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Nua Internet Surveys

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October 22, 1999: This message was distributed by Papyrus News, a free e-mail distribution list on the global impact of information technology on language, literacy, and education. Feel free to forward this message to others, but please include this introductory paragraph. For information on subscribing or unsubscribing to Papyrus News see http://www.lll.hawaii.edu/web/faculty/markw/papyrus-news.html.

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People ask me where I get the info I put on Papyrus News. Surprise -- I get it on the Internet! :-) I subscribe to a variety of new services, listservs, etc. Occasionally I'll share them with you so you can subscribe too if you want. One weekly report I get is Nua Internet Surveys, which usually includes demographic and business reports. They also have more extensive reports on their Web site listed below, including periodic reports of the size of the Internet.

I don't always read everything thoroughly, of couse, but glance through for things that match my interest. Note in this report below that Palestine now has its own Internet domain, "PS".

Mark

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NUA INTERNET SURVEYS NUA INTERNET SURVEYS NUA INTERNET SURVEYS

Weekly free email on what's new in surveys on the Internet

By Nua Email: surveys@nua.ie Web: http://www.nua.ie/surveys/

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October 18th 1999 Published By: Nua Limited Volume 4 No. 41

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<http://www.nua.ie/surveys/analysis/weekly_editorial.html >

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A report from Intermedia Communications finds that online advertising spend has increased by 80 percent in the first quarter. Despite the seemingly positive ring to this fact, online advertising represents only a fraction of total advertising spend and if current trends continue, that fraction will get even smaller.

Dotcom mania has set in Stateside and in the run up to the season of folly, Internet pureplays are pouring gargantuan sums of money into TV, billboard and radio ad inventories. It's not just the predictables either, new players such as Flooz.com, Uproar.com, Paymybills.com, and launch.com are all desperately trying to spend their IPO money on any advertising medium other than the Internet.

Competitive Media Reporting found that spending on outdoor advertising alone rose 4 percent in the first-half of 1999. Ironically, Internet companies are driving this growth. Billboards on Highway 101, between San Jose and San Francisco are expected to yield USD66 million in gross revenue this year, up from USD15 million just five years ago. Ironically again, the ads are all for dotcoms. What's going on? Does Internet advertising not work?

The online advertising conundrum has been a thorn in the side of Internet pundits for many years now. The problem is that while so many sites are trying to support themselves on advertising models nobody is really convinced that online advertising "works".

The problem is conceptual. The fundamental questions are, what makes an online ad campaign successful and how do you measure that success. It's hard to come up with an industry standard when there are so many needs to be fulfilled both on the part of the buyer and the seller. The dominant industry premise, click-though, seems anachronistic.

While counting up eyeballs is a reasonable way to measure the success of TV ads, it's clearly not suitable for the Internet. The Internet is interactive, dynamic and as such demands a new approach to both creating and measuring advertisements. As with any message, the medium is as important as the message itself and intelligent use of the medium enhances the message. Expecting a user to put on hold what they are doing and go to visit a site on the basis of a banner ad is not an intelligent use of the medium. Where's the interaction, the dynamism?

For the full article please see:

http://www.nua.ie/surveys/analysis/weekly_editorial.html

For editorial archives please see:

http://www.nua.ie/surveys/analysis/weekly_editorial/archives/index.html

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<http://www.nua.ie/surveys/about/advertise.html >

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To advertise see <http://www.nua.ie/surveys/about/advertise.html > or contact us at <mailto:surveys-advertise@nua.ie>

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DIGESTS START HERE

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E-COMMERCE:

Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=14 >

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1.9 million users in the UK have bought something online in the last six months, according to BMRB International, a London based consulting firm. The study, "E-commerce - An Attitudinal Evolution" found that one fifth of all Internet users in the UK are comfortable with ecommerce and of those 75 percent are home users.

In a bid to ascertain nuances in behaviour and attitudes to branding, product sourcing, delivery, quality of service and general convenience, the study breaks British online shoppers into six distinct groups. The study found that the longer the consumer had been online, the more likely they were to be in the top 2 categories as listed below.

Realistic Enthusiasts - Representing 15 percent of the market, this group is prepared to spend more than STG500 online, is prepared to buy from an unknown company and believes that convenience when shopping online is more important than price.

Confident Brand Shoppers - Representing 16 percent of the market, this group spends an average of STG275 online per month, 20 percent more than average. The group's confidence in online shopping is fuelled by an implicit trust of established brands.

Carefree Spenders - Representing 15 percent of the market, this group is not phased by brand equity. Rather, it will buy from unknown companies and in addition will buy without seeing the product beforehand. The group spent 55 percent more than average and accounted for 33 percent of all online shoppers in the last six months.

Cautious Shoppers - Representing 20 percent of all UK shoppers, this group would prefer to view an item before purchase and is extremely unlikely to purchase at an online auction.

Bargain Hunters - Representing 16 percent of the market, this group is motivated primarily by price. Those belonging to the group are not discerning about what Web site they will buy from and are not prepared to spend more than STG50 per purchase.

Unfulfilled - Representing 17 percent of the market, this group finds the entire process of purchasing online unsatisfying. This group find it difficult to find what it is they are looking for, they will not buy without seeing the product, they will not buy from an unknown company and they believe that the delivery process is too slow.

<http://www.bmrb.co.uk/newsdesk/index.cfm?url=http://www.bmrb.co.uk/newsdesk/ecom.html > __________________________________________________________________

According to a new report, a basic lack of customer service and site functionality could end up costing online retailers USD6 billion in lost revenue this season. In a study of the Net's top ten retail sites, 39 percent of attempts to buy something failed and 56 percent of search attempts failed.

Sites should concentrate on improving functionality and customer service on their sites rather than pouring money into advertising, according to Mark Hurst, author of the report.

The study, "Holiday '99 E-Commerce", found that a dollar spent on advertising during the holiday season in 1998 yielded USD5 in return while a dollar spent on customer service yielded USD60 in return.

Participants in the study abandoned their shopping attempts due to repeated errors and confusion over navigation. The monitored sites were: etoys.com, godiva.com, llbean.com, beyond.com, sharperimage.com, wal-mart.com, avon.com, disney.com, petsmart.com and buybooks.com.

<http://www.goodreports.com/cgi-bin/SoftCart.100.exe/rholi.html?E+scstore >

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Consumer purchases online are expected to be worth USD380 billion in 2003, up from an estimated USD31.2 billion in 1999, according to a study by Dataquest.

At a press conference on Tuesday afternoon, Dataquest vice president and worldwide director Brett Azuma outlined some of the findings of the report.

Online consumer purchases no longer represent a niche market, as retailers around the world rush to replicate the US experience. "E-tailing has become mainstream," Azuma said.

By 2003, Dataquest estimates that the US market, at USD147 billion, will be less than half the world total (down from two-thirds of the world total, at USD20.5 billion, in 1999).

Online consumer sales in Europe are expected to exceed USD115 billion in 2003, up from USD5.4 billion in 1999. Among the reasons for this growth Azuma cited free Internet access and a drop in security concerns. Another key factor is word of mouth, which serves to calm anxiety about online purchases and validates the idea of shopping online, he said.

The Dataquest study predicts a prosperous holiday season for online retailers. The fourth quarter of 1999 should bring in USD12.2 billion, 300 percent more than last year's fourth quarter, Azuma said. About 64 percent of Internet users plan to make an online purchase this season, he added.

Finally, Azuma pointed out that price is only in fifth place among the reasons that people shop online. Their primary motivation is convenience.

<http://gartner12.gartnerweb.com/dq/static/about/press/pr-b9957.html >

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The number of Australian shoppers choosing to buy in virtual stores as opposed physical stores is growing by 500 percent per year, according to Sydney based Web sales analyst www.consult.

In 1996 Australians spent USD40 million online, in 1998 they spent USD200 million online, this year they will spend USD1 billion and next year USD5 billion. By 2001 www.consult expect Australians to spend

USD10 billion online.

Meanwhile the results of a survey released by the Australian Bureau of Statistics released in September are considerably more conservative. They found that online shopping had increased by 60 percent between May '98 and May '99. During that period 3 million purchases were made by 650,000 adult shoppers.

According to www.consult, it is business use of the Net which is driving growth. However, ABS have just released figures which suggest that business use of the Internet and technology down under is paltry.

In June 1998, 29 percent of Australian businesses were online, 13 percent more than June 1997 when 6 percent were online. A mere 14 percent extra said they intended to be online by July 1999.

The ABS study found that only 23 percent of businesses use the Net to promote their business, 16 percent use the Net to purchase, 10 percent use it as an additional sales channel and the remainder use it for email.

<http://www.news.com.au/news_content/national_content/4317827.htm >

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Businesses engaging in B2B marketing online recently attributed 17 percent of overall sales to their Internet presence in an Activmedia report.

"The Real Number Behind The Online Business-To-Business Industry" found that in those companies that have had an online presence for, on average, 2.67 years, one sixth of their revenue is now Internet generated.

Only 8 percent of companies interviewed were "pureplays" yet 51 percent of them used the Net as a supplementary sales channel. 59 percent used the Net to make purchases for their company. 92 percent market through traditional means as well as Internet. 42 percent of companies interviewed use their Web site to complement offline marketing campaigns.

The study concentrates on four industry segments, B2B Retailing, Manufacturing, Service and Wholesaling/Distribution and found overall the majority of B2B sites use the Internet to attract new customers, to reinforce existing customer relationships and to improve sales channels and post-sales services.

<http://www.activmedia.com/rnb2b_lite.html >

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Oct 12 1999: A new study by Frost & Sullivan has found that online gambling yielded USD834.5 million in revenue last year. The figure represents a 100 percent increase on revenues in 1997. In 1996, IDC reported that USD 1.5 million spent online at gambling casinos. Analysts at IDC forecast that online gambling could yield USD10 billion by 2002.

The Frost & Sullivann study, "World Online Gambling Markets", found that gamer operators are not worried about impending laws which may be introduced online to curb the industry, rather they believe these laws cannot be enforced and people will continue to gamble.

Frost & Sullivan opine that the lack of legislation may be detrimental to the credibility of the industry. The research also found that if the US government does legislate, this would allow established gambling houses to leverage their economies of scale and push small operators out of the market.

<http://www.frost.com/rp/ >

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DEMOGRAPHICS:

Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=18 >

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After two years of negotiation with the Internet Registration Authority (IRA) and the International Standards Organisation (ISO), Palestine is to get it's own top level domain. The UN General Assembly adopted a special resolution to award Palestine with the suffix .PS.

The decision was announced today by Dr. Ghassan Z. Qadah, Senior Technology Advisor to the Palestinian National Authority and Supervisor General to the Palestinian Government Computer Center.

According to the Palestine Central Bureau of Statistics, 6.9 percent of households in the West Bank and the Gaza strip have a PC. While the total number of computers in the region was calculated to be 33,867, the majority of these are concentrated in the West Bank.

There are nine private ISPs in Palestine and between them they have 7,840 dial-up accounts. This number does not include those users in NGO's and government sectors. The region has ISPs covering all the main population areas however because there is no connection to the Internet backbone they all must go through an Israeli owned ISP.

The cost of going online in Palestine is relatively expensive. While the average Palestinian wage is USD300 per month, dial-up access costs between USD15 and USD25 per month while lease-line costs between USD200 and USD400 per month. Bandwidth ranges from 128K to 768K.

<http://www.birzeit.edu/web/99internet.html >

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A survey of 23,636 users in France has found that in the first three months of this year there was a significant demographic shift in the French Internet user profile.

According to the study, NetObserver 99 by Novatris, a market research company, 42 percent of French netizens are now female and the amount of mothers who use the net has increased greatly and now account for 6.4 percent of users. The majority use the Internet for finding specific information online while 34 percent use the Net for entertainment.

In addition, the amount of seniors online has also increased and this group now represents over 10 percent of the entire demographic. Of this group, 79 percent were male and were also likely to be Minitel users.

Surfers said they spent less time watching TV, less time using Minitel and read less newspapers since they started to use the Net. The survey found that one third of those surveyed have purchased something online. The most frequently purchased items were books,music and IT ware.

The changes occurred in the first three months this year and coincide with the movement of the Free ISP model from the UK to the continent. The most recent figures from Nua's How Many Online? show that there are 6.2 million users in France representing 12.9 percent of the population.

<http://www.novatris.fr/fr/conference/slides/sld005.htm >

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Data from the Second International Technology in Education Study (SITES) shows that nine out of ten elementary, intermediate and secondary level schools in Canada have access to the Internet for educational purposes.

A mere 12 percent of elementary students surveyed attend a school without access and only 3 percent of intermediate and secondary level schools are without access. According to Statistics Canada there is one computer to every seven students in Canada. 73 percent of students went to a school with it's own website. 4 out of every 10 students had used email by the end of the last school year. One third of students had sent disseminated information online and 30 percent had designed their own website.

Despite the high numbers, the report noted that there are obstacles to gaining full advantage of technology in Canadian schools namely a lack of equipment and a lack of training opportunities for teachers.

<http://www.statcan.ca:80/Daily/English/991012/d991012a.htm >

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A report by the Census Bureau, based on a survey taken in October 1997, found that 20 percent of Americans used the Internet in 1997 and nearly 47 percent of adults used a computer, up from 36 percent in 1993. 57 million people aged 3 and older surfed the Net.

75 percent of students, public and private, said they had access to a computer at school. 42 percent of public students had access to a family PC while 65.3 percent of private students had a PC at home. Of the 14 million children who used the Internet, 9 million went online from school and 7 million went online from home.

70 percent of women use a PC in the home however women were more likely to have used a computer at work than men, 57 percent compared to 44 percent of men. Women used computers primarily for word processing, 60 percent compared to 54 percent for men. Only 20 percent of women used a computer for analysis compared to 34 percent of men while 11 percent used a computer for programming compared to 20 percent of men.

43 million people aged 18 or over used the Internet and 28 million had their own accounts at home. 21 million logged on from work and 6 million logged on from school. Male and female surfing habits differed slightly. 58 percent of men logged on to view news, weather and sports compared to 41 percent of females. Men were more likely to check schedules, make reservations or buy tickets online, 27 percent compared to 23 percent of females.

Of those adults that used the Internet at home, 80 percent used it for email, finding government information, business, health and education. The report is based on interviews with 50,0000 households and over 128,000 people.

<http://www.census.gov >

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IT/COMPUTER INDUSTRY:

Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=12 >

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Gartner Group have released a study which finds that companies using Microsoft products in the year 2002 and afterwards will be paying 50 percent more than they do now. The change in price will be a result of changes to the terms and conditions of licenses issued.

Vice president of Microsoft, John Connors, has stated that he has no idea how Gartner Group came up with the higher figures as Microsoft have not released any prices for licenses. The Gartner Group stated, "We believe Microsoft will increasingly use changes to terms and conditions related to use as a means of increasing revenue."

Gartner reckon that Microsoft will begin to issue nonperpetual licenses to companies in a few years time and these nonperpetual licenses will be 20 percent more expensive than current perpetual licenses.

<http://gartner11.gartnerweb.com/public/static/home/home.html >

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PORTALS/ISPS

Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=22 >

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AOL Europe have announced that for the first time an AOL property outside of the US has 1 million members. Launched in 1995 it has taken AOL Germany just four years to reach this number whereas in the US it took nine years, more than twice as long.

Recently AOL Europe introduced flat rate access to Germany, DM9.90 per month, and cheaper telephone connection fees to it's members, consequently the amount of new subscribers surged. The company are currently running an aggressive ad campaign on German TV featuring Boris Becker, Wimbledon Champion.

AOL Europe is a joint venture between America Online Inc. and Bertelsmann AG and describes itself as the largest multinational Internet online service in Europe. AOL worldwide now has 18 million members.

<http://media.web.aol.com/media/press_view.cfm?release_num=100200&title=AOL%20Germany%20Surpasses%20One%20Million%20Members >

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PRIVACY

Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=37 >

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According to analysts at International Data Corp. 17 percent of all Fortune 1000 companies have installed software to monitor employees at work and by 2001 80 percent of large companies will be monitoring employee behaviour at work.

The software includes tools which can scan emails, scan PC hardrives and watch Internet use. According to IDC, the reason companies are becoming vigilant is because of fears of virus infection and Y2K bug compliance.

Employers also stated that they were interested in improving general productivity levels and were trying to prevent as many legal action cases as possible by getting rid of sexist or racist emails and by preventing confidential information from leaving the building.

AT&T currently monitor the emails and Internet surfing patterns of over 1 million employees. Consequentially filtering software has become big business.

<http://www.seattletimes.com/news/technology/html98/moni_19991012.html >

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PUBLISHING/MEDIA

Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=46 >

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A study by Arbitron NewMedia has found that use of the Internet does not affect consumption of traditional media. The Pathfinder Study found that heavy Internet users actually consumer more traditional media than light users.

The results of the study are in keeping with those of survey conducted by Burke Information Communications and Entertainment Research for MTV Networks and Turner Entertainment Networks. The latter attempt to identify any links between Internet use and TV consumption and found that less than 2 percent of people with Internet access spend less time watching TV.

On the basis of both surveys web marketers and traditional marketers are advised to recognise the synergies between media, including radio and cinema, and exploit these synergies to promote their brands. For example the Burke Study found that heavy users tend to listen to classic rock.

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TELECOMS

Archives: <http://www.nua.ie/surveys/?f=FS&cat_id=38 >

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According to John Roth, chief executive of Nortel Networks, an estimated 2.5 billion hours were wasted online last year as people waited for pages to download. Speaking at Telecom '99 in Geneva Mr. Roth discussed the findings of a recently published study which his company sponsored.

According to the study, bandwidth in Europe will explode in Western Europe as the online population grows from 38 million today to 150 million by 2005. Speaking at the same conference, IBM CEO, Louis Gerstner agreed commenting that many industry insiders were well aware that "bandwidth will be nearly as plentiful as sugar or pork bellies".

Speaking on global Internet penetration, Gerstner recounted the results of another study which found that while there will be 600 million PC's globally in 2003, there will be over 2 billion handheld devices connected to the Internet. The proliferation of the latter will drive online commercial growth in less well-off economies where the PC is not a domestic appliance.

Telecom '99, currently running in Geneva Switzerland, is sponsored by the International Telecommunication Union and is the world's biggest Telecom Exhibition and Forum.

<http://www.ap.org/ >

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This newsletter is copyright 1996 - 1999 Nua Ltd. Permission is given to reproduce this newsletter in any format pending full recognition of Nua Ltd. Nua do not accept responsibility for the accuracy of information contained in this newsletter. The content has been obtained from sources Nua Ltd. deems reliable.

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Last updated: October 26, 1999