Third annual AA study shows consumers get savvy to the Internet
Consumer awareness of interactive media is growing steadily, but the Internet is stealing the show.
Advertising Age's third annual survey of 1,000 U.S. adults found 44.7% have heard of the concept of interactive media, more than double 1993's 19.1% figure.
But awareness of the Internet is enormous: 82% of those surveyed this year said they had heard of it, while 44.7% said they know about the World Wide Web.
For a medium that's been in the vernacular for only a few years, the figures are astounding. But the "Kleenex factor" may be at work.
"It's a great name," said Tom Mularz, VP-manager of Market Facts' Telenation polling service, the Arlington Heights, Ill.-based research company that conducted the study for Ad Age. "It might be a case where the brand name is driving the category, like Kleenex. People don't talk about facial tissues, they talk about Kleenex. Interactive media is kind of cumbersome on its own."
Still, awareness of a trend is important because people are not likely to purchase or subscribe to an unknown quantity.
"If you get consumers involved in the category, they will be more easily led into the specific brands," Mr. Mularz said. "The concept of interactive media in general is important because people won't be receptive of the advertising messages of specific brands unless they know what the concept is."
The telephone survey was conducted Sept. 22-24 among a random sample of adults age 18 and over in the continental U.S. The margin of error is 3 percentage points.
This year's survey found consumers are using interactive devices more often, too. Results show 60.7% of respondents have used videogames, compared with 46% in 1994; 35.5% have used CD-ROMs this year, vs. only 9% last year; 23.6% have used online services, up from 15.7% in 1994; and 17.7% used kiosks in malls, stores, airports or other public places, up from 12.6%.
"The survey is very encouraging," said Gary Arlen, president of Arlen Communications, Bethesda, Md. "It shows interest in interactive media is finally trickling into the demand side, it's not just being hyped by suppliers. We've been hearing of the info revolution since the mid-1980s and what you're seeing now [in the survey] is consumers seem to be catching onto it and finding ways to make it significant in their lives."
The Internet was such an unknown quantity last year that the Ad Age survey didn't even ask about it. This year, not only is awareness sky-high, but a good number of people have used it, too.
The study found 20.6% of respondents have tapped into the Internet, just a few points shy of the 22.6% who say they've used TV home shopping, an elder statesman by comparison.
"The Internet has entered the public consciousness. `Interactive media' is such a large umbrella term it's hard for the industry to define let alone for civilians to define. The Internet word has been out in front of us so much recently, it's not surprising awareness is high," said Mr. Arlen.
The Internet is also: More attractive to younger Americans: 33.1% of 18-to-24-year-olds and 32.8% of 25-to-34-year-olds have used it, at least 10 percentage points higher than older age groups.
More popular among the wealthy: 32.5% of those whose annual household income exceeds $50,000 reported having used the Internet, compared with 21.4% of people with household incomes of $40,000 to $50,000 and just 13.3% of those under $15,000.
Used by men more often than women: 26.4% vs. 15.3%. Used by singles more often than marrieds: 25.1% vs. 17.8%. And used by Coasters more than Midwesterners. The survey found 26.1% of West Coast respondents and 23.4% of Northeastern respondents have used the Internet; just 14.8% of Midwesterners and 19.7% of Southerners have used it.
The online world has not materialized into one of commerce, though it does show some promise. Among respondents who have used online services or the Internet, 77% said they have never purchased products or services online. But a respectable 45.6% of those respondents reported they were somewhat or very interested in using online services to make purchases.
Despite the growth of the Internet and online services as marketing media, acceptance of advertising is at a standstill, with 29.7% of this year's respondents saying interactive services should include advertising, virtually unchanged from last year.
Consumers' interest in paying for interactive services also is waning slightly. This year's survey found 41.3% of respondents would pay $25 or more per month for any one service, down from 48% last year.
Women, however, are more willing than men to pay more: 45% of women vs. 38% of men would pay $25 or more per month.
The online world hasn't zapped people of outside interests, however. Most online users, 59.7%, spend an hour or less online per week; 26.4% spend two to five hours; 5.3% six to 10 hours; and 6.1% spend a bleary 10 or more hours online each week.
Among the total survey sample, interest in interactive media is growing as awareness levels rise.
In 1993 and 1994, roughly 34% of respondents said they would be very or somewhat interested in getting interactive media services on their home TV. This year, 44.8% of consumers said they would be very or somewhat interested.
Interest in interactive services on home PCs also is trending upward: In 1994, 25.3% of respondents said they would like to get interactive services on their home PC; 36.5% responded that way this year.
This year's study found educational shows were the most appealing element of interactive media, with 71.8% of respondents reporting they would be interested in them. Sixty percent of respondents said they would be interested in using interactive services to do research on products or services they were interested in buying (are you listening, Consumer Reports?); 54.9% said on-demand movies or TV programs were appealing; and 54% said they were interested in online travel services that could offer reservations and information.
Happily for the purveyors of online services, more consumers than ever are willing to pay for their services: 46.1% in the 1995 data compared with 39.4% last year and 39.5% in 1993.
Mr. Mularz likens the shift in price points to calculators from the 1970s.
"When calculators were introduced they were considered high tech products with high-entry price points which the early adopters paid. But within a short period of time those prices fell rapidly.
"That's what's happening with interactive media," he said: The more popular it gets, the less suppliers will be able to charge for it."
Copyright October 1995 Crain Communications Inc.