2011 Australia - E-Commerce, Marketing and Advertising

Publication Overview

This annual publication offers a wealth of information on the trends and developments taking place in the m-commerce and e-commerce sectors. The publication analyses the issues surrounding the growth of e-commerce, including e-banking, e-payments and online advertising. Developments are currently being driven by the emerging NBN and by the explosion in mobile broadband access. Many organisations have announced plans for participation in these opportunities. Information on mobile commerce developments is also given, including m-payments and m-banking, plus statistics and forecasts for both the e-commerce and m-commerce sectors.

Subjects covered include:

  • Analysis of key e-commerce trends;
  • E-commerce trends and statistics;
  • NBN Trans-sector model
  • Information on e-payment and e-banking sectors;
  • Analysis of key m-commerce trends;
  • Advertising  and marketing industry update
  • Prepaid payment market
  • M-Commerce developments and projects

Researchers:- Paul Budde, Kylie Wansink, Stephen McNamara
Current publication date: March 2011 (10th Edition)
Next publication date:- March 2012

 

Executive Summary

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

Category

2010

E-payment revenue (million)

$3,800

Online advertising revenue (million)

$2.3

Online advertising growth

18%

Mobile advertising revenue (million)

$10

(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.

 

Table of Contents

  • 1. Key Elements of a Digital Economy
    • 1.1 Infrastructure essential for the digital economy
    • 1.2 Can we fast-track the digital economy?
    • 1.3 Key sectors for the digital economy
      • 1.3.1 Background information
      • 1.3.2 Smart grids and the environment
      • 1.3.3 E-commerce
      • 1.3.4 E-government
      • 1.3.5 E-health
      • 1.3.6 E-education
      • 1.3.7 E-science
      • 1.3.8 Social media
    • 1.4 Key requirements of the digital economy
      • 1.4.1 Broadband
      • 1.4.2 Trans-sector approaches
      • 1.4.3 Open access
      • 1.4.4 Internet neutrality
    • 1.5 Conclusion: digital economy services
  • 2. E-Commerce and M-Commerce Insights
    • 2.1 Market summary
      • 2.1.1 Global e-commerce market
      • 2.1.2 Global m-commerce market
      • 2.1.3 Security still a key issue
    • 2.2 Market insights
      • 2.2.1 Underlying trends
      • 2.2.2 E-payments
      • 2.2.3 M-commerce/M-payments
      • 2.2.4 Internet banking (E-banking)
      • 2.2.5 Evolving e-commerce business models
      • 2.2.6 Internet based content still relies on advertising
      • 2.2.7 Cloud computing and e-commerce
    • 2.3 Case studies
      • 2.3.1 E-commerce in the USA
      • 2.3.2 M-commerce in the USA
      • 2.3.3 E-commerce in China
      • 2.3.4 M-commerce in China
      • 2.3.5 FeliCa in Japan
  • 3. Advertising and Marketing Insights
    • 3.1 Market summary
    • 3.2 Market insights
      • 3.2.1 Consumers will lead the way
      • 3.2.2 Changes in internet advertising
      • 3.2.3 Mobile advertising
      • 3.2.4 Mobile Location-Based Advertising (MLBA)
      • 3.2.5 TV advertising
      • 3.2.6 Hulu
    • 3.3 Key online advertising categories
      • 3.3.1 In-game advertising
      • 3.3.2 Social media advertising
      • 3.3.3 Online video advertising
      • 3.3.4 Online search advertising
  • 4. National Broadband Network – Trans-sector Model
    • 4.1 Analysis late 2010
      • 4.1.1 National plan for the digital economy
      • 4.1.2 First release site – trans-sector test sites
    • 4.2 Trans-sector awareness update 2010
      • 4.2.1 2010 election puts focus on trans-sector
      • 4.2.2 Sectors are starting to understand the benefits
      • 4.2.3 Commitment from Prime Ministers
      • 4.2.4 The National Broadband Network (NBN) can pay for itself
    • 4.3 E-services in the context of national broadband
    • 4.4 Introduction to trans-sector thinking
      • 4.4.1 Fragmented society requires cohesive leadership
      • 4.4.2 Problems in most silos
      • 4.4.3 National welfare depends on new ways of thinking
    • 4.5 A matter of leadership
      • 4.5.1 Obama’s leadership - a catalyst for change
      • 4.5.2 Work in progress: political leadership
      • 4.5.3 Trans-sector thinking at highest levels in Australia
      • 4.5.4 Towards trans-sector government
    • 4.6 Barriers to broadband adoption
    • 4.7 We lack the structures to implement trans-sector visions
    • 4.8 Multiplier effect for the NBN
    • 4.9 Trans-sector regulation
      • 4.9.1 Regulations need to be rewritten
      • 4.9.2 Fibre-to-the-Home (FttH) will change telecom models
      • 4.9.3 Utilities-based regulation
      • 4.9.4 Removing blockages
  • 5. E-Commerce
    • 5.1 Trends and statistics
      • 5.1.1 The key drivers of growth
      • 5.1.2 Market analysis
      • 5.1.3 Market statistics and surveys
      • 5.1.4 The online marketplace
    • 5.2 E-payment
      • 5.2.1 E-payment – analysis
      • 5.2.2 Service providers
      • 5.2.3 Micropayment developments
  • 6. Prepaid Payment Market
    • 6.1 Introduction
    • 6.2 Major players in Australia
      • 6.2.1 Overview and statistics
      • 6.2.2 epay Australia
      • 6.2.3 Web-based service providers
    • 6.3 Retail outlets
    • 6.4 Revenue overview
    • 6.5 Market developments update – 2010
    • 6.6 E-payment charging models
      • 6.6.1 Card and PIN (scratch cards)
      • 6.6.2 PIN-based systems
      • 6.6.3 Rechargeable calling-cards (swipe cards)
      • 6.6.4 Other recharge models
    • 6.7 New markets
      • 6.7.1 Electronic gift cards (open loop cards)
  • 7. M-Commerce
    • 7.1 Overview and analysis of m-commerce in Australia
      • 7.1.1 Introduction
      • 7.1.2 Development of m-commerce in Australia
      • 7.1.3 Research indicates consumers wary of telcos for payment options
      • 7.1.4 Apps need m-payments
      • 7.1.5 Developments in Australia
      • 7.1.6 Closed systems
    • 7.2 M-payment projects and services
      • 7.2.1 mHITs
      • 7.2.2 Visa’s payWave service for the National Australia Bank (NAB)
      • 7.2.3 MasterCard PayPass
      • 7.2.4 Near Field Communications (NFC)
    • 7.3 Mobile banking (m-banking)
      • 7.3.1 M-banking overview
      • 7.3.2 Commonwealth Bank of Australia (CBA)
      • 7.3.3 Australia and New Zealand Bank (ANZ)
      • 7.3.4 National Australia Bank (NAB)
      • 7.3.5 Westpac
      • 7.3.6 Public transport
    • 7.4 Other m-commerce developments
      • 7.4.1 SMS m-commerce
  • 8. Advertising and Marketing Industry
    • 8.1 Digital economy – Internet income
    • 8.2 The online advertising market
      • 8.2.1 Interactive Advertising Bureau (IAB) survey of online advertising expenditure – 2010
      • 8.2.2 Revenue trends from 2010 into 2014
      • 8.2.3 Moving into 2011
    • 8.3 Mobile Internet advertising
      • 8.3.1 Background
      • 8.3.2 Insights into mobile advertising trends
      • 8.3.3 Mobile advertising to mature
    • 8.4 Generation Y is driving the online media push
    • 8.5 Revenue statistics
      • 8.5.1 Online advertising revenue forecasts
      • 8.5.2 Online advertising revenue statistics
    • 8.6 Online classified advertising
      • 8.6.1 Overview of market spending – 2010
    • 8.7 Online video advertising market
      • 8.7.1 Market overview
      • 8.7.2 Video gaming industry downsizes
    • 8.8 Website usage statistics
      • 8.8.1 Election 2010 website visits
      • 8.8.2 Top 10 Australian websites – 2009 - 2011
    • 8.9 Market surveys
      • 8.9.1 Online shopper survey – customers still buying offline
      • 8.9.2 Children and the usage of social networks
      • 8.9.3 Ericsson/IDC – rapid growth for TV/video sector
      • 8.9.4 Online general advertising survey
      • 8.9.5 PricewaterhouseCoopers (PwC) Entertainment & Media Outlook report to 2012
      • 8.9.6 Search advertising revenues
  • 9. Glossary of Abbreviations
  • Table 1 – Worldwide telecom statistics at a glance – 2011
  • Table 2 – Visitors to top fifteen web properties worldwide – 2009 - 2010
  • Table 3 – Worldwide transaction value of m-payments – 2008; 2012 - 2013
  • Table 4 – Number of consumers worldwide using m-payment services – 2008 - 2012
  • Table 5 – Worldwide transaction value of NFC m-payments – 2009; 2012
  • Table 6 – Number of mobile banking users worldwide – 2008; 2014
  • Table 7 – Number of mobile banking users – Asia-Pacific; North America and Europe – 2014
  • Table 8 – Mobile banking users in the USA – 2007; 2009
  • Table 9 - Worldwide advertising spend versus online advertising spend – 2009 - 2010
  • Table 10 - Most popular formats for receiving news in the USA – 2010
  • Table 11 – Fastest growing e-commerce sectors in the USA – 2008 - 2010
  • Table 12 – Online retail sales and annual change in the USA – 2003 - 2010
  • Table 13 – Mobile banking users in the USA – 2007 - 2010
  • Table 14 – Breakdown of e-commerce users in China – 2009
  • Table 15 – Estimated value of B2C e-commerce market in China – 2005 - 2011
  • Table 16 – Estimated value of C2C e-commerce market in China – 2005 - 2011
  • Table 17 – Worldwide advertising spending- all mediums – 2008 - 2012
  • Table 18 – Worldwide online advertising spending – 2007 - 2012
  • Table 19 – Most popular forms of online advertising
  • Table 20 – Western Europe mobile ad spending – 2009 - 2012
  • Table 21 –Asia-Pacific mobile ad spending – 2009 - 2012
  • Table 22 – Growth of Hulu video streams – various months – 2008 - 2010
  • Table 23 – Worldwide in-game advertising spending – 2007 - 2009; 2013
  • Table 24 – Worldwide social network advertising spending – 2008 - 2010
  • Table 25 – USA social network advertising spending – 2008 - 2009
  • Table 26 – US online advertising revenues - top four portals – 2008 - 2011
  • Table 27 – Selling over the Internet by industry sector – 2010
  • Table 28 – Mobile transactions on eBay by phone type – 2010
  • Table 29 – Mobile transactions on eBay – 2010
  • Table 30 – Estimated market share – electronic mobile payments of total prepaid – 2002 - 2010
  • Table 31 – Major electronic payment providers and estimated market share – 2010
  • Table 32 – Estimated electronic payment market revenues – 2007 - 2011
  • Table 33 – Estimated breakdown of prepaid electronic payment market revenues – 2009
  • Table 34 – Market shares of key online advertising markets – 2008 - 2011
  • Table 35 – Nielsen Online top Australian websites by unique audience – 2009 - 2010
  • Table 36 – Top ten Australian websites by unique audience – 2009 - 2011
  • Table 37 – Social networking in the workplace – 2009 - 2010
  • Table 38 – Australian entertainment and media market – revenue by industry – 2007 - 2012
  • Table 39 – Australian entertainment and media market – annual growth by industry – 2008 - 2012
  • Table 40 – Australian consumer/end-user spending – 2007 - 2012
  • Table 41 – Australian consumer/end-user spending – annual growth by industry – 2008 - 2012
  • Table 42 – Australian advertising spending – 2007 - 2012
  • Table 43 – Australian advertising spending – annual growth by industry – 2008 - 2012
  • Table 44 – Australian entertainment and media market – revenue by industry – 2006 - 2008; 2011
  • Table 45 – Australian entertainment and media market – annual growth by industry – 2007 - 2008; 2011
  • Table 46 – Australian entertainment and media market – consumer/end user spending by industry – 2006 - 2008; 2011
  • Table 47 – Australian entertainment and media market – consumer/end user annual growth by industry – 2007 - 2008; 2011
  • Table 48 – Australian entertainment and media market – advertising spending by industry – 2006 -2008; 2011
  • Table 49 – Australian entertainment and media market – advertising annual growth by industry – 2007 - 2008; 2011
  • Table 50 – Share of consumer spending by industry sector – 2006; 2011
  • Table 51 – Share of advertising revenue by industry sector – 2006; 2011
  • Chart 1 – Top five uses of the Internet by businesses – 2008 - 2010
  • Chart 2 – Top five uses of mobile Internet – 2009 - 2010
  • Chart 3 – Percentages of businesses online – 2008 - 2010
  • Chart 4 – Top five items bought by SMEs using the Internet – 2008 - 2010
  • Chart 5 – Business Internet customers by location – 2008 - 2010
  • Chart 6 – Internet selling by SMEs – 2008 - 2010
  • Chart 7 – Estimated coupon website revenue - 2010 - 2014
  • Chart 8 – The growth of eBay members in Australia – 1999; 2003 - 2004; 2006; 2009 - 2010
  • Chart 9 – E-readiness and digital rankings of Australia – 2007 - 2010
  • Chart 10 – Business Internet income – 2007 - 2011
  • Chart 11 – Mobile online advertising revenue – 2008 - 2011
  • Chart 12 – Online advertising expenditure and forecasts – 1997 - 2015
  • Chart 13 – Online advertising expenditure in the email and video sector – 2009 - 2011
  • Chart 14 – Visitors to top news websites for election coverage – 2010
  • Chart 15 – Use of price comparison sites – 2010
  • Chart 16 – Use of social networking sites by demographic – 2008 - 2010
  • Chart 17 – Social networking trends among children – 2008 - 2010
  • Chart 18 – Paid search advertising revenue – 2005 - 2006; 2010
  • Exhibit 1 – Faster broadband speeds offer more than just fast internet
  • Exhibit 2 – Explanation – optical fibre
  • Exhibit 3 – Selected examples of countries with planned ICT infrastructure investment
  • Exhibit 4 – Digital economy – key developments
  • Exhibit 5 –Popular online activities
  • Exhibit 6 – M-Commerce – key developments
  • Exhibit 7 – Overview of PayPal
  • Exhibit 8 – M-PESA
  • Exhibit 9 – Money transfer services
  • Exhibit 10 – Definition: Cloud computing
  • Exhibit 11 – Amazon Web Services
  • Exhibit 12 – Subway introduces SMS ordering
  • Exhibit 13 – China’s dominant e-commerce site
  • Exhibit 14 – Digital advertising cost considerations
  • Exhibit 15 – Examples of large global advertising groups and subsidiaries – 2010
  • Exhibit 16 – Examples of digital advertising agencies
  • Exhibit 17 – Top sectors for online advertising spending
  • Exhibit 18 – Online ad deal between Google and Yahoo aborted
  • Exhibit 19 – Anarchy Online by Funcom
  • Exhibit 20 – Facebook and Nielsen’s marketing alliance
  • Exhibit 21 – Economic effects of trans-sector broadband
  • Exhibit 22 – Online users and other media usage
  • Exhibit 23 – Example items sold on average in Australia on eBay
  • Exhibit 24 – Interesting items from online auctions
  • Exhibit 25 – BPAY – company overview 1997; 2010
  • Exhibit 26 – Overview of Google Checkout
  • Exhibit 27 – PayPal – other developments

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Annual Publication Profile

Technologies

Broadband Fixed
Digital Economy
Mobile & Wireless Broadband and Media

Number of pages 133

Status Archived

Last updated 9 Mar 2011
Update History

Analyst: Paul Budde

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