Speaking Sensis

The latest Sensis® Business Index recorded the third successive quarter of growth in confidence amongst Australia’s small and medium businesses.  Report author Christena Singh takes us through the key results and some of the challenges facing SMEs and the economy going forward.

It was really encouraging to see the Sensis® Business Index record the third successive quarter of growth in confidence amongst Australian small businesses.  SME confidence has now risen by some 40 percentage points in the past three quarters, to a net balance of 52 per cent.

And while the continued increase in confidence and performance is good news, it is important to realise that we are still only partly down the path of economic recovery.  If you look at the indicators compared to their long term averages, you can see that while confidence is now four percentage points above its long term average, all performance indicators are still tracking below their long term average levels.

For example, as you can see in the attached chart, the sales performance indicator is some four percentage points lower, profitability five percentage points lower and capital expenditure nine percentage points lower.  The indicator that is closest to its long term average is employment, which is only one percentage point lower.

And all of these indicators with the exception of capital expenditure have risen in the past quarter.  So Australian SMEs have made good progress on the path to economic recovery but there is still some way to go.

And this is perhaps emphasised by the fact that SMEs are expecting conditions to moderate over the next quarter to some extent, with more thinking that the Australian economy will be weaker in a year’s time.  While many SMEs are still facing challenges such as reduced demand and cash flow, others are already facing the “problems” of economic growth, including difficulties finding staff.

Six months ago the Australian economy had to face the challenges of economic downturn.  We have seen the Australian economy and Australia’s small and medium business meet this challenge.  But in many ways the challenges of economic recovery will be more complex, with the need to tackle both the problems of growth and decline at the same time.  This will be the challenge the Australian economy will face for the year ahead.

Charles Wright recently wrote in The Age how the benefits of search engine optimisation (SEO) and search engine marketing (SEM) for one small business provided a far better return on investment (ROI) than advertising in the Yellow Pages®.

It’s easy to find one example of a business that’s been successful with any sort of advertising. The challenge is to find lots of them. Yellow Pages® has hundreds of examples of advertisers who get a majority of their business through Yellow Pages®. We even put some in our TV ad earlier this year.

Charles’ article was based on a simple assessment of ROI: cost of SEM outlay and the return in website traffic compared to the cost of advertising with Yellow Pages® Online and the subsequent website.

Where his case fell down is that it left out a number of costs a small business faces when gearing up for effective SEM and SEO activity.

These include the costs of building, hosting and maintaining a decent website, and possibly the cost of an SEO/SEM consultancy (or a significant time cost if you are able to do it yourself).

Sure there are online businesses that can manage all this and find customers. But there are a lot of businesses that can’t. Which is where the Yellow Pages® network can deliver real value.

Through its network, Yellow Pages® provides an effective multi-channel solution. With one Yellow Pages® ad, a business goes in the Yellow Pages® Book, Yellow Pages® Mobile, and the 1234 and Call Connect phone services.

In addition, Yellow Pages® also gives businesses a significant online presence by putting them in yellowpages.com.au, whereis.com and by making Yellow Pages® listings available to be searched on Google Maps and Bing Maps.

In fact, if you add up all these print, online, voice and mobile services, you find that Yellow Pages® advertiser content can be searched for through services used by almost 65% of Australians every month.

And that doesn’t include search engines. Recognising their significant value, we’ve made Yellow Pages® content not only searchable through the major search sites but we’ve optimised the content for search engines as well. That’s why over 2.5 million referrals come from search engines to Yellow Pages® Online every month.

People searching Yellow Pages® are buyers, not browsers. And they are often serious buyers who are ready to make a major purchase such as buying tyres for their car, booking an appointment with a dentist, booking a function at a restaurant or hiring a tradesman for work on their house.

The Yellow Pages® network helps puts businesses in more places customers are looking – including major online sites – with ease and convenience, leaving them to get on with running their business.

It was interesting to observe the Digital Gurus panel conversation about the role that mobile advertising and social media will play in the foreseeable future at Monday’s Digital Marketing & Media Summit in Melbourne, and to compare this to what’s been said recently at similar forums in Sydney and published in marketing journals. It seems Melbourne’s marketing community is still treading with quite a bit of caution, perhaps waiting to see what others are going to do before going for broke and full integrating mobile and social media into their digital strategies…

A couple of the panellists observed that rightly or wrongly, mobile is still viewed as a bit of a ‘bolt-on’ to traditional marketing strategies. Sensis’ Cheryl Vize and a representative from Google agreed that we’re only just starting to see what mobile can achieve in terms of its ability to target consumers by personal profile and location. A major travel provider said they still a way off viewing mobile as a viable means for booking travel. This is interesting considering research such as the Sensis e-business Report based released in August revealed that 31% of male mobile users and 26% of female mobile users are accessing the internet on their mobiles and 41% use it to look for information on products and services and 25% have used it for banking. So it seems (and Google made this point) that mobile has a growing role to play where functionality and utility meet the consumer. Sure there’s a role for brand campaigns on mobile, but there’s also a massive opportunity to make services available via the most convenient and personal medium around. Perhaps major service providers just need convincing that device functionality can offer their consumers an optimal user experience…hopefully their digital agencies were listening!

On the social media front, key players in the travel and health insurance industry are realistic in their views that consumers don’t want to be their ‘friends’, but there’s a growing trend towards communities of people wanting to talk about travel and healthcare/insurance matters…so by monitoring this activity, and perhaps even setting up the infrastructure for discussion forums etc, brands can benefit by learning from their comments in order to better understand their consumers’ wants and needs.

What about smaller businesses wanting to reach their consumers via their channels? Cheryl said she sees Sensis’ role into the future as collaborating with them to help them understand how all of the different advertising channels, including emerging channels like social media and mobile, can help them and guide them through the maze of options.

As everyone kept coming back to over the course of the day, it’s not about jumping on the latest trend for the sake of it. Any marketing strategy needs to start with an understanding of who your consumers are and where they are looking.

I went along to the 15th Telstra Business Women’s Awards National Awards Ceremony on Thursday 12 November and was overwhelmed by the achievements of the inspiring business women in the room.

Christine Nixon, Head of the Victorian Bushfire Reconstruction and Recovery Authority and former Police Commissioner made a great speech, telling the room about her experience joining the police force as a 19 year old woman in 1972.

She spoke about the importance of respect and courage in the workforce, and how there weren’t too many people in 1972 telling her that one day she could be the Chief Commissioner of Victoria Police.

She recounted a time in her early career when she was being harassed by a more senior policeman and two of her male colleagues overheard. They marched straight in and made it very clear to the harasser that – “We don’t do that around here.”

At risk of sounding a little bit Sliding Doors I wonder what the impact of that situation and those six words have had on Christine Nixon’s career. If her colleagues hadn’t overheard the situation and 19 year old Christine had continued to be harassed, would that have changed Christine’s path?

I wonder if WA’s Gina Rinehart has ever been bullied? Gina, Chairman of mining house Hancock Prospecting was announced as the 2009 Telstra Australian Business Woman of the Year. She has being working in a heavily male dominated mining industry since 1992 and successfully transformed the small prospecting company into a growing mining house.

The awards followed comments from Deputy Prime Minister Julia Gillard from 10 November, lamenting the status of working women.

“A lot of progress has been made for women at work over the last 20 or 30 years, indeed all the world has changed in many ways.

“But there are still some troubling sings, there is still a pay difference between men and women, there is still a clustering of women tending to be in low-wage, low-skill occupations,” Ms Gillard said.

The latest Bureau of Statistics (ABS) data reported the average hourly gender pay gap was 13.1 per cent in May 2009, the biggest gap since 1996.

It’s figures like these that reinforce the importance of continuing to recognise and celebrate the achievement of women in business.

The Telstra business Women’s Awards have recognised the achievements of more than 400 women in business since its inception in 1995.

So you think office workers sit at their computers writing Word docs all day? Forget that. According to the latest Sensis® eBusiness Report, we’re all going shopping!

There’s something distinctly Escher-like about the Sensis® eBusiness Report.

Okay, so comparing the mind-bending explorations of the impossible created by Dutch artist Maurits Cornelius Escher with an Internet survey might sound a stretch (although the cover of the Sensis® eBusiness Report does have a freaky picture on it).

But, there is method in my madness.

The thing is, the longer you look at the Sensis® eBusiness Report, the more interesting little tidbits pop out at you.

Just like Escher, eh?

Every year around August, the Sensis® eBusiness Report comes out and gets its fair share of headlines – usually focussing on one or two key observations.

This year was no different. The main focus of reporting was on the uptake of mobile data services by Australian consumers.

But some other really interesting findings hit me as I stared at the report recently. They relate to the way eBusiness has evolved in Australia.

The rise and rise of eBusiness
First up, it’s clear that eBusiness has had a real growth spurt over the last two years.

There’s four distinct activities related to eBusiness measured by the Sensis® eBusiness Report: two (research and buy) sit on the ‘buy side’, while two (sell and promote) sit on the ‘sell side’.

And, as the table below shows, all of these activities have really packed on the muscle over the last two years: albeit at different rates. In fact, researching potential purchases has reached the point of near-ubiquity in Australia, with the buying and selling activities not far behind them.

Businesses placing almost a third of their orders online
The second observation is that the SMEs who have cottoned onto online ordering are using the web for an average almost a third (31%) of their orders.

Ponder that for a moment. 78% of Australia’s SMEs are placing, on average, almost a third of their orders online.

That’s staggering and it underpins just how far eBusiness has come in this country.

Having said that, it does look like online’s share of orders may have hit a bit of a ceiling. While the number of SMEs placing orders online has grown rapidly since 2007, the average percentage of orders they’re placing (31%) has remained static.

Around the world? Nup… around the corner
One final observation. Back when the web was a toddler, the talk was of globalisation. If I recall, the thinking went something like ‘anyone could sell anywhere so everyone will sell everywhere’.

And while the web certainly has given birth to a new generation of multinationals, it pans out (perhaps not surprisingly) that the overwhelming bulk of businesses remain focussed on their neighbourhoods.

In fact, it turns out that two thirds of SMEs mainly sell to local customers – in the same city or town. 11% mainly sell elsewhere in the state, 12% interstate and 4% overseas.

So there you have it. A growth spurt in the uptake of eBusiness; a high (although static) share of purchases being placed online and a real focus on the customers just around the corner.

The Internet may not have changed the face of business in the way we once believed, but it sure has changed the way we do business.

Anyway, enough said. I’m off shopping (click, click, click).

The latest Sensis® Consumer Report found a second successive quarter of improvement in consumer confidence – report author Christena Singh tells us why now is the time to kick goals for your business.

The latest Sensis® Consumer Report found consumer confidence up again – increasing by 13 percentage points and building on the previous quarter’s increase of 18 percentage points.

But let’s step back a bit. Consumer confidence peaked at a net balance of 61 per cent in November 2007. At this time consumers were not showing signs of concern about economic conditions in Australia. There were a few rumblings happening overseas though at this stage, and we had already measured are largest fall to that time in business confidence. It would be almost another year before the collapse of Lehman Brothers.

Consumer confidence fell to its lowest point in February this year – a net balance of 21 per cent. Overall, consumer confidence fell some 40 percentage points. This quarter’s increase represents consumer confidence recovering over three-quarters of the amount that it lost. That recovery has taken place within the past six months. Playing fields can shift quickly…

Now, to move to a completely different tack, we also had a bit of a look at how sport affects Australian consumers – and as a great sporting nation it is not surprising that over three-quarters of Australian are sporting fans. Consumers that were sporting fans were more confidence than those that were not.

Around Australia, the Australian Cricket Team was the most nominated as the favourite team, but looking around the states and territories AFL teams were most likely to be named as favourite in most states.

Now, my allegiances as a Melbourne Demons supporter are well known, and I was a bit disappointed that we did not top the list, but my second team “whoever plays Collingwood” did better. While Collingwood topped the charts for teams in Victoria, if you take all other teams together, anyone but Collingwood comes on top…

But on the economic front, Team Australia has been kicking goals – our economic fundamentals are the envy of most developed economies, based on decades of economic reforms. Australia did not record a technical recession, our major financial institutions have remained strong and our unemployment levels have not even come close to predictions.

But for many businesses the playing field has felt a lot different in the past year, with consumer spending having been impacted in many sectors. Australian consumers are expecting the economy to continue growing over the next year, and their spending expectations are improving. Recognising that Australia is on the path to recovery and positioning your business to take advantage of the opportunities of growth will be an important step to making sure that your business keeps kicking goals in the next few years.

Australia’s top ten favourite sports:
1.    AFL (21 per cent)
2.    NRL (12 per cent)
3.    Cricket (11 per cent)
4.    Soccer (11 per cent)
5.    Tennis (nine per cent)
6.    Swimming (four per cent)
7.    Netball (four per cent)
8.    Motor sports (four per cent)
9.    Rugby Union (three per cent)
10.    Golf (three per cent)

Australia’s favourite teams:
1.    Australian Cricket Team
2.    Adelaide Crows
3.    Collingwood Magpies
4.    Brisbane Broncos
5.    West Coast Eagles
6.    Carlton Blues
7.    Essendon Bombers
8.    Sydney Swans
9.    Hawthorn Hawks
10.    Fremantle Dockers

We’re a pretty tech-savvy population, early adopters of innovation. We don’t treat our handsets as a device any more – it’s a resource, a personal medium. For many, it’s our diary, our music store, it stores all of our secrets – basically, it’s our best friend!

A growing number of advertisers are turning to mobile to supercharge traditional media by targeting campaigns to specific user groups, and adding a stronger response mechanism than they can achieve with any other medium. I’ve recently had the opportunity to speak to a number of industry peers and commentators about whether mobile really is the great marketing enabler, and I think there are three clear reasons why it is.

The mobile internet audience is available and ready.

Currently, over 8 million Australians use a mobile phone connected to a 3G network. New smart phones are precipitating the uptake of mobile usage. Retail analyst group, GFK reports that retail sales of smartphones in Australia grew by 604% in the June quarter while standard mobile handset sales fell by 30%.

The June 2009 Sensis® e-business Report based on a survey of 1,500 Australians revealed that 31% of male mobile users and 26% of female mobile users are accessing the web on their mobiles.

Almost half of all 20-29 year olds have now used mobile internet, while 47% of 14-17 year olds, 34% of 18 to 19 year olds, 33% of those in their 40s and 24% of 50-64 year olds are also surfing the web on their handsets.

As to what Australians are doing with the mobile web:

• 41% use it to look for information on products and services;
• 40% are accessing the mobile web to use social networking sites;
• 36% are using it to find suppliers of products and services;
• 27% are downloading video content;
• 25% are downloading games;
• 25% are doing their banking;
• 17% are watching TV; and
• 12% uploading video content.

The Australian Interactive Media Industry Association’s Mobile Lifestyle Index survey findings which were released this week validated that mobile web browsing is on the rise, with 21 per cent of the 3,710 respondents visiting websites on their mobile phones at least once a day. The report’s author, Dr Marisa Maio Mackay, said accessing the web, video, music and information on mobile phones was now well and truly mainstream, and that Australians are comfortable with mobile phone advertising. Our experience at Sensis certainly bears out these findings.

Mobile reaches buyers and browsers

Mobiles are conducive to search, being with you at all times when you’re out and about looking for products, services and places. This explains why usage of Sensis’ mobile sites including Yellow Pages® Mobile, White Pages® Mobile, Whereis® Mobile, Citysearch® Mobile and Sensis Search has double over the last 12 months to almost 2 million visits a month. When the Yellow Pages® application for iPhone was launched in August, it shot to the number one position in Apple’s Lifestyle category and the number two position in its top 25 free applications. This is people using their mobile actively searching for goods and services.

Mobile display ad campaigns have also far-exceeded many people’s expectations across a range of sectors. They allow advertisers to display information in a teaser format and to entice mobile browsers to click through to a specifically designed ad site to find out more about a product, service or offer, download a video or wallpaper or click to place an order. MediaSmart recently notched up 200 mobile display campaigns for advertisers in the auto, finance, FMCG and entertainment sectors. These campaigns are getting real results: the average interaction rate for mobile advertising is about 30 per cent – that’s 30 per cent of people clicking on an ad and going on to so something else, such as downloading a video, wallpaper or ring-tone, entering a competition, making a call or ordering a product. This is compared with a 3-4 per cent interaction rate which is commonly achieved for online.

Mobile is the glue that brings all the elements of a marketing campaign together

One of the really exciting aspects of mobile’s addition to the marketing mix is its ability to interact with other media, enabling advertisers to extend the reach of offline and online advertising. There are a range of other opportunities to integrate mobile with other media, for example:

• SMS shortcodes – eg. ‘text 19WIN’.
• Mobile codes – scan a code with your mobile camera to get access to content on your mobile
• Send to mobile – search online and take the result with you
• Coupons – present for redemption at a retail store
• Voice to mobile – call a voice service for information or directions and have the info sent direct to your mobile.

Mobile offers sophisticated targeting capabilities to the marketer

The mobile audience can be refined by age and gender, but also by location, household income, and time of day. Media Smart, 3 and Vodaphone have demonstrated similar targeting capabilities for the last year or so. At MediaSmart, we can currently target 1 million Telstra mobile customers, and this is set to increase. Consumer information is ascertained based on the billing address that they include in their mobile contract, which is then refined according to their Mosaic profile – a geodemographic classification that categorises people into 11 groups according to their ‘neighbourhoods’, which is more accurate than post code information. So a Bali holiday package could be marketed to 25-year old females in the ‘Young Ambition’ group and a Gold Coast fun park 40-somethings in the ‘Pushing the Boundaries’ group. And you could target the message to the target audience at the end of a hectic day, just when they’re wishing they could get away from it all.

The capability is also being developed to deliver advertising that is contextual to where a person is located at that very moment. Location-based solutions can allow retailers to send a mobile coupon or incentive when a prospect is just around the corner. For example, in the near future, you might make a video of a house for sale available when the user is in the area during inspection times.

A parting thought…

Mobile is not a marketing add on – it’s at the centre. And that’s because mobile is an essential part of the lives of most in the developed, developing and increasingly, the underdeveloped world!

As Henry Jenkins, Professor of Comparative Media at MIT recently said in a presentation to Tribal DDB in London, “the future of media and advertising is not about technology – it’s about emerging cultural practices”.

This year Sensis is sponsoring a series of lunches for members of the Sydney Chamber of Commerce. After two of these lunches, it’s really pleasing to get feedback from this diverse audience that we’ve shared a few things about consumers, small businesses and advertising that they didn’t already know…and actually wanted to know!

I mean, let’s face it, how many times have you turned up to a seminar or lunch only to walk away thinking, I’ve just been robbed of two precious hours in my life and I should demand a refund! I’m not saying Sensis hasn’t been guilty of this in the past… we’ve had our moments like any large business given the opportunity to put someone on the soapbox. But we’re starting to use opportunities like this to – and don’t gag here – help people.  So we asked the Chamber what their members wanted to know to about digital marketing.

And as the chicken and beef mains made their way around the room, our head of Yellow Pages® Digital, Sandeep Baruah, explained that the future of digital marketing in business will see a range of new applications at the disposal of the marketer. The question is what opportunities do they really present to increase brand equity and a company’s bottom line?

For some business, just knowing where to start is daunting in itself.

Sandeep unlocked some of the mystery around digital marketing tools such as:

• Social networking sites
• Search engine marketing
• Search engine optimisation
• Content syndication
• Mobile internet and
• Mobile codes

And he gave the audience a realistic check-list to help them make decisions about their digital marketing strategies:

• Who are my customers and where are they looking?
• What media are they accessing that influences their buying decisions?
• Which of these channels can I use to engage my customers?
• How can I use new technology to integrate campaigns and content across different media?
• Finally, what return am I actually going to see from this investment and how will I measure it?

Answering these questions will help any business go a long way to ensuring that they’re not simply swallowing the hype around new ways of reaching consumers, or putting all of their eggs in one basket.

In his April speech “The Rise of Social Media“, Sensis CEO Bruce Akhurst commented on the US mobile takeaway business – Kogi BBQ – and their success in using Twitter to keep customers in touch with where their vans would be.Bruce commented that Kogi BBQ had acquired 15,000 Twitter followers in its short life.

Well, I happened across Kogi BBQ’s Twitter page the other day. Turns out their band of followers has more than doubled – to over 36,600 – in just three months.

Ahhh… the tweet smell of success.

Okay. So, hopefully my last article established that print isn’t a spent force in local search… it’s actually growing.

Having done that, however, I now need to change tack a bit and proffer a slightly different view: that this whole ‘print vs online’ debate is all a bit of a pointless exercise.

For the best part of a decade now, local search players of various persuasions have been running around with their chests puffed out, proclaiming to anyone who’ll listen that “my channel’s bigger than your channel”.

But the sad truth about this posturing is that it’s all pretty much irrelevant.

The bottom line is that buyers are exercising their right to choice and searching for local businesses across all sorts of different channels – like print, online, voice and mobile.

Here’s a case in point.

If we cut the print vs online usage of all the print and online services containing Yellow Pages® advertiser content, we find an interesting set of numbers(1) :

• 41% of the audience use print only;
• 32% use online only;
• 26% use both.

Clearly, in this environment, you can’t truly optimise a local search strategy by choosing between print or online (or any of the other channels).

You can only do that by choosing them all.

Or course, that’s not such an easy thing. If you start toting up the number of vendors offering local search services across all these channels, you’ll quickly find they number into the hundreds.

If you tried to deal with all of them, you could end up spending so much time finding customers that you’d have no time to serve them.

So, the ideal solution in local search ends up looking a bit like this:

1. Provide a wide range of services to buyers so they can choose the way they want to search. That can ultimately lead to a larger audience;
2. Syndicate advertiser content across as many of those channels as possible so advertisers can optimise reach and still get some sleep.

That, in essence, is what we’ve tried to do with Yellow Pages®.

When you advertise in Yellow Pages® today, you’re not just advertising in the print directories. Your advertising is syndicated across a broad network of different services that spans not only different channels but different brands as well.

This includes not only the Yellow Pages® print directories, but the yellow.com.au and whereis.com.au web sites, the 1234 and Call Connect voice services and the Yellow™ Mobile and Whereis® Mobile sites as well.

And it also includes sites from other vendors. Today, Yellow Pages® advertiser content can be searched for in Google Maps, MyLocal, LiveLocal and the new Bing Maps site.

The net result of this ‘one ad, many avenues’ strategy is that advertisers can reach out to a much larger base of potential buyers through the one campaign.

In short, the potential for more reach, more easily.

And the impact of this sort of multi-channel strategy is pretty significant. The bottom line is that syndication through a range of brands and channels leads to a total potential reach for advertisers that no single channel local search solution can come close to matching.

In online, for example, there are six local search sites that individually hold more than 2% share of online traffic in Hitwise’s business directories category(2). They are yellow.com.au, whereis.com.au, whitepages.com.au, Google Maps, TrueLocal and Hotfrog .

Because of Yellow’s syndication strategy (allowing Yellow Pages® content to be searched for through yellow.com.au, whereis.com.au Google Maps as well as Microsoft’s local search sites), Yellow Pages® advertising could appear on sites that generate 64.5% of this traffic. White Pages® Online accounts for 22.5% and the other sites 13%(3) .

In other words, the multi-brand online syndication leads to a massive share of the traffic generated by these major local search sites.

But then you have to figure in print, voice and mobile as well. These add something like 15 million searches to the potential reach of Yellow Pages® advertising every week(4) .

Clearly, being able to advertise across multiple brands and channels is a major advantage in local search.

Which, as I said before, kind of renders this whole ‘print vs online’ debate as moot.

The bottom line here is that people aren’t turning into online zealots, no matter how much some wish they were.

Instead, buyers are showing their preference for choice.

The local search providers and advertisers who recognise that are the ones most likely to win.

Related links

Sensis on local search 1 – BIG

Sensis on local search 2 – GROWING