Regional Market Outlook on Digital Marketting
The digital marketing spend is valued at $7–9 billion in 2019 and future estimates looks much stronger, due to continual attraction on digital channels. It is forecasted to grow at a CAGR of 5 percent to reach around $7.35–9.45 billion in 2020. Australia has medium market maturity for digital marketing buyers and suppliers. The market for digital services is healthily growing with industries such as BFSI, telecom, retail at its forefront.
Market Drivers and Constraints
The digital marketing spend in Australia is expected to grow at a CAGR of 5 percent and will contribute around 3–5 percent of the global digital marketing spend in 2019. This growth is due to the positive spend inclination from key sectors like BFSI, media and telecom and retail sectors.
RTB and Digital OOH Media
- Rising adoption of Real-Time Bidding (RTB) of online display ad slots and increasing consumption of rich media and video advertisements are expected to be the key driving factors for display advertising spend in the coming years in Western Europe
- Adoption of digital Out-of-Home (OOH) media is limited to the developed countries; e.g., the emergence of digital TVs in gas stations where 78 percent of the drivers (in the US) watch TV as their vehicles are refuelled
Targeted Mobile Ad Delivery
- Emerging advertising technologies (such as RTB platforms, location-aware and bandwidth-aware technology tools) are enabling contextually relevant and personalized ads based on device features, mobile internet speed, location and other factors.
Difficulty in Calculating ROI
- Most marketers believe that they are not sure about the impact of digital marketing as they often encounter lack of synergy between marketing and procurement centers. Thus, securing a budget for digital marketing investments becomes difficult because providing a digital marketing return on investment is the most critical challenge.
Porter’s Five Forces Analysis: Australia
- Global agencies with established presence have higher supplier power, but the price points of local agencies and competition in the market brings down the supplier power significantly
Barriers to New Entrants
- High investments in terms of technology and infrastructure to compete with existing agencies and the difficulty in attracting and retaining top talent act as deterrents for new entrants
Intensity of Rivalry
- The competition in the digital marketing space is primarily driven by buyer accounts that do not have long-term contracts with the top agencies and are open to working with the fragmented agency base
Threat of Substitutes
- Threat of substitutes is very low. Traditional field market research studies are still adopted in moderately mature markets of Australia
- The government in Australia has encouraged investments in digital marketing across industries as internet penetration has increased manifold. The marketers will have higher buyer power as the agencies compete to grab a higher share of the marketer’s spend