Gearing Up For Web

By Elizabeth Bennett  |  Posted 2007-06-14 Print this article Print

Stormhoek Vineyards created the equivalent of a digital grapevine to promote its products and more. Did it work?


Gearing Up For Web 2.0

CIOs have Web 2.0 platforms on their radar, according to a March research report from Forrester, which found that 90% of CIOs surveyed at firms with more than 500 employees say their company uses at least one Web 2.0 technology.

Stormhoek, which produces 10 types of red and white wine ranging in price from $10 to $15 a bottle, has chosen to use a blog as its corporate Web site. When visitors go to Stormhoek.com, they are presented with the latest posting from a Stormhoek employee. Korman chose Movable Type, Weblog publishing software from San Francisco-based Six Apart, based on a consultant's recommendation. Jonathan Alstead, I.T. director at Launch Site of Edinburgh, Scotland, configured and customized the template-based application in about a week. The blog supports video links (Stormhoek bloggers can cut and paste embedded links to YouTube videos directly into an entry), an XML feed that sends new posts to subscribers, and an e-commerce component that allows visitors to purchase promotional "swag," like Stormhoek-branded posters and underwear.

One challenge in the implementation, according to Alstead, was ensuring that the standard identifiers for each file type being transmitted from the blog over the Internet be it an image, text or video were all correct. That meant encoding placeholders in the software that would support multiple media file types.

Since the Stormhoek.com launch in May 2005, the only consistent problem has been a profusion of blog spam random comments automatically posted by marketers promoting commercial services. The Stormhoek site sometimes gets spammed hundreds of times a day. Korman and other Stormhoek staffers purge the unwanted posts daily.

The blog setup and a five-user license cost about $500, according to Korman, who says Movable Type is fairly easy to use; he can type up his posts into a text field and a script in the software's scripting language, Perl, pulls the information into the blog template.

For its wiki, Stormhoek chose MediaWiki, a free Web-based software package originally created for Wikipedia, a publicly edited online encyclopedia. Hugh MacLeod, a marketing consultant and illustrator who's been working with Stormhoek for two years, configured the wiki in a matter of hours and hosts it on his Web site, Gapingvoid.com. He programmed fields for information, such as the location of each geek dinner and a link to each host-blogger's home page. MacLeod also creates clever wine-related cartoons for the Stormhoek site and marketing paraphernalia.

Integrated into the wiki is an interactive map of the U.S., created with an application called Frappr Maps. The "mashup" a hybrid of information pulled from two or more content sources allowed dinner hosts to display their geographic location graphically. When visitors clicked on an event on the map (represented by a colored dot), they could sign up to attend the dinner, send a message to the host and view photos of him or her.

From a financial perspective, companies can get started with commercial Web 2.0 technologies by investing in the $10,000 to $20,000 range for commercial software, Forrester's Young says. For that amount, a company could purchase a blog, social networking or wiki platform. Adding features and functionality could increase the annual costs to $100,000 to $200,000.

But Web 2.0 doesn't have to be a major investment. Young says there are plenty of open-source applications, like MediaWiki, that can accomplish many of the same tasks as commercial software. In those cases, the only investment is time and I.T. resources. "For a very limited investment, firms can get up and running with Web 2.0 technologies," Young says. "The barrier to entry is very low."

There's an adage that it takes a large fortune to make a small fortune in wine, and Stormhoek is trying to buck that trend. Korman and his Stormhoek staff of about 20, including farm workers, have built a brand from scratch with a marketing budget of $50,000 in 2006 and $100,000 in 2007.

Stormhoek, which means "stormy corner" in Afrikaans, measures success according to a few metrics some hard, like revenue growth, and some squishy, such as mentions in the trade press and winning tasting awards. In the first half of 2006, Korman estimates that Stormhoek had about 100 mentions in the wine press, and about 200 in the second half of the year. Stormhoek's pinotage, a signature South African red wine with hints of fruit, was named the best pinotage of 2006 by the International Wine and Spirit competition.

Sell rates, the number of bottles actually sold, is another key metric. In 2005, for example, Stormhoek sold a weekly average of 4.3 bottles of wine per store in the U.K., its primary market. That number leaped to 7.8 in the first quarter of this year, an 80% jump.

Korman uses Stormhoek's limited budget as a license to leap into the unknown. "Our attitude is, we might as well try stuff if it doesn't cost much to give it a try," he says.

Stormhoek's culture of experimentation provides a context for success with Web 2.0 technologies, according to Forrester, which found that the only common thread among a handful of large businesses that have adopted Web 2.0 is an adventurous corporate culture and the freedom to fail.

Sometimes, the experiments work. In April, MacLeod, Stormhoek's marketing consultant, asked readers of his blog to weigh in on the tagline for a new wine, a rosé designed to be drunk with ice (a no-no for wine purists). MacLeod posted 10 prospective taglines for Couture Rosé including, "Happiest over ice" and "Best over ice, Darling." Three days later, visitors had posted more than 160 comments, many of them suggesting their own witty catchphrases, such as "BYO Ice" and "Rocks on the Rocks." Stormhoek does not particularly encourage visitor comments on the Stormhoek site, Korman says. Rather, the strategy is to use MacLeod's and other blogs to have digital "conversations" online. Indeed, Stormhoek reviews in the blogosphere have been, by and large, positive, and include comments from "eminently quaffable" and "good ... but not enough fruit," to "The palate is zippy with nice balance between the ripe fruit and the grassy freshness."

Not every undertaking is a slam dunk. Following one of the Stormhoek-sponsored geek dinners in the U.K., a mini-battle ensued between MacLeod and British blogger Ben Metcalfe, who referred to Stormhoek in one post as "crappy," and to MacLeod as a wine "pimp." Korman says the experience was upsetting. "We had a very little brand and were trying to grow," he says. "It's the risk you take in being online." MacLeod fired back on his own blog with some choice words for Metcalfe. It was a brief but pointed cyber-spat.

Seth Godin, who blogs and writes about marketing, cites this risk and lack of control as the primary reason that large companies hesitate to try new kinds of Web marketing; audience cooperation isn't always there.

For example, Godin points to Microsoft's offer to ship free laptops loaded with Windows Vista to bloggers. The hope was that they would write about the new operating system. Critics suggested that Microsoft's offer amounted to a bribe, while defenders said the laptops let them try out Vista.

"You can't bribe these people into giving their opinion," says Godin, among the critics. "What you can do is to create a story that encourages them to choose to write about you."

Young, on the other hand, believes that Stormhoek's efforts were successful in appealing to potential customers' palates. That's because the winery is engaging users in a culture around the wine. As Young explains: "It's far more about lifestyle than about the product."

Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.

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