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More Broadband Usage Means More Online Spending

  |  October 8, 2004   |  Comments

Research from comScore examines the impact of broadband, tenure and search use on consumer behavior.

Broadband growth means increased online spending, says comScore networks Chairman Gian Fulgoni.

In a presentation titled, "A "High Order Bit" of Research Examining the Impact of Broadband and Internet Tenure on Consumer Behavior," Fulgoni details a myriad of factors that impact online consumer behavior, including broadband adoption and search activity levels.

Broadband users spend 50 percent more than narrowband users. Quarterly spending per household of narrowband users sits at $217, while broadband users spend $311.

Fulgoni says the connection between increased spending and broadband comes down to speed.

"It's difficult to overstate the convenience factor associated with shopping online using broadband compared to a narrowband connection," Fulgoni told ClickZ. "The speed and convenience with which shoppers can comparison shop can make online shopping much more appealing relative to offline purchasing."

The number of years a Web user has been online also plays a role in their online spending. Fulgoni notes in his presentation, "as users gain experience, their comfort level with buying online increases." Those who have been online for 10 years spent an average of $700 over the past 6 months. An average user who's been online less than a year has spent less than $400 online in the past 6 months.

Click Here for Chart Below

"We were surprised by the multiplicative effect of broadband and tenure on e-commerce, which suggests that we will see strong growth in online spending for years to come," Fulgoni said.

He also detailed the pervasiveness of search and its impact on online spending. The average searcher conducts 34 searches per month. In August, U.S. Internet users searched 3.9 billion times.

Light searchers comprise the largest group, at 39 percent of the population. Twenty-three percent are medium users, and 16 percent are considered heavy users. Non-searchers represent 22 percent of the population.

In terms of the distribution of dollars spent online by different search users, the numbers are somewhat closer. Heavy searchers were responsible for 35 percent of dollars spent online. Medium searchers came in at 34 percent, and light searchers at 27 percent.

Fulgoni expressed surprise at the magnitude of difference between power searchers and light searchers, and the obvious impact search and the associated transparency of information has in terms of creating a price-driven market.

"This suggested that merchants that don't have a low cost advantage must be sure that they have a different and compelling value proposition in order maintain their franchise," he said.

Average Spending by Tenure

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