VET Marketplace Review

Marc Phillips is principal of APT Strategies, a Sydney based Internet research and online strategy consultancy established in 1991. APT Strategies has conducted over 100 qualitative and quantitative research projects and over 70 Internet research and electronic commerce studies for leading Australian and international companies. Clients include Norwich Union, Yahoo!, Commonwealth Bank, IBM, Intel, OzEmail, Fujitsu, Yellow Pages, Telstra and Computer Power Group. APT Strategies also publishes various syndicated online readership, e-commerce and business-to-business surveys of leading Australian organisations with web sites.

Marc Phillips is a regular columnist in the Australian Net Guide, Internet World and AdNews Magazine. He is author of several books including the very popular "Behind Australia's Most Successful Web Sites and 'Successful e-commerce' and is a judge of the Telstra-Australian Financial Review Internet Awards. He can be contacted at marc.phillips@aptstrategies.com.au.

This project was managed on behalf of the Victorian Office of Training and Further Education by Chris Corbel.

The views and opinions expressed in this document are those of the author and do not necessarily reflect the views of the State Training Board of Victoria.

We believe that the information contained herein is true and correct. While all care and skill has been taken in relation to the information, the author and publisher make no warranty in relation to the information and no liability is accepted for any losses or damages arising as a result of a person acting thereon.

Copyright in this document is owned by the State Training Board of Victoria. The State Training Board of Victoria will allow free use of this material as long as the interest of the State Training Board of Victoria is acknowledged and the use is not for profit. In all other cases, permission to use the document must be sought from the Director, Office of Training and Further Education, 3^rd Floor, 2 Treasury Place, East Melbourne 3002.

This report, and the accompanying project outcomes is available on-line through the OTFE Home Page at http://www.otfe.vic.gov.au/sprd/cmu/projects/vetmkt.htm

OTFE has identified a requirement to better understand how to successfully market VET services and to attract overseas students using the Internet. To meet this need it commissioned APT Strategies to carry out a research project - Marketing VET Online.

APT Strategies Pty. Ltd. has carried out a five-stage research project, intended to provide an improved basis for Internet marketing strategy implementation by Australian VET providers.

This report details the executive summaries of the research projects conducted in Stages One, Two and Three as well as recommending the most appropriate online business and marketing models for consideration by State Training Authorities. There is companion document – Successful Internet Marketing: a Guide for VET Providers

Each of the project aims has been associated with the appropriate report to identify which stage of the research project met these objectives.

These objectives were completed in Stage One: Global Website Marketplace Review.

of educational program delivery (drawn from educational and commercial internet advertisers).

The project outcomes have, in accordance with the tender document, provided State Training Authorities with:

This document Marketing VET Online is most relevant to State Training Authorities websites whilst the Guide to Successful Internet Marketing of VET for Australian VET Providers has been prepared for VET Providers.

The audience for this document is directors and senior management within State Training Authorities and VET providers who are looking at the strategic implications of the Internet on their business. Whilst the Guide to Successful Internet Marketing of VET for Australian VET Providers covers various sections contained in this report, it is more of a practical marketing guide that looks at online marketing and promotional activities. Its audience is VET provider staff responsible for marketing, online learning initiatives and international activities.

In order to develop both this report, Marketing VET Online and the Stage Five Guide to Successful Internet Marketing of VET for Australian VET Providers, APT Strategies conducted the following research projects:

Stage One provided a summary of key details from 50 web sites. This summary identifies current methodologies used to distribute material, to build interaction and where possible to sell courses supported via online technologies. In addition the research highlights examples of other educational models.

Stage Two provided a report summarising the key findings from 50 telephone interviews with potential client groups decision makers and decision makers in training institutions.

Stage Three provided a report to identify target markets that can be reached via the Internet and summarises the decision making process of overseas residents wishing to study abroad. To gather this information, APT Strategies placed a hyptertext link to the online survey (located at http://www.aptstrategies.com.au/survey/survey8.htm) on Link Union, which displays advertisements across 400 websites throughout the Asia/Pacific region.

The findings of these reports are incorporated into this Strategy Report and the Successful Internet Marketing: A Guide for VET Providers. Survey results can be found at http://www.otfe.vic.gov.au/sprd/cmu/projects/vetmkt.htm

The countries surveyed show both differing levels of web site sophistication and, within those countries, varying levels of understanding of the Internet as a promotional tool. Some countries, such as Australia, Hong Kong, Singapore, the UK and the USA are generally advanced in their interpretation of the Internet’s educational opportunities. Others, such as Malaysia and Thailand, still appear to use web sites as brochures. However there were exceptions to this in almost every country.

Many institutions use web sites to distribute information, ranging from large online clearing-houses, to universities providing downloadable research or academic prospectus details. More sophisticated sites add a high level of interaction, such as enabling students to apply for courses or training organisations to apply for financial awards. Some also incorporate online study facilities.

Some of the reviewed sites use added value features such as online maps, virtual tours, links to ‘lifestyle’ web sites, searchable databases, online staff and student contact details. Many of the web sites offered the opportunity to see part of the web site in other languages, but it should be noted that the web sites reviewed were predominantly in English.

Details and link to the websites featured below can be found at http://www.otfe.vic.gov.au/sprd/cmu/projects/vetmkt.htm.

TAFE websites are particularly good. They include value-added features and applications to attract international students. Australian universities distribute material and promote partnerships online. Private organisations use features not yet used by public institutions. For example Drake International uses online registration to build an email contact database and allows users to store resumes. Open Learning Systems uses the Internet to book, pay for and deliver courses.

VET provider, The Academy of Photographic Arts, offers detailed information about visas, studying at the Academy and living in Sydney. Although not e-commerce enabled, the Academy allows email enrolment. Training Boards are at varying Internet adaptation stages. Most merely offer information. However, Business Skills Victoria offers downloadable reports.

Certain non-profit and government sites distribute or sell information online. For example, The Queensland Vocational Education and Training Authority uses an online slide show to distribute training materials. Australian Education International promotes Australian education and training internationally. Its web site provides comprehensive information about living and studying in Australia.

The Source, a site from the Commonwealth Ministry for Youth Affairs, is primarily for young Australians, but it is a good example of a service targeting overseas students.

Wellington Polytechnic's highly creative site uses features that could be adapted for Australian use. The Polytechnic is researching and developing online courses and services. It plans to offer hypermedia presentations, online asynchronous and real-time communications between students and lecturers. Online courses provide communication facilities such as open message boards, hypermail boards, e-mail and Internet Relay Chat for use among students as well as between students and lecturers.

Singapore offers the most advanced web use of all the Asian countries reviewed. Singapore Polytechnic not only caters for academic life, but also details recreational and support facilities. There’s a ‘virtual college’ – which conducts study, assignments and feedback online. Ngee Ann Polytechnic includes a student and staff intranet, downloadable files, links to corporate homepages, links to music, magazine, travel and other academic sites.

The Hong Kong web sites, whilst not as consistently advanced as those in Singapore, also incorporate features relevant to Australia. These include online maps, web site search functionality and links to download sites, for example, with shareware. Hong Kong University makes good use of technology to provide students with an Intranet and an access anywhere network. It incorporates online maps, virtual tours and campus route suggestion, web site search and campus photos. The Chinese University of Hong Kong site is primarily in English, but does use some Chinese, especially in subject headings.

The Malaysian web sites reviewed focus primarily on providing information about the university and the country. They also show a number of links to industry web sites. The National University of Malaysia promotes its position as Malaysia’s first Malay language based college by giving Malay greater prominence than English. The University of Malaya promotes industry links making good use of pictures to promote both the campus and Malaysia in general.

Thai sites use features such as online maps and photos to attract students. Links to lifestyle sites adds to the appeal of the web sites. For example, Bangkok University’s site shows campus maps in plain format, or in 3D together with links to lifestyle sites such as airlines, bookstores, electronic postcards and shopping malls. It does not make much use of the Internet to distribute material, nor does it offer online courses. Assumption University’s slow loading site offers IRC chat and the acceptance of online applications. Chiang Mai’s site shows that even a Thai provincial university can use features such as online maps, job opportunities, promotion of their location and the country in general.

The University of Indonesia uses its site to promote its facilities and to promote Indonesia. It shows tuition fees and entrance requirements. The site attempts to attract school leavers by displaying University Entrance exam results. There are facilities such as an interactive map, multilingual information and a bulletin board. Each faculty has its own page on the site.

The key feature of the Kuwait Public Authority for Applied Education and Training site is the attention given to providing international language learning facilities to students in Kuwait. While the site does not provide online courses itself, links are given to other providers.

NIACE aims to increase adult training numbers and improve learning opportunities for under represented communities. The site addresses cultural and minority issues and has international and European links to promote and distribute transnational training materials in a variety of languages.

The reviewed European sites focus on initiatives to further vocational education and training in a multilingual environment. For example, The Leonardo da Vinci Programme site is in French, English and German together with some other European languages. The European Distance Education Network (EDEN) promotes itself using multilingual, multimedia online newsletters.

The US sites reviewed here provide good examples of using the Internet to distribute information. For example, ERIC/ACVE offers extensive searching facilities to ease the collation and distribution of material while the ASK Eric service takes this further with a personalised email query service.

The Canadian Association for the Study of Adult Education site has a large amount of adult education, training and distance learning information. It links to a number of educational establishments whose sites are valuable sources of presentation ideas.

UNEVOC has already demonstrated its commitment to this region with a vocational education conference at the Adelaide TAFE. UNEVOC is highly relevant to VET’s aim of establishing national and international co-operative training ventures. The site shows how language issues can be addressed in a multilingual format. Through its email forum it also appears to be building an online community online and encouraging member interactivity.

Only 12% of respondents offered more than one language on their website. Over half the respondents (54%) did not offer any other languages apart from English. Some respondents from Universities, TAFE institutes and the private sector dealt with this issue by using overseas agents and by providing links to their websites. A further 28 % did not have a website whilst 6% did not know.

The majority of respondents either considered their websites successful on a domestic basis (32%), or did not know whether their website was successful or not (24%). The lack of knowledge of website performance indicates a lack of awareness of the results websites are expected to achieve. This has implications for the design, output, marketing and potential of many websites. 16% of respondents stated their websites were not successful mainly because they needed to be upgraded and lack of interactivity.

More than one quarter (26%) of respondents stated that their websites were successful internationally. 18% stated that they did not know whether their website was successful or not. 20% stated their website was not successful internationally.

Respondents highlighted the following success factors of their websites: relevant content, speed of access, inter-activity, fast response to queries, design, end user approach and value added information.

40% of respondents do not measure any log file statistics, indicating a high number of respondents were unaware of the real performance and impact of their website. Of those who do track elements of their website, 30% track visitor numbers, 14% track enrolments and 12% track the country of origin of their visitors.

Almost half of the respondents (44%) did not implement any sort of visitor registration process. This means that they are not taking advantage of the opportunity to build and use a direct online marketing database.Less than one quarter of respondents (20%) asked visitors to register their details for storage in a database.

Respondents were divided on the Internet’s impact on the organisation’s advertising budgets. 46% of respondents stated the Internet would be not very significant or totally insignificant in its impact on their advertising budgets. 40% of respondents stated that they thought the Internet would be quite or very significant in its impact on their advertising budgets.

Two third of respondents (66%) stated they were likely or very likely to advertise their services online. This is a significant percentage and quantifies the enthusiasm of respondents towards this new advertising medium. Only 18% were unlikely or very unlikely to advertise online.

Amongst Universities, TAFE institutes and private organisations the most common strategic objectives for advertising on the Internet were, branding / brand awareness, encouraging more students to enrol, student care and course information – product management.

Respondents were most commonly aware of the possibilities of advertising on email (72%) and of banner advertising (66%). Almost half the respondents (52%) were aware of the ability to sponsor a website. 42% of respondents stated they knew about traffic partnerships. Less than one quarter of respondents (24%) stated they knew about sponsoring a topic on a chat group.

Respondents were commonly planning to promote traffic to their websites by including their website addresses in marketing collateral – such as letterhead and business cards - (84%) and in print advertising (80%). Almost half the respondents (52%) were planning on using reciprocal links with other websites to attract traffic.

Amongst Universities and TAFE institutes, the following comment was typical amongst respondents, "Don’t know what I don’t know as there is just too much information." However, respondents from Universities and TAFE institutes did ask for information on local and international Internet demographics, software and hardware used overseas, Internet terminology, how to convert enquiries into ‘action’, and how to target their audience. Other requests were for information on building links and relationships and for Internet training to be available to a wider number of staff members.

Private providers asked for research, for information on how to target audiences and how to convert enquiries into enrolments. They also wanted information on the cost elements of the Internet and on advertising on the Internet. Additionally, respondents from private organisations wanted details on database capture and tracking.

Almost two thirds of respondents (62%) stated they agreed, or strongly agreed, that they were likely to co-operate with other Australian VET providers. 20% of respondents disagreed, or strongly disagreed that they were likely to co-operate with other Australian VET providers.

60% of respondents stated they agreed or strongly agreed that they were likely to co-operate with international education and training institutions. Approximately one quarter of respondents (24%) stated they disagreed or strongly disagreed that they were likely to co-operate with international education and training institutions.

Respondents from the Universities and TAFE institutes commonly asked for funding and for more education/information about the Internet (such as demographics and technical information) and about OTFE strategies. They also asked for help building relationships.

Respondents from the private providers felt that they needed to be recognised as different from the Universities and TAFE institutes and treated accordingly. Funding, support and more education were key issues. Respondents from private providers also asked for assistance in establishing links and relationships.

In stage three of the research, over 1500 prospective international students answered a survey posted on the Internet. Details and link to the websites featured below can be found at http://www.otfe.vic.gov.au/sprd/cmu/projects/vetmkt.htm. The following summarises the key elements from each question.

Over four fifths of respondents (83 per cent) said that they were planning on studying at a university or with an advanced vocational and training provider in a country outside of where they permanently lived. When broken down by country, the results were very similar. 79 per cent of respondents from Hong Kong, 77 per cent of respondents from Taiwan and 74 per cent of respondents from other countries wanted to study overseas.

The most popular way of obtaining advice about overseas study was speaking to friends or relatives (58 per cent). This was followed by contacting students who have studied previously overseas (48 per cent). Formal agencies/institutions were the third preference, with education agents (37 per cent) coming before parents (30 per cent). Embassies and consulates were the least popular way of obtaining information about studying overseas (18 per cent).

Australia was the overwhelming choice (85 per cent) of overseas study destination amongst respondents. This was followed by theUSA (58 per cent). Canada was the preferred destination for 42 per cent of respondents, followed by Great Britian (20 per cent) and New Zealand (15 per cent). Japan was the least popular choice with 7 per cent of respondents selecting it as a preferred study destination.

Quality of education was the priority for half of the respondents (50 per cent) followed by financial issues. Fees less expensive was the reason selected by 40 per cent of respondents and lower cost of living by over one third of respondents (36 per cent). Other factors were selected by just under one quarter of respondents (24 per cent). The influence of parents/relations and of education agents was equal at 18 per cent.

44 per cent of respondents selected New South Wales (Sydney) as their preferred study destination. Just over one quarter of respondents (26 per cent) selected South Australia (Adelaide). This was followed by Victoria (Melbourne), selected by 18 per cent of respondents. The least preferred study destinations amongst the respondents were Queensland (Brisbane) with 8 per cent, and Western Australia (Perth), selected by 5 per cent of respondents.

A key factor influencing the choice of a study destination amongst respondents was a safe environment, perceived as very important by almost three quarters of the respondents (73 per cent). This was followed by extensive entertainment/recreation facilities which were seen as very important by half (50 per cent) of the respondents.

Reinforcing the importance of the quality of education (highlighted as a key reason for choosing Australia as a study destination), the quality of the teaching was seen as very important by 45 per cent of respondents. Financial reasons were also highlighted as a key reason for choosing Australia as a study destination, and these too were highlighted in this question, with 41 per cent of respondents noting the cost of tuition fees was very important to them.

An equal amount of respondents (65 per cent) agreed with the statements: I want to study in Australia because it is important to the future of the Asia/Pacific economy and I want to study in Australia because I would like to live there one day. 63 per cent of respondents agreed with the statement: I want to study in Australia because it is a clean and healthy country. Over half the respondents agreed with the statement: I want to study in Australia because I would like to work there.

Respondents predominantly supported themselves financially, with over two thirds (68 per cent) reporting that they were self funded. 44 per cent of respondents received aid/scholarship, while 42 per cent said their main source of financial support was their parents.

The answers were varied, with a wide number of different websites selected, both local and international. They included:

Reflecting the high use of the World Wide Web as a source of overseas study information, almost three quarters of respondents (73 per cent) said they used the Internet to look for an overseas course to study.

59 per cent of respondents said they would take further action by making an enquiry via email to a university about studying. 43 per cent of respondents would register name and details of what course you are interested in studying using the Internet. Far fewer respondents (14 per cent) would pay for a course at a university through their website.

Reflecting the high proportion of respondents (85 per cent) who chose Australia as their preferred study destination, comments on Australia included:‘I want to study in Australia because of its high education quality and nice environment. I love that country."

Comments about the United States included the quality of the education and the perception of the United States as a world technology leader: "[I want to study in] the United States. It is a free and multi-cultur[al] country with high-quality education system." And "The United States.. symbol[ises] science and liberty."

Australia is perceived as a safe, healthy environment in which to study: "Australia is a clean, healthy and safe country." Tuition fees are perceived to be lower than in other countries respondents may have considered studying in: "Australia is a beautiful country. Tuition fees are less expensive than other countries such as England or America" Australia is perceived as providing good education and high living standards whilst at the same time being part of the Asian/Pacific community: "Australia is part of Asia-Pacific community, with high quality education and [high] living standards."

The need for a business model may be considered a far cry from your organisation having a website. Increasingly, websites are more than just online billboards. The Internet technology that makes it possible to host a website also embraces communications, such as email messages and transactions for e-commerce. As the Internet becomes more than just an information and advertising medium for your organisation, it is necessary to consider what business models will apply to your website.

The status quo with many public service organisations is often that the Internet is nothing more than a website. However, it is time to reconsider the Internet as part of every business’s infrastructure. All of the below listed online business models have matured since the Internet reaching the consumer in 1993. Many have been tested and refined by large corporations both in Australia and overseas. They should be carefully considered by State Training Authorities and further discussion held with senior management to identify time frames, resources and a forecasted budget required for their successful implementation.

Given State Training Authorities’ sheer size and large number of stakeholders, State Training Authorities are in a unique position to leverage their relationships with VET providers, students, suppliers and other stakeholders to quickly evolve into an online media property. Given the repeat visitation to the website, State Training Authorities have the opportunity to lead other government departments in shifting their website beyond being a static information pit-stop to a media property deriving advertising revenue.

With the online advertising industry in Australia currently generating between $12 to $15 million in the 1998 calendar year, the industry is still in an embryonic state. However, if Australia grows in proportionate terms with the growth in online advertisements in the USA, online advertising revenue is projected to be $150 million in 2001.

There appears to be an absence of Australian federal and state government departments selling online advertisements on their websites. This presents State Training Authorities with the opportunity to create a first mover advantage – a position that usually ensures wide exposure and increased awareness through media attention.

Given that Stage Two of the project, which surveyed 50 VET providers’ marketing personnel, identified two thirds of respondents (66%) were likely or very likely to advertise their services online, this represents a significant opportunity for OTFE and the State Training Authorities to position their websites as a vocational and educational training portal that accepts banner advertisements. By providing these services to VET providers, this would ensure that the State Training Authorities met the additional requests made by marketing officers as detailed in the Stage Two report:

In order to assist State Training Authorities determine revenue projections for their website, APT Strategies research has found that the average CPM (Cost per ‘000 Impressions) is $45 to $60. Given that page impressions is the standard metric that advertisers and media personnel use to calculate the cost of banner advertisements, it is necessary for State Training Authorities to produce log file analysis that page impressions in order to calculate projected revenue. Simply speaking, State Training Authorities need to track the number of pages that are downloaded by visitors to their website and this can be done by ensuring the log file analysis outputs this data.

In addition, APT Strategies recommends that State Training Authorities undertake a user profile survey to determine the demographic and pyschographic make up of the online audience visiting the the State Training Authorities websites. This will further assist in approaching potential advertisers.

There are various Australian and overseas companies that act as online advertising brokers for websites that do not have the desire or infrastructure to support online advertisement sales and service resources.

State Training Authorities may consider preparing a Request for Information (RFI) for online media representation on a non-exclusive basis. The reason why non-exclusive media representation is suggested is that these companies typically charge between 15 to 25 per cent commission for the current level of traffic visiting your organisation’s website, yet this may increase to up to 50 per cent during the period of contract.

With the average inventory fill rate on an advertising enabled website being 30 per cent, an exclusive relationship would prohibit State Training Authorities, as the proprietor, in selling their own advertisements. This means that online advertising brokers often can not sell 100 per cent of the available banner space an organisation’s website and therefore having a non exclusive relationship allows you to sell advertising space on your website as well. The RFI should encompass banner advertisements, sponsorship, hot buttons, logo links and other ‘beyond the banner’ advertising opportunities.

The registered subscriber online business model aims to encourage visitors to the State Training Authorities websites to enter their personal details and email addresses which are then stored in a database. Revenue is derived from selling advertising in communication formats (such as newsletters) which are sent to them regularly. This business model is increasingly being used by commercial organisations to offer advertisers a very targeted approach to reaching a niche audience. VET Providers are a niche audience and may wish to procure revenue by advertising enabling their online newsletters.

The registered subscriber online business model is the basis for reverse direct marketing used by major search engines such as OzEmail, eXcite, Lycos and Yahoo! Users are encouraged to divulge varying levels of personal information about their demographic profile and pyschographic behaviour (hobbies, attitudes, etc) in return for access to a wider range of premium services (such as free web based email and chat groups).

To support these value-added services such as email and chat groups, advertising is sold on regular updates – usually in the form of online newsletters - that are sent to the registered subscribers.

Research conducted in Stage Two found that 72 per cent of respondents were most commonly aware of the possibilities of advertising on email, suggesting that VET providers would not need to be educated on such an online advertising option.

Most of these advertisements take the form of text based advertisements ranging between 25 to 100 words and include a website address that links back to the advertiser’s offer.

The ICONOCAST newsletter illustrates the text advertisement that 247media have placed in this email newsletter that targets an online marketing and advertising audience.

I C O N O C A S T b y M i c h a e l T c h o n g
Business 2.0's Newsletter for Internet Marketing Executives
For a FREE trial, visit http://www.business2.com
++++++++++++++++++++++++ 30-Sep-98 ++++++++++++++++++++++++

!!!!!!!!!!!!!!!!!!!!!!!!!!! FLAG !!!!!!!!!!!!!!!!!!!!!!!!!!!
High impact campaigns.
Through outstanding brand-name sites.
Reaching the masses.
The 24/7 Network
24/7 Media--Always Serving You
http://www.247media.com/ad_sales/ad_sbc.htm
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

State Training Authorities may wish to create email address catchment areas within their website and implement a listserv mail software program which houses the registered email addresses and acts as an bulk email client.

Newsletters not only encourage registered users to visit an advertiser’s websites but also the State Training Authority’s website via hypertext links embedded in the body copy of the newsletter email. Consequently, more page impressions are generated which increases the potential advertising revenue of the OTFE and State Training Authorities’ websites.

VET providers appear to be a ready market keen to advertise in State Training Authorities’ email newsletters. Over half the respondents (52%) interviewed in Stage Two were planning on using reciprocal links with other websites to attract traffic.

Similarly with banner advertisements, there is potential for both domestic and overseas sponsors that allows the State Training Authorities to meet the objectives of increasing revenues whilst building international alliances which may lead to co-operative ventures with VET providers.

By implementing a registered subscriber online business model, State Training Authorities will set the example for many VET providers. As detailed in Stage Two research, 44% of the respondents did not implement any sort of visitor registration process and less than one quarter of respondents (20%) asked visitors to register their details for storage in a database. This means that they are not taking advantage of the opportunity to build and use a direct online marketing database.

Once a registered subscriber database has been compiled, there is opportunity to offer value add services to its members. Most portals today have extended their services to include chat groups, an interactive component the State Training Authorities may consider in the future:

There are two types of e-commerce business models that are available for the State Training Authorities. At this stage APT Strategies encourage State Training Authorities to evaluate both the:

Using the consumer e-commerce business model, State Training Authorities may consider selling various products (such as reports, research and other intellectual property) to customers that visit their website. This would involve enabling the website to accept secure payments.

A recent example of how Internet profits can be derived with the education sector is the relationship which SchoolsNet, which has connected over 1 million Australian school children, has with the world largest online bookstore, Amazon.com. Amazon.com has given SchoolsNet the status of an Associate Partner which means that any book that is purchased from Amazon.com by a person connected by SchoolsNet will generate 15% of the sale price in commission for SchoolsNet.

In addition to consumer e-commerce opportunities, many government organisations are using Internet technology to streamline business processes and capitalise on supply chain efficiencies. Commonly referred to as Business to Business e-commerce, various government departments are already benefiting. For instance, the Australian Taxation Office has launched a service that allows people to electronicly submit their tax return via the Internet whilst the South Australian Motor Registration and Licensing Authority permits drivers to update and amend their vehicle registration details via the Internet.

According to leading US based IT researcher, Forrester Research Inc.:
Business to consumer e-commerce will be worth $17.3 billion in 2001.
Business to business e-commerce will be worth $183 billion in 2001.

There is significant opportunity for State Training Authorities to benefit from business to business e-commerce by creating an Extranet.

What is an Extranet ?

An Intranet partially accessible to authorised outsiders. Whereas an Intranet resides behind a firewall and is accessible only to people who are members of the same company or organisation, an Extranet provides various levels of accessibility to outsiders. You can access an Extranet only if you have a valid username and password. Your identity determines which parts of the Extranet you can view and what you can do.

State Training Authorities may also wish to audit the communications and administrative processes that frequently occur with VET Providers and other members of the supply chain. This will determine whether there are efficiencies that can be gained from the implementation of a business to business e-commerce system.

Increasingly, commercial websites are using the Internet as another medium to brand their products and services to ensure greater awareness and brand retention amongst Internet users both here in Australia and the lucrative overseas audience.

In order to monitor the online branding model, it is essential to measure the average Time Spent Viewing of an individual user to a website. This allows an organisation to understand the interactive branding effect.

Given that State Training Authorities are seeking to provide thought leadership amongst VET Providers with websites and extend their presence online, State Training Authorities may wish to:

Time Spent Viewing is one of the best benchmarks to determine the ‘Quality of Content’ organisation websites feature and the State Training Authorities should be constantly reviewing it as a benchmark of their website success and appeal.

Time Spent Viewing as a standard benchmark is being increasingly embraced by search engines, aggregated content and media websites – most notably NineMSN – who sell advertising as well as websites that focus upon branding their goods and services.

There is a common problem facing online managers within VET providers that many are not aware of the online branding model as they don’t know where to find the Time Spent Viewing statistics. In fact, 40 per cent of organisation respondents in Stage Two of the OTFE research project did not measure any log file statistics including the average Time Spent Viewing.

This often points to the lack of integration between the information technology (IT) department or outsourcing company who are not focused on providing important website statistics, such as Time Spent Viewing, to the marketing department in a format that is comparable with other advertising mediums.

The IT department and Internet Service Providers, who have log file data on their servers, are not entirely at fault. It may also result from the marketing departments not briefing their IT managers and webmasters on evaluation periods of website usage. Ideally, these periods of analysis should coincide with media schedules and advertising

plans so specific website statistics can be provided which correspond to the time periods of offline media and advertising campaigns (in both days and hours).

Given that the most common strategic objectives stated in Stage Two of the research project for advertising on the Internet were, branding / brand awareness, State Training Authorities may wish to embrace the branding online business model.

State Training Authorities should not only be interested in the number of visitors but the length of time that they stay on the website. Therefore, it is important to provide maximum exposures in multimedia formats of data, sound, animation and where applicable motion video.

The Online Branding business model - Return On Investment equation

Number of Users X Time Spent Viewing = Time Per Visit (minutes)

Since 1997, commercial websites have begun to realise that visitors to a website hold the same status as regular clientele for traditional businesses and hence should be monitored so that they can be serviced to a higher degree of customer satisfaction.

The online customer satisfaction business model has been adopted by many large private companies and public organisations such as NRMA, Toyota, National Australia Bank and Charles Sturt University. NRMA and Toyota are efficiently handling email enquires and building healthy relationship with customers. NRMA have specified a 48 hour email response policy.

State Training Authorities should be aware that email, if used effectively, can provide a tremendous benefit by ensuring that VET providers are receiving prompt replies to their email queries. Whilst Australian organisations strive to improve traffic to their websites by employing the latest technology, many are focusing their attention using email to improve customer relations and build strong virtual communities.

In cyberspace, the excess supply of websites has led to a buyers’ market where price has been substituted for content appeal and customer service when users are interacting with a website.

In an increasing trend with the more serious web businesses, the formal email response policy is being written into Quality procedures. The may wish to consider this option. Increasingly, emails are being answered in accordance with an organisation’s Quality Assurance guidelines.

Internet consumers are rapidly developing cyber-personalities and are beginning to value intangible and digital assets, particularly if they are asset rich - time poor professionals! Quick email replies will demonstrate State Training Authorities’ commitment to VET providers and other customers.

It is common for a webmaster to be of a technical skill set and hence not naturally having the sensitivities or inclinations for customer satisfaction. State Training Authorities may wish to review this issue internally.

The Return on Investment equation for State Training Authorities to ensure an acceptable level of customer satisfaction is detailed below. APT Strategies recommend a Time Per Response of 24 hours or less.

Consideration should be given to the quality and accuracy of each response, with each email responses being personalised where possible.

Online Customer Service business model

Return On Investment equation

Number of Responses = Time Per Response (hours)
Length of Time to Respond

Given that respondents in Stage Two of the research project noted responding to email queries quickly was a lesson learnt, APT Strategies recommend that State Training Authorities make known to VET providers their response policy as part of their thought leadership on doing business online.

After attracting visitors to the State Training Authorities websites, deriving revenue from banner advertisements and possibly e-commerce initiatives, deploying strategies to increase the time spent viewing and then keeping the customer base happy, State Training Authorities will have the foundations of a virtual community.

APT Strategies recommend that State Training Authorities build into their online business strategy the virtual community as an eventual state of online maturity.

It appears that there may be various State Training Authorities’ stakeholders that are beginning to embrace the virtual community as an emerging online business model. This was evident in the Stage Two research where respondents from the Universities and TAFE institutes repeatedly asked for help in building relationships. Respondents from private organisations also asked for assistance in establishing links and relationships.

This finding also underpins the APT Strategies recommendation that the State Training Authorities give consideration to becoming a portal for vocational and educational training. This will facilitate the State Training Authorities’ objective of establishing national and international co-operative training projects.

What is a Portal ?

A "portal" is a term given to websites that act as gateways to the Internet. They are places that Internet users go to find directions to other websites or the answers to their online needs, primarily because they provide structure and convenience through comprehensive content. Understanding their commercial strategies will be a key to successful Internet business longevity

The National Grid for Learning based in the United Kingdom is an excellent example of how education resources have been brought together by the UK Government to help raise standards in education and to support lifelong learning. It is located at http://www.ngfl.gov.uk.

With a majority of respondents in Stage Two of the research project expressing their willingness to co-operate with other Australian VET providers and also with international education and training institutions, the concept of the portal and virtual community should be nourished through a co-ordinated Internet strategy with selected VET providers.

It is a common shortcoming of commercial and public organisation websites to overlook the business models relating to their online business. This shortcoming is evident where organisations simply provide brochureware information which is only justified on the costs savings attached to disseminating this information in an electronic format.

By adopting these five online business models in the short term, State Training Authorities not only gain immediate strategic direction for their online presence but are preparing for the creation of a virtual community; comprised of intellectual property such as a virtual educational network and databases.

The revenue positive models (including advertising, registered subscriber and e-commerce) provide a commercial orientation for State Training Authorities. This could be considered necessary given the external pressures of reduced funding. However, they should not be viewed as more or less important than the revenue neutral online business models (branding and customer satisfaction).

The progressive and consistent implementation of these five online business models offers State Training Authorities immediate return on investment justifications for their website, beyond the current performance measurement standard of ‘hits’ or ‘users’ of the website. The individual return on investment equations are contained in the respective sections detailed in this report.

It is essential that an online strategic business plan considers the creation of a virtual community and exit strategies for creating wealth. Wealth, as distinct from operational revenues, is often not materialised until after the Internet business has been sold for a capital gain.

With this in mind, State Training Authorities should be aware that the implementation of the five business models previously detailed will assist in the creation of a virtual community. Whilst the advertising, registered subscriber and e-commerce online business models will provide operational revenue, the State Training Authorities should also take a longer term view to create a virtual community which can be itemised as an intangible asset on their balance sheet.

This ensures that whilst operational revenue is derived through online advertising, registered subscriber and e-commerce transactions, there is a valuation of a capital asset.

Many of the successful internet companies, based on APT Strategies’ knowledge of online business models (from those we have developed for clients, and those we are exposed to), it is important to understand that few online businesses globally are financially profitable in their first three years of operation.

Even the most talked about success stories are mostly considered successful because of their market capitalisation, not because of the profitability or sustainability of their operational business model. In Australia, even the busiest websites are not yet generating substantial revenues, either because the buying and selling infrastructure for online business propositions (e.g.: advertising or subscriptions) is underdeveloped, and/or because the market size (i.e.: customer spend) is still relatively low.

To set expectations correctly, the State Training Authorities should consider themselves successful if their online website generates a level of revenue to subsidise some of the required supporting personnel.

Therefore, for many Internet companies it is the perceived value of a growing virtual community and their demand for an increasing number of products and services that the online property offers that is creating greater than average price earnings multiples and hence shareholder value.

In addition to direct revenue raising to offset the cost of operation, State Training Authorities should consider managing the business with an eye to possible exit strategies. At some point, State Training Authorities should consider the capital value of their database and network infrastructure to private industry. Clearly, a database rich in understanding of VET providers and international student needs, and a capabilities register of value to search tools and portal business models, along with an effective supporting operational infrastructure, could be of value to other government departments and business in Australia or overseas.