Support Material: Hackers, Hits and Chats
Keyterms: broadband, blogs, bundling, digital divide, GPS, news aggregator, rss, VoIP, WiFi
Consumers online: Who are they and What are they doing?Much of the material for this section has come from ClickZ. All articles used are linked to each section.
Who ?United States
Slightly more than 60% of US households have access to the internet from home. Teens have a higher than average rate of internet access, those over 65, not surprisingly, are lower at about 35%. Households with school age children are more likely to have internet access at home than those without school age children.
Teens (87% used the web in 2004; and their use is increasing in frequency) are inclined to get news online at a greater rate than the adult population, signaling this is an area of future growth in terms of internet use. The gender gap is almost negligible in the US, and other developed internet markets (Canada, UK etc.) but in less developed countries is markedly wide and a contributing factor to the digital divide. Within the US, hispanics are very connected and have a higher adoption rate of broadband access from home than the general population. This impacts their use of the web (spanish language advertising has not caught up to this phenomena). The African American population lags the general population slightly in terms of internet access but has a higher rate of access via broadband. Those who gain access to the web for the first time are more likely to do so via broadband access.
Sources: Internet Users Show Their Age; Teen Use Of Web, Online Technologies Growing; Hispanic Online Users Adopt Broadband; African American Online Population Is Growing; The Online Battle of the Sexes; Blog Readers Spend More Time and Money Online
Rest of the World:
The US has the largest active internet population, approximately 140 million users, 47 million have broadband access (15th place only on a per capita basis). Surprisingly China lies second (79 million users). This is impressive until you consider the respective population sizes: US: > 60% of its population online, China has 6% of its population online. Japan lies in third place with 40 m online users; India is fourth with 38 m users; Germany lies fifth with 32 m and the UK is sixth with 24 m. Scandinavian countries, although small in terms of population size have always had a high per capita adoption of the internet.
China, among the countries that have significant internet populations, seems to have taken a unique approach in terms of providing the access to its citizens. In line with its tight media controls, China has also placed tight controls on its citizens access to content via the internet via its Golden Shield. This has limited access to the China markets for US companies. Google has recently entered China with a version of its search engine that is appropriate for China, this has angered many free speech advocates, suggesting Google is putting its profit motive before its principles ("don't be evil"). In fairness, Google is following its competitors who had made similar moves.
Growth of internet adoption world-wide appears to be about 1% per month. There is certainly a disparity in internet use across different parts of the world (digital divide). Africa and the Middle East account for about 1% of internet use in total, where as US is 57% of internet use.
The internet is seen as an enabling technology for less developed countries to potentially leap frog traditional stages of transformation to developed economies. These countries have established, or need to establish national policies regarding their adoption of internet technologies. Critical issues in adoption include:
At this point the digital divide persists, and is particularly harmful to women in these countries who have less access to the internet through lower paid work.
- Providing cheaper PCs
- cheaper / broadband access
- basic education
Sources: Web Usage Grows Internationally; Online on the Rise in Europe; Active Home Web Use by Country, December 2005; Worldwide Broadband Accounts Continue to Rise; Population Explosion!; India's Internet Users Spiked in '05; China's Internet Use Surges; Most Americans Have PCs and Web Access; Global Digital Divide Still Very Much in Existence
What for ?Not only are more users moving online, but users are spending more time online, especially those with broadband access. Typically users with broadband access spend 16 hours per week online versus other users at 10 hours per week online.
E-mail remains the number one reason for access, 90% of internet users are using the internet for e-mail. Close behind, and gaining ground rapidly is search, with about 80% penetration. Searches' gains are due to more accessible broadband access and better search. Getting news is the third most popular activity on the internet. Sites like GoogleNews illustrate how the internet can provide content in unique ways. Gathering news from a variety of RSS feeds via a news reader also illustrates some of the more unique capabilities of the internet (unbundling and rebundling content). Job-related research is also a popular use of the internet. IM is popular among teens. Researching health related issues and online banking are becoming more popular with all but the younger markets online.
$1.8 billion was spent on content on the internet in 2004. Online personals and dating sites were the lead recipient, but gaining ground rapidly was downloadable music, no doubt as a consequence of developments with iTunes and Napster.
Online retail grew to $143 b. in 2005, up 22% over 2004.
More and more consumers are going online to simply have fun, with no real objective in mind. This is a consequence of broadband access. With more limited access consumers are likely to have a purpose in mind prior to logging on. Community-based activities are starting to gain significant traction, and online gaming, especially among younger audiences is also popular.
Consumers are also willing to share their thoughts and ideas. This has manifested in the emergence of blogs (30 million, with a blogosphere that doubles in size each five months) and other sites (sucks sites) that marketers need to be aware. Thus the medium is not one-way, consumers participate!
VoIP is becoming quite popular. Skype was recently purchased by eBay for about $2.5 billion, signaling a commitment to this type of internet use. In the long run internet telephony is predicted to grow rapidly, especially as it combines with mobile access: Microsoft free internet voice service challenges Vodafone.
Sources: The Web: Just for Fun; The Year in Search: A 2005 Review; Search Sees Double-Digit Growth; Local Search to Hit $13B by 2010; Search Usage Spikes As A Daily Online Habit; Yahoo! Local Trumps Google in Local Search; Mobile Search: Monster or Mirage?; Entertainment Leads Content Spending Growth; Personal Relationships Expand with Use of the Web; Online Retail Sales Grew in 2005; Online Shopping's Holiday Surge; Microsoft free internet voice service challenges Vodafone
How are people accessing the web ?The principle means of access to the web remains a PC over a fixed access point (i.e. from work or at home) accessing web-sites on an individual basis. As more WiFi capabilities are rolled out and people can access the web, using their laptop, in many locations (wireless access), this may change the behaviour of users of the internet. The internet essentially becomes more convenient, likely expanding our use. Locally Philadelphia has plans to develop a wireless network throughout the city. London announced, February 21 2006, that it was going to develop a wireless network within the city (one square mile). These are not the only, nor the first, initiatives of their kind. Wireless access can only increase our dependancy and use of the internet, as broadband access has done in terms of increasing our time on the internet.
Mobile access via a device other than a laptop / PC also adds an interesting component to overall web access. Those access from a mobile device tend to want information, rather than entertainment, although one can see music being a draw. Currently news, sports sites, weather, maps etc. are key utilities saught by mobile users. The mobile market is still in its very early stages, but can grow rapidly as marketers, hardware providers and content providers continue to develop solutions for this marketplace. This will spawn a considerable growth in contextual marketing that uses technologies like GPS to determine the location of the consumer.
The final shift that is beginning to emerge is reading content in forms other than that originally provided by the content providers. This may mean getting all news from Google News or from a news reader. While Google News does deliver the reader to the original site to continue to read a news item, this is not always necessary for those reading their news in a news reader. Of course advertising models to support this will begin to emerge, but at this point it is still at a very early stage of development.
Sources: Blogging Resources; Wireless Philadelphia; Wireless Philadelphia to Provide Free Internet, Access to Education ; CITY OF LONDON GOES WIFI; Going On Vacation? Pack Your Laptop; Among Mobile Portals, Yahoo! Wins; The Utilitarian Life of the Mobile Internet; Wireless Users Want Local Content;
What has driven changes in behaviour ?The increasing numbers of users of the internet can be attributed to the reduced costs in access to the internet in terms of hardware and access. Clearly this has to be reduced further to gain further adoption, especially to reduce the digital divide that is present nationally within the US and more so internationally. Projects such as the $100 Computer are designed to meet this important purpose (FAQ).
Changing use of the web can be attributed to three factors. Broadband access and wireless access makes the online experience more convenient and easier to navigate. Thus more people are online to simply enjoy the experience, browse, use search to find things etc. When access was more limited we went online for specific reasons. Having better connections and more persistent online presence of consumers has manifested in companies investing more in their online resources and offering richer experiences. The better web content therefore makes the web experience much improved encouraging more people to get broadband access.
Sources: $100 Laptop; Worldwide Broadband Accounts Continue to Rise; U.S. Tops Broadband Usage, For Now; Broadband Population Growth Continues; Broadband Boosts E-Commerce, New Media Adoption; Video Stream Volume Surged 80 Percent in '04