Speaking Sensis

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 AIMIA Digital Summit in Sydney last week included presentations from the likes of BBC, Facebook, Viocorp and Microsoft, research presentations from the Internet Advertising Bureau, Nielsen Online and Research International and case studies from Aussie, Witchery Holdings and Tourism Queensland. To sum up some of the key themes that emerged over the two days… online usage is flattening out but continuing to grow and mobile internet usage is on the up. Companies like Aussie and Witchery Holdings now attribute a significant proportion of their revenue to online retailing.

But, 97% of Australian retail sales are still occurring offline. This highlights the importance of local search services like Yellow Pages, which provide the link between online purchase research and the bricks and mortar supplier.

Jonathon Stinton from Research International explained that with so many channels at the disposal of the consumer and the advertiser, it’s getting harder and harder to determine what the key influencers are over a purchase decision. He calls this the “Twilight Zone of information”. So what are influencers as far as we can tell? Consumers are strongly relying on the web to research retail buying decisions and social media is having a minor but growing impact on this phase of the purchase cycle. With the phenomenal rise in social media traffic, brands want a piece of the action and are exploring ways to tap into this and develop relationships with consumers.

So what should an advertising and media company take away from this? We need to be focused on providing choice to both buyers and sellers – and hence our multichannel strategy. With digital such a major part of many Australians’ search repertoire, Sensis needs to provide the most relevant online and mobile local search experiences possible to bring buyers and sellers together. Speaking on the closing panel, Sensis’ GM of Digital Development Cheryl Vize said this is why Sensis is so proud of innovations like the Yellow iPhone app and why we’re absolutely determined to keep “raising the digital bar”.

One thing seems clearer than ever: there may be no crystal ball, but it’s never been as important as it is now for a business to get the magnifying glass out and really examine the DNA of its target market and what media they are consuming where, when and for what purpose in order to determine how to get the best cut-through.

Crunch! is a new column looking at the numbers behind advertising and local search. In today’s Crunch!… Defining what a click is. That’s easy. Defining what a click isn’t. That’s harder… but much more important.

In the 12 years I’ve been working in online media, there’s one thing that’s always befuddled me.

It’s the fact that online marketers cite measurement as the biggest barrier to advertising on what is touted as the world’s most measurable medium.

Go figure!

To highlight this, a 2007 McKinsey Quarterly report* found that over 50% of Internet advertisers saw “insufficient metrics to measure impact” as a barrier to using or considering digital advertising.

And there’ve been similar surveys, with similar results, in Australia.

So, what’s going on here? How the hell can measuring such a measurable medium raise so much angst?

I’ve long thought there’s two reasons.

The first is confusion about how we’re measuring – in other words the different public measurement services and their methodologies. For quite a while now, there’s been concern in Australia about the accuracy of online statistics. Naturally, when there’s a lack of faith in the source, there’s going to be a lack of faith in the data as well.

The second is a lack of clarity around what we’re measuring. Just think about the simple issue of online traffic as an example. Over the years, we’ve been stumped by a blinding array of different metrics – hits, page views, sessions, visits, unique users and unique visitors just to start with.

These metrics all mean slightly different things but, despite that, they’re often quoted interchangeably: a recipe for much pulling-of-hair and gnashing-of-teeth if I ever saw one.

This metric malaise is a really big problem, and I wanted to touch on it today with a focus on one particular metric – the humble click.

WHAT’S A CLICK?

The other day, an interesting question was raised at a customer panel session I attended.

On the surface, the question – “what (in advertising terms) is a click?” – would seem pretty straightforward.

Put simply, it’s when a person clicks from a feeder – like a search engine or banner ad – to a particular advertiser’s web site. It’s the action that gives rise to pricing terms like ‘cost per click’ and ‘pay per click’.

Okay, no biggie there.

CLICKS AIN’T LEADS

But the question becomes a lot murkier when you think about what a click isn’t. In particular, whether a click and a lead are the same thing.

Now, this might seem like nit-picking, but it’s a really important question – especially for the numerically-obsessed, like me. It gets to the heart of how you understand, measure and evaluate the contribution of different media to your business.

To start with, let’s think about this in a traditional media context.

Let’s say you send out a DM piece to 1,000 potential customers. As a result, 100 people take a moment to read it and 10 are so enamoured with what you’ve said that they give you a call.

What have you got there? 1,000 leads? 100 leads? 10 leads?

If you’re a media outlet trying to justify your existence, you might say 100. You might even say 1,000 if you’re feeling particularly hairy-chested (and/or deluded).

But if you’re a manager trying to get a handle on your sales pipeline, the answer is unequivocal… 10.

A lead isn’t a passing ship; it’s a real potential customer who has called, emailed, visited or contacted you in some way expressing a real interest.

A lead is a real sales opportunity that – most critically – you have a real chance to close.

Don’t get me wrong. The fact that 100 people read your DM piece (or clicked through to your web site) is great. They now know you and have you in the back of their minds. They’ve interacted with your brand.

But those people don’t qualify as ‘leads’ until they take that next step and get in touch with you.

BRINGING CONVERSION INTO THE MIX

Clearly, you can’t properly equate clicks to leads (which take the form of calls, visits, emails and other forms of enquiry) in the way some try to do these days.

To properly measure the leads generated by online advertising, you need to bring another ratio into play – conversion.

Conversion measures how many people actually took that next step of contacting you.

Most research suggests that online conversion rates are quite low – in the low single digits. That means the actual leads stemming from your online advertising may only be a relatively small fraction of the number of clicks.

THE BOTTOM LINE

So, what’s the bottom line here?

Firstly, comparing clicks with leads ain’t comparing apples with apples. If you want to compare clicks generated by one form of advertising with calls or visits generated by another, you need to think about the conversion as well. How many people actually visited your site and then contacted you?

Secondly, think about how well your web site converts browsers to buyers. Optimising online lead-generation campaigns means not just getting lots of people to your site, but having a site that efficiently converts them to leads as well.

And finally, if someone comes to you offering a mountain of ‘leads’, ask them precisely what they mean by the word ‘leads’.

How many of them will be real leads – enquiries from potential customers that you have a chance to close?

You might just find they’re leading you up the garden path.

* How companies are marketing online: A McKinsey Global Survey. September 2007

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

I read in the paper this morning that when Elizabeth Blackburn was a young woman, she was asked by a family friend: “What’s a nice girl like you doing studying science?” On Monday, Dr Blackburn became the first Australian woman to win a Nobel Prize.

It made me realise how lucky I am as a businesswoman in 2009, that I don’t have to put up with that kind of rubbish. It also made me proud to be working for a company with 40 per cent of its senior management positions held by females.

Fresh off my Australian-business-woman-pride with role models like Dr Blackburn leading the way for young business women all over the country, I gladly accepted an invitation to attend the 2009 Victorian Telstra Business Women’s Awards at Crown Palladium in Melbourne on Tuesday 6 October.

The winner of the White Pages® Community and Government Award category was Professor Pauline Nugent, Dean of Health Sciences at Australian Catholic University and Chair of Southern Health.

Professor Nugent was overseas for work at the time of the awards announcement and had sent her sister along sans speech because she was so sure she wasn’t going to win. Not only did Professor Nugent win the White Pages® Community and Government Award category, she was also announced as the 2009 Victorian Telstra Business Women of the year!

The Honourable Maxine Morand, Minister for Women’s Affairs congratulated Professor Nugent and spoke about the wonderful progress women have made in the business arena in Australia, but she also reminded the room of 500 that there is still a way to go with regard to equality in the workplace.

“Legislation may be needed to set quotas for board appointments in the private sector given that only eight per cent of board members on the top 200 are women,” Minister Morand said.

It was a good reminder for me, that while I’m lucky enough to work for a company which has many inspiring business women holding senior roles, it’s not the same across the board, so to speak.

Minister Morand has also recently mentioned that in the 2008/09 financial year, it takes women an extra 62 days to earn what men earn over the same period, based on average full-time earnings.

So, while we have made progress in Australia – there’s still a long way to go. We need to start challenging the way we think about women in business and continue the great (albeit slow) progress we’ve made to achieve equality among men and women in the workplace.

Ahh, what fun. The phrase “not happy, Jan” of the Yellow Pages® ad of the very same name was voted as Australia’s number one catchphrase on Channel 10’s The Spearman Experiment tonight.

Connie Barbagallo joined Sensis’ Sustainability team as a trainee in July 2009 under the WPC Group’s GreenSkills initiative.

GreenSkills creates opportunities for apprentices in the green economy, so our workforce has the skills to make a real difference to the sustainability of Australia’s future.

Read more about Connie’s Sustainability Coordinator traineeship at Sensis here.