UNDER THE RADAR:E-COMMERCE IS growing rapidly in Ireland but still lags well behind most other European countries - largely, says Cormac Smyth, because of the Government's failure to invest adequately in broadband.

"This is a case where the Government dropped the ball big time, especially for a country which prides itself on being a knowledge economy with enormous investment in IT," says Smyth (30), chief executive of internet design and marketing company A:m web. "As a result, online advertising, online marketing and e-commerce in general are all far less developed than they should be," he says. "You can see that the fastest-growing broadband is 3G mobile broadband because it can serve areas that aren't covered by fibre networks."

If Smyth's frustration with the level of investment is evident, so too is his confidence that this is a market with a lot of pent-up growth. Last year, he says, 30 per cent of Irish companies did no online marketing at all; this year that figure is just 14 per cent.

Irish businesses are now committing more than 10 per cent of their marketing budgets to online advertising and promotions. As a result, online sales are growing by 20 per cent a year.

"When we set up A:m web in 2004, people were only waking up to the idea that it was good for a business to have a website," he says. Now, of course, it's an absolute necessity; in fact, it's the key marketing tool for many companies. "After the overinflated prices of the dot.com [era], companies started looking for a return on their investment in websites. And that's the key to our business: delivering value for money.

"On the web there's nowhere to hide. When we do a project, the statistics speak for themselves: the number of hits, the number of purchases, the number of leads generated - they're are all totally transparent."

In these recessionary times, there is also the question of value for money on the web compared with traditional media.

"If a company spends €2,000 on newspaper advertising, it may generate a number of phone calls. If you give me the same budget to spend online, you could get upwards of 4,000 people coming to your website, most of whom are specifically interested in your product and have shown that interest in their search."

That, he says, is a key difference: "Search engine optimisation can ensure that your business is at the top of the list when a customer does a targeted search on the internet. An advertisement in a magazine may look nice, but it will be seen by a whole lot of people who have absolutely no interest in you, your product or your business."

For a typical medium-sized customer, Smyth says he would usually recommend a mixed online strategy. "The key, of course, is the management, maintenance and updating of the website.

"And although that sounds pretty obvious, it's surprising how many companies don't update their sites - even after paying for them."

The next step, he says, is to use "search engine optimisation to push them up the search lists and increase the number of hits".

And then there is pay-per-click advertising, "where you take an ad on a popular website and your company pays every time someone clicks to go to your site".

According to Smyth, a parallel long-term strategy might include an online newsletter, which he says is a good way of keeping in touch with existing clients and generating new business.

Smyth runs A:m web with business partner Sujeev Atluri, who has opened an office in India to capitalise on the development of the IT sector there.

"We believe the online market is just taking off and will continue to expand in a recession - and we intend to work with our clients to take advantage of that."

ON THE RECORD

Name:Martin Murphy.

Position: Managing director, HP Ireland.

Age:46.

Family: Three children.

Background:Born in Dundalk, he completed a degree in engineering and maths and a masters in electronic engineering at Trinity College Dublin, from where he was recruited to Dutch electronics giant Philips. He came back to Ireland, joining HP in the late 80s. Has held positions in consultancy, project management, marketing and sales.

Interests: Cycling, the gym and family. He tries to avoid weekend working and always takes his holidays.

Something you might expect: He believes keeping fit is "absolutely key" to succeeding in business.

Something you might not expect: Spends one day a week in the office, spending the rest with customers.