Speaking Sensis

Tansel Ali in training for World Memory Championships

PR for Yellow Pages can be, I think it is fair to say, a challenging and even “tough gig” at times. This year we have been having some fun and the creative juices have been flowing – first with the Hidden Pizza Restaurant and now, with our walking talking human Yellow Pages.

In a world first, Australian Memory Champion, Tansel Ali is letting his mind do the walking by memorising all of the display advertisements, that is those the size of a standard business card and larger, in the Sydney Yellow Pages® Book. In training for the 2010 World Memory Championships in China later this year, Tansel has devoured over 2,306 pages, over 16,000 numbers and thousands of ads to recite any business name and phone number on request.

Tansel’s rigorous training regime allows him to store each advert in his memory after just 30 seconds of focus, by using a series of visual journey and recall techniques.

From the 13 – 16 May, Tansel will be at the Yellow Pages® stand at the HIA Sydney Home Show showcasing his skill. The public is invited to go down there and challenge him to recall and quote names and numbers from more than 2,000 home improvement or DIY business from the Sydney Yellow Pages® Book.

Do you remember playing Chinese whispers when you were a little tacker?

A group of kids line up. You whisper a word – let’s say ‘egg’ – to the first one. One by one, each child whispers the word down the line until – miraculously – it comes out the other end…

As ‘football’!

Well, it seems the online advertising industry’s got its own little game of Chinese whispers going at the moment.

The ‘egg’ takes the form of research reports from organisations like the Internet Advertising Bureau and Frost & Sullivan. These reports have confirmed that online advertising’s search and directories segment has now surpassed $800m annual revenue(1).

The ‘football’ refers to the outlandish interpretations of this data being presented by a growing coterie of commentators.

Last week, Paul McIntyre reported in the Sydney Morning Herald that Google may surpass $1bn revenue this year(2) . This was followed up by Julian Lee in Saturday’s SMH , who said(3):

“Yet last year Google received an estimated $800m in revenue from Australian advertisers…”

Recognise that $800m number?

Meanwhile, Crikey took the Chinese whispers to an entirely new level by claiming that(4) :

“…Google’s Australian advertising revenue may have reached $1 billion a year…”

Now, the purpose of this article is not to speculate on Google’s revenue. I’ll leave that to others.

It’s to comment on a common misconception that the $800m odd search and directories revenue is all coming from search engine marketing (SEM). It’s a misconception that’s underpins not only some of the numbers in these articles, but several other observations made about the industry in the past.

So, let’s test that theory.

SEM is an $800m per year business.

Well… not really. You see, the sector to which the $800m is attributed to is called online search and directories. To state the obvious (but increasingly ignored), there’s a chunk of revenue from directories like Yellow Pages® Online in this number. In 2008, Frost & Sullivan (the only researcher to break out search and directories revenue) forecast that the annual revenue from online directories would be approximately $264m out of a total for the sector of $869.7m(5) .

For the record, Frost’s forecasts for the total were a bit on the high side (not surprising given the slowing economy) but they were pretty close to the reality subsequently reported by the IAB.

Okay, so SEM is a $600m per year business

Hmm. Sorry. Not right there either.

The search and directories sector also contains something that Frost calls ‘contextual search’. This is a form of advertising that includes products like Google AdSense. Frost estimated contextual search would be worth approximately $163m in 2008 (6).

The issue here is that while contextual advertising is sold by search engine companies on a cost per click basis (just like SEM), it’s not search engine marketing.

These aren’t ads that people ‘search’. They’re placed on web sites – waiting to jump out at any passing surfer. As such, they’re actually general or display advertising, not search.

And they should be represented that way in industry data. Calling contextual advertising ‘search’ is like saying that peanut butter is actually Vegemite because it comes in a jar and it’s made by Kraft.

These calculations suggest that SEM isn’t an $800m per year business in Australia, as it’s sometimes assumed. In fact, these calculations suggest it’s only a tad over half of that…

SEM is a $440m per year business.

There’s no doubt that SEM is a phenomenal business. It’s grown from nada to nine figures in little more than a decade.

But we need to be mindful of how destructive over-exuberance can be. After all, the entire dot.com boom, and the billions of dollars it ultimately cost investors, was built almost entirely on people getting over-zealous about the industry’s potential.

By all means, get excited about the growth of online advertising. You should.

But, please try to keep things in perspective.

Oh… and let’s try to get the numbers right.

UPDATE

A follow up article today from Julian Lee seems to recognise the fact that not all search and directories is SEM.

(1) PriceWaterhouseCoopers. IAB Online Advertising Expenditure Report, Quarter ended March 2009 and Frost & Sullivan. Australian Search Advertising Market, 2008 – 2012.

(2) Paul McIntyre, Sydney Morning Herald. “Google on target to crack $1bn in revenue”. Thursday 21 May 2009. http://www.smh.com.au/news/technology/biztech/google-on-target-to-crack-1b-in-revenue/2009/05/20/1242498841271.html

(3) Julian Lee, Sydney Morning Herald. “Mystery over local Google’s missing millions”. Saturday 23 May 2009. Page 3

(4) Crikey.com.au, “Google advertising revenue trump’s Australia’s traditional media”, Friday 22 May 2009.

(5) Frost & Sullivan. Australian Search Advertising Market, 2008 – 2012, page 10.

(6) ibid.

Sensis General Manager, Marketing, Michelle Sherwood is participating on a panel at the Advertising, Marketing & Media Summit this Monday 11 May. The session is titled “When the going gets tough… The tough get marketing”….topical for most marketers today. Joe Talcott, Marketing Director, News Limited is chairing the session and the other panelists include senior marketing practitioners from marie claire, AFL, Medibank Private, ninemsn, MINI and Australia Post.

Sensis will have a double-billing at the CeBit WebForward web, search and e-marketing event in Sydney next week. General Manager, Digital Marketing Services, Thomas Arthur is speaking on Wednesday 13 May about Integrating Mobile Advertising into the Marketing Mix. Group Manager, Mobile, Gregan McMahon is speaking on the following day about Tapping into Mobile Search. Both presenters are hoping the audience comes away revved up about the endless possibilities of the mobile medium!

Meanwhile, Group Marketing Manager, Yellow Pages, Stephen Harvy is addressing a luncheon hosted by the Australian Arab Business Network in Bankstown, NSW on 13 May. This group, which represents a wide range of businesses, invited Stephen along as they’re keen to know more about Local Business Search: how are consumers really searching and how are technologies converging to enhance the consumer experience?

Hope to have an update with key take-outs from these sessions soon…

As part two of his ‘The Age of Engagement’ series, Bruce Akhurst shares his thoughts on the rise of social media and what it could mean for marketers and the media.

Want to know about the US food van business that has built a huge following using Twitter? Or the toy company that used advice from its fans to create a truly innovative product development processes? Or the coffee chain that asked its customers for ideas and ended up with 70,000 of them in just one year?

Welcome to the extraordinary world of social media. The use of social networking sites have grown at extraordinary rates. Did you know that two thirds of Australian teenagers now use Facebook, YouTube or MySpace every month? (1)

But, in reality, these networks are just the beginning of the social media landscape.

In this presentation, Bruce takes a look at the world of social media and concludes that it is a game-changer on a par with the launch of television. It provides the potential for small businesses to access serious online technologies. And it can get companies and consumers not just talking with (instead of at) each other, but actually working together to build things that ultimately benefit them both.

(1) Roy Morgan Single Source Australia, base: Australians 14+

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.

Times might be tough in the media sector today, but there’s a lot about the future to be excited about.

This week, Bruce Akhurst, the CEO of Sensis, will be sharing his thoughts on the future in a two-part presentation: The Age of Engagement.

The first part of his speech – covering the rise of local search – will be delivered at an American Chamber of Commerce luncheon in Sydney this Thursday, 23 April.

And, in a departure from the norm, part two of this presentation, which covers the rise of social media will be delivered using – what else – social media!

So, pop back to the Speaking Sensis blog this Friday, 24 April. You’ll be able to view both of Bruce’s speeches.

My last couple of entries have looked back on 2008.’s

Now it’s time to turn from past to future, with eight trends for 2009.

It’s a testing time for the media sector today. But despite the impacts of the economic downturn, there’s a lot to be optimistic about. The key will be focusing on customer needs and listening to what your customers are saying to you.

Which is why we’ve dubbed 2009 ‘the year of the customer’.

Have a read and tell us what you think. Do you agree… or not? What do you think this year’s hot spots will be and why?

Mobiles make mainstream

Mobile advertising has been promising big things for years. Now it’s delivering and, this year, mobile advertising will make the mainstream.

I could spend hours talking about the unique capabilities mobiles offer marketers (and I will do soon), but, for now, let’s talk numbers.

From January 08 to January 09, traffic to Sensis Mobile sites grew on average 12% A MONTH . Mobile now represents 8% of Sensis’ total Australian digital traffic – and it’s growing fast(1) .

And, according to MediaSmart (Sensis’ digital display advertising business), the uptake of mobile display campaigns is currently running at almost three times the rate it did last year.

Think mobile advertising is a way off? Think again.

Integration

The marketing challenges created by fragmentation (people spreading their media consumption) has been a hot topic for years.

In 2009, we’ll turn our attention from the problem to the solution – integration, multi-channel, cross-platform or whatever you choose to call it.

Increasingly, media companies will bundle different media into multi-brand, multi-product networks. This way, advertisers can access a larger base of consumers with a single purchase and manage their media strategy in a co-ordinated way.

Sensis has been executing on this for a while through our Yellow Pages® print, online, voice, mobile and sat nav network. We”re also seeing strong traction for cross platform advertising in the activities of a number of major media players, including the Mitchell Communication Group’’s cross-platform media negotiations, which received considerable media coverage late last year.

Expect integrated campaigns to steadily become the norm.

Syndication

Okay. So, major media providers are increasingly enabling cross-platform advertising. But what about the web itself? After all, it isn’t just one platform, it’s millions. About 108 million at best guess(2). How can you possibly reach out across such a diverse landscape?

In the past, going online meant having a web site and not much more. This year will see more marketers stepping outside their web sites to create syndicated content that windows that reach out right across the web.

Today, advertisers are increasingly using blog, video and even Powerpoint networks like LiveJournal, Wordpress, YouTube and Slideshare to generate and deliver content. They’re using a blinding array of sharing and syndication tools to spread that content everywhere. And the whole lot is search engine optimised, including their Yellow Pages® and White Pages® listings.

The end result is an easy to manage content store streaming content out to a whole mass of proprietary and public sites. You’re heavily increasing potential reach and enabling a whole range of different opportunities, like the ability for people to discuss, share or subscribe to your content.

No doubt about it, there’s more work in this than the old model. But the spin-offs are potentially huge, which is why you‘ll see far more syndication occurring in the future.

Social Media

While we’re on the subject, there’s no doubt that social media is the hot topic right now.

And it’s likely to stay that way. YouTube and Facebook usage continues to grow at almost obscene rates. According to Roy Morgan, over 5.5m Australians used these two sites every month in the September quarter last year – up 1.8m on the previous year(3).

Meanwhile, Coca Cola’s Facebook page now has over 3 million fans !(4)

So social media is a big potential opportunity. But how do you unlock it?

The exciting thing about social media this year won’t just be its growth. It will be the fact that marketers will work out how to use it.

Engagement versus eyeballs

But, to do that, there’ll need to be a major (and very welcome) shift in how we perceive the role of marketing.

Will marketers get value out of social media by using it as another way of shoving brands in people’s faces?

No. They’ll drive value by using social (and other) media to genuinely engage people in conversations and learn from their views. They’ll use media as a channel to provide service – not just taglines – to consumers. They’ll begin sharing, rather than just promoting, their brands and they’ll use media to go right to the source: seeking consumer views on everything from product development to customer service to community relations.

Make no mistake. This is a quantum shift. As a result, brand awareness will start giving way to brand ownership and the role marketing plays in the business will change forever.

Accountability

Here’s a disturbing irony. While digital media is touted as highly accountable, a lack of accountability is still seen as the greatest roadblock by online advertisers. For example, a 2007 McKinsey survey(5) found that over 50% of digital advertisers nominated “insufficient metrics to measure impact” as a barrier to adoption.

The IAB is currently undertaking a much welcomed revision of online measurement guidelines and industry standardisation.

Let’s hope the many issues confronting online measurement can be resolved, including the ability to align online metrics with other media and the ability to measure the rapidly growing mobile landscape in a standardised way.

Of course, accountability doesn’t apply solely to online. Traditional media need to become more transparent about ROI as well. One example of how Sensis is following through with this is our Yellow Pages® metered ads. Unique phone numbers are used on Yellow Pages® ads and then monitored. In this way, the advertiser can see exactly how many calls their ad is generating.

Advertisers have been demanding accountability for some time now. Over the next year, you’ll start to see media providers – both online and offline – start to really deliver it.

Tough times

So there’s a lot of exciting things going on today. But you can’t realistically talk about 2009 without mentioning the global downturn and it’s impact on media.

In Australia, the Sensis Business Index and Sensis Consumer Report are reflecting global trends by finding the lowest levels of consumer and business confidence in their history.

This declining confidence has had a sobering impact on advertising and media.

Almost every major Australian media business is staring at falling revenue, although it’s pleasing for us that Sensis has been a notable exception.

And even the major dot.com high flyers are experiencing either curbed growth or revenue declines.

There is a feeling that things will improve for the industry in 2010, although recent downward revisions in forecasts from various analysts suggest we may not yet be at the bottom of this cycle.

The year of the customer

And this leads me to the final trend. 2009 will be the year of the customer.

Over the last few years, the industry has been beset by discussions about systemic changes. Is traditional giving way to digital? Are advertising business models changing?

These discussions, while vital, have tended to divert the industry’s attention away from the most fundamental and vital question of all – are we delivering what our customers (both consumers and advertisers) want?

Whether they’re traditional, digital or both, the companies that survive and thrive through this downturn will all have one thing in common.

They’ll be focused unerringly on the needs of their customers.

1: Omniture. Visits to Sensis sites. January 2008 to January 2009.
2: www.domaintools.com
3: Roy Morgan Single Source Australia. October 2007 to September 2008. Base Australians 14+.
4: Facebook
5: How Companies are Marketing Online – A McKinsey Global Survey. September 2007.