivors.