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The recent surge in broadband use in Australia has created a new set of possibilities for marketers. Some will seize the opportunity and use it to develop the medium, while others will waste it, predicts Simon van Wyk.

How quickly our expectations change. I’ve been digging back into past predictions about broadband use in Australia, and found that four years ago ABN AMRO predicted that home broadband connections, then accounting for less than 5% of Internet connections, would soon reach the tipping point and “explode” to reach 625,000 Australian homes by 2005.

By July this year, Australia reached 1 million broadband connections. However, analysts say we still haven’t reached the tipping point, where uptake takes off and spreads like a virus rapidly through a community. Furthermore, groups like KPMG’s technology research group are calling Australians laggards compared to broadband adoption trends overseas.

Mind you, if we haven’t reached the tipping point yet, we must be getting pretty close. There were barely 700,000 broadband connections at the end of 2003, which means better than 40% growth in seven months and nearly 100% over the previous 12 months largely due to Telstra’s introductory plan rates which start at $29.95 per month.

Embracing business

Telstra now has an estimated 75% share of the broadband market (when you include other ISPs it supplies lines to), with Optus accounting for 20 percent. They are soon going to be challenged by innovative competitors such as Unwired, which is rolling out wireless broadband in Sydney and has a license that will allow it to eventually cover up to 95% of the Australian population.

The Australian Bureau of Statistics pegs the number of Internet-enabled homes at nearly six million, so there is still a lot of room for growth in home use. Businesses, on the other hand, have fully embraced broadband technology.

A report on the e-business market put out by Telstra’s online search arm, Sensis estimated that 43% of small and medium businesses in Australia are accessing the Internet via broadband, while Pacific Internet’s Broadband Barometer puts the figure at 52%, up from 23% a year ago.

The Broadband Barometer declared that “There remain no killer applications for broadband,” with the most widely used technologies among broadband small businesses being firewalls (81%), network security (75%) and LANs (67%). Broadband penetration is significantly higher in metropolitan areas (62%) than rural (24%).

Mature or lagging?

Ericsson Australia recently released findings from a survey of nearly 2,000 tech-savvy city-dwellers with a strong desire for broadband. The survey revealed that compared to most other countries, Australia is a technologically mature market, with high penetration rates for mobile phones, Internet at home, computer at home, digital cameras and electronic organisers. Ericsson estimates Internet penetration in Australia at 75% in 2004, up from 66% in 2002.

This contrasts another Australian report released at almost the same time by KPMG, which stated that “If broadband is not moved to the high ground of national priorities, we are virtually guaranteed to remain a laggard. The long-term economic consequences of such an outcome could be very severe.”

Their justification for such strong statements is quite eloquent, so I’ll quote a large slab of it here: “Why does this matter? It is not primarily about cool stuff - even though downloading a CD-quality song in a few seconds for less than a dollar is pretty cool. Rather, it is about the national consequences if, over the next few years, people still waste time and money jumping on planes when they could videoconference but for adequate bandwidth, or die needlessly when telemedicine could have saved them, or still take orders manually in the field only to re-key them back at the office.

“If, compared with our international peers, Australia has lower productivity, a massive imbalance of intellectual property trade with the rest of the world and loss of digital content creators i.e., talent emigration and loss of remote higher education to foreign institutions; then there will be very real, negative consequences for the economy.”

On the upside, if we get it right, the benefits are enormous. The Federal Government’s Broadband Advisory Group reported last year that “next generation broadband” - the next stage in broadband development, starting to take place overseas, offering much greater bandwidth that current DSL technology - could produce economic benefits of $12-30 billion a year to Australia.

Get creative

So what does this mean to marketers? Well, the rich media revolution has finally arrived. After what seems like decades of catering to the lowest common denominator of a crappy 56K modem and painfully slow page download times (it has, in fact, only been one decade, but that’s 70 years in Internet time), it is finally time to rely on animation, multimedia and video to get your message across.

I predict that we’re on the cusp of a creative Renaissance for Internet marketing. Clever designers and producers will now be able to combine the deep information potential of the Internet with the high-impact techniques that have worked well in traditional offline media.

Sadly, I also predict that many lazy marketers will simply put their TV commercials on the Web, without consideration of the distinguishing features and rich possibilities of the new media.

Which category will you fall into?