2011 Australia - E-Commerce, Marketing and Advertising

Digital marketing, advertising and revenue set to expand into 2011

The initial impact of the global financial crisis has passed and we are now tuned in to the positive outcomes that new infrastructure developments can bring.

In Australia these new developments include the shift to the National Broadband Network (NBN), a high-speed internet national backbone infrastructure that will underpin a range of positive social and economic developments using the digital economy. Preparation for NBN participation is now well and truly underway, with many organisations increasing their investments to enable them to participate in the opportunities it will create.

There is also evidence that overseas companies are interested in using the NBN as a test bed for new products and services they want to develop for global markets. Among the companies who have already indicated they are working on NBN opportunities are Telstra, iiNet, Internode, Optus, Macquarie Telecom, NEC, Google, PayPal, Salmat, Seven Media, Foxtel and Austar, as well as the healthcare, education and energy sectors.

E-commerce will benefit from improvements in infrastructure and a trans-sector approach to governance. E-government, e-health, e-education, social media and e-science are also important elements of a digital economy.

In this publication we provide the latest industry insights and information on the e-commerce and m-commerce sectors. Selected information is also included on the leading trends in this sector in Australia, plus a brief overview, with some valuable observations, of the global market.

Spending on advertising using digital media channels will grow to around 15% of overall worldwide advertising spending in the next couple of years. While the economic downturn initially impacted on the growth of overall advertising spending, in 2011 there are signs of recovery with online advertising continuing to grow and the ever popular TV advertising rebounding. In Australia online advertisements are growing by 21% while TV advertising revenue grew by 19% in 2010.

Digital marketing remains a growth area, as marketers move towards new advertising methods at the expense of traditional formats. This publication supplies an analysis of the digital media market, focused on two of the key digital advertising platforms, internet and mobile.

Online spending that is directed towards international purchases varied between 3%-50% of the total spend – in 2010 overall estimated online spending by households was only 3%.

But in early 2011 about 25% of mobile users were shopping online using their mobile, with eBay reporting that an item is bought from a mobile every 15 seconds. The online economy is booming for some – online market revenues increased by up to 40% during 2010.

This report identifies the primary areas that customers are interested in, which are therefore significant commercial starting points. It looks at topics about buying/selling over the internet and at some of the players; and it provides statistics in tabular and chart formats.

In 2011 the main form of online payment continues to be via credit and direct debit cards. The financial institutions have been more interested in protecting their incumbent businesses than in seriously embarking on e-payment developments. PayPal has established itself as the most advanced e-payment system outside the banks. With its online payments increasing by more than 20% that company has become the market leader.

We report on off-deck payment systems using mobile phones – these constitute another fast-growing market, as do calling cards.

In 2010 the total revenue from electronic payment systems for mobile services in Australia was estimated at around $3.8 billion. This market segment in Australia is dominated by epay, with the major banks and mobile operators commanding smaller shares. Prepaid mobile voice services are the largest revenue segment, followed by calling-cards, prepaid mobile internet access, music purchases and gift cards, as well as Premium SMS services. The market is rapidly developing, following the arrival of rechargeable magnetic cards.

Significantly, Australian mobile operators expect to further increase revenue earned from sales for prepaid mobile internet access in 2011. The emerging prepaid electronic transport ticketing services is another growth market.

Key performance indicators of the e-commerce, marketing and advertising markets – 2010

(Source: BuddeComm)

Market highlights:

• Spending on advertising using digital media channels is moving towards 15% of overall worldwide advertising spending.
• The economic downturn impacted upon the growth of overall advertising spending in 2009 but recovered successfully in 2010.
• In early 2011 about 25% of mobile users are shopping online with their mobile, with eBay reporting that an item is bought from a mobile every 15 seconds.
• PayPal has over 5 million active users and around 18,000 merchant customers in Australia.
• In 2010 the total revenue from electronic payment systems in Australia is estimated at around $3.8 billion.
• Prepaid mobile voice services are the largest revenue segment, followed by calling-cards, prepaid mobile internet access, music purchases and gift cards, as well as Premium SMS services.

Note: all $ are US$ unless otherwise stated

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