e-Statistics Report 2001

Richard D. Vaughan
CCHM

Contents: 
Introduction and Aims
Background
Internet population demographic and usage statistics
Internet search statistics
Internet functionality provision
Mobile Internet StatisticsFindings

Introduction and Aims

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The concept behind this research document is to provide a ‘snapshot’ of the Internet, ranging from usage statistics to advertising spend and revenue. This level of research allows greater scope for analysis of target audiences, and which technologies to implement when creating anything from a full portal-based website to designing banner advertising campaigns.

The main aim for the document is to provide a collation of existing research available from a range of sources, and to compile results from these documents. In terms of findings and theses, this document will not provide anything other than a summarization of what the current status of each area is (i.e. Online population statistics), and a basic forecast of how each area will change.

Background

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A range of established Information Technology research companies have undertaken this research, and each area has, in some form or another, a link to e-business. This report is a condensation of all this research, allowing a brief overview of the Internet in general.

Whilst there is a considerable number of websites over research results regarding the Internet, the documents contained are rarely, if at all, broken down into findings and predictions. Additionally, the usability of these documents is questionable due to the specific results offered. As a result of these factors, it is necessary to compile the information currently available into an essay style document to allow this information to be usable in practice.

Internet population demographic and usage statistics

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Currently, there are an estimated 374,900,000 internet users worldwide, with predicted growth to 490,000,000 by the end of 2002. The top 15 countries will account for almost 82% of worldwide users.

The US is currently the world leader in terms of internet usage, with 36.2% of all worldwide internet users. It is predicted that the US will hold around one third of all internet users until 2005.

The current demographical statistics for worldwide internet usage are as follows;

However, these statistics only give us a view of the worldwide online populations in demographical terms. To further understand the application of e-business and e-marketing principles, we will need a view of how these users access the internet, and how often they access the internet.

For the purpose of analyzing internet usage statistics, I will be using the profile of an average American internet user. In the month of January 2001, users accessed the internet for an average of 28 sessions, visiting 19 unique sites. There are trends showing that a majority of users are spending an average of 12 minutes a month more online, although the number of average page views is down by 5.5%. This compares favorably against the statistics for the month of December 2000, when users were spending less time online and viewing more pages.

To conclude this point, users are currently giving more attention to each individual page when compared with the month before. It is possible to conclude that this is equivalent to an environment more conducive to effective marketing and promotion through the use of the internet, although the currently available figures do not allow that to be proved conclusively.

*The statistics used above are for the United States of America, for the month of January 2001.

Internet search statistics

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The next point to consider is how these users actually spend their time on the internet. We have already seen how many users there are online, and how the average user will access the internet, and this section will be focused on how users navigate the internet, and where they visit during an average session.

Results from a two-year study by Alexa Research has revealed that a large number of internet users, based on their searching habits, have difficulty in finding and reaching their required online resources. The research has shown that a large number of users will enter the name of the site they are searching for in a search engine, rather than directly into the address bar of the browser.

The research conducted by Alexa was undertaken from the aggregate search results from 10 of the Internets’ leading portal sites. These were altavista.com, aol.com, excite.com, go.com, google.com, goto.com, lycos.com, msn.com, netscape.com, and yahoo.com. The results shown below are the figures calculated between March 1999 and January 2001.

The results offer a few points of relevance, the most important of which is the actual figures. Whilst the percentage figures would lead us to believe that these terms are not used often in searches, it is important to consider how many searches occur each day; current information shows that Yahoo alone performs over 50 million searches daily. Another key point that can be made from these statistics is how varied search terms are becoming, which would lead to the conclusion that users are looking for newer, more diverse content, or that more diverse sites are being launched.

Whilst these statistics give us a little insight into what internet users are searching for and how they find specific sites, they do not offer any information into what is actually viewed in terms of content. In order to gain a more effective view of what the internet offers a user, we will require a view of what is actually offered by the internet to the end user.

Internet functionality provision

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In this section we will mainly be considering what functionality the internet offers, and how this functionality is utilised to provide services and entertainment to the end user. In order to do this, we will not be focusing on the areas of e-marketing and e-promotion, e-retail, or the mobile internet. All of these areas will be covered in later sections.

Before going into the main points of this section, it is important to consider what the current role of internet access is in a domestic environment, and how much weight it carries in comparison to other media. For the purpose of this analysis, we will be considering the comparative roles of the internet in contrast to the television.

Recent statistics show that spending has increased in both the computer related and the consumer electronics fields, although the actual amounts spent on computer equipment has fallen. In contrast to this, the amount of dollars spent on other consumer electronics products has risen. There are two conclusions that can be drawn from this; firstly, the number of internet users is rising, and secondly that the cost of internet access and its’ related computer hardware is falling.

When this is coupled with the increased functionality of modern computing equipment in comparison to the levels of functionality in other domestic appliances, the rising numbers of internet users, the comparison between home electronics and internet usage becomes clear.

The next topic of discussion within this field is how the functionality of the internet compares with that of television and audio-visual packages available for home use, and what this ultimately means to the end user.

At this juncture, it is necessary to include an extra category of internet user. We have so far dealt with a view of an average surfer and their general surfing habits, although it is now required that we consider a growing number of internet users; ‘Streamies’. The degree of functionality offered by the internet has increased with the speed of the internet. As newer, faster connections become available, the range of content available through the internet expands. At this moment, technological advancement allows internet users to access streaming video. This allows a user to gain access to television clips, news footage, and advertising through the internet. People who use this technology are commonly known as ‘Streamies’.

The results clearly show that, on average, almost half of all ‘Streamies’ and people in the 12-24 year old age group would get rid of their televisions rather than lose their internet connection. A study by Statistical Research, Inc., entitled “The TV/PC Connection 2001” showed that when a PC and a TV interact during primetime, the PC was four times more likely to hold a consumers’ attention than the TV, with over 80% of users who use a TV and a PC simultaneously during primetime considering the PC to be their primary activity.

Whilst the number of users who use the internet for interactive functions, such as the growing range of audio-visual content available through streamed media, it is important to consider what formats are used to make this content available.

Research has shown that the three main formats (RealPlayer, Windows Media Player, and Apple Quicktime) are currently being used in up to 32% of households in the US. This leads to the conclusion that there are enough commonly used formats in place to allow televisual content to be provided via the internet as speeds and bandwidths increase.

However, Internet functionality covers a much wider range of services, and these areas are also important considerations in the field of e-marketing, e-retailing, and e-promotion. The two other areas of functionality that are of equal importance to the average user are chat rooms and chat sites, and online gaming.

Research has shown that people who chat online are among the heaviest users of the internet. The study, by NetValue, also found that ‘chatters’ generate twice as many online sessions as the general internet user. The general profile of a ‘chatter’ shows that they are among the most technically aware users, and a majority of ‘chatters’ are also heavy users of other internet protocols, including audio-visual streaming, secured connections, and instant messaging software. ‘Chatters’ use chat rooms or instant messaging software to meet and converse with people of similar interests. NetValue’s research has shown that the internet sectors with the highest concentration of chat users are the personals, with more than 16%, and the movie sector (15%.) Current statistics show that Instant Messaging software provided by internet content providers, such as Yahoo and MSN, account for 37.1 million ‘chatters’ worldwide.

The second area of focus is the online gaming market, with research figures showing that out of 2.4 million UK visitors in December, less than 200,000 played any games online. In comparison to this is the online gaming market in the US, where 28 percent of all Internet users have visited a games site, and over 4.8 million have played games online. Statistics generated by research from NetValue show that users in the US spent, on average, 37 minutes per user session on gaming sites. The highest average session time across Europe is 27 minutes for Spanish gamers, a full ten minutes behind those in the US.

These statistics are relevant to e-promotion in that they offer further insight into how the world’s population employ their time online. The International Data Corporation (IDC) have researched the field of online gaming, and have formed predictions that as internet capabilities and next-generation videogame consoles, the number of households involved in online gaming will rise to around 40 million worldwide by 2004.

Mobile Internet Statistics

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The number of Internet users is currently forecasted to rise to around 1.17 billion users worldwide, and an increasing number of these users will be using wireless devices to go online. The current profile of wireless Internet users is the same as the profile of the Internets’ earliest users; young affluent males.

eTForecast have predicted that in developed countries, wireless Internet access will be used largely as a supplement to traditional Internet access. The main field of growth predicted by eTForecast is the use of wireless Internet in developing countries, where Internet penetration is lower. This information is backed by results from a study by Jupiter Research, who are predicting that by 2005, more than 50 million internet users in Latin America will be accessing via wireless devices – this online population will be equivalent to, or possibly more than, the number of traditional internet users.

As the capabilities of wireless Internet solutions increase, so will the usage. Telephia Inc.’s December 2000 study concludes that wireless Internet users are becoming more satisfied with the services available, when compared with results from May 2000. On average, the study showed that wireless Internet users rated their mobile phones, PDA’s, laptops, and two-way pagers a seven out of ten (ten being “extremely satisfied”) – a rise of one point over the seven months between the two studies.

eTForecasts’ predictions show that roughly two-thirds of all Internet users will be accessing the Internet through wireless devices by the year 2005. The main cause of this is the rapidity of change in the mobile communications market in comparison to the relatively slow pace of change in the traditional Internet market.

Surveys have shown that 83% of wireless web users do so for personal use, and almost half do so for work. Additionally, due to the young age of wireless users, school-related use is popular, with 30%. In addition to these results from a study by Taylor Nelson Sofres Intersearch (TNS Intersearch), 69% of wireless users use wireless applications for e-mail, 32% for research, 26% for gaming, and 25% for news. Other popular uses of wireless devices included shopping and/or purchasing online, checking sports scores, and checking stock quotes. While the TNS Intersearch survey found continued growth for wireless devices across a wide range of users, there remains a wide gender gap between those planning to purchase a wireless device within the coming year, with men almost twice as likely to purchase than women.

According to a report by The Strategis Group, mobile data will have a penetration rate among the US population of nearly 60% by 2007. This constitutes a rise of 300% from the current market penetration rate, which can be attributed to the aggressive deployment of high-speed services in the US. This research also found that the projected size of the market will grow exponentially, with mobile data subscribers rising from the current 5 million, to around 172 million in 2007.

It is also predicted that the highest growth area within mobile data transmissions will be in the packet data over cellular/PCS networks. Cahners In-Stat Group is predicting that wireless Internet access devices, including handheld computers, wireless modems, and two-way pagers, will boom in popularity over the next several years.

Cahners In-Stat Group are also predicting that wireless devices will eventually displace PC’s as the preferred method of internet access, and that shipments of wireless internet devices will sustain double and triple figure growth throughout 2004.

Predictions made by Cahners In-Stat Group are also predicting that sale of internet ready phones will surpass one billion units per annum by 2004, and that by the end of 2002, almost all cellular phones will be pre-loaded with mini browsers and will be internet enabled.

Other findings from In-Stat include:

• Internet-ready two-way paging unit shipments will exceed 10 million by 2004.
• Much of the growth in the wireless modem market will come from after market upgrades to mobile computers built without wireless capability.
• Users will be increasingly likely to rely on one device that incorporates both voice and data services instead of multiple devices offering only voice or data.

However, whilst the usage of wireless Internet devices is set to grow rapidly, m-commerce does not show the same degree of promise. Currently, 22% of users who access the Internet via wireless devices have made purchases online. Users surveyed showed more interest in making secure transactions via mobile devices, such as online banking, online trading, purchasing, and other activities, with nearly 75% of the survey respondents from Telephia’s panel of wireless data users saying that they either use, or are considering using, their wireless devices for such purposes. These statistics are not necessarily indicative of the usage traits of all wireless users, as they include the responses of laptop users, who are not essentially wireless or mobile Internet users.

Additionally, Telephia’s survey produced results for users who visited commerce sites but did not make a purchase, with varying results according to device used. Nearly a quarter of all web-enabled mobile phone users responding to this question cited complicated navigation as a primary barrier to m-commerce, while PDA users were chiefly concerned with connection speeds and security issues.

Findings

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This document has considered several key areas of Internet research, from online population statistics through to statistics for mobile Internet solutions. In terms of conclusive findings, the research used to create this document has offered specific conclusions. However, as the aim of this document is to provide a generalized view of the Internet, these conclusions were inadmissible.

Findings for this document are a guideline, and, as such, do not offer any conclusive or definitive findings other than those shown already in the statistics. Generalizations cannot be made from the research contained in this document due to the wide range of topic areas covered. In place of generating specific findings from this document, this section will review the findings of the source research used. 

•         Total current online population estimate – 374,900,000

•         36.2% of total online population is US based.

•         Average user surfing session length – 31minutes, 41 seconds

•         Most widely used search term – Sex (with 0.3289% of all searches)

•         One third of all Americans, when questioned, said that they would rather get rid of their TV than their Internet connection.

•         46 Million Internet users use instant messaging software

•         There are over 40 million active wireless internet users worldwide.