Nassim Khadem Reporter

Nassim covers the accounting and tax rounds for BRW, as well as general business news. She previously worked for The Age newspaper covering general news, state politics and economics.

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Australia top in Asia Pacific for digital marketing spending

Published 20 November 2012 06:15, Updated 21 November 2012 08:44

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Australia top in Asia Pacific for digital marketing spending

The highest level of digital marketing funding in Australia is being directed towards website content development and performance optimisation, search engine optimisation and email marketing. Illustration: Michele Mossop

Australia invests more in digital marketing than any other country in the Asia Pacific with a new study of showing that 41 per cent of Australian companies spend 25 per cent or more of their budgets on digital marketing.

The Digital Marketing Performance Dashboard 2012 report, which takes in the results on an online survey conducted earlier this year from 295 senior marketers operating in the Asia Pacific including companies such as Toyota, 20th Century Fox, Tupperware, Citi Group, Cigna, Nokia, and Yahoo, found that Australia is not only the biggest spender, but the most dedicated to digital analytic tools.

The study, undertaken by Adobe and the Chief Marketing Officer (CMO) Council (which represents 6000 global marketing leaders spending a combined $300 billion annually on marketing) found Australia’s results to be higher than in most other digitally-savvy nations including Hong Kong (with 28 per cent of companies saying they spend 25 per cent or more of budgets on digital marketing), China (24 per cent), Singapore (24 per cent), India (20 per cent) and Korea (20 per cent).

Adobe’s senior director for marketing, Asia Pacific, Mark Phibbs says while companies across the Asia Pacific understand the value of investing in digital marketing, many are struggling with low budgets.

“Australia has realised the benefits of digital early compared with the rest of the region and has invested accordingly,” Phibbs says.

The report says Asia has the largest percentage of worldwide internet users (40 per cent) by population but only has 21 per cent internet penetration. The report quotes Radicati Group estimating 3.3 billion email accounts globally, with nearly half of those accounts located in Asia, but says due to broadband infrastructure limitations and government regulations adoption and return in Asia have traditionally been low.

The spend in Asia is estimated to pick up however, with the report noting that China is set to become the world’s second-largest advertising market in 2013 and second-largest digital advertising market

For now, Australia is leading the way in digital marketing spend, with:

  • 84.5 per cent of Australian marketers surveyed using digital marketing analytics and reporting; this compares with Korea (84 per cent), Singapore (75 per cent), India (63 per cent), Hong Kong (61.5 per cent) and China (33 per cent).
  • 67 per cent of Australian marketers surveyed cited customer preference as their reason for investing in digital marketing; the second key driver is the promise of greater productivity, visibility and accountability of marketing campaigns.
  • The highest level of digital marketing funding is being directed towards website content development and performance optimisation, search engine optimisation and email marketing.
  • 50 per cent of Australian marketers ranked social media optimisation, including boosting community growth and engagement, as a priority this financial year, followed by increasing and improving paid search and online display advertising (43 per cent).
  • Measures and metrics being used by Australian marketers are website performance data including traffic and traffic sources (76.5 per cent), click-through rates (74 per cent), response rates (72 per cent), and conversion rates (64 per cent).
  • Australian marketers are also the most likely to engage multiple digital agencies.

Phibbs says the business benefits of digital marketing are understood across the region with 93 per cent of marketers surveyed in the Asia Pacific believing digital marketing could create competitive advantage for their company, and 52 per cent saying digital marketing is crucial in a “customer-centric and responsive organisation”.

But the report shows only 6 percent of marketers working in the APAC region believe they have a very high level of digital marketing proficiency. Many (40 per cent) feel they either need improvement or are lagging behind.

“The implication of this lag in digital advancement is that while consumers in the region continue to advance in their adoption, consumption, and dependence on digital engagements, marketers are struggling to provide targeted, intelligent, and personalised experiences that can have a direct impact on the success of the business,” the report says.

Companies in the Asia-Pacific also lack “sophistication and depth of measurement” when it comes to measuring the organisation’s spend .“As global marketers adopt measures that link back to revenue-driving metrics, APAC marketers are struggling to move beyond surface-level KPIs that simply report clicks, views, and baseline consumption,” the report says

Of those marketers actively measuring digital programs, only 3 per cent are excelling in their ability to measure value and return. Most companies in the Asia-Pacific measure website performance (72 per cent), click-through rates (69 per cent) and response rates (68 per cent).

But they are less likely to measure average order value/cost per sale (19 per cent), customer lifetime value (12 per cent), up-sell and cross-sell activities (11 per cent) and customer churn levels (10 per cent).