The higher marketing and advertising spend of Internet service providers over the last few months has paid off, with broadband subscriber numbers surging by 25 per cent, according to Nielsen//NetRatings.
The research company has released figures showing that spending on advertising broadband services went from a mere $265,000 in January of this year to over $2.3 million in March, and increase of 800 per cent. This trend continued over the last few months, with $2.18 million being spent in June.
The marketing efforts have been led by telecommunications giant Telstra, which after a slow start to the broadband race has committed a significant amount of its marketing budget to the cause. It was the most dominant advertiser of broadband services in the first seven months of the year, and its aggression has resulted in its competition ramping up their own marketing activities.
"Telstra's CEO has gone on the public record that they are committed to broadband, that they will have a million broadband customers by 2005," commented Andrew Reid, senior analyst for Nielsen//NetRatings. "They are doing the whole industry a favour. The more users consider the technology, the more price-savvy they will become and they will shop around. There is a spill-on effect to the other ISPs to upgrade their facilities and take advantage of the market awareness. And with their wholesale and retail divisions, Telstra wins either way."
The money has been well spent, according to Nielsen//NetRatings. Over half a million Australians now enjoy a connection speed that is superior to the standard 56K modem. The research company said that an additional 150,000 home users accessed the Internet via a broadband connection between May and July alone.
"Broadband has benefits which aren't immediately apparent to consumers," Reid said. "Creating demand by giving broadband a higher profile, while playing on that upgrade culture' found amongst all computer owners to encourage the take-up of high-speed access, has certainly had an impact."
Reid expects that the IT channel will reap some of the rewards of this marketing spend. He said that once users have broadband connections, the next logical step is that they will begin accessing content that is power-hungry from a hardware point of view. "It is a natural progression," he said. "Faster speed means more downloads, more demanding applications, and the need for more processing power."
This flow-on effect will take time, however, and Reid believes resellers will gradually see the effects over the next 12-24 months.