Does Australian business ‘get’ the web?

May 05, 2012 Comments Off by

Many businesses and business owners get bashed up for behind the game in the online world.

I know,  I’ve done it. But sometimes it’s a bit unfair.  Then again, according to a recent survey, less than 16% of SMEs in Australia have some form of strategy for the digital activities of their business.  

The digital world won’t go away. Some businesses are thriving online. Most are not.  But how many are missing out? 

MYOB’s Business Survey

Here is a very worthwhile and provocative article from Mark Garner of Make Them Click about business in Australia. (Mark is a long-time marketing, eBusiness and analytics consultant, and one of the straight-shooting good guys in the Western Australian web industry. At least, that’s how I see him.)

Mark was commenting about an article on the ABC.net.au website by John Moss, Chief Strategy Officer with MYOB. Here’s a quote from John from the ABC site:

“Our recent Business Monitor study found that only 38 per cent of Australian SMEs have a website, so almost two-thirds are missing out on online opportunities. This gap is beginning to be recognised as 30 per cent of those businesses without a website expect to have one within the next 12 months.

According to the data, not surprisingly those businesses with a website have greater expectations around revenue in the next 12 months. 40 per cent of businesses with a website expect revenue to be up in the coming year whilst only 28 per cent of businesses without a website feel the same way.”

You can find the detailed MYOB survey report here.  I made a few comments about this in a LinkedIn group discussion, and thought I would add some of the points here on this website.

The MYOB report says that “38% of business owners surveyed use their own website”. It says 64% of manufacturers and wholesalers have their own website. The lowest were the businesses in agriculture, forestry and fishing. 15% have their own website – which I reckon is actually pretty high for that category.  You can do anything with numbers… Lies, damn lies and statistics.

The more interesting survey would be “How many Australian businesses consider their website to be really effective in helping to grow their business?” And the follow up, “How many see it providing positive ROI?”  Not many.

The results of MYOB’s survey were a bit surprising, but of course as with all surveys it depends who you survey and what you ask them. I’ve been reading business surveys for the last 15 years about business take-up of the web. The growth trends are obvious, but the numbers are sometimes contradictory.

Getting accurate info is a challenge. I reckon the NAB Online Retail Sales Index seriously underestimates the amount of online transactions being done by Australians.

Sensis eBusiness Survey

One interesting survey is the eBusiness survey done by Sensis since 1995.  You can find their latest survey here.  Here’s a quote from it:

“The proportion of SMEs with a website continued to increase over the past year from 61 per cent to 67 per cent. A further six per cent of online SMEs indicated an intention to have one within the next 12 months. Over two-thirds of SMEs reported that having a website had improved the effectiveness of their business. Expenditure on website maintenance was one of the few areas of technology to record an increase in the past year.”

Now that is a lot different to MYOB’s findings. And here’s another Sensis extract, looking at business use of the Internet.

“The rate of internet connectivity among small and medium businesses was relatively unchanged during the year, with internet connectivity among small businesses increasing marginally from 94 per cent to 95 per cent. While 95 per cent of all SMEs currently have internet access, only a further two per cent expect to connect within the next 12 months and the remaining three per cent do not expect to be connected within the year. Some 95 per cent of SMEs with internet access have broadband internet access, which was down one percentage point in the past year.

The single most important reason for use of the internet (as identified by 96 per cent of all internet-connected SMEs) remains email (to communicate with clients, customers and suppliers). The next most important uses of the internet were looking for information about products and services and internet banking, which were both used by 91 per cent of SMEs that were connected to the internet. The fastest growing applications in terms of usage for SMEs were using a website to advertise a business, internet banking and monitoring markets and competitors.

The applications that were considered essential by a majority of SMEs were e-mail communication, internet banking, looking for information about products and services, getting reference information and research data, paying for and receiving payments for products and services, placing orders for products and services and accessing directories such as the Yellow Pages™.”

(Well, Sensis would say that about Yellow Pages, wouldn’t they!  )

And wait, there’s more stuff of interest here in the Sensis report…

“Online selling by SMEs continued to grow during the past year. The percentage of SMEs taking orders online has increased one percentage point to 59 per cent. Online selling as a share of total sales activities also rose during the year among e-commerce oriented SMEs, increasing from 24 per cent to 27 per cent. Along with the rise in the average level of online sales, the average proportion of total sales that were made online rose from 24 per cent to 27 per cent. Some 18 per cent of SMEs who used e-commerce to sell made the majority of their sales online, which was up five percentage points in the past year. The number of SMEs receiving payments online for sales made over the internet also grew slightly, with the proportion of SMEs receiving payments for sales over the internet up one percentage point to 71 per cent in the past year.

Once again, SMEs were most likely to report that they were making sales online to customers in their local area, with 60 per cent reporting they mainly sold to customers in the same city or town. Of those SMEs that sold online, 27 per cent had made sales to customers overseas.”

Whose Stats Do You Believe?

With such contradictory survey results, it’s tough to know who to believe. So, let’s turn to the Australian Bureau of Statistics. Finding stuff on the ABS website is a challenge, but here is what I think are their latest stats on online business. (And thanks to Jim Wyatt for showing me these a few months back.)

The ABS figures show that 40% of Australian businesses have a ‘web presence’ and 90& have Internet access. It also shows that 46% have placed orders via the Internet and 25% have received orders via the Internet.  These figures date back to 2009-10.  (You really can say anything using stats. “Receiving orders via the Internet” apparently also includes having someone send you an email saying “Yep, go ahead’.)

Maybe MYOB’s figures are close to reality.  Maybe they are not.

Does Australian business ‘get’ the web?

Whatever the numbers, how many Australian businesses get the web? I think many do ‘get’ it.  Sadly, they also get confused with it.

It’s about everyone having realistic expectations. Most people think that because they put up a website, then the world will find it and beat a path to their online door. It’s unrealistic – and it’s fed by the media promoting stories of some online success stories. It does not translate to rivers of gold for most businesses that go online.

They get shitty ROI and are then bashed up for not wanting to continually invest more. Some get conned by people in the digital industry who over-promise and then under-deliver.

Many businesses  know they need to do better online but struggle.  So they decide to get a website.  But just  “going online” often does not change their business. So they get disappointed again after falling for more hype.

At a talk I gave recently, I pointed out that there are 100,000 new websites going online every DAY. Every DAY. It’s hard to stand out – so businesses need to realize that their the website is ONE of the tools in the business toolbox, not the total solution.

Your Website is different to your Web Presence

Mark Garner makes the very valid point that a web presence is different to a website. As he  points out, a business and its staff can have a web presence simply by being mentioned online by someone else. Here’s a quote from Mark’s post:

“Before the web the only way for a customer to interact with you was to come to your store (or maybe call you) and the retailer had complete control of that experience.  These days the first port of call for any customer is the web, and the business has little control over that.

Even if a customer does come to your physical location they have already checked you and your products out on the web first. In many cases they know more about your business and product than the salesperson. Even if you don’t yet have a website, you still have a web presence whether you realise it or not. People are already talking about you in forums and on social media, and if you’re not taking part in those conversations, then you’re not taking part in the modern economy.”

Yep, your web presence – or your ‘online presence’ is very different to your website.  And often, your online presence is controlled by others.

Often I find I search for a business and I’m amazed at what comes up.  Very often, Google gives Search Engine Results Page (SERP)  priority to an old outdated business listing that appears in some crap online business directory rather than giving any priority to the website of the business itself.  The web presence created by others overrides and outweighs the presence the business is trying to develop for itself.

Take the business directory “Hot Frog”.  (It’s one of several that Google seems to take seriously, for reasons that escape me.)  Hot Frog has free listings for businesses, and a free Hot Frog listing for a business may often rate higher in Google’s SERPs than the website for a business. For about $20 per month, you can pay Hot Frog to run ads for your business on the same page as the free Hot Frog profile for your competitors.  I’m not recommending Hot Frog, but you do need to be aware how your online  presence is at the mercy of others.

Smarter Web Strategies

One of the many paradoxes of doing business online, is that while almost anyone CAN create a website, most do not create a smart website, a smart online business or even a smart multichannel business. Some do, and do it on a digital shoestring, but the “shoestring-startup” category killer success stories are rare.

The flipside is that the really big offline businesses who succeed online are also rare. These dinosaurs are often left exposed in the fast-moving digital jungle. They also can lack smart strategies. (Often being big makes it so much harder to change.)

The latest Sensis survey also included this finding:

“While 95 per cent of SMEs reported that they were online, only 16 per cent of those reported that they had some form of strategy for their businesses digital activities. For most SMEs that did have a digital business strategy, it was most likely to be focused on internet and websites (90 and 89 per cent respectively), with 54 per cent including a mobile component and 53 per cent including a social media component.”

So does Australian business ‘get’ the web?  Some do. Most don’t. 

Blindly going online is silly and expensive.  

Funding your business to play in the digital world without a digital business strategy makes little sense.  

Giving up is not the answer.  The digital world won’t go away. 

We all need to get smarter.

Strategies & Roadmap, The Big Picture, Trends
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