Our Hat Is Already Hung

Since online advertising was first sold in 1994, the number of new users coming online has grown exponentially. Many of us have spent this time jumping through hoops to prove the media’s worth and chiseling away dollars from a variety of recognized and trusted offline vehicles, such as TV, print, and radio.

At one point or another, buyers and sellers alike have used the good ol’ penetration-curve slide. You know the one. It explains how online has grown so fast that in only 5 years its audience reached the size that it had taken TV 50 to attain. Well, that’s all changed now.

A Harris Poll report from an October 2001 survey recently passed my desk. The researchers surveyed 2,000 adult respondents by phone. Before I share the stats with you, the key takeaway is this: Internet penetration is flat. Gulp.

According to the poll, there are 127 million adults (18+) online. Additional findings include:

• The population of adults accessing the Internet from home, work, or elsewhere has remained virtually unchanged at 64 percent for the last year.
• This number grew from 9 percent in 1995.
• The rapid growth of the Net appears to have stopped after the crash of Internet stocks on the Nasdaq.

The research is based on adults accessing the Internet over the past six years. The breakout is as follows:

2001	All Online	Online at Home	Online at Work	Online Elsewhere
September/October	64%	52%	28%	19%
March/April	64%	53%	27%	20%

2000	All Online	Online at Home	Online at Work	Online Elsewhere
October/November	63%	49%	27%	17%
April/May	57%	45%	24%	14%

1999	All Online	Online at Home	Online at Work	Online Elsewhere
December	56%	46%	N/A	N/A

1998	All Online	Online at Home	Online at Work	Online Elsewhere
January/Febuary	35%	22%	22%	N/A

1997	All Online	Online at Home	Online at Work	Online Elsewhere
May/June	30%	16%	18%	N/A

1996	All Online	Online at Home	Online at Work	Online Elsewhere
June/September	17%	16%	16%	N/A

1995	All Online	Online at Home	Online at Work	Online Elsewhere
September/November	9%	N/A	N/A	N/A

Why consider these numbers for online media strategy and planning? As media planners, we look at the overall trend with regard to Internet penetration. We do this for a variety of reasons. The most obvious is that our advertising and marketing efforts are based on technology. Home use may indicate slow connection speeds, prohibiting a user from viewing rich content/media in the way it was designed.

More important, we look at access and penetration numbers to try to gain insight into the lifestyle of the user. Location and time of day is key to tapping into the mindset of the user. I often write about message receptivity. For example, when is a user most receptive to receiving a message?

To illustrate this point further, consider this example: A user logs onto the Net at work to take advantage of the low finance rates he heard about on the radio as he drove to work this morning. He surfs to find information about current rates and applications for a home mortgage. He may end up on the application page of a loan site, spend a couple minutes there, and abandon the site. Why? Well, we knew the user was at work. Maybe he didn’t have his personal financial information close at hand. Maybe he didn’t have the time to fill out such a form. Maybe he realized the mortgage would be under his significant other’s and his names, thus requiring two sets of financial information. There could be a variety of reasons. The bottom line is that you need to scratch below the surface of the numbers.

So now what? I say we look at the positive. If consumption has plateaued, the number of users online is still a pretty big number. If it hasn’t, all the better. Although traffic per unique user is down, spending is up. Online spending rose to $16.3 billion in the third quarter this year according to Nielsen//NetRatings. This was a 60 percent jump since third quarter last year. With the holiday season in full swing, Nielsen predicts $9.9 billion in online spending in November and December (an estimate that does not include travel). In October, spending online reached $4.6 billion.

The data leaves us with the question, has penetration peaked, or is it flat? Does it even matter? Let’s get back to the basics for a moment. Our goal is to reach a particular target audience defined by demographics, such as age, income, and gender. Many times, we know psychographic information, such as hobbies, purchasing habits, and the like. We now also have a solid history of Internet consumption since online ad sales began in 1994. Aren’t we glad that hypergrowth is over?