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February 1998 Benchmarking
Australia's Top Websites Findings from The
1stAustralian Strategic
Internet Business Report by: Marc Phillips Australian organisations with websites will be better equipped using eight performance benchmarks to compare their Internet businesses with other Australian organisations and provide forecasts to assist the strategic planning of their Internet businesses in 1998. These are the conclusions from the first Australian Strategic Internet Business Report released this month by APT Strategies, after surveying 90 of Australia. s leading organisations with websites. As the author of the Australian Strategic Internet Business Report, I have taken the business analysis a step further by forecasting the developments amongst Australian organisations with websites to assist business manage and plan their resources needed to ensure they have a successful website and Internet business. The report also explore some of the critical issues that confront Internet developers, project managers, Internet regulators and business proprietors who have invested in Internet technologies. The analysis of the following eight benchmarks details the critical issues that management should understand when analysing the success of their website and the Australian Internet business sector. Benchmark Number 1. Internet Business Models used by Australian Organisations I have heard many people talk
about the lack of Internet business models from Rupert Murdoch, global media
mogul to Vincent Cerf, dubbed the father of the Internet TCP/IP. I believe
they need to be enlightened. There are at least six Internet business models which
Australian organisations are currently using. Today, most Australian
companies use several Internet business models until they work out which is
the most appropriate model for their business. Of all the 90 organisations
surveyed, an average of 2.7 Internet business models were selected by each
organisation. Quite predictably, a significant majority of Australian organisations surveyed with a website use the Internet as a method of 'Distribution of Information', the most popular Internet business model. More than half the Australian organisations surveyed (53 per cent) engaged the Internet for 'Branding a Product or Service'. With one in every two Australian organisations using the Internet to support their customer satisfaction strategies, the Internet is providing organisations with a tremendous benefit by ensuring that customers are receiving prompt replies to their email queries. I covered this topic in detail in the December, 1997 edition of the Australian Net Guide. Online media companies and advertisers should be aware that 1998 will see an increase in the competitiveness of the Australian online advertising market with a general averaging down of Cost Per thousand Impressions (CPM). With the economics of web distribution being totally different from physical distribution, I recommend that the Internet advertising participants focus heavily on the relationship between inventory and costs in 1998. Increasingly, website proprietors are finding it difficult to substantiate subscription business models due to various factors including the proliferation of websites and higher transaction costs. Bucking this general trend is John Fairfax Holdings. The Trading Room website which has been quite successful. (http://www.tradingroom.com.au) As at December 1997, there were
7,500 registered active users and 2,500 paying users. With users prepaying a
minimum of $10 fee and being charged a minimum of 10c per draw down fee per
download, The Trading Room undercuts the cost of a local telephone call for
their users who wish to find the price of a stock. According to Michael Gill,
Business Online Manager of The Trading Room, . we are very satisfied with our
subscription progress and given we also derive revenue from advertising, we
expect the advertising market to pick up in Quarter 1, 1998..
Benchmark Number 2. Actual and Forecasted Revenue of Australian websites There has been an lack of information on actual and forecasted sales via the Internet from an Australian perspective for many years. We are too often left to quote figures from wide ranging guess-timates produced by North American research organisations. According to the recent survey of Australian websites, almost one in five of Australian organisations surveyed stated they were using the Internet to sell goods and services. These organisations who sold goods and services to consumers via their website in 1997 achieved an average of over $8,000 in revenue. Forecasts for sales to consumers via these Australian organisation website in 1998 is more than $2.5 million, a massive increase over the 1997 revenue year. Actual sales for 1997 in the business to business market were far stronger than the consumer market which is forecasted to increase by 54 per cent in 1998. This underlines the implementation of Intranets and Extranets in 1998. Benchmark Number 3. Uptake of Secure Electronic Transaction Trials With Secure Electronic Transaction (SET) trials taking place with Westpac and ANZ banks in 1998 together with over 20,000 VISA customers, momentum is gathering for other large organisations to participate in SET trials. I found that there is overwhelming support and willingness for Australian organisations to become involved in a SET trial if approached by a financial institution with a majority of organisations expressing they were likely to participate. One of the more likely sectors to participate is the Communications industry with the Manufacturing industry the least likely sector to participate in SET trials in 1998. Many Australian organisations with websites are eagerly awaiting the outcomes of the SET trials in Quarter 1 and 2 in 1998. Although business has been a popular
verbal bashing target by frustrated web developers and some industry
analysts, it is now apparent that we are waiting for assurance from the
Australian banking sector that SET will operate effectively. Benchmark Number 4. Allocation of Expenditure on Australian Websites With
the average expenditure allocated to each Australian website in 1997
marginally below $25,000 this amount is expected to more than double in 1998
as Australian organisations spend an average of $58,239 on their website. There was a blowout in website
maintenance costs in 1997 which due to senior management expressing more
interest once the organisation website was completed and then requesting more
information and changes be made. With a forecasted 15 per cent drop
in maintenance expenditure from 46 per cent of the total website expenditure
in 1997 to a budgeted 31 per cent in 1998, there is a definite trend towards
building websites that can be updated by organisational employees which do
not require the expertise of outside contractors. The growing trend by organisations to train and empower staff members to regularly update the website places greater pressure on Internet design and production companies to have a better understanding of backend and database technologies. Benchmark Number 5. Preferences of Australian Website Features
In many focus groups I conduct, clients are looking for the most preferred elements of what constitutes a website. To assist business understand this intriguing question, the Australian Strategic Internet Business Report ranks the importance of the five integral factors in relation to their organisations website. Quality of Content. was considered to be the most important feature for Australian organisations websites with a very high 85 per cent preference rating. This confirms the very real concentration by Australian organisations to ensure that their website content is factually correct and compelling. Consistent with the finding that a majority of Australian
organisations engaged the Internet business model for the . Distribution of
Information. , the branding feature shows the Internet is being used to
increase awareness and communicate advertising messages. With . Design. and 'Including the Latest Technology' receiving the two least preferred rankings, Australian organisations are showing a lack of commitment to the "build it and they will come philosophy" that has been dictated in the past by the software industry. Benchmark Number 6. An Industry Performance Benchmark: Time Spent Viewing (TSV) With
Australian organisations demanding greater accountability from their website
investments, marketing departments, webmasters and IT Managers will be
closely scrutinised in 1998 to monitor the average time spent viewing
statistics. The
highest time spent viewing category was 11-15 minutes followed by those
organisations who received an average of 6-10 minutes viewing per user. Amazingly,
43 per cent of Australian organisations did not know the time spent viewing
period on their website with the government and retail sectors being the
worst offenders.I
predict that Time Spent Viewing will increasingly be recognised as a standard
benchmark of performance, particularly amongst search engines, aggregated
content and media websites who sell advertising as well as websites that
focus upon branding their goods and services. Benchmark Number 7. Status of Employment Of
the 90 organisations surveyed, slightly more people were employed in a 'Full
Time' capacity compared to those who were either 'Outside Contractors' or
'Part Time'. The
average of 10 personnel working on the website in various capacities was
consistent across small, medium and large organisations. The high number of
personnel involved in a typical Australian organisation website points to the
trends that specialists are being used and organisations are recruiting the
best and smartest Internet savvy personnel they can find. Strategy
is becoming more important for clients, many of whom are now taking a very
strategic approach before producing a website with various Internet and
multimedia organisations ensuring 25-50 per cent of the Internet project cost
being in the strategy planning and the pre-production stage. This is leading
to Internet employment increasing in three main areas, one of which is
Internet business strategists. According to Sally Mills, Director
and specialist Internet recruitment consultant at Mills Harding, . there will be a concentration of
outsourcing to those contractors who are more specialists than generalists as
more organisations bring the day to day management of the Internet technology
in-house.
Benchmark Number 8. Number of Web pages on Australian websites
Lastly,
it is forecasted that of the 90 organisations surveyed, more than 200 pages
will be added to the average Australian organisation website in 1998 with the
vast majority of companies indicating that the number of pages on their
websites will grow substantially.
Conclusion
1998 will see a doubling of website expenditure by Australian organisations and a fine tuning of their existing Internet business models. With more resources being brought in house and a greater awareness and accountability of their Internet businesses, 1998 will be very progressive year for the Internet in Australia. With the performance benchmarks for business included in this Australian Strategic Internet Business report, there will be a greater understanding about how organisations can monitor their performance on the Internet. With a growing level of understanding of the Internet technology and specific budgets being allocated, the horizons of Internet based businesses and electronic commerce is broadening ever so quickly. For further information contact APT Strategies at info@aptstrategies.com.au |