The NBN Debate

The National Broadband Network is a $37.4bn investment – but the debate has focused on the political rhetoric, so consumers are largely unaware of the future benefits it will bring. Jessica Kennedy finds out what the NBN will mean for business, media and marketing

Political football. A waste of tax payers’ money. Game-changer. A lot has been written, and said, about the National Broadband Network. It is a divisive topic that has fuelled numerous debates – be that in Parliament, on talkback radio or news sites’ comment threads.

But despite the project’s visibility, consumers are largely unaware of the NBN’s potential benefits.

“A lot of the benefits have been underplayed by the political debate,” Peter Vogel, chief executive of media agency MEC, says.

“Should it have been fibre? Should it have been wireless? Is it too much money?

“Those are the questions everyone has been focused on, as opposed to ‘For Australia to be a successful country we need internet speeds that are comparable to the rest of the world.’”

So what are the potential benefits of this $37.4bn investment? What will it mean for innovation, business and, of course, media, marketing and advertising?

Updating to an optic fibre network will see broadband speeds accelerate up to 40 times faster than the current ADSL broadband can deliver through the old copper network. Sandy Park, managing director at STW-owned digital shop The White Agency, explains that the update to the national network will bring Australia’s internet service up to speed with other developed countries.

“Businesses will have the opportunity to develop new ways for customers or clients to interact with them, and their products and services,” Park says.

“As a foundation this may involve a greater use of video chat for servicing customers and clients, retailers and manufacturers using interactive video to showcase their products, and a broader range of online gaming and entertainment options.”

Increasing the availability of high definition video conferencing will allow those in rural and regional areas easier access to the services that city dwellers take for granted.

For instance, telehealth services would allow doctors to check-in on far-off patients and teleconferencing could boost efficiency of satellite offices and, therefore, productivity.

Smart TVs gained momentum last year, and with 220 million sets forecast to be sold worldwide in 2017, up from 54 million last year according to an Informa Telecoms and Media report, the NBN is sure to boost local sales.

That rush of internet-enabled televisions is set to have a profound effect on media consumption and will do nothing to stem media fragmentation.

“Internet-enabled TVs will become more user friendly and will gain greater penetration,  and consumers will have an ever greater choice of devices with which to consume media,” Park explains. “Media fragmentation will increase and consumer’s expectations of receiving an excellent experience from the places they choose to consume media from will continue to grow.”

Vogel predicts that Smart TVs will have as large an effect on consumption as the iPad had on consumer’s online habits.

“It is going to have the same impact on what has been the most powerful medium of our era – the television – because all of a sudden the TV almost becomes a big iPad.”

Expect another flood of apps, a rise in the level of content and a whole lot more competition says Vogel, who believes the NBN will level the playing field and give every content owner a chance to challenge the status quo.

“Your traditional players, free-to-air and the like, at the moment are demanding the lion’s share of advertising revenue – they are going to come under pressure,” he predicts.

Increased connectivity will also boost the level of interactivity which, as Ian Oppermann, director of CSIRO Digital Productivity and Services Flagship explains, will lead to more personalization and customisation.

“You can suddenly close the one too many loops by gathering information from them, and they suddenly have a voice. You could respond as a broadcaster and a media generator by tailoring that content to individuals.”

Similarly, marketing collateral can also be personalised.

“However, as content becomes richer, the lines between advertising and content will blur, as we’ll be able to serve up what the customer is actually interested in, which is ultimately what brands want,” says Konrad Spilva, founder and managing director of digital agency Visual Jazz Isobar.

“That means marketing becomes useful and informative as opposed to something that you get beaten up with,” Oppermann adds.

Online advertising is sure to receive a boost from the NBN, with Bruce Buchanan, chief executive of digital ad platform Rocklive and former CEO of Jetstar, excited about the rising number of connected devices in a household.

But for media agencies, further media fragmentation will deliver yet another headache.

“DSPs for living room eyeballs will also come into play where you can choose which household and which demographic you are actually wanting to serve your advertising to as opposed to buying a broad area,” says Buchanan.

While the increased complexity will prove aggravating, Buchanan says it is a great opportunity for media agencies to deliver tangible and measurable results.

“Media agencies that can actually demonstrate that skill set to marketers are going to have a great entr√©e into all of the large corporate and the big marketers around the country.”

Vogel also sums up the affect on media. “A whole lot more complexity. A whole lot more choice. And a whole lot more competition. Interesting times,” he laughs.

According to Spilva, the role of creative and digital agencies will also be shifted as the “profound financial impacts flowing on from the NBN” affect the way businesses operate.

“Increasingly our role will extend beyond marketing communications – assisting clients to shift their business models, provide greater operational efficiency or at least diversify towards digitally-enabled revenue streams,” he says.

“More high quality connectivity and more data always results in more competition and regularly results in a price fall – or abandonment of pricing – in the industry.

“There will be a dramatic shift in focus from the cost of delivering a service, to the perceived value or benefits of delivering a service. It will be a paradigm shift for most businesses.”

Businesses that are complacent “will be eliminated” by the changes the NBN rolls out, warns Park, who adds that innovation is crucial regardless of network speed.

Spilva agrees that the NBN is just an enabler, but says it will open the floodgates for ideas, services and businesses we can’t even imagine yet.

“Global digital business entering other markets will force Australian businesses to innovate like never before, or die,” warns Spilva.

“The NBN will only help to fuel our already pretty healthy startup scene.”

Government agencies have splashed out $29m on advertising the NBN since 2010. The NBN Co spent $8m itself between 2011 and 2012, and in October last year the federal government announced plans to funnel another $15m into advertising the project in the lead up to the election this year.

So why are consumers still largely unaware of the NBN’s future benefits and ramifications?

“Consumers know it is coming and that it is costing taxpayers a lot of money and that it will mean the internet gets faster – but that’s all they know,” Park says.

“For it to work for consumers it needs to focus on the emotional benefits of this new technology as bandwidth, devices and interfaces are secondary characters to the human experiences they enable and facilitate.”

The debate is starting to take on a new tone but Oppermann says the nation needs to hurry up and get behind the NBN, especially with the federal election approaching.

Vogel concurs and, with a sense of urgency behind his words, adds: “The sooner we have it the better because, yes, it is a big investment, but the benefits will be one hundred thousand fold.”