2008 Australia - E-Commerce, Marketing and Advertising

Publication Overview

Subjects covered include:

• Industry segments and key players;
• Commercialisation of digital media, opportunities and pitfalls;
• Revenue overview, forecasts and opportunities;
• Key trends and developments;
• Market and industry analyses;
• E-payments, e-banking and m-commerce;
• Adverting statistics, revenues and forecast;
• E-commerce trends and statistics

Researcher:
Paul Budde

Current publication date:- April 2008 (1^st Edition)

Next publication date:- April 2009

Executive Summary

E-commerce

The digital economy affects everybody. Existing players such as telcos, banks, media, and retail will need to adapt to the new environment, while new players will enter these markets from a different starting point. The report explores the first areas that customers are interested in – these areas represent good commercial starting points. It looks at topics such as e-money – who is using what. It also lists in detail the tools that SMEs possess that enable them to participate in the digital economy. For more information, see chapter 1, page 1.

The report analyses the role of the various industry segments in the digital economy and describes how they interact. Segments include: the media players; content providers; broadcasters; incumbent and second-tier telcos; mobile operators; film producers and financial service providers. It discusses the strengths and weaknesses of the various segments and their current performance in the new environment. Business opportunities and potential commercial openings are considered in the light of the present market structure.

The Internet media companies have led the field in shaping the developments in this market over the last five years. Despite being challenged by the telcos they maintained the upper hand. In future the battle will be between the traditional media and these new media companies. They are very much international players but the report identifies a web of partnerships with local partners. In the report we cover Google, Microsoft, Ebay, Telstra, Sensis, Skype and YouTube. For more information, see chapter 1.5, page 33.

M-commerce and M-payments

Mobile communications remains best-suited for voice services. Data will operate predominantly to support the main voice function. Nonetheless, many vested interests depend on the success of mobile data services, including the much-vaunted mobile commerce services, or m-commerce. While there are good applications, the current technologies and business models are not well-suited for mass market applications. SMS-based systems are now also used for micro-payments on the Internet. The billing features that mobile operators have are among their strongest assets and we will see them extending these facilities off-net to include Internet billing. For more information, see chapter 1.7, page 49.

Marketing and advertising

New business models are now emerging, giving the industry the confidence to begin changing their more traditional models. Equally important is that this is backed up by a phenomenal growth in online advertising revenues – these are now well above $1 billion. Video-based services on broadband and interactive digital TV networks are becoming a whole new area of advertising opportunities. Personalised media and one-to-one communication will be the predominant mode in the digital media. New models will need to be developed to succeed in this highly competitive and highly customer service sensitive market. Over the next several years, video advertisements in Australia could outpace Internet search advertising as the fastest growing online revenue stream. The report provides revenues, shares by product and company, overall statistics and tables on sub-market segments. Forecasts towards 2010 are also provided. For more information, see chapter 3, page 74.

Online advertising revenue and forecasts – 2005 - 2010

(Source: BuddeComm)

Key highlights

• By 2015, broadband will add over $20 billion to the economy – it will be a critical element in business models; distribution models, communication, e-marketing and as an electronic production tool.
• 60% of SMEs use the Internet for transaction services; almost half of them use the Internet to sell their products and services.
• Online advertising will reach $2 billion in 2009.
• Key companies in this e-advertising market include: Blue Freeway, Destra, Hyro, Belong, Photon and Premium TV.
• The current split is roughly one-third each for classifieds, online advertisements and searches.
• Significantly more innovation still needs to be brought into this market.
• Google has been showing the industry the way forward here.
• Significant mergers and takeovers took place in a repositioning industry – expect more of the same in 2008.
• M-advertising is achievable if the users receive discounts on their mobile phone bill in return.
• M-marketing is declining in 2008, because marketers are not operating according to the right business models.
• Over half of the Australian population uses e-banking.
• Financial institutions are still reluctant to throw their weight behind e-payments.
• The Internet, assisted by Web 2.0, is creating a new environment for business applications – such as collaboration and e-commerce. Australia is lagging here.
• There will 5 million broadband-enabled households towards the end of 2008.
• The lack of affordable high-speed broadband is holding back the market.

Data in this report is the latest available at the time of preparation and may not be for the current year.

Table of Contents

• 1. The Digital Economy
  • 1.1 Broadband a $70 billion industry in the making
    • 1.1.1 How to develop the broadband economy
    • 1.1.2 Economic benefits (stats)
    • 1.1.3 Emerging digital media
    • 1.1.4 Measuring digital media revenues
    • 1.1.5 How to make money in the digital media
    • 1.1.6 Digital media – revenue predictions
  • 1.2 Industry segments
    • 1.2.1 Traditional players are holding the Australian market back
    • 1.2.2 Broadcasters
    • 1.2.3 Content providers
    • 1.2.4 Film producers
    • 1.2.5 Financial service providers
    • 1.2.6 Incumbent telcos
    • 1.2.7 Internet Service Providers
    • 1.2.8 Media industry
    • 1.2.9 Second-tier telcos
    • 1.2.10 The mobile operators
  • 1.3 Trends & statistics
    • 1.3.1 The key drivers of growth
    • 1.3.2 Market statistics and surveys
  • 1.4 Opportunities and pitfalls
    • 1.4.1 Digital Media key to E-economy
    • 1.4.2 Music industry: commercial pitfalls
    • 1.4.3 Digital media require new business approach
  • 1.5 Internet media companies
    • 1.5.1 eBay Australia
    • 1.5.2 Google
    • 1.5.3 Microsoft wasting $45 billion
    • 1.5.4 Skype
    • 1.5.5 Telstra Sensis
    • 1.5.6 YouTube
  • 1.6 E-payment
    • 1.6.1 E-payment – analysis
    • 1.6.2 Micropayment developments
    • 1.6.3 PayPal
    • 1.6.4 Industry (self) regulation
    • 1.6.5 Near-Field Communications
    • 1.6.6 The e-tag payment infrastructure
  • 1.7 M-commerce
    • 1.7.1 Mobile marketing
    • 1.7.2 Mobile advertising
    • 1.7.3 M-commerce market forecasts
    • 1.7.4 Mobile banking
• 2. The Market
  • 2.1 Content profiles & market statistics
    • 2.1.1 Consumer profiles
    • 2.1.2 Market surveys
  • 2.2 Marketing strategies
    • 2.2.1 Introduction: the changing role of marketing due to digital media
    • 2.2.2 Internet companies taking over the bat
    • 2.2.3 Simultaneous media users
    • 2.2.4 The role of service providers
    • 2.2.5 Customer loyalty
    • 2.2.6 Permission-based marketing
    • 2.2.7 Advertising
  • 2.3 Permission-based marketing
    • 2.3.1 Permission based: 65% of residential New Media market by 2015
    • 2.3.2 Banners and SPAM are the Ford T-models
    • 2.3.3 Permission-based marketing
    • 2.3.4 Customer Relationship Management (CRM)
• 3. Advertising and Marketing
  • 3.1 The online advertising market - moving into 2008
    • 3.1.1 Digital marketing companies
    • 3.1.2 Online advertising auction systems
    • 3.1.3 New advertising models
    • 3.1.4 Industry analysis
    • 3.1.5 Mobile advertising
    • 3.1.6 Dubious ‘advertising’ tactics
    • 3.1.7 Moving into 2008
    • 3.1.8 Generation Y is driving the online media push
    • 3.1.9 Revenue statistics
    • 3.1.10 Online search statistics
    • 3.1.11 Market surveys
    • 3.1.12 Media and Communications in Australian Families 2007 report
    • 3.1.13 The online advertising market
    • 3.1.14 Mobile marketing
    • 3.1.15 Advertising and the digital media – analysis
• 4. Glossary of Abbreviations

• Table 1 – Digital media as a percentage of total telecoms spend – 2000; 2005; 2010; 2015
• Table 2 – Estimated value of digital media market – 2005; 2010; 2015
• Table 3 – Online users and other media usage
• Table 4 – SME computer equipment ownership trends – 1999 - 2007
• Table 5 – Business trends in Internet connections – 1995 - 2007
• Table 6 – How SMEs access the Internet – May 2007
• Table 7 – Summary of current and expected uses of the Internet by SMEs – May 2007
• Table 8 – Computerisation in the home – May 2007
• Table 9 – Internet applications in the last 12 months – May 2007
• Table 10 – BlackBerry ownership – May 2007
• Table 11 – BlackBerry usage – May 2007
• Table 12 – Benefits and drawbacks of mobile email – May 2007
• Table 13 – Items bought by SMEs over the Internet – May 2007
• Table 14 – Selling over the Internet by industry sector – May 2007
• Table 15 – SME computer hardware & software expenditure – 2005 calendar year
• Table 16 – SME trends in mean expenditure, computer hardware & software – 1998 - 2005
• Table 17 – SME expected computer hardware & software expenditure – 2006 calendar year
• Table 18 – New software applications purchased/planned by SMEs – 2005/06
• Table 19 – Buying over the Internet by business size – 2006
• Table 20 – Buying over the Internet by industry sector – 2006
• Table 21 – Proportion of orders placed over the Internet – 2006
• Table 22 – What businesses buy over the Internet – 2006
• Table 23 – Business trends in Internet connections – 1995 - 2007
• Table 24 – Reasons for connecting to the Internet by business size – May 2006
• Table 25 – How SMEs access the Internet – May 2006
• Table 26 – SME broadband access questionnaire – May 2006
• Table 27 – Summary of current and expected uses of the Internet by SMEs – May 2006
• Table 28 – Percentage of businesses placing/receiving orders via Internet or web by region – June 2006
• Table 29 – Percentage of businesses placing/receiving orders via Internet or web by employment size – June 2006
• Table 30 – Methods of receiving orders and supporting business systems – 2005 - 20061
• Table 31 – Switched-on cyber demographics
• Table 32 – Digital absorber demographics
• Table 33 – Tech pragmatic demographics
• Table 34 - Techno learner demographics
• Table 35 – Digi-not demographics
• Table 36 – Top favourite websites – males (16-30 years of age) – 2007
• Table 37 – Top favourite websites – females (16-30 years of age) – 2007
• Table 38 – Key digital media advertising companies
• Table 39 – Online advertising revenue and forecasts – 1997 - 2010
• Table 40 – Market shares key online advertising markets – 2005 - 2006; 2010
• Table 41 – Market shares by major players – 2005 - 2006
• Table 42 – Australian entertainment and media market revenue by industry – 2006 - 2008; 2011
• Table 43 – Australian entertainment and media market – annual growth by industry – 2007 - 2008; 2011
• Table 44 – Australian entertainment and media market – consumer/end user spending by industry – 2006 - 2008; 2011
• Table 45 – Australian entertainment and media market – consumer/end user annual growth by industry – 2007 - 2008; 2011
• Table 46 – Australian entertainment and media market – advertising spending by industry – 2006 - 2008; 2011
• Table 47 – Australian entertainment and media market – advertising annual growth by industry – 2007 - 2008; 2011
• Table 48 – Share of consumer spending by industry sector – 2006; 2011
• Table 49 – Share of advertising revenue by industry sector – 2006; 2011
• Table 50 – Online advertising by classification – 3 months to Sept 2007
• Table 51 – Online advertising by classification – 12 months to June 2007
• Table 52 – Paid search advertising revenue by company – 2005 - 2006; 2010

• Exhibit 1 – Selection of some business models
• Exhibit 2 – Micro-payments examples
• Exhibit 3 – Why mobile marketing won’t work
• Exhibit 4 – Telecommunication convergence
• Exhibit 5 – Why mobile marketing won’t work
• Exhibit 6 – Banner ads
• Exhibit 7 – Permission-based business model
• Exhibit 8 – Early adopters
• Exhibit 9 – belong at a glance
• Exhibit 10 – Why mobile marketing won’t work
• Exhibit 11 – Digital media marketing commandments