2008 Australia - E-Commerce, Marketing and Advertising

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.