Approximately how much does it cost each of the top 6 laptop/notebook
computer manufacturers/marketers (Sony, IBM, Dell, Toshiba, Compaq &
HP) to attract each unique visitor to the laptop/notebook related
sections of their respective websites?

(By "laptop/notebook related sections" I mean, for example, sony.com's
page at http://www.sonystyle.com/vaio/)

---

Request for Question Clarification by morris-ga on 03 Jun 2002 17:11 PDT

The information you are asking for is proprietary to those companies.
The best anybody will be able to do is give you generic numbers about
the cost of attracting web traffic. Will you accept such a generalized
answer?

---

Request for Question Clarification by jasonm1-ga on 04 Jun 2002 01:34 PDT

Because there are many factors that go into this calculation, it is
useful to break it down into parts. How do these companies draw users
to their sites? They use advertising in a variety of media to attract
viewers. These include: print (magazines & newspapers), internet ads
(banners, membership programs, etc), television spots (they all
advertise their website in their tv ad), and radio.

Now the question becomes, how much does each company spend in each of
those media. In addition to counting direct references to the laptop
site, you need to determine an approximation of how much traffic to
the main (say Dell) website will lead to traffic on the laptop site
(that is, if a user enters the Dell page, how likely are they to enter
the Dell laptop page?). So should our count of spending include
advertising that links to, say, the Dell webpage but not the Dell
laptop page? (determined via the above paragraph -- if the probability
that I'll go to Dell laptop from Dell home is high, you should count
ads for Dell home for Dell laptop.)

Another interesting point is that products themselves drive users to
websites. If I have a Sony Vaio, I will be more likely to check out
the Sony Vaio website. How does this "cost "calculate into the amount
of money spent on the website?

With all this worked out, you can sum up all of the cost of
advertising in all the different media for each company, and there you
go. Easier said than done.

The hard part is that you actually need the data. I have no idea where
to get such data just yet, but I hope this is a useful framework for
the question.

---

Clarification of Question by sdchap-ga on 04 Jun 2002 09:40 PDT

Thank you for your questions. I'll provide some additional context for
clarification:

Presumably, virtually every individual who types, for example, the
address "laptop.com" or "notebook.com" into their web browser is
seeking information specifically about laptop and notebook computers
and accessories. Thus, each of those uniques is highly targeted.

The question, then, is this: What is the approximate value (to the top
6 laptop/notebook manufacturers/marketers) of each of those precisely
targeted visitors? Apple, for example, presumably invests some amount
of money to entice impending notebook computer consumers to learn
about and consider the purchase of Apple's iBook notebooks. Apple,
therefore, invests some amount of money to attract each unique visitor
to http://www.apple.com/ibook/. How much does Apple invest to attract
each unique visitor?

In other words, what might the value be to Apple (or Sony or Toshiba
or Compaq, etc.) of each individual who types into their browser the
address "laptop.com" or "notebook.com", if each of those unique
visitors were to be delivered directly to Apple's (or Sony's, etc.)
specific laptop/notebook page?

(I believe there may be a significant distinction separating this
scenario from more generic data about attracting web visitors in
general: namely, the specificity of the visitors. While Apple could
attract a huge number of visitors if www.sex.com were to point to
www.apple.com/ibook/, the quality of the visitors would be suspect.
Presumably the quality and thus value of visitors from www.laptop.com
or www.notebook.com, for example, would be considerably higher.)

Granted, the answer to this question has to be constructed on some
fairly complex estimates. In that regard, jasonm1-ga has done an
outstanding job of outlining the framework. While I don't need an
exact number, I am looking for a resonable and defendable estimate. I
hope this clarifies the question. Thank you.

---

Request for Question Clarification by morris-ga on 04 Jun 2002 16:15 PDT

Stephen (I assume), it's an interesting investment for a trust fund.
I'm not going to pretend I have an answer, I only want to point out
that the top hit in Google for ibook is:

Apple - iBook
... movie. With its extra long battery life, compact shape and light
weight, the iBook is designed to accompany you everywhere. And ... 
Description: Apple corporate website includes features and
information.
Category: Computers > Systems > Apple > Macintosh > Hardware >
Portables > iBook
www.apple.com/ibook/ - 23k - 04 Jun 2002 

and since Google is taking over the world, I suspect "good" url names
are devaluing. You know better than me how many people are typing in
"notebook.com" each day, I checked your site for usage stats but they
aren't public. Since brand-name manufacturers are all interested in
building their own brand, I don't know how motivated they would be to
put "notebook.com" in their ads. It sounds like a better match for an
information site.

All that aside, you might try a trick an old boss of mine used, which
would be to call the least of the companies mentioned, tell them what
your traffic is and ask what they would pay. Then call manufacturer B
and tell them manufacturer A has offered you $X + 20%. By the time you
get to the top of the list, you might find out what it's really worth.

---

Clarification of Question by sdchap-ga on 04 Jun 2002 18:17 PDT

In response to morris-ga's request for clarification: Our intention,
as stated, simply is to determine the acquisition cost of unique
visitors to the major manufacturers' laptop/notebook sites. (We never
would presume that a major manufacturer would want to "brand"
notebook.com, laptop.com, or any other url; nor do we imply that they
ever would want to utilize those or any other urls in their
advertising.) We simply want to know how much the major
laptop/notebook manufacturers/marketers invest to attract each unique
visitor.

Please forgive me, morris-ga, for being a bit slow on the uptake--but
I don't understand the relevance of your point concerning your Google
search on "iBook". You seem to find significance in the axiomatic fact
that a Google search on "iBook" returns a link to Apple's iBook page.

Perhaps it will be helpful to restate our question in the context of
your iBook Google search example: One's decision to conduct a Google
search on "iBook" does not occur in a vacuum. Clearly, by the time
someone types "iBook" into the Google search engine, Apple has already
invested a significant amount of money to generate that interest from
that specific unique visitor. Our question, then, is how much did
Apple invest in bringing a "laptop/notebook" customer (from the wide
end of the funnel) all the ways down to an "iBook" customer (to the
small end of the funnel)?

Again, thank you for your request for clarification. We’re not looking
for any “tricks”—just hard data. Thank you.

This is a real tough one but there is some information that can shed
some light on this. To start, here are some statistics.

Total size of the hardware computing market - US - $158.8 billion as
per 2001. http://www.bizstats.com/marketsizes.htm

2002 forecast - Total Computer shipments 
http://cin.earthweb.com/public/article/0,,10493_995951,00.html "Total
Number of PC shipments world wide - 139.2 million. - Market will rise
3.0%" - "US Market Share of PC shipments - 33%"

Notebook market size is a "35 bilion dollar market." - 2002,
www.notebook.com The site is not up yet but it will be. This is a
flash blurb they show on the site as a statistic.

http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2868844,00.html
"But by the first quarter of this year, notebook sales doubled from
3.6 million to 7.2 million machines and increased to 23.8 percent of
the market, according to IDC."

Total unit sales of portables for the year = approximately 33.1296
million. Average cost - $1000 so the Notebook makret size works out to
be about 35 billion a year as per the www.notebook.com blurb.

Total projected 2002 world wide PC sales including Notebooks totals
$147 billion. (23.8% X 147.5 = approximately 35 billion.)

http://www.bizstats.com/computersvs.htm This file shows the percentage
of total expenses given to advertishing for US computer companies.
"0.9% of total Computer expenses goes to adversting for compaies with
more than $100 million in assets. Total expenses average 90% of total
revenues for these companies." The 100 million club "comporise 0.1% of
the number of computer companies in the US market but make up 45.3% of
total revenues."

Taking this as a start point, 

$35 billion = Notebook Sales 
$31.5 billion = Notebook Expenses = 90% of total revenues as per
www.bizstats.com
The top 7 owns approximately 90% of the notebook market Logical guess
here.
Apple, (had to go in :)) Dell, Compaq (now HP/Compaq) HP IBM, Sony,
Toshiba,

90% of the $35 billion notebook market = $31.5 billion
  
$28.5 = Total Expenses (31.5 X 90% = 28.5 - www.bizstats.com)

$256,999,999.99 = Total Advdertising spent for the Notebook market
world wide
(28.5 X 0.9%)

Divide the $256 million ad figure by the projected 33,1236 million
notebooks that will be sold in 2002 and it equals $7.76 cents (per
machine sold) they will use to attract people to their websites (and
retail stores etc.) using traditional & web related media (print, TV,
Cable, Banners, Net ads, websites etc, etc.) to pull them in.

Market shares: In  http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2868844,00.html
"Toshiba has 14.4 percent of the worldwide notebook market. Dell
slipped into the No. 2 spot with 13.2 percent of the market during the
quarter...
Sony had a quarter similar to Toshiba's, growing 11.7 percent to
capture 8.9 percent of the market. IBM followed Sony with 8.4 percent
of the market."

(Potential spurious data because efficiency of advertisng cannot be
factored in without REALY  extensive research.) When you factor in
these companies market share percentage against the $256 million
spent, Toshiba would theoretcially spend $36.86 million while Dell
would go for $33.79, Sony $22.784 and IBM $21.504.

This seems to work out pretty well. The only thing I have not
calculated is actual ad budgets of the individual companies. (this
would be really difficult because of a (I included Apple in the mix.)

HTH

Bob

PS - I included Apple in the mix.

Intense question.

---

Clarification of Answer by remoran-ga on 08 Jun 2002 14:21 PDT

The corret number of notebooks sold should be 28.8 million. (4 X 7.2
million sold per quarter.

http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2868844,00.html
Last correction, I hope:

"But by the first quarter of this year, notebook sales doubled from
3.6 million to 7.2 million machines and increased to 23.8 percent of
the market, according to IDC."
 
(corrected) Total unit sales of portables for the year = approximately
28.8
million. Average cost - $1220 so the Notebook makret size appear to
work out to
be about 35 billion a year as per the www.notebook.com blurb.

(Notebook market size is a "35 bilion dollar market." - 2002,
www.notebook.com The site is not up yet but it will be. This is a
flash blurb they show on the site as a statistic.)

---

Clarification of Answer by remoran-ga on 08 Jun 2002 15:06 PDT

Just had to make some corrections & additions to the answer. Concept
was right but the numbers were wrong, sorry about this.

The correct number of notebooks sold should be 28.8 million. (4 X 7.2
million sold per quarter.

http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2868844,00.html

"But by the first quarter of this year, notebook sales doubled from
3.6 million to 7.2 million machines and increased to 23.8 percent of
the market, according to IDC."
 
(corrected) Total unit sales of portables for the year = approximately
28.8
million. Average cost - $1220 so the Notebook makret size appear to
work out to
be about 35 billion a year as per the www.notebook.com blurb.

(Notebook market size is a "35 bilion dollar market." - 2002,
www.notebook.com The site is not up yet but it will be. This is a
flash blurb they show on the site as a statistic.)

The total market owned by the big 7 is approximately 70% and not 90%
so the figures change.

Computer Market shares: 
In  http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2868844,00.html
"Toshiba has 14.4 percent of the worldwide notebook market. Dell
slipped into the No. 2 spot with 13.2 percent of the market during the
quarter... Sony had a quarter similar to Toshiba's, growing 11.7
percent to
capture 8.9 percent of the market. Compaq was the No. 3 notebook
seller worldwide
with a 10.4 percent share of the market. IBM followed Sony with 8.4
percent
of the market." HP estimate 7+-1% Apple 5%+-1%.

70% of the $35 billion notebook market = $25.9 billion 
   
$23.31 = Total Expenses ($25.9 X 90% = $23.31 - www.bizstats.com) 
 
$209,790,000 = Total Advertising spent for the Notebook market
world wide (28.5 X 0.9%) 0.9% of Total expenses = advertising budget
(www.bizstats.com)

http://www.bizstats.com/computersvs.htm This file shows the percentage
of total expenses given to advertising for US computer companies.
"0.9% of total Computer expenses goes to adversting for compaies with
more than $100 million in assets. Total expenses average 90% of total
revenues for these companies." The 100 million club "comporise 0.1% of
the number of computer companies in the US market but make up 45.3% of
total revenues."
 
Divide the $209,790,000  ad figure by the projected 20,160,000 (70% of
the
28.8 million notebooks that will be sold in 2002 - the big 7) and it
equals $10.41 cents (per machine sold) that is used to attract people
to their websites (and retail stores etc.) using traditional & web
related media (print, TV,
Cable, Banners, Net ads, websites etc, etc.) to pull them in.


(Potentially spurious data because efficiency of advertisng cannot be
ascertained without REALY extensive research.) When you factor in
these companies market share percentage against the $209,790,000
spent, Toshiba would theoretcially spend $30,209,760 while Dell
would go for $27,692,280, Compaq 21,818,160, Sony $18,671,310, IBM
$17,622,360,
HP 14,685,300 and Apple $10,489,500.

For Dell, the $10.41 per visitor cost is just about dead on because
Dell's website is, for the most part, the primary generator of revenue
for the company. For the others, the breakdowns of web sales vs retail
store sales is much more difficult as all the other vendors use retail
stores like Comp USA, The Wiz, Staples and Office Max, among others,
to sell product. (Apple also has their retail stores as a sell
resource.)

http://cyberatlas.internet.com/markets/retailing/article/0,,6061_943821,00.html#table3
In 2001, the top E-Tailors on the net on the computer side are Apple,
Compaq, Dell & HP.

2001 
http://cyberatlas.internet.com/markets/advertising/article/0,,5941_757221,00.html#tab
The top online computer ad spenders on the net are Sony and Compaq.
Sony's figure
would include, music and comsumer electronics as was as notebook
adversing while
Compaq's would include Desktop and Server as well as notebooks.

Getting percentages of online sales of notebooks vs retail sales is
very difficult but here are some stats.

Top ranking compuer brands on the net.
http://cyberatlas.internet.com/big_picture/traffic_patterns/article/0,,5931_1004191,00.
html#table They are in terms of ranking HP, Dell, Apple, Compaq &
Gateway.

http://cyberatlas.internet.com/markets/retailing/article/0,,6061_948461,00.html#table2
2000-2001 - Fastest growing Computer E-Tailers are: Apple 71%, HP, 53%

http://cyberatlas.internet.com/markets/retailing/article/0,,6061_930841,00.html#table
Computer 2000-2001 Computer hardware online sales growth = "22$".

http://cyberatlas.internet.com/big_picture/geographics/article/0,1323,5911_151151,0
0.html Total retail sales for the first quarter were estimated at
$743.8 billion, so e-commerce represented about 1.3 percent of total
sales, up from about 1.1 percent of the total (retail market) in the
first quarter of 2001.
http://cyberatlas.internet.com/markets/retailing/article/0,,6061_1151201,00.html

http://cyberatlas.internet.com/markets/retailing/article/0,,6061_937951,00.html#table
shows the integration of on and offline selling options for comsumers
as of 2000-2001 4th quarter. (This is a terrific document that shows
how smart retailers have integrated on and offine sales.) Quick
catalog orders on the net has reached "51%" Other online options
include "Gift Certificates 63%, Online liquidation of on and offline
inventory, 44% Instore pickups of online orders 17% and Instore online
kiosks - 29%". As a indirect guesstimate, this might be a fairly good
percentage of online notebooks sales as computer buyers tend to be
more savvy with buying online than other folks.  If this 51% fugure is
accurate , than 51% of the $209,790,000 total advertising figures =
$106,992,900 that, in effect, goes to attract unique vistiors to the
net. This seems about right as supported by this important document.

As of 2000 - "15.2%" of all computer & electronic hardware sales come
from the net. http://www.census.gov/eos/www/papers/estatstables.pdf
For wholesale, it's "10.7%". and finally: The total of E-commerce
sales generated by computer hardware sales is "23%". (just as a
comparison - software = 31.3)

I cannot find the number of unique visitors that go to each company's
website as I suspect that is a very closely gurated secret. Needless
to say, the Net is growing and will become, IMHO, the primary way
people will buy notebooks in the near future

and finally: 

The "Online population is 533 million as of 2002, in 2004, it will be
709 million." as shown by this article.

After looking at all of this, it's no wonder why the big 7 are making
the big move to the net

Hope this clarification helps

Bob

Valuable research and commentary. Very impressive. Well done.

From Apple's 10Q filing for the last quarter

http://www.sec.gov/Archives/edgar/data/320193/000091205702020280/a2079853z10-q.htm

Selling, general and administrative expense (advertising is in here)
was $270M, on Total Sales of $1,495M

From Compaq's last 10Q before the merger

Selling, general and administrative expense (advertising is in here)
was $1,157M, on Total Sales of $6,109M

http://www.sec.gov/Archives/edgar/data/714154/000095012902002073/h96143e10-q.txt

From Hewelett Packards last 10Q before the merger

Selling, general and administrative expense (advertising is in here)
was $1,750, on Total Sales of $9,432M

http://www.sec.gov/Archives/edgar/data/47217/000091205702009662/a2072639z10-q.txt

From IBM's last 10Q

Selling, general and administrative expense (advertising is in here)
was $4,053M, on Total Sales of $18,551M (note, IBM does break out that
hardware sales were $6,405M, but only gives a company wide number for
selling expense).

From Dell's last 10Q

Selling, general and administrative expense (advertising is in here)
was $662M, on Total Sales of $7468M (hands down the winner for
efficiency, despite all those "Dude, get a Dell" TV commercials).

http://www.sec.gov/Archives/edgar/data/826083/000095013401509549/d92912e10-q.htm

From Sony's 6K for the YEAR (remember, all previous were quarters) 

Selling, general and administrative expense (advertising is in here)
was $13,104M, on Total Sales of $53,073M

http://www.sec.gov/Archives/edgar/data/313838/000095010902002462/d6k.htm

None of these manufacturers break out their notebook sales from other
sales in their reports, but some patient sleuthing might turn those
numbers up as percentages. Attributing those percentages to particular
advertising dollars would be pretty tough without inside info. The
last step, of guestimating percentage of advertising dollars resulting
in web traffic is eludes me, but hopefully somebody will have a
formula. I apologize if my request for was a little over the top.

To get the specific numbers your requesting, you'll probably have to
hire one of the big consulting firms to get that kind of detailed
data. I suggest someone like Gartner Dataquest. If you do indeed own
Laptop.com and Notebook.com, it would be well worth your expense.
You're sitting on a goldmine.

Laptops are getting more and more popular AND they're becoming
commodities. They're all made by the same offshore manufacturers
without much differentiation between brands. There's a HUGE battle
going on for market share.

It sounds like someone like Toshiba or Sony could gain a tremendous
amount value by owning your "funnel". You’re talking about a way that
will bring people looking for information about laptops directly to a
specific laptop site. That's very, very valuable.

Imagine what a coup it would be for Apple. They'd have a mechanism for
attracting buyers who might not otherwise even have considered Apple
laptops before, and bring them directly to their site. Apple's market
share has been stagnant for a long, long time. They've got great
products, but I’ll bet they spend a fortune in acquiring marginal
additional customers. If I were you, I'd put them at the top of my
list.

Good luck!

I think you are going to have trouble on this one. The information you
require is typically proprietary. To find the data on many of the
factors I listed in my comment would require direct access to the
advertising budgets of each company. This data can be inferred from
the costs of these various services, such as costs of TV ads, banner
ads, radio, etc. What's worse, you need to figure out how to account
for traffic that is not directly related to the laptop site. This
would vary from company to company, since some focus on laptops and
others have larger markets (for example, I'd guess that a higher
percentage of people visiting www.dell.com will look at laptops then
those visiting www.ibm.com).
Unfortunately, these theoretical backgrounds are all I have to offer
now.

Hey sdchap-ga you lucky guy.

An easy way to determine the "approximate" cost/value of unique
visitor coming from laptop.com/notebook.com. You can get an estimated
"Average Cost-Per-Click" for the keywords "laptop" and "notebook" from
Google Adwords at http://adwords.google.com.

Keyword 	Clicks / Day  Average Cost-Per-Click  
laptop    	290.0  	      $1.36  
notebook  	230.0  	      $0.95  

Cheers
David

Thank you for the nice comment. Your question was truly awesome.

Bob
remoran-ga

Not that there is that much to add to the thesis paper that has
already been written on this, but consider:
Amount spent on advertising, even if we assumed we knew how much a
company spends specifically advertising Notebooks and how much of
their traffic is for notebooks, would be very difficult to translate
to cost per visitor.
Why?
Because: When you see a Toshiba ad, it's an ad for a Toshiba notebook.
It probably has a website and a phone number, and it may even tell you
to see your nearest reseller. It isn't an ad for toshiba.com/notebooks
or whatever. Traffic, while probably signifigant, and valuable, is
still incidental. The only cost per visit that could be truly
determined would be to establish what a given company spends on web
advertising, email advertising, etc. Any advertising where the user is
specifcally intended to click through to the website. You'll find
either a cost-per-click or a cost per thousand impressions.
Kepp in mind though, that even just online advertising has many
different types, with different costs and different effectiveness.
Examples:
email newsletter sponsorship.
sponsored links through google.
sponsored results through other search engines
banner ads
pop-ups
pop-unders
interstitials
sponsorship of sites like gaming sites (ie. pogo.com or
prizegames.com)
paid to read emails (I know Compaq, HP and IBM have used these).

Also, in the general ad budget, don't forget to include such things as
SPIFFs and incentives and contests for resellers and retail sales
emplyees; all the stuff you see in the stores such as brochures; the
amount they pay for shelving/endcaps in the stores (yes there is a
reason brand x gets an endcap and brand y doesn't. brand x offered to
pay more); the amount they pay to be featured in the resellers flyers;
giveaways, promos; etc. etc. etc.

Also, some advertising is more valuable then others. For example
traffic from a paid-to-read email company wouldn't be worth much
because the visitor probably doesn't care about what they're seeing,
they are just waiting at the site long enough to be credited their
penny or whatever. Whereas somebody who was reading reviews of
notebooks at cnet.com may be on the brink of buying, and a well placed
banner ad could close the deal.

Another question that would come up would be The age old
What percentage of impressions become hits?
more important for this discussion - 
what percentage of hits become sales?
this will have an effect on the value of the hits.

On a personal note, I cannot remember ever going to
www.genericproductcategory.com such as www.notebook.com for
information unless it was as alast resort because I wasn't satisfied
with what I had found elsewhere. If I do, and I find it just channels
me to a specific manufacturer, I leave ASAP because it's no use to me.
I think this sort of attitude could lead to a long-term devalueing of
the domain.

I would suggest developing into a site with valuable content regarding
laptops. Information, tips, reviews, etc. Then sell advertising and
sponsored links. But don't ever let the sponsorship affect the
reviews. if you can't/won't do this then auction off the domain.

Ironically, I visited www.laptop.com while figuring out which laptop
to buy. Maybe, again, because laptops really seem to be becoming
commodities. There's not that much differentiating one brand from
another. While I wouldn't generally go to a
www.genericcategorysite.com either, www.laptop.com just seemed like a
logical place to look. I'll bet I'm not alone.

In the final analysis, Davidr-ga hit the nail on the head: Laptop
makers are paying, right now, $0.95 to $1.36 per person to bring
visitors to their sites. Simple, empirical evidence. Depending on how
many hits laptop.com and notebook.com are attracting, that could
translate into a substantial amount of money.

Especially when one considers the likelihood that an average visitor
will click-through to four or five different manufacturers, directly
from www.laptop.com. (A not unreasonable assumption considering that
those who have arrived at the site via www.laptop.com have
self-selected for specificity of interest.)

The result? Toshiba ($1.25) + IBM ($1.25) + HP ($1.25) + Apple
($1.25)... One suddently has generated $3 to $7 with each unique
visitor. I am envious.