2008 Digital Marketing Trends Survey

2008 AUSTRALIAN DIGITAL MARKETING TRENDS SURVEY

In conjunction with Dr. Michael Valos, Chair, Monash University Marketing Alumni Association

2008 Australian Digital Marketing Trends Survey © 2008 Next Digital Group Page 2


Contents

Foreword .......................................................................................................................................... 4

Introduction ...................................................................................................................................... 5

The greatest opportunities in using the digital channel ...................................................................... 6

The greatest challenges to successful digital marketing ..................................................................... 7

Strategic Issues .............................................................................................................................. 7

Implementation Issues .................................................................................................................. 8

Proportion of marketing budget allocated to the digital channel ....................................................... 9

Explanations from respondents ................................................................................................... 10

Key Facts – Australia online ............................................................................................................. 11

Digital Media Effectiveness .............................................................................................................. 12

Most effective digital media ........................................................................................................ 12

Moderately effective digital media .............................................................................................. 14

Less effective (relative to other 5) digital media ........................................................................... 17

Currency of Websites ...................................................................................................................... 22

“Traditional” Media effectiveness.................................................................................................... 23

Most effective traditional media .................................................................................................. 23

Moderately effective (relative to other 2) traditional media ........................................................ 24

Respondent information.................................................................................................................. 27

Visualising the Internet – a snapshot ............................................................................................... 29

About Next Digital ........................................................................................................................... 33


Foreword

Dr. Michael Valos

The findings of this study showed the majority of marketers perceive digital marketing as an

opportunity more than a threat and in many cases they are already experimenting with it within

their existing marketing communications mix. It appears that many marketers are unsure as to the

best way of integrating digital media within marketing strategies. Over time each organisation will

find the degree they should substitute traditional media for the digital media. Some will be ‘digital

media dominant’ while other organisations will have limited usage of digital media in niche or ad hoc

situations. In summary the riskiest approach to the growth of digital marketing & media is to ignore

it before deciding an appropriate level of usage.

“Opportunities are endless, but all our businesses digital marketing will assist to build revenue and understand our customers’ needs and promote loyalty”.


Introduction

By Anthony Goldman, GM, Marketing & Development, Next Digital.

In May 2008, the active online population in Australia was 11,725,000, and the average time spent

online was 20 hours and 13 minutes.

Think about it. The average time someone spent online was the equivalent to just over 40 episodes

of your favourite sitcom. The equivalent of 2,426 30” TV Commercials.

That’s a lot of time. The debate about “to digital or not” no longer has a place in marketing planning.

However the prioritisation of marketing activity, online and offline, is the new challenge facing

marketers in Australia and elsewhere in the world.

This report is aimed at gauging the opinions and thoughts of marketers in relation to digital

marketing in Australia. It is our first survey of this kind and we intend to continue to gauge the

interests and opinions of marketers on an ongoing basis to provide us, and the wider community,

with a greater understanding of where digital marketing is heading.

There are various opportunities and challenges in using the digital channel. We explore these as well

as investigating how marketers are using various digital channel “tools”. At the same time we check

on “traditional media” usage – just for good old days sake.

The good news for digital advocates is that digital is the new black. The percentage of organisations

that will spend more than 50% of their marketing budget on digital media going from 4% in 2007 to

19% in 2013. We also found that the other major trend is that the percentage of organisations who

will spend between 25% and 50% of their marketing budget on digital media going from 10% in

2007 to 51% in 2013.

So get on board. The debate is no longer should I digital, rather how should I digital.

Next Digital has been doing this for 12 years. Digital is what we do all day every day. So it’s nice

people are listening.


The greatest opportunities in using the digital channel

Personalised/direct/targeted 21%

Reaching consumers with ‘top of mind’ branding in younger demographic,

distant locations and in wide range of on line ‘spaces’/communities

14%

Rich flexible media providing brand experiences and engagement and

interactivity

13%

Measure campaign ROI and can test consumer responses and behaviours 13%

Both aid and reach customers in search mode 9%

Speed of reaching consumers with both offers as well as updated information 8%

Cost of reaching consumers 7%

Reaching consumers with mobile devices 6%

Getting customer to take the next step in purchase/relationship or move to

next channel interaction point

4%

Unsure 3%

Other 3%

When viewing the responses be aware that the responses were categorized by the phrase used by

the respondent and there are obvious overlaps between categories. For example ‘rich flexible

media’ could be targeted at consumers with mobile devices. It should also be considered that

although respondents have listed one key opportunity they would consider other opportunities to

offer benefits.

In summary the four main themes coming from the table regarding opportunities Digital media have

to offer would be

Personalised/Targeted/Cost effective

Reach (in many places and states)

Rich engaging brand and relationship enhancing interactions

Measurability of digital media initiatives

"Personal, tailored communication with your consumers with ability to gain real target insights and adapt fluidly to market responses”.


The greatest challenges to successful digital marketing

The responses can be classified into 2 areas: Strategic and Implementation related.

Strategic Issues

Differentiating and ‘standing out’ in cluttered environment with relevant entertaining

and/or informative messages and not being seen as SPAM through overuse or

irrelevance

44%

Reduce uncertainty and better understanding right role for digital media in terms of

marketing strategy and traditional media

21%

Conversion of empowered consumers through purchase steps with ‘right’ media and

‘timely’ customised messages

15%

Gaining consumer use and acceptance 9%

Measurement of digital ROI 7%

Broadband cost and access 4%

When viewing the responses be aware that the responses were categorized by the phrase used by the respondent and there are obvious

overlaps between categories.

In summary the three main strategic themes coming from the table regarding Digital challenges are

Getting engagement and attention in digital environment where there are low cost barriers to entry and many choices for how consumers can spend their time

Avoiding irritation and harassment of consumers

Using each new and traditional media in a way that maximises strengths and weaknesses as buyers go through pre-purchase stages of behaviour

“Search and SEO - People cannot buy or view you if they cannot find you, with most people having Google or Yahoo as their homepage, and use their search facilities often, it is very important to have your brand show up in those relevant searches.”


Implementation Issues

Obtaining senior management acceptance and resources 25%

Technology (complexity cost and implementation) 23%

Good and/or trusted agencies 18%

Responsiveness and adaptiveness to our brand promise 18%

Consistent innovation while predicting future directions 16%

When viewing the responses be aware that the responses were categorized by the phrase used by the respondent and there are obvious

overlaps between categories.

In summary the three main implementation themes coming from the table regarding Digital

challenges are

Communicating Digital potential to conservative senior management

Technology infrastructure decisions in rapidly changing environment so brand promise and customised responses can be delivered

External realistic and reasonably costed advice from agencies

“The most efficient way to get up to date information to the public”.


Proportion of marketing budget allocated to the digital channel

NOW AND THE FUTURE.

The percentage of organisations that will spend more than 50% of their marketing budget on digital

media going from 4% in 2007 to 19% in 2013. The other major trend is that the percentage of

organisations who will spend between 25% and 50% of their marketing budget on digital media

going from 10% in 2007 to 51% in 2013.

“It’s measurable, interactive & engaging, allows to tweak creative that isn’t performing and targets an important segment.”


Explanations from respondents

Of those who indicated an increase in digital marketing expenditure and a further increase over the

next 5 years...

Increase use due to general benefits of digital media 47%

Increase use due to strengths/capabilities/opportunities of digital media 21%

Increase use due to as customers using digital more 19%

Increase use due to cost effectiveness 5%

Increase use due to accountability/measurability 4%

Increase use due to digital better at targeting consumers 4%

Approximately 75% of respondents are increasing digital expenditure. It is likely that organisations

positive or at least open to digital opportunities are more likely to take in a survey of this nature so

figures can’t be extrapolated to entire marketing community.

Only one respondent mentioned competitive pressures directly but this would be an underlying

reason for many of the movements to usage and/or evaluation of digital. Approximately 20% of the

responses showed organisations unconvinced of the potential of Digital media (rightly or wrongly)

for their organisation.

Surprisingly commonly cited reasons for increasing digital usage such as cost, targeting and

accountability were rarely mentioned. However the respondents putting general reasons for digital

initiatives would most probably be considering these benefits in concert.

“The digital channel is becoming a lot more effective at getting the message to targeted audience at the right price. It is more effective at gaining meaningful measurements.”


Key Facts – Australia online

1. The Australian Active Online Population Size in May was 11,725,000

2. There were 15,992,900,000 web pages viewed in Australia in May 2008

3. The average user spends over 20 hours per month online

4. One third of the active online population in Australia has a household

income of $100,000 or more

Nielsens NetRatings NetView, May 2008. Accessed July 14th 2008

Most trusted source of media – 25% said internet

Preferred communication medium – 32% said internet

Preferred information source – 39% said internet

Medium most lost without – 30% said internet

Best for opinions – 37% internet

Best source of news – 16% internet

Best for entertainment – 45% said TV

Nielsen Online, Internet and Technology Report , March 2008


Digital Media Effectiveness

Most effective digital media

Of the nine digital media examined the two most effective were websites and e-mail marketing.

WEBSITES

How heavily do you use your website as part of your digital strategy?

How effective is your website at supporting your overall marketing objectives?

Only 6% of respondents considered websites to be ineffective or didn't use them at all. On the other

hand 50% consider them to be very or extremely effective. The benefits of the website appear to be

the starting point of the deeper engagement on a one-to-one basis. The ability to link to other digital

media and other resources within the organisation or externally.


EDM (Email Marketing)

How heavily do you use email marketing as part of your digital strategy?

EDM

0%

5%

10%

15%

20%

25%

NIL Extremely

light

Very light Light Medium Heavy Very heavy Extremely

heavy

How effective is email marketing at supporting your overall marketing objectives?

EDM

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

NIL Ineffective Somewhat

effective

Effective Very effective Extremely

effective

Only 17% of respondents considered EDM to be ineffective or didn't use them at all. On the other

hand 34% consider them to be very or extremely effective. The benefits of the EDM appear to be the

low cost of contact on a personal basis. When linked to accurate and up-to-date databases which

have comprehensive customer low-cost large-scale campaigns can be undertaken. Differentiated

offers to market segments and customers within segments can be undertaken.


Moderately effective digital media

Of the nine digital media examined three media performed moderately well but not as well as

websites and EDM.

SEO (Search Engine Optimisation)

How heavily do you use search engine optimisation as part of your digital strategy?

SEO

0%

5%

10%

15%

20%

NIL Extremely

light


heavy

How effective is search engine optimisation at supporting your overall marketing objectives?

SEO

0%

5%

10%

15%

20%

25%

30%

35%

40%

NIL Ineffective Somewhat effective Effective Very effective Extremely effective

While 21% did not use it at all only 7% of respondents considered SEO to be ineffective. In contrast

20% of respondents considered SEO it to be very or extremely effective. The benefits of SEO

strategies are that through the use of keywords it is possible that a company's website can appear

on the first page of search results which is often the only search results page looked at by searchers.

With web empowered consumers using the Internet to a)understand product features and b)

develop the purchase consideration set is vital to be ‘top of mind’ in the immediate prepurchase

stage.


SEM (Search Marketing)

How heavily do you use search marketing as part of your digital strategy?

SEM

0%

5%

10%

15%

20%

25%

NIL Extremely

light


heavy

How effective is search marketing at supporting your overall marketing objectives?

SEM

0%

5%

10%

15%

20%

25%

30%

35%

40%


effective


effective

It is interesting to note that SEM and SEO ranked similarly terms of effectiveness within the nine

digital media compared. While 24% of respondents did not use SEM at all only 9% of respondents

considered SEM to be ineffective. On the other hand 20% considered SEO to be very or extremely

effective. The benefits of SEM strategies are that paid methods can be used (sponsored results on

search page) and the marketer chooses the ‘landing point’ for the searcher. I.e. The page the

searcher first sees on the corporate site. Micro sites can be used for different market segments.

The benefits of SEM are similar to those above for SEO but diversity of method is its advantage.


DISPLAY ADVERTISING (Banners)

How heavily do you use display advertising as part of your digital strategy?

Display Ads

0%

5%

10%

15%

20%

25%

NIL Extremely

light


heavy

How effective is display advertising at supporting your overall marketing objectives?

Display Ads

0%

5%

10%

15%

20%

25%

30%

35%

40%


While 26% of respondents did not use Display Ads at all only 11% of respondents considered them to

be ineffective. In contrast, 13% considered Display Ads to be very or extremely effective. The

benefits of Display Ads are that as a paid digital media they can be placed where you think your

target market go. A major use of this appears to be for building brand or achieving awareness but it

is possible that you will reach consumers in a ‘ready to buy’ state. However most probably they are

in ‘passive information seeking’ in terms of your product when they see your banner. This media can

reach the consumer as part of their lifestyle web behaviour eg social, entertainment, purchasing

other lifestyle products common to the market segment.


Less effective (relative to other 5) digital media

Of the nine digital media examined the following 5 performed least effectively but that does not

mean all companies should ignore them. It could be that they are harder to optimise or usage is

more dependent on ‘right’ situation or context.

SOCIAL NETWORKS (e.g. Facebook)

How heavily do you use social networks as part of your digital strategy?

Social Networks

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

NIL Extremely

light


heavy

How effective is social networks at supporting your overall marketing objectives?

Social Networks

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Although some recent statistics and opinions suggest the growth of social networking may have

reached a plateau marketers need to track online behaviour of their consumers to assess relevance

of this media for them.


While 45% did not use Social Networks at all 23% of respondents considered them to be ineffective.

On the other hand 5% of respondents considered them to be very or extremely effective. The

benefits of this media is that although some consumers see marketing as an intrusion others are

happy to see familiar brands in their online and offline leisure environments.

Fact: Australian Facebook users grew from 500,000 in July ‘07 to 2.5 million in Feb ’08. (Nielsen Online,

Internet and Technology Report , March 2008)


DIRECTORIES (e.g. Sensis/Yellow Pages)

How heavily do you use directories as part of your digital strategy?

Directories

0%

5%

10%

15%

20%

25%

30%

35%

NIL Extremely

light


heavy

How effective are directories at supporting your overall marketing objectives?

Directories

0%

5%

10%

15%

20%

25%

30%

35%


While 30% did not use them at all 23% of respondents considered Directories to be ineffective. In

contrast 6% of respondents considered Directories to be very or extremely effective. The benefits of

these media are that they can reach consumers in pre-purchase state so a successful marketing

message or interaction will provide a clear immediate pay back. (Assuming brand and features and

word of mouth is good.)


MOBILE

How heavily do you use mobile as part of your digital strategy?

Mobile

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

NIL Extremely

light


heavy

How effective is mobile at supporting your overall marketing objectives?

Mobile

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


effective


effective

Mobiles are only in 2008 starting to provide web access at high enough speed to become a valuable

‘on the go’ resource. The following survey figures should be treated with caution and are likely to

change rapidly over the next 12-18 months as people update mobiles to low priced, high speed,

large screen models such as iPhone etc.

While 39% did not use Mobiles at all 19% of respondents considered them to be ineffective. In

contrast 5% of respondents considered Mobiles to be very or extremely effective. The benefits of

these Mobiles are that they can reach consumers in out of home environments which are frequently

purchase situations. Special offers can be targeted to consumers in geographic proximity to

products.


MULTIMEDIA (e.g. Podcasts, DVDs, CDs)

How heavily do you use multimedia as part of your digital strategy?

Multimedia

0%

5%

10%

15%

20%

25%

30%

NIL Extremely

light


heavy

How effective is multimedia at supporting your overall marketing objectives?

Multimedia

0%

5%

10%

15%

20%

25%

30%

35%


While 27% did not use it at 17% of respondents considered SEO to be ineffective. In contrast 9% of

respondents considered Multimedia to be very or extremely effective. The benefits of these diverse

media are that they can reach consumers in both mobile situations and in highly engaged situations.

Rich messages and information can be presented and engagement achieved.


Currency of Websites

How often do you refresh your customer website?

Daily

36%

Weekly

28%

Monthly

12%

Every 2-3 months

11%

Annually

13%

In broad terms slightly more than one third of marketers refresh web sites daily, one quarter refresh

weekly and slightly more than one third refresh monthly or less frequently.

“The greatest opportunities in digital are delivery of better targeted information to customers. Our research shows communication through a variety of channels to be one of the biggest drivers of customer satisfaction in our business, often rating higher than investment returns.”


“Traditional” Media effectiveness

Most effective traditional media

Of the six traditional media examined the two most effective for those using the media were Free to

Air TV and Print Newspaper. (Please note as these media are not appropriate for all marketers in

contrast to digital media which can be used on a small marketing budget only the effectiveness

rating of users are compared.)

FREE TO AIR TV

Free to Air TV

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

NIL Ineffective Somewhat effective Very effective Extremely effective

While 4% who used Free to Air TV considered it to be ineffective 29% considered it to be effective

(i.e. somewhat, very or extremely). TV can reach consumers who do not actively seek information

and can direct consumers to digital media.

PRINT NEWSPAPER

Print Newspaper

0%

5%

10%

15%

20%

25%



While 3% who used Print Newspapers considered them to be ineffective 28% considered them to be

effective (i.e. somewhat, very or extremely). Like TV they can reach consumers who do not actively

seek information and can direct consumers to digital media.

Moderately effective (relative to other 2) traditional media

Four of the six digital media examined performed less effectively than both Free TV and print

newspapers.

PAY TV

How effective are the following channels at supporting your marketing objectives?

Pay TV

0%

10%

20%

30%

40%

50%

60%

70%


With very low figures the following numbers should be considered with caution. Pay TV was the

least effective media according to respondents. While 5% considered it to be ineffective 11%

considered it to be effective (i.e. somewhat, very or extremely).

“Real measurable financial return. It's no longer about just sending emails or having a website, it's important to show that these activities save the company money, or generate revenue.”


RADIO

Radio

0%

5%

10%

15%

20%

25%

30%

35%

40%


Radio was the third best performing media according to respondents. While 5% who used Radio

considered it to be ineffective 24% considered it to be effective (i.e. somewhat, very or extremely).

OUTDOOR

Outdoor

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


While 7% who used Outdoor considered it to be ineffective 21% considered it to be effective (i.e.

somewhat, very or extremely).


PRINT MAGAZINES

Print Magazines

0%

5%

10%

15%

20%

25%


While 9% who used Print Magazines considered them to be ineffective 27% considered them to be

effective (i.e. somewhat, very or extremely).

In summary, marketers should be familiar and experienced enough with these traditional media and

be able to know when and how to use them. Thus these figures should be reasonably accurate in

assessing their value. The uncertainty however is the possible synergistic affects of the use with

these media and the newer Digital media that are only starting to be understood by marketers and

consumers. This suggests the figures we have for Digital Media will change in next 6-18 months.

An increase in budget allocation for BTL marketing activity. The trend suggests that in 5 years time more budgets will be assigned in this area for digital.”


Respondent information

In which industry is your company involved?

Few FMCG respondents as mainly services

Large Government representation

Diverse range of industries


Number of employees

This table shows the respondent sample characteristics to be:

Vast majority of the companies/organisations represented to have 10 or more employees

50% have more than 500 employees while 33% have between 100 and 499 employees

What is your overall revenue in 2007?

This table shows the respondent sample characteristics to be:

25% over $100m revenue

32% below $20m revenue


Visualising the Internet – a snapshot Australia’s Internet Scene, May 2008 - Source: Nielsen NetRatings NetView

1. The Australian Active Online Population Size in May 2008 was 11,725,000

2. Active Internet Universe Profile

Gender

Age

Household Income


3. Internet Usage: Quick Stats

Total Web Page Views This Month 15,992,900,000

Web Pages Views Per Person 1,364

Time Per Person 20:13:41

4. Daily Traffic: Home and Work % of all active internet universe; Web Only


5. Hourly Traffic: Home and Work % of all active internet universe; Web Only

6. Top 10 Internet Brands / Unique Audience (‘000), May 08’

7. Top 10 Internet Channels/ Unique Audience

(‘000), May 08’

5pm to 7pm


7. Online Advertising Expenditure (000 AUD), May 08’ Note: These are rate card estimates and not accurate figures.

Sectors Advertisers


About Next Digital

Next Digital is Australia’s largest full service digital marketing and solutions agency. We provide strategic, integrated, digital driven business and marketing solutions for the consumer and business markets. Over the last 12 years, Next Digital has evolved into a complete digital partner. We help companies discover the power of a new medium and how to embrace this business-critical communications channel. Today, Next Digital provides the online horsepower behind many of Australia’s most successful companies and brands. We have established relationships with leading organisations in key market segments including automotive, banking and finance, telecommunications, government, sports and entertainment and technology. Next Digital has offices in Melbourne, Sydney, Brisbane, Bangkok and Shanghai. We categorise our services under two areas of expertise:

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2008 Digital Marketing Trends Survey