By Amanda Gome
John O’Neill, the chair of online strategy and digital agency Komosion, talks about shaking the status quo in the face of the changing online space.
John O'Neill left his job as chief executive of Tourism New South Wales last year under a bit of a cloud. He’s now re-emerged as an entrepreneur heading up a new full service digital agency called Komosion.
He talks about his new life, changes in his industry and what happened when he left Tourism New South Wales. He will also discuss how the digital landscape is changing and how SMEs can improve their communications.
To listen to the interview with John O'Neill, click here. (Interview length 25 minutes.)
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Amanda Gome: Why move from Tourism New South Wales to start Komosion?
John O’Neill: I'd had almost five years in the role as chief executive of Tourism NSW and I'd retained all through that period an interest in a Sydney-based website design and online marketing company called Glass Onion. I'd been a member of the board and a shareholder of that business.
You'd also been an adviser to Michael Egan, then New South Wales treasurer, and before that a journalist. So you have had a number of fingers in different pies as you've gone along. Why choose entrepreneurship?
Well, I think the continuity is communication. So as a journalist and then working for the former New South Wales treasurer it was really about bringing together communications and the commercial world.
Looking back on leaving Tourism New South Wales, you left under a bit of a cloud. What happened?
Well I wouldn't say under a cloud. These environments are highly political. We had an external review into the state of the tourism economy. I think the New South Wales Government would acknowledge it had been pound-for-pound significantly under-investing in the promotion of tourism in New South Wales, and a report came out which basically suggested completely disbanding Tourism New South Wales and giving money directly to the regions.
My argument in relation to that is that it would be like a corporate simply saying to all its branches ‘look go out and do your own thing’ independently of a central framework for aligning and magnifying the marketing resources, so I don't think that report's recommendations will be implemented. But I could see it was time for me to move on.
Small and medium businesses aren't terrific at communications. What have you learnt from all those years focused on communications that you will bring to your new life as an entrepreneur?
Well I think the skills that you acquire in journalism are really valuable in the corporate world, and perhaps less valued perversely in the media environment. Being able to take, collapse and collate complex issues and communicate them clearly and succinctly is really a fine art.
It's really about your philosophy and your model. I mean you can outsource (PR) and you can insource if you like, but the thing that you really need to do is be clear on your own strategy.
It helps if you don't have someone inside your business to have someone who understands the media and how it works, what its deadlines are, how it builds on relationships with journalists and all that sort of stuff, and again it's about like how much of that resource do you need.
The most important thing is to be really clear about what it is that you want to communicate.
How are you seeing websites and online strategies change communications?
I remember being in America during the last Presidential election and every journalist was using a BlackBerry, and what I observed was that the political parties were actually sending drafts of what they were going to release in advance to the journalists on the BlackBerry, who would then in turn flick the draft to the other side and get comments – so there was almost a publishing cycle that was happening in advance of the formal statement being put out.
It’s all about the intensity and speed of communication, and as we all know, it's also that immediacy and intensity can also lead to error, so it leads to I suppose ever more crafty ways of manipulation.
Other things like Twitter.... Citizen journalism is a funny term because I guess they're really not journalists, but it gives people the opportunity to do very short observation reporting from the front line, wherever that may be, and that kind of creates this additional incredibly rich stream of information that captures something of the moment.
How can companies understand the speed and the cycle of news? You used to ring people up and say my deadline’s in a week. Now the deadline's in half an hour but not many businesses in Australia really understand that urgency to respond. Are you seeing any change in that?
Well I think smart businesses understand that it's in their interest to communicate through the media, and a smart business, a smart company, pardon the pun, will by definition be looking to understand how those needs for media has worked and will seek to meet them.
From a corporate perspective you've really got to be very very clear about what it is you are communicating, so yes I think be ready to respond quickly but the old journalism adage, if in doubt leave it out, holds – don't just take the opportunity for the sake of it because you can do yourself some damage if you're trying to respond so quickly but you're not really clear about what you want to say or why you're doing it.
Komosion is a merger between two businesses, one in Melbourne and one in Sydney. What it is and what are you aiming to do?
I was a major shareholder in a boutique website development and design company in Sydney called Glass Onion and we got together with a boutique web publishing software company in Melbourne called Komodo CMS. It's been a great marriage of internet marketing services expertise that we have in our Sydney team, and that's everything from search engine marketing, search engine optimisation, some online advertising, creative skills, website design and development work with a company that creates a software platform for website publishing, which is scaleable and will meet our customers' needs.
What are the changes in web publishing? What niche do you see for yourself?
What's particularly notable about the Melbourne business is the business model. It’s software as a service, which means the company hosts the website publishing software and during the course of any 12 month period you get the benefit of our research and development team making continual improvements and big annual feature releases.
Now the fact that the software is hosted by us means two things. Number one we charge less upfront than many of the big multinational vendors that come in and can charge, in software and services, anything up to half a million bucks and then want 22.5% a year going forward.
The benefit not only of having a lower cost entry point is that the software evolves with the internet, which changes so rapidly.
So who are your competitors in the small and medium space?
It's a very oblique marketplace and that's one of the opportunities in my mind. There are many small companies that have, and indeed Glass Onion was in this category, what I'd call bespoke software. They will customise software to give you a system, but a problem you'll run into is that the system will become superseded.
I had this at Tourism New South Wales. We had a system there and we bought it I think four years earlier, and the site wasn't search engine friendly and the software wasn't, and the company just didn't have the capacity to get back to us in a timely or cost effective way to help us solve the problem.
I suspect there's many companies out there and they're locked in to content management systems. They've taken a license. How do you get out of these kind of agreements?
In our case we have an annual license so you can choose to renew or otherwise. In some of these other cases it's just a question of people understanding that either they had the wrong software in the first place or trying to time the cycle of design renovation with development renovation. I think that generally it's probably understood these days that you'd want to refresh your site, tidy up your brand and so forth probably every two to three years.
Our chief executive, a guy called David Warwick, is the co-founder of what's called CMS Professionals, the content management professionals society here in Australia, which has a parent relationship in the US. And he and the companies that are involved in that enterprise are very keen to try and take some of the opaqueness away from the marketplace. It’s not good for consumers, and it means also as a company sometimes you are competing with people who are claiming they can do all sorts of things at terribly low prices, and really what they're going to do is give the customer a lot of grief.
How do you see your industry changing?
Our guys are very focused on the separation of content from the content publishing system. They believe in being able to publish, if you like, within a lock down brand framework but create as much flexibility within that for companies to be able to refresh their content as they see fit.
While there is inevitably a very substantial rise of mobile communications, the internet will form a very good staging post from which to marshall content and then distribute it. The trend is make sure that technologies like Ajax allows you to refresh component parts of a web page without having to wait for the whole thing to reload and become very useful tools inside a publishing framework.
I was talking to a very senior person in one of our largest Australian companies only a few weeks ago, and he was telling me that they have a budget in marketing and communications over the $100 million mark, so it's a big, big outfit. He was telling me that advertising agencies that he sees don't understand the constraints or the technology that they're working with, or the opportunities it can give a company to interact with its clients. He believed that the above line agencies were most comfortable making ads to impress and to the extent that they were in the digital domain often they would sacrifice the things that really benefit a company.
The solutions were creatively exciting but say were so Flash heavy they couldn't be tracked. What we will see is the rise of specialist digital expertise that works in relationship with holistic brands activity.
So it's almost like what's happened online. Companies in media that do not have to defend print assets are doing better. Same for those agencies in the digital space that are not weighed down with old preconceptions or the need to look after the TV and the radio and print networks.
Exactly right. And yes I think you will see the increasing rise of the specialist as a result and certainly I think you can get quite powerful combinations of expertise working very well. One of the things that I think is probably undervalued from a SME point of view is the combination you can now get using PR and the web. It gives you access to a marketing communications platform that we just didn't use to have if you had to buy radio, print and TV, and there were no other options so I think there are also, with this specialisation, more opportunities for SMEs.
How does that work? How do you combine new PR strategy with a digital strategy?
Well obviously the call to action really becomes either your corporate side or a relevant campaign site. The sites in and of themselves can become events.
It really depends on your individual expertise or driver, whether it's a price point offer or if it's information or if it's a value added offer. But you can make all of those things available to consumers via a website and you can alert them to it via PR, and you can also use the web as a vehicle for PR.
Companies like your own and even the mainstream media digital website platforms now have quite a bit of traffic and are relatively cost effective, so I think there are ways of having great sites and driving traffic to those sites both using the internet itself. Certainly that's what our company specialises in, creating those sites and driving traffic to them via the web but you can supplement that also by driving traffic to them using PR I think.
Now the two combined companies have got revenue of about $3.5 million. What are you aiming for next year?
Well we did about 33% growth last year and I'd certainly like to see something approaching that. I think the economy's slowing so if we can do 20% in organic growth I think we'll be pretty happy, but if we can exceed our own expectations we'd be even happier.
How have you protected your IP?
We've done the normal trademark and patenting work that you would expect to protect our software. That's one of the challenges as a company like ours grows. Some of the larger clients may wish to develop on the side of our code, and so we actually have to make sure that we're very careful if we enter into those sort of arrangements that our IP is protected.
But there are good models where it has worked. Salesforce.com that's now got hundreds of millions, I think billions in revenue in fact, through using their software as a service platform has managed to overcome those IP challenges.
I think at the end of the day most people respect what you've done. If you can create a framework for people so if they wish to extend what you've done but not disrupt the core code that we need to keep building and turning and evolving for all our clients, then I think you've got a pretty good formula.
And expansion plans overseas? You're looking at the US and Europe?
Yeah, well we already have customers for our software in the UK, Europe and the US. We have hosting facilities in Sydney and in London and in California. And that's to try and make sure that we've got that consistency of service because when you take on the hosting as well as the software that's absolutely bread and butter. I think I was in New York in January this year and I think that many of the things that characterised the market place in Australia talking to some companies over there, are true of that marketplace.
It's opaque and not particularly friendly to the customer, so we certainly see opportunity; but look we're also clear that we want to walk before we run so we're putting one foot in front of the other. There's good organic growth. We want to bed down the merger but certainly we have some global aspirations and as I say, we already enjoy some global clients.