digital benefits at expense of traditional

Despite the economic crisis most organisations are still planning to increase their investment in digital services this year, at the expense of traditional advertising, according to new research from the Australian Interactive Media Industry Association.

AIMIA and Hyro Limited’s Digital Services Index Online Survey Report, which surveyed 145 small and large businesses from a range of industries and government agencies, revealed that a majority of respondents (54%) plan to increase their digital budgets this year, which includes investment in advertising, software and hosting infrastructure. More than 50% of respondents also said they were committed to upping the percentage of their total advertising budget allocated to digital, with just 4% saying less will be allocated to digital this year and 34% revealing it would remain unchanged.

This second DSI report follows the same research launched last November, but AIMIA decided to promptly investigate digital spend again to check the effect of the global financial crisis.

The report claims that 67% of organisations believe their revenues generated from digital channels will increase this year. Despite this expected rise in revenues, AIMIA has suggested that companies are still under-investing in digital services.

It was revealed that 44% of the commercial and government respondents spend less than 10% on their total advertising budgets online and almost 60% spend less than 20%. Among those organisations with more than $100m in revenue, more than half are spending under 10% of their marketing budgets online and 74% are investing under 20%.

Companies also expect to increase their use of external suppliers for digital services, with 45% expected to increase expenditure this year, which AIMIA suggests shows opportunities for growth in the Australian digital services industry, despite the economic conditions.

AIMIA CEO, John Butterworth, said: “"In the months that followed the release of (the first) report, much changed in the world, in particular in the world economy. As many parts of the world have experienced an economic slow-down, or even worse a recession, it was considered necessary to revisit some of the key statistics from the 2008 Digital Services Index and to gain insight into the intentions of corporations and government agencies in light of these changes.

"The results are very heartening indeed and show that digital remains top of mind for companies as the most effective way to increase revenue, deliver services and extend customer engagement."

19 May 2009


http://www.bandt.com.au/news/18/0C060F18.asp