Without the instant recognition of a high profile brand or the credibility of a major business centre behind them, it can be hard for start-up businesses to penetrate international markets. New companies do not usually have the money to set up a physical presence in different regions. This makes it difficult to acquire customers because they are unaware of new products or hesitant to invest in services that are based in another country.
As a small messaging services company based in South Africa, BulkSMS.com faced this dilemma shortly after the company was established. Founded in June 2000, it grew rapidly in its first six months and the owners, Dr Pieter Streicher and Richard Simpson, were quick to spot the potential for expanding the business in an international market.
Pieter Streicher and Richard Simpson
Streicher, MD of BulkSMS.com, explains: "South African businesses rapidly embraced the concept of using SMS to communicate with customers and colleagues. Now, even the major banks use SMS regularly. We were confident that businesses in other countries would soon follow suit."
Before Streicher and Simpson could make their business truly global, they needed to establish the company's brand credibility. According to Dr Streicher: "South Africa has a low profile in the international business arena, so our first goal was to gain greater visibility."
In June 2001, the entrepreneurs approached Google. "Our objectives were to enhance awareness of the brand and acquire more international customers. Google AdWords offered us a low-cost, low-risk strategy to penetrate regional markets from our base in South Africa," says Streicher.
Establishing an international presence quickly
Despite the fact that BulkSMS.com had only US$500 per month to spend on advertising in the first stage of its expansion strategy, it was enough for the company to immediately establish an online presence. The company's pay-per-impression English text-based ads appeared alongside relevant Google search results, capturing the attention of people from all over the world searching for SMS services online. Simpson, a director, says: "Customers in different countries could see the BulkSMS.com brand name and website address, which helped establish our business credibility straight away."
"The whole process of setting up an ad campaign took just three hours," says Simpson. "Within days, we attracted customers to our English language website from the United Kingdom, Australia, the Middle East, India and Malaysia."
Accelerating business growth, internationally
50% of BulkSMS.com customers are now based outside South Africa - the split being 40% from the United Kingdom and 10% from Europe, the Middle East and Asia. Simpson attributes this large international customer base to its Google advertising strategy. "We would not have acquired them in any other way," he says.
BulkSMS.com is now aiming to increase sales in Europe, particularly among non-English speaking customers from countries it views as potentially strong markets for its services. For example, the company has created a German language version of its South African website, which makes it possible for the country's non-English speaking customers to view BulkSMS.com products and services.
AdWords target business customers in their local language, and the text ads appear alongside relevant Google search content. This is encouraging local customers to click on the ad to find out more. From the website, they can use a credit card to pay for the company's services.
Simpson explains: "Google AdWords removes the costs involved in setting up a local office, or the hassle of setting up a local bank account, outside of South Africa."
Based on its AdWords strategy, the company has already gained a steady foothold in the German market and is reinforcing brand recognition through a mixture of print advertising in magazine and billboard advertising.
Creating consistent return on investment
Within two years of starting advertising on Google AdWords, BulkSMS.com had grown by 37%. Since 2003, it has continued to grow at the same rate year-on-year. With 60% of all new customers coming through Google, it is not surprising that the company now allocates 70% of its advertising budget to Google AdWords, and spends around US$600 per day on this advertising programme. "We have established an acquisition cost per client through our own research and using Google Analytics. It is clear that AdWords is a very cost effective way of gaining online sales, and this return on investment ensures it remains at the heart of our advertising strategy," said Streicher.