AOL-Time Warner accounted for nearly one-third of all time spent online in January 2001 in the United States, according to Jupiter Media Metrix.
On their own, Time Warner’s online properties reached 15.7 percent of users at home, but combined with AOL, the merged entity had an at-home penetration of 72.3 percent. While the total usage minutes for Time Warner’s properties amounted to 0.3 percent of all time spent online in January 2001, AOL and Time Warner combined accounted for 32.7 percent.
“The Media Metrix audience ratings indicate that Time Warner has an unmatched opportunity to cut media marketing and promotional costs,” said David Card, Jupiter senior analyst. “Time Warner can now tap into the most time-intensive audience online, providing an opportunity to present content, advertising and services to its customer base at an unprecedented rate.”
According to Jupiter analysts, AOL receives a huge benefit from Time Warner’s presence at work. Media Metrix data found that AOL had a 67.2 percent reach, but that figure increased to 72.1 percent with the addition of Time Warner’s online properties, which include CNN.com, CNNfn.com, and CNNSI.com among others.”
While advertisers and marketers may find the AOL-Time Warner combination attractive, from the consumer’s perspective, AOL-Time Warner may be vulnerable to competition.
A report by independent market research company Solomon-Wolff found that, while AOL continues to be the dominant ISP in the United States (accounting for 25 percent of all consumer Internet customers), AOL’s share of households has declined slightly during the past year. However, because the number of Internet households continues to grow and because many new users use AOL, the number of households using AOL continues to increase.
“AOL is a marketing powerhouse, and it gets new customers when they first get on the Internet,” said Joey Wolff, partner, Solomon-Wolff Associates. “But as users get familiar with the Internet, some begin to try other services. Our report shows that during the past year, only 10 percent of AOL customers switched from other ISPs, while almost 25 percent of all Internet users switched.”
But AOL users may begin to migrate to other ISPs because they are less satisfied with AOL than with several of the top tier ISPs, and AOL is gaining a smaller percentage of switchers from other ISPs than are its competitors. Among top tier ISPs, only WebTV shows more vulnerability to losses in market share than AOL, according to Solomon-Wolff.
The report indicates that the top tier ISPs which have the highest level of customer satisfaction are MSN, Earthlink, and AT&T Worldnet.
According to Wolff, brand switching among ISPs is fairly limited, but it has increased during the past two years. “Our data shows that consumer switching has increased from 17 percent of Internet users in January 1999 to 24 percent in July 2000,” said Wolff. “This is a surprisingly large number considering how much trouble is involved in discontinuing one service and initiating an account with a new one.”
|Total Time Spent Online AOL-Time Warner
|Share of Total
Proprietary and WWW
|Time Warner Online||293||0.3%|
|Source: Jupiter Media Metrix|
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