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.
Thats 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 its 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.
Its measurable, interactive & engaging, allows to tweak creative that isnt
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 cant 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 Extremel y
l i ght
Very l i ght Li ght Medi um Heavy Very heavy Extremel y
heavy

How effective is email marketing at supporting your overall marketing objectives?
EDM
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
NIL Ineffecti ve Somewhat
effecti ve
Effecti ve Very effecti ve Extremel y
effecti ve

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 Extremel y
l i ght
heavy

How effective is search engine optimisation at supporting your overall marketing objectives?
SEO
0%
5%
10%
15%
20%
25%
30%
35%
40%
NIL Ineffecti ve Somewhat effecti ve Effecti ve Very effecti ve Extremel y effecti ve

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 Extremel y
l i ght
heavy

How effective is search marketing at supporting your overall marketing objectives?
SEM
0%
5%
10%
15%
20%
25%
30%
35%
40%
effecti ve
effecti ve

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 Extremel y
l i ght
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 Extremel y
l i ght
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 Extremel y
l i ght
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 Extremel y
l i ght
heavy

How effective is mobile at supporting your overall marketing objectives?
Mobile
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
effecti ve
effecti ve

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 Extremel y
l i ght
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?
Dai l y
36%
Weekl y
28%
Monthl y
12%
Every 2-3 months
11%
Annual l y
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 Ineffecti ve Somewhat effecti ve Very effecti ve Extremel y effecti ve

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
Australias 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 Australias 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 Australias 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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