Speaking Sensis

In business it is important to look forward, but it is also important to stop sometimes and look back.

One year ago, the Sensis® Business Index recorded the lowest level of confidence among Australia’s small and medium businesses since the survey began in 1993.  Confidence at height of the downturn fell to 12 per cent net balance in the first quarter to 2009.  This quarter, one year on, we measured confidence at 49 per cent.

And you can see from the chart it has been a pretty volatile couple of years in the business world.  And while confidence has improved, it suffered in the past quarter – such is the complexity of economic recovery. 

When global economies headed downhill, governments went into action with stimulus packages to keep things ticking over. The prescription that governments and central banks followed worked to a large extent.

While I could make a comment here about roof insulation, it is probably best to just say that the Australian economy made it through without a recession, technical or otherwise. Let’s just leave it at that…

The interesting thing is that the prescription for the GFC was pretty well known, but what was not well-known was what to do “next”.  As an economy we are now at this “next” stage and Australia’s small and medium businesses are saying that they are still facing problems of economic downturn, such as falling sales and lower demand.

But at the same time they are having to concurrently deal with the “problems” of growth, such as trying to find staff for their businesses and trying to get finance to grow their businesses.

Managing the recovery is as complex, if not more so, than managing the downturn. But it is still important to look back to where we were a year ago and what we have achieved since then.

And after you look back, it is also important to remember to start looking forward again. I’d be keen to hear about what you see on the horizon…

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.

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

Australia’s small and medium businesses have recorded another record quarter of surging business confidence – author of the Sensis® Business Index Christena Singh tells us where exactly we are on the path to economic recovery.

It was great to see another surge in business confidence amongst Australia’s small and medium businesses this quarter. In the September 2009 Sensis® Business Index we saw confidence up 20 percentage points to a net balance result of 50 per cent.

But it is important to look at the path we have trodden over the past few years.  This result has come from a record low of 12 per cent just two quarters ago.  Overall, the highest result we have every measured for SME net confidence was 67 per cent back in August 2004, so a result of 50 per cent, coming from a record low two quarters ago is strong by any measure.

If we take another step back, it is almost two years since Australia’s small and medium businesses told us their confidence was slipping – we measured the largest single quarter drop in SME confidence in November 2007, with confidence falling almost every quarter between then and June this year. So to see two successive records set in growth in the confidence indicator is great news.

While the results this quarter are very positive, it is important to look at the detailed analysis as well, and this shows that the growth in confidence and expectations is much stronger than the growth in performance. The September 2009 results saw sales improve strongly, but it was to a zero per cent net balance – this means that the proportion of SMEs that increased their sales in the past quarter was exactly balanced by the proportion that recorded a fall.

Likewise, profitability improved, but remains net negative. Employment fell back to net negative five per cent, and while the capital expenditure performance was strong, it has continued to outstrip expectations, with SMEs still hesitant about investing in their businesses.

So while the signs for recovery are good, there are still downside risks, and it will be important to see the performance indicators move into positive territory before we can really say that we have a sustainable recovery in place – but at least now the signs are positive and heading in the right direction!

According to the Sensis® e-Business Report – one of Australia’s longest running and most respected digital media surveys – the mobile generation has arrived.

For years there’ve been promises. Now the proof is well and truly in the pudding. According to the 14th Sensis e-Business Report, Australians and their mobiles have really clicked.

Almost half of all 20 – 29 year old Australians have now accessed the mobile internet. And teenagers aren’t far behind them, with 47% of 14-17 year olds and 34% of 18 – 19 year olds also surfing the web from the comfort of their phones.

In fact, all up, over a quarter of all Australians over the age of 14 have now accessed the mobile internet.

But the size and growth of the mobile generation is only part of the story. The other exciting bit is how Australians are using the mobile internet.

Unlike their dot.com boom predecessors, today’s mobile generation know exactly what the internet is about. And they’re getting straight down to business – in a big way.

41% of mobile internet users are looking for information on products and services, making it the number one mobile activity. And number three, at 36%, is looking for suppliers of products or services.

According to Mark Shaw, GM of Sensis’ digital advertising business MediaSmart, “this interest in product and service information is well and truly hitting the mobile usage numbers. Usage of Yellow Pages® Mobile has almost tripled in just one year¹”.

But the mobile generation isn’t just searching. They’re buying as well. 25% have purchased a ringtone, 25% have undertaken mobile banking, 19% have made a credit card purchase, 12% have ordered goods and services, and 10% have bought or sold through an auction site.

Clearly, this is an audience with a penchant for buying. And that’s gotta bring a smile to any advertiser’s face.

Of course, people aren’t just using their mobiles for business. They’re getting social as well.

40% of the mobile generation have used their mobile to access a social networking site. 27% have read a blog (while 12% have written one) and 7% have used Twitter from their mobiles.

And, not surprisingly, the mobile generation is tech-savvy to boot; getting stuck right into the most cutting edge rich media and applications.

Like the 27% who’ve downloaded video, the 25% who’ve downloaded games, the 17% who’ve watched mobile TV and the 12% who’ve scanned a mobile or QR code.

It’s now beyond doubt. A new revolution has begun. And it’s all happening right there in your pocket.

There’s a lot of support for small and medium enterprises (SMEs) coming through from Sensis at the moment. We’ve just launched a new ‘Small Business’ section on the Sensis corporate website. Here you’ll be able to find all the free resources Sensis produces for SMEs  in one convenient location. And we can also confirm that a new book specifically for SMEs focusing on sustainable business practices is in the making.

The ‘Small Business’ page is the new home to a range of popular resources Sensis produces for Australia’s SMEs, including the Small Business, Big Opportunity advertising and marketing guide; Sensis® research reports such as the quarterly Business Index, Consumer Report and annual e-Business Report and a summary of Sensis’ small business partnerships and a useful links page.

With all the free resources produced for SMEs now in one convenient location, smallbusiness.sensis.com.au has been concluded and traffic to that site is now redirected to the new ‘Small Business’ page.

As well the new page, following the great feedback received about the advertising and marketing guide Small Business, Big Opportunity, Sensis has decided to produce a new book exploring how SMEs can grow and prosper by implementing sustainable business practices.

Jon Dee

Environmental expert Jon Dee has partnered with Sensis to research and write the book, which will deliver easy to understand practical insights.

Jon co-founded Planet Ark with Pat Cash in 1991 and today is Founder and Chairman of the Australian advocacy organisation ‘Do Something!’ He is also the Environment Editor for Channel Nine’s nationally broadcast TODAY Show.

Jon has more than 25 years working on cause-related projects. Some of the highlights include co-producing ‘The World Against AIDS’ global broadcast which launched ‘World AIDS day’ in 1988; initiating and running ‘Rock Aid Armenia’ in 1989; co-founding Australia’s ‘National Tree Day’ with Olivia Newton-John which resulted in more than 12 million native trees and shrubs being planted… and that’s just to name a few!

Jon and Sensis have worked together before when Jon initiated the Sensis sponsored RecyclingNearYou.com.au. Working alongside Sensis’ ongoing commitment to supporting SMEs, the new book will be available to download or order at no cost from the new ‘Small Business’ page towards the end of the year. Keep an eye out on about.sensis.com.au for updates.

If you have any feedback about the new ‘Small Business’ page or any questions about the upcoming book, please contact Smallbusiness@sensis.com.au.

The latest Sensis® Consumer Report recorded the largest rise in consumer confidence in a single quarter that it has measured.  Report author Christena Singh tells us why this latest bit of good news is important for the Australian economy.

It is great to see the Sensis® Consumer Report recording the largest increase in consumer confidence since the survey started exactly five years ago. This quarter we saw consumer confidence increase by 18 percentage points to 39 per cent – the strongest level we have seen in 15 months.

To see such strong increases in both consumer and business confidence is heartening, because we are now seeing consistent, strong improvements in the sentiment that forms the heart of the Australian economy.

In fact, many of the indicators of the Australian economy improve, and the much heralded “green shoots” theories abound.  The latest Australian GDP figures were positive, we are not in technical recession, and a range of other statistical indicators are telling the same story.

But what I personally find interesting in the latest data is that consumers are not basing their confidence on the fact that the Australian economy is not in recession. In fact, only four per cent of Australians currently thought that the Australian economy was growing, despite what the national accounts might say.

At the grass roots of the Australia economy, both consumers and businesses are under no illusions about the current state of our economy. What they do agree on is that over the next year they believe think things will pick up.

This is particularly important, because businesses need confidence to invest in their businesses to produce growth and jobs in the future. And business confidence depends on strong consumer confidence – on businesses seeing consumers – customers – coming through their doors.

Consumers have told us they base their confidence most strongly on employment, and in particular at the moment, job security. Some 30 per cent of confident Australians told us they were confident because they had a secure job.  This compared to 21 per cent of worried Australians who told us they were worried because of unemployment.

So it is a vicious circle to some extent – businesses base their confidence on the demand of consumers, who in turn base their confidence on businesses employing them. So if both business and consumer confidence are moving up at the same time it bodes well for the Australian economy for the next year.

You can download a copy of the latest Sensis® Consumer Report here.

The latest Sensis® Business Index has recorded the largest rise in SME confidence in a single quarter since it started 16 years ago.  Report author Christena Singh tells us why the good news from small businesses is great news for the Australian economy.

I was at a conference earlier this year just about to present when the speaker before me, Peter Switzer, one of Australia’s most respected small business and financial commentators, put a slide up with a quote from me back in November 2007. It recounted how the Sensis® Business Index had just recorded the largest fall in business confidence for SMEs in a single quarter since the survey started more than 16 years ago.

I can remember the time well, the Australian economy was still looking to be in peak condition, Australia was heading into the last election and while the US economy was already in serious trouble, there was no serious talk that the global economic conditions would impact Australia.

The first significant indicator of economic downturn was picked up in the voices of small business, and this first steep downward movement in confidence heralded one of the most difficult times the Australian economy has experienced in recent history.

So it is great to announce the findings this quarter that the Sensis® Business Index has recorded the largest increase in business confidence in a single quarter.  It is great because this is a much needed boost in confidence for Australia’s small businesses, coming from the lowest levels of business confidence on record.

This quarter the Sensis® Business Index recorded a 17 percentage point increase in business confidence, which rose from 13 per cent to 30 per cent. Increases were also recorded in sales, employment, profitability and capital expenditure.

And while the strong improvements are very welcome, it is important to remember that all of these indicators remain in negative territory overall, that is more businesses experienced falls than increases.

There is a long way to go to see these indicators return to healthy positive territory. But the improvements are significant and hopefully signify a sustained rebound in economic conditions, with Australia’s small businesses leading the way.

Small businesses were the first to tell us of economic downturn – small businesses are now telling us that the economy is starting to turn around.

Today, Sensis CEO Bruce Akhurst spoke at an American Chamber of Commerce luncheon on what he describes as The Age of Engagement.

Digital media isn’t merely cannibalising traditional media. It’s giving marketers new tools to work with and the ability to build deep, valuable relationships with customers.

The first presentation in this series looks at how local search is helping marketers support consumer purchase decisions in exciting new ways. And how the next generation of local search is being driven by the mobile phone.

The second presentation looks at social media. Be sure to check back as this presentation will be uploaded shortly.