The convergence of PCs, TVs, wireless phones and hand-held devices is becoming an inescapable reality this year. While marketers should be prepared for the broadband future, they need to milk the opportunities that already exist today.
That is one of the findings of "NetSmart VI," a study of consumers' Internet insights to be released tomorrow from Internet researcher NetSmartAmerica.com. NetSmart, which has conducted annual surveys since 1995, surveyed 1,000 people by phone in May who spend at least one hour online a week, excluding time spent on e-mail.
NetSmart found that while broadband is a driving force behind convergence, giving consumers always-on Internet access at speeds 50 times faster than a standard modem dial-up connection, today's broadband penetration is analogous to the early days of the Net in 1995. Only 9% of the survey group have broadband and, surprisingly, only 44% have heard of it.
Twenty-seven percent are willing to pay $39.95 a month--today's going rate--to get broadband access; that group plus the 9% that already use broadband have a profile almost identical to that of upper-income males that NetSmart categorized as early Net adopters in 1995. Their median age is 34 and they earn an average $59,700 a year; almost half have high-speed access at work. Women tend to be more price-conscious: Just 27% have broadband access or are willing to spend $39.95 a month for it.
NetSmart classifies Internet users in three groups: newbies, people who've been online less than one year; integrators, one to two years; and trendsetters, three-plus years.
Trendsetters have a proven track record. In 1996, they predicted the 1999 holiday explosion in
e-commerce. In 1997 they predicted the 2000 explosion in online banking and investing. In the latest survey, 40% of today's trendsetters either have or are willing to pay for broadband access. So by 2003, NetSmart forecasts more than one-third of online users will have high-speed access.
The majority of users surveyed, however, were unconvinced of the benefits of high-speed access. When the benefits were explained in detail, only 24% of non-high-speed subscribers said they would pay $39.95 a month for broadband. The price was too high for the other 76%. As one quickly calculated, "That's an extra $250 a year. For what?"
As for e-commerce, the new survey bodes well for shopping online. Seventy percent of respondents said they already make at least one credit-card purchase online a year. That's up 11 percentage points from just last year. And by 2003, 82% of trendsetters said they will make credit-card purchases online.
NetSmart found widespread wireless ownership among both men and women. Some 68% of online users have at least one wireless device. Of those who have a wireless device, for 60% that apparatus is a phone; for 26%, it's a pager; and for 18%, a digital organizer. However, only 6% have wireless Internet access. The U.S. is far behind Europe in consumer adoption of wireless communications. The problem is a lack of wireless standards, something that could be remedied by mid-2001.
The developments bode well for online advertising. As legendary adman David Ogilvy once said, "Wherever there is space there will be advertising." What would he have said about the wireless future? He would have been the first to spot content sponsorship opportunities, e.g. "Brought to you by."
Content sponsorships and location-based marketing are two key wireless advertising opportunities. Early signs of wireless advertising are seen in marketer-sponsored news alerts. Other than e-mail, the most frequent information accessed via wireless devices is: weather forecasts (33%), stock quotes (26%), travel updates (21%), breaking news (19%) and sports scores (7%).
The Federal Communications Commission has mandated that wireless phone service providers be able to identify the location of every user within 160 yards for 911 emergencies by 2001. On the surface, this is a windfall for geographic-based advertising. Discount offers could drive traffic to retail outlets from passersby. Can discounts overcome the potential specter of Big Brother? The good news is that 65% of people surveyed said they are willing to receive opt-in e-mail offers on their wireless devices.
While wireless is opening up new opportunities for marketers, many are losing sight of their primary objective, which is making money rather than winning Web-site design awards. In the new survey, 87% left Web sites "out of frustration," up from 83% in 1999. Some 81% criticized difficult navigation, 60% gave up after three or four clicks, 54% got lost in the site and 53% abandoned shopping carts.
Be ready for the broadband future, but don't be obsessed with it; It's still two to three years away.
[email protected] is president of NetSmartAmerica.com, New York, which conducts syndicated surveys for the Internet industry.
Copyright June 2000, Crain Communications Inc.