Client Survey 1996
An exclusive survey of potential Canadian multimedia clients
by Robert Haiat, February 1996
I recently conducted a survey of Canadian
companies in the private and public sectors to
determine the level of awareness of multimedia firms,
their products and services, and the benefits of
multimedia. Additionally, the purpose of the survey
was to determine the range and average revenues for
companies in the private sector, the aggregated
amount of advertising conducted by these companies,
and the varying uses for and the current and
prospective popularity of multimedia products and
services.
Potential and existing multimedia client surveys
(hereinafter referred to as "client") were
sent to 171 companies in the private sector with
either a head or subsidiary office located in
Toronto. Of these 171 surveys, 17 were completed and
returned. (Editor's note: While the small sample
body makes the findings of this report inconclusive,
the survey results are still fascinating.) The
characteristics of each of the companies which
participated in the survey are diverse. Some are
involved in retail, cosmetics, financial services,
publishing, electronics, etc.
Revenues
Of the respondents, revenue for the last fiscal
year ranged from approximately $1,250,000 to over
$100,000,000. More specifically, 47.06% of the
companies surveyed indicated that they had revenues
over $100,000,000 during the last fiscal year;
whereas 5.88% indicated that they generated between
$50,000,000 and $100,000,000, 5.88% earned between
$10,000,000 and $50,000,000, 23.53% generated between
$2,000,000 and $10,000,000, and 5.88% made between
$500,000 and $2,000,000. The remaining 11.76% did not
provide an answer for the question.
Advertising
Advertising expenditures for 1995 ranged from
roughly $30,000 to $750,000, with the vast majority
of companies skewing to the latter amount. In fact,
41.18% indicated that they spent over $500,000 in
advertising in 1995. According to the results, the
average amount that a company in the private sector
spent on advertising in 1995 was approximately
$472,500, yielding a standard deviation of $340,000.
Companies were asked to identify and break down
the expenditures and the type of medium used for
their advertising. In order to prevent ambiguity in
their responses, respondents were asked to provide a
percentage breakdown of their advertising using a
predetermined list of mediums, including print,
radio, television, multimedia applications, posters,
direct mail, telemarketing, and other. Before
aggregating the results, each response was weighted
by multiplying the corresponding number of dollars
spent on advertising for each company. Figure 1
illustrates this weighted breakdown of advertising
expenditures.
(Figure 1)
As illustrated in Figure 1, direct mail is the
most popular means of advertising, accounting for 33%
of the aggregated advertising expenditures. Print
advertising is almost as popular as direct mail, at
24% of all advertising expenditures. The most notable
form of advertising is multimedia applications at 3%
of the aggregated advertising expenditures. Although
the percentage of advertising expenditures to
multimedia is currently small, it is expected that it
will increase in the next two years.
Companies were asked to identify the percentage of
the budget which will be allotted to multimedia in
the next two years. As per the results, prospective
percentages of advertising expenditures to multimedia
ranged from 0 to 40% of their budget, yielding an
average of 12.14% and a standard deviation of 10.14%.
In order to determine the increase in multimedia
spending from 1995 to 1997, current and future
averages of multimedia spending were compared. In
order to ensure that the averages maintain its
validity, the percentage of advertising expenditures
to multimedia was multiplied by each company's
corresponding advertising budget. According to the
results, the average amount of expenditures on
multimedia advertising for a company in the private
sector was $45,000 in 1995. In 1997, this figure is
expected to increase by 150% to an average of
$112,500. Therefore, as illustrated in figure 2, if
all other factors and advertising expenditures are to
remain constant, 6% of all advertising spending
should be devoted to multimedia products by 1997.
(Figure 2)
Use of Multimedia
58.8% of the respondents indicated that they used
multimedia in the company's operations or strategy
(e.g. advertising, training, communication). Of the
remaining 41.2% who stated that they have not yet
used multimedia, 71.43% mentioned that they plan to
do so in the future.
Of all 17 companies, 82.35% indicated that they
plan to use or continue to use a multimedia company
in the future, whereas 5.88% of the companies said
that they would not. The remaining 11.76% of the
private sector companies did not provide an answer.
Private sector companies were asked to identify
the types of multimedia products that they have used
in the past for their company operations and/or
initiatives from a predetermined set of multimedia
applications, including internal communications,
World Wide Web sites, CD-ROM applications,
information kiosks, multimedia catalogues, and
multimedia annual reports.
Internal Communications: Of the 17
respondents, 47.06% indicated that they have used
multimedia for internal communications. Internal
communications was the most popular use of multimedia
within organizations in the private sector. The
applications for internal communications vary from
company to company. The most common form of internal
communications include multimedia training programs
on the CD-ROM/Kiosk platforms for employees.
Web Sites: The next most common multimedia
initiative implemented by companies in the private
sector was World Wide Web sites. In fact, 35.29% of
the respondents stated that they have already
invested in developing a Web site to complement the
company's advertising strategies. Of the remaining
64.71%, 91% indicated that they are interested in
developing a Web site. Of the companies with a Web
site, 50% indicated that they have their own in-house
multimedia department to design and maintain the
site. The remaining 50% however, hired a multimedia
firm to design it for them. Of the companies which
hired the multimedia firm for front-end design and
back-end data, 33.33% indicated that they maintain
the site in-house. Figure 3 is an illustration of the
World Wide Web investments made by companies in the
private sector.
(Figure 3)
Other Multimedia Applications: According to
the results, kiosks and CD-ROM investments by
companies in the private sector are just as popular
as World Wide Web investments. That is, 35.29% of the
respondents mentioned that they have already invested
in either information kiosks, CD-ROM applications, or
both. Other applications used by companies in the
private sector include multimedia catalogues and
annual reports: 17.65% of the companies indicated
that they have used multimedia catalogues, while
5.88% indicated that they have invested in multimedia
annual reports. Because most of the companies which
participated in the survey are not publicly traded
(the actual statistic of this is not available), the
percentage of multimedia annual report investments
may be higher in the private sector.
Figure 4 is a percentage breakdown of all the
aforementioned multimedia applications used in the
private sector.
(Figure 4)
As illustrated in Figure 4, multimedia internal
communications applications is the most popular
format used by private sector companies, accounting
for 27% of all multimedia investments. Web site
design, information kiosks, and CD-ROM applications
each account for 20% of all multimedia investments.
Multimedia catalogues however, are less popular,
accounting for only 10% of all multimedia
investments. The limited use of multimedia catalogues
may be attributed to the fact that they are
company-specific applications. That is, while the
uses for internal communications, kiosks, CD-ROMs,
and Web sites are diverse, the uses for such
company-specific applications as multimedia
catalogues are much more limited. Finally, the least
popular type of multimedia investment is the
multimedia annual report. It is obvious that only
publicly-traded companies would consider investing in
such an application. However, as previously
mentioned, the number of publicly traded companies
which participated in the survey is small. Therefore,
multimedia annual reports may be more popular than as
specified in the pie chart illustrated above.
Of the private sector companies that have already
invested in multimedia applications as part of their
strategy and/or operations, 91% indicated that they
were satisfied with the product/service, while the
remaining 9% indicated that they were unhappy.
However, of the companies which invested in
multimedia applications, 100% indicated that the
company would invest in a multimedia product/service
again.
Multimedia Company
Awareness
Private sector companies were asked to identify
the multimedia companies with which they recognize
from a predetermined list of companies. The list
included (in alphabetical order) The Bulldog Group,
Devlin Multimedia Inc., Digital
Renaissance Inc., Integrated Communications
and Entertainment (hereinafter referred to as
"ICE"), and Mackerel Interactive
Multimedia. Respondents were also given the option to
list other multimedia companies not specified on the
survey. After analyzing the results, it was
determined that 76.47% of the companies surveyed
recognized at least one multimedia firm.
The multimedia company most recognized by the
private sector companies surveyed was ICE; 47.06% of
the companies recognized ICE as a multimedia company.
35.29% of the companies surveyed recognized The
Bulldog Group. Devlin Multimedia, Digital
Renaissance, and Mackerel tied for third, each
yielding a 23.53% recognition rate. Other companies
listed include Electromedia, Cyberplex, Carter Craig,
Blackstock, Spectrum, NR Zone, Lumina, and McGill;
each of these multimedia companies earned a 2.9%
recognition rate. The 2.9% recognition rate for each
of these companies is misleading. Because these
companies were not listed in the survey, name
recognition was more difficult. Figure 5 is a
percentage breakdown of the awareness levels of all
the aforementioned multimedia companies.
(Figure 5)
As illustrated in Figure 5, ICE controls almost
one quarter of the market in terms of awareness
level. The Bulldog Group came in second, earning an
18% awareness level. Devlin Multimedia Inc., Digital Renaissance, and
Mackerel tied for third, each generating a 12%
awareness level in the private sector. Other
companies which make up the remaining 23% include,
Electromedia, Cyberplex, Carter Craig, Blackstock,
Spectrum, NR Zone, Lumina, and McGill.
Private sector companies were asked whether or not
it is important to establish and maintain a long-term
relationship with a multimedia firm. 58.82% of the
respondents said yes, while 23.53% indicated no. The
remaining 17.65% did not provide an answer to the
question.
In contrast, private sector companies were asked
whether or not they would use more than one
multimedia firm when investing in one or more
multimedia applications. According to the results,
58.82% said yes, while 29.41% mentioned that they
prefer to hire the services from only one multimedia
firm. The remaining 11.76% did not provide an answer.
Robert Haiat has an MBA with an area of
concentration in Arts and Media Management and
Entrepreneurial Studies. He has conducted extensive
research on the film and television, digital
communications, and interactive multimedia
industries. He has also worked for several motion
picture production/distribution companies in both the
Marketing and Business Affairs departments, including
MGM/UA Canada, Norstar Entertainment, and Nelvana.
His ultimate goal is to become a producer of film,
television, and interactive multimedia.
