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Australia - E-Commerce, Marketing and Advertising

Attention: There is an updated edition available for this report.

This annual publication offers a wealth of information on the trends and developments taking place in the m-commerce and c-commerce sectors. The publication provides analyses of the issues surrounding the growth of e-commerce, including e-banking, e-payments and online advertising. Information on mobile commerce developments are also provided, including m-payments and m-banking, included statistics and forecasts for both the e-commerce and m-commerce sectors.

Subjects covered include:

  • Analyses of key e-commerce trends;
  • E-commerce trends and statistics;
  • Information on e-payment and e-banking sectors;
  • Analyses of key m-commerce trends;
  • On-line advertising market update, including statistics and forecasts. 

The financial crisis has focused global attention on new infrastructure developments and facilitated a unique opportunity to shift the broadband emphasis from a high-speed Internet service to a national infrastructure for the digital economy that will underpin a range of positive social and economic developments. E-commerce is just one sector that 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.

Australia had already begun this process and it is now finding itself at the forefront of investigations into the development of the new infrastructure necessary to help stimulate the economy. Open access infrastructure provides the best way forward as it creates a multiplier effect that will assist developments in healthcare, education, energy and the environment, as well as in Internet and digital media.

The Australian government is also leading the world in this trans-sector thinking and the industry has embarked on a trans-sectoral campaign, convincing other sectors that an open network will give them the tools to save money and improve their service. At the same time this multiplier effect will create new jobs, perhaps as many as 10,000. This trans-sector thinking will be required to guide us through the next stage of human evolution. In this report we draw attention to the importance of looking across sectors to create that synergy.

E-commerceLooking in more detail at e-commerce the publication contains detailed statistics from e-business activity usage surveys. The Digital Economy affects everybody existing players such as telcos, banks, media, retail and they will need to adapt to the new environment, while new players will enter these markets from different angles. British research indicates that online users can save £70 per month. We survey the first areas that customers are interested in and which are therefore interesting commercial starting points. It looks at topics such as e-money, mobile email, and buying and selling over the Internet.

Micro-payment utilising e-banking has been discussed for more than 25 years. Online e-payment via telephone billing systems was launched in the 1980s; at the same time smartcards were trialled for micro-payments. However 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. Off-deck payment systems, using mobile phones, constitute another fast-growing market, as do calling cards. But the real breakthrough will only happen when the large financial institutions decide to become more serious about e-payments.

Prepaid telecommunications products make up a significant proportion of total telecommunication revenues. 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. The market is rapidly developing and the arrival of rechargeable magnetic cards is a major new development. The market in Australia is dominated by epay with the major banks and mobile operators commanding smaller shares. Significantly Australian mobile operators expect to further increase revenue earned from sales for prepaid mobile Internet access during the rest of 2010. Another growth market is the emerging prepaid electronic transport ticketing services.

M-CommerceRelative to Asian markets, especially in Japan and South Korea, Australia has a small m-commerce industry. The key elements of effective mobile commerce are mobile payments and mobile advertising. The period over 2009 and 2010 is a critical one for the development of a larger m-commerce market. No widely adopted standard for mobile payments has been developed in Australia to date. However mobile banking services have been launched by a number of major financial institutions and these services are expected to become more popular with the mass market in the short to medium term. Widespread adoption of mobile banking is often a precursor to increased adoption of mobile payments and mobile commerce.

Mobile advertising is also in its infancy in Australia; however all major mobile operators have advertising and more sophisticated call-to-action devices within their mobile web portals. There are several key issues impacting on the development of m-commerce in Australia. Typically these are issues related to the customer’s experience of m-commerce services and technical issues relating to the telephony infrastructure.

Online advertisingDefying market expectations, expenditure on online advertisements in Australia grew 18.5% year-on-year. Unabated by the current poor economic environment sales increased to $1.8 billion at the end of the 2009 financial year according to figures from PricewaterhouseCoopers. More specifically Australia’s online search advertising market achieved a 30% growth rate during 2008/09, with both revenues per ad and the amount of search ads served continuing to rise.

Buoyed by the increased use of multimedia advertising on the back of improvements in broadband availability has seen advertisers continue to experiment with new formats. 2010 may see increased use of targeted advertising delivered over the internet as well as increased use of mobile internet advertising by firms which has been driven by advances in the capability of multimedia handsets, the increasing use of mobile data services and the fall in the associated costs to the user.

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

1. Key elements of a Digital Economy
1.1 Infrastructure essential for the digital economy
1.2 Key sectors for the digital economy
1.2.1 Smart grids and the environment
1.2.2 E-commerce
1.2.3 E-government
1.2.4 E-health
1.2.5 E-education
1.2.6 E-science
1.2.7 Social media
1.3 Key requirements of the digital economy
1.3.1 Broadband
1.3.2 Trans-sector approaches
1.3.3 Open access
1.3.4 Internet neutrality
2. Government Policies for the Digital Economy
2.1 Australian government is leading the way
2.1.1 OECD gives Australia’s telecoms policy the thumbs up
2.1.2 Kick-starting the digital economy
2.1.3 NBN significant financial incentive
2.1.4 Benefits are beyond telecoms
2.2 Essential for public and private sectors
2.2.1 Multiplier effect creates new jobs
2.2.2 FttH long term infrastructure goal
2.2.3 Vertical models won’t deliver the national benefits
2.2.4 Other sectors need to adjust their policies as well
2.3 Innovation
2.4 Digital Economy Industry Working Group (DEIWG)
2.5 Trans-sectoral thinking required for governments
2.6 Regulatory frameworks are failing
2.7 National benefits are astounding
2.8 Conclusions
3. National Broadband Network
3.1 Government’s Trans-Sector Conference
3.1.1 The key sectors
3.1.2 Commitment from the Prime Minister
3.1.3 Infrastructure
3.1.4 E-health
3.1.5 E-communities and E-business
3.1.6 Trans-sector requirements and the NBN
3.2 National Broadband Network based on Trans-sector model
3.2.1 Trans-sector awareness update 2010
3.2.2 E-Services in the context of national broadband
3.2.3 Introduction to Trans-sector thinking
3.2.4 A matter of leadership
3.2.5 Barriers to broadband adoption
3.2.6 We lack the structures to implement trans-sector visions
3.2.7 Multiplier effect for the NBN
3.2.8 Trans-sector regulation
3.2.9 Removing blockages
4. E-Commerce
4.1 Trends & statistics
4.1.1 The key drivers of growth
4.1.2 Market statistics and surveys
4.1.3 The online market place
4.2 E-payment
4.2.1 E-payment - analysis
4.2.2 Service providers
4.2.3 Micropayment developments
5. Prepaid Payment Market
5.1 Introduction
5.2 Major players in Australia
5.2.1 Overview and statistics
5.2.2 epay Australia
5.2.3 Web-based service providers
5.3 Retail outlets
5.4 Revenue overview
5.5 Market developments update 2010
5.6 E-payment charging models
5.6.1 Card and PIN (scratch cards)
5.6.2 PIN-based systems
5.6.3 Rechargeable calling cards (swipe cards)
5.6.4 Other recharge models
5.7 Prepaid open to misuse
5.8 New markets
5.8.1 Electronic gift cards (open loop cards)
6. M-Commerce and M-Payment
6.1 Overview and analysis of m-commerce in Australia
6.1.1 Issues impacting development of m-commerce in Australia
6.1.2 M-commerce services
6.2 M-Payment
6.2.1 Introduction
6.2.2 Off-deck services need m-payments
6.2.3 Developments in Australia
6.2.4 Closed systems
6.3 M-Payment projects and services
6.3.1 NAB-Visa trial
6.3.2 MasterCard PayPass
6.3.3 Near-Field Communications
6.4 Mobile banking
6.4.1 m-banking overview
6.4.2 Commonwealth Bank
6.4.3 ANZ bank
6.4.4 St George Bank and Vodafone - credit card payments via PDAs
6.4.5 NAB - text messaging banking service
6.4.6 iPhone banking
6.5 Mobile advertising and marketing
6.5.1 Local advertising
6.5.2 Analysis of mobile marketing in Australia
6.6 Other m-commerce developments
6.6.1 Barcode readers on mobile phones
6.6.2 Smart QR codes
6.6.3 SMS m-commerce
7. Advertising and Marketing Industry
7.1 The online advertising market - moving into 2010
7.2 Mobile Internet advertising
7.3 Generation Y is driving the online media push
7.4 Revenue statistics
7.4.1 Online advertising revenue statistics and forecasts
7.5 Online classified advertising
7.5.1 Online ad market to eek out growth despite GFC
7.6 Online search and directories market
7.7 Online video advertising market
7.7.1 Telstra records strong online and mobile advertising growth
7.8 Website usage statistics
7.9 Market surveys
7.9.1 Digital Services survey - AIMIA
7.9.2 Frost & Sullivan survey
7.9.3 Children usage of social networking
7.9.4 Online entertainment and media activity
7.9.5 Ericsson/IDC - rapid growth for TV/video sector
7.9.6 ACMA survey on converged technologies
7.9.7 PwC Entertainment and Media Outlook report - to 2012
7.9.8 High-speed broadband equals high-spend online advertising
7.9.9 IAB survey on online advertising expenditure - 2007-2009
7.9.10 Search advertising revenues
8. Glossary of Abbreviations
List of Tables
Table 1 - Online users and other media usage
Table 2 - Buying over the Internet by business size - 2009
Table 3 - Items bought by SMEs over the Internet - 2009
Table 4 - Selling over the Internet by industry sector - 2009
Table 5 - Selling over the Internet by business size - 2009
Table 6 - Location of Internet customers selling to - by business size - 2009
Table 7 - Estimated market share - electronic mobile payments of total prepaid - 2002 - 2010
Table 8 - Major electronic payment providers and estimated market share - 2010
Table 9 - Estimated electronic payment market revenues - 2007 - 2011
Table 10 - Estimated breakdown of prepaid electronic payment market revenues - 2009
Table 11 - Online advertising revenue and forecasts - 1997 - 2010
Table 12 - Market shares key online advertising markets - 2006; 2009 - 2010
Table 13 - Australian online advertising revenue market - 2006 - 2010
Table 14 - Changes in Australian ad revenue by sector - 2007 - 2010
Table 15 - Nielsen top Australian websites by unique audience - 2009
Table 16 - Use of social networking sites by demographic - 2009
Table 17 - Social networking in the workplace - 2009
Table 18 - Social networking among children - 2009
Table 19 - Online chat room use among children - 2009
Table 20 - Australian entertainment and media market revenue by industry - 2007 - 2012
Table 21 - Australian entertainment and media market - annual growth by industry - 2008 - 2012
Table 22 - Australian consumer/end-user spending - 2007 - 2012
Table 23 - Australian consumer/end-user spending - annual growth by industry - 2008 - 2012
Table 24 - Australian advertising spend - 2007 - 2012
Table 25 - Australian advertising spend - annual growth by industry - 2008 - 2012
Table 26 - Australian entertainment and media market revenue by industry - 2006 - 2008; 2011
Table 27 - Australian entertainment and media market - annual growth by industry - 2007 - 2008; 2011
Table 28 - Australian entertainment and media market - consumer/end user spending by industry - 2006 - 2008; 2011
Table 29 - Australian entertainment and media market - consumer/end user annual growth by industry - 2007 - 2008; 2011
Table 30 - Australian entertainment and media market - advertising spending by industry - 2006 - 2008; 2011
Table 31 - Australian entertainment and media market - advertising annual growth by industry - 2007 - 2008; 2011
Table 32 - Share of consumer spending by industry sector - 2006; 2011
Table 33 - Share of advertising revenue by industry sector - 2006; 2011
Table 34 - Paid search advertising revenue - 2005 - 2006; 2010
List of Exhibits
Exhibit 1 - Faster broadband speeds offer more than just fast Internet
Exhibit 2 - Explanation: optical fibre
Exhibit 3 - Example items sold on average in Australia on eBay
Exhibit 4 - Interesting items being auctioned
Exhibit 5 - BPAY - company overview 1997; 2009
Exhibit 6 - Overview of Google Checkout
Exhibit 7 - PayPal - other developments

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