Category: Research

According to the Internet Advertising Bureau, Internet advertising was down in the second quarter by 4.1%. But the first half is 22% below the first half of 2001.
Keyword-based search ads grew from 3 percent to 9 percent of ad spending, and “niche ad formats” (i.e. “rich media”) grew from 9 percent to 12 percent of overall revenues.
Top categories:
computing 19%
financial services 14%
media 12%
telecom 7%
These are categories that mostly sold by direct marketing, instead of brand advertising. It’s another indication that the current mini-trend toward to rich media is a move in the wrong direction.
Online advertising is highly concentrated. The top ten media outlets took in 76 percent of all revenues, and the top 50 got 97 percent. Most media sites are not in the top 50. How are they going to pay the bills?

Handheld sales will grow 18% over the next five years, according to In-Stat/MDR, and are poised to grow the fastest next year.
Their theory is that speed, better form factors, and Internet connectivity will breathe new life into what has been the moribund personal organizer segment. Palm’s lack of innovation and Microsoft’s unappealing offerings have pretty much stifled the demand.
Maybe, maybe not. It’s hard to believe that we won’t have handheld computers at some point, but no one knows how we’ll get there. Meanwhile, the wireless carriers are a huge barrier to innovation in this segment.
In the meantime, start prepping your templates and CMS to deliver information to multiple platforms.

People with household incomes over $100,000 are the fastest growing group on the Net, according to a report from Nielsen/Netratings. This is surprising, because the penetration of that group was always high. Among those making less than $50,000, usage growth was less than 5%.
Because the growth rate is for individuals using the net, this may be the result of increasing use of shared broadband connections and multiple computers in the home.

Online pornography revenues in the US were $230 million in 2001, according to Jupiter.

Gartner confirms that Internet use is diminishing the use of other media. It’s not surprising, but it’s nice to have the number to back it up. The net is clearly affecting communication patterns more than media use:

• more than half of Internet users said they use postal mail less,
• A third placed fewer long-distance telephone calls,
• 20% watch television less,
• 20% read newspapers less,
• 18% go to see fewer movies,
• 15% watch fewer videos, and
• 15% read magazines less often.

It’s hard to believe these numbers are so low. I suspect the effect is higher than the respondents are reporting.

90% of Europeans have not paid for online content, and 40% say they won’t, according to Jupiter.
Also notable, some 16% said they would pay for news and archives, and of the £140m spent on online content this year, nearly half was on pornography.
I don’t have the figures for online advertising in Europe handy, but it has be to significantly, more than an order of magnitude, more than the £70m they’re spending on nonporn content.

According to the Internet Advertising Bureau, Internet advertising was down 18% in the first quarter.
This is still worse than other media. The IAB says, “According to CMR, 2002 first quarter ad spending was down 13.8 percent from the first quarter of 2001 for cable TV, 9.6 percent for magazines and 8.5 percent for national newspapers. In contrast, Spot Radio and Network TV both reported strong results for the first quarter of 2002, up 9.5 percent and 6.6 percent respectively.”
It’s not clear how much of the decline is due to the improved booking and accounting practices.

Jupiter says, “Fewer than 20 percent of most sites’ audience will customize, and only five percent will increase usage frequency because of it.” There’s not a lot more information available without buying the report.
This isn’t surprising, but it’s certainly reason for caution and parsimony when implementing customization.

Another researcher is investigating consumers’ simultaneous use of multiple media. As I said earlier, this multi-tasking almost certainly favors the Net.
Try it and see. I think you’ll find that if you’re really reading and thinking, you won’t have any idea what’s happening in your local soundscape. Certainly not well enough to follow a narrative or ad message.

Newspapers are missing out on $300 million in national online advertising, according to Clark G. Gilbert of the Harvard Business School. From E&P:

“Newspapers are exhibiting the classic symptoms of an industry faced with disruptive technology,” said Borrell Associates CEO Gordon Borrell in a statement. “They’ve invested in Web sites, sometimes heavily, but they have remained dangerously over-reliant on their traditional customers. The disruptive technology of the Internet opens up new classes of potential customers that newspapers must pursue.”

The recommended tactics — “tap into the power of the Web as a medium”, focus on banner ads and email notifications on classifieds, invest in databases, create online ad staffs, and sell localization to national advertisers — sound awfully familiar.
If I understand the notion of disruptive technology expressed in The Innovator’s Dilemma, more than this is needed. Online newspapers need a new charter of independence from the print edition, and a mission to put the print edition out of business, if they’re going to succeed.
It’s clear how the Net disrupts newspapers, but how can newspapers use the Net to disrupt other businesses?