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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 at nua dot 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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CONTENTS
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EDITORIAL :This week Sorcha Ni hEilidhe comtemplates why
Internet pureplays are grappling to spend all
their advertising budgets on every medium other
than the Internet in "Dotcom Mania".
E-COMMERCE :Lack of Customer Service To Cost USD6 Billion
:Six Different Types of UK Net Shoppers
:Disparity in Australian Internet Figures
:Consumers Will Spend USD380 Billion By 2003
:One Sixth of B2B Revenue Generated Online
:Online Gambling Revenues Increase by 100%
DEMOGRAPHICS :Palestine Awarded Top Level Domain
:More Women Embrace the Net in France
:US Census Bureau Reveals New Profile
:90 Percent of Canadian Schools Are Online
IT/COMPUTER INDUSTRY :MS Licenses to Be 20 Percent More Expensive
PORTALS/ISPS :AOL Germany Hits 1 Million Member Mark
PRIVACY :Filtering Now a Business Liability Issue
PUBLISHING/MEDIA :Internet Does Not Effect TV Viewing Habits
TELECOMS :2.5 Billion Hours Spent Waiting in 1998
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EDITORIAL - Dotcom Mania by Sorcha Ni hEilidhe
<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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E-COMMERCE:
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=14>
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BMRB International: Six Different Types of UK Net Shoppers
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/new
sdesk/ecom.html>
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Creative Good: Lack of Customer Service To Cost USD6 Billion
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+scsto
re>
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Dataquest: Consumers Will Spend USD380 Billion By 2003
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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www.consult: Disparity in Australian Internet Figures
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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Activmedia: One Sixth of B2B Revenue Generated Online
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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Frost & Sullivan: Online Gambling Revenues Increase by 100%
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.
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DEMOGRAPHICS:
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=18>
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Bizreit University: Palestine Awarded Top Level Domain
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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Novatris: More Women Embrace the Net in France
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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Statistics Canada: 90 Percent of Canadian Schools Are Online
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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US Census Bureau: US Census Bureau Reveals New Profile
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.
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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: MS Licenses to Be 20 Percent More Expensive
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: AOL Germany Hits 1 Million Member Mark
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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IDC Research: Filtering Now a Business Liability Issue
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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Arbitron New Media: Internet Does Not Effect TV Viewing Habits
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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Associated Press: 2.5 Billion Hours Spent Waiting in 1998
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.
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