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Hitting the Speed Limit

Hitting the Speed Limit

July 31, 2006
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" If your particular business model is based on wireless access, then I think that has a large upside down the line. "

Six years into the technology-laden 21st century, the number of new users logging onto the Internet should be exploding. However, a telltale sign of changing times began to appear in user statistics in 2005, where the global online population increased by only 5 percent, compared to the 20 percent growth rate seen in 2004.

To keep up with these changing patterns in web use, today's webmasters are going to have to be more imaginative to stand out and remain competitive among a shrinking pool of new Internet users, according to industry analysts.

But the news is not all bad; both new and current Internet users are staying logged on for longer periods of time, becoming more dependent on the Internet in their daily lives.

According to global research company Ipsos Insight, until today's 10-year-olds are tomorrow's twenty-somethings, the U.S. and Canada may have actually moved into unfamiliar cyber territory: Internet user saturation.

While global Internet user growth continues at a healthy clip in web-based economies such as Japan — where close to nine in 10 people claim to have used the Internet in the last 30 days — the same cannot be said for other territories where standard Internet adoption may be plateauing.

But tech-hungry North Americans have not moved on in search of the next new cyber-wonder. On the contrary, the Ipsos survey shows that today's North American user is becoming more Internet dependent, visiting the web more often and staying logged on for longer periods of time, and they also are finding ways to stay connected even when they're not at home.

At least one-third of users surveyed in the U.S. and Canada have accessed the Internet wirelessly in the past 30 days. Simply put, North Americans are becoming more technically sophisticated Internet users. And for webmasters, this means finding ways to prosper in times of smaller Internet user growth but stronger user dependence on the medium as a way of life.

Vivid Entertainment co-founder and co-chairman Steven Hirsch says his company has seen significant growth over the past year by working to entice fans to its website by changing out content daily and promoting the brand online.

Unique Content
"We attribute this first and foremost because we are a production company and we are able to continue to add new and unique Vivid content on a daily basis," Hirsch said. "Secondly, the Vivid brand is well established, and as a result, visitors feel comfortable coming to our site. We also continue to improve our marketing of the brand online, and we have a great support staff that assists us in our online marketing."

Adam Wright, a consultant for Ipsos Insight, sees great promise in established, content-driven Internet companies making the migration to wireless downloading or streaming to compensate for falloff in new surfers navigating the Internet.

"There is growth in the wireless aspect," Wright said. "If your particular business model is based on wireless access, then I think that has a large upside down the line."

Eric Weiner, new media analyst for Adams Media Research, says his firm also has noticed similar trends in user growth and has seen a significant up-tick in broadband usage.

Nielsen/NetRatings further supported observations by Adams Media Research and Ipsos Insight with statistics that show overall Internet penetration in the U.S. has stabilized over the past few years, reaching 74 percent in the home by February. As broadband penetration increases, so does the average PC time spent per person.

Nielsen's data showed not only the growth in broadband usage — 68 percent of active Internet users using broadband in February 2006 and 25.5 hours a month in February 2003 to 30.5 hours in February 2006 — but also users' reliance on the Internet as an indispensable tool.

"The growth in average PC time per person is the result of broadband users' greater satisfaction with their online experience," Jon Gibs, senior director of media for Nielsen, said. "The 'always on' nature of a broadband connection allows the Internet to become more entrenched in consumers' lives. In broadband consumers' minds, activities such as checking account balances, downloading music, watching streaming video and checking email become just another application of the PC rather than a separate activity that happens when they log onto the Internet."

According to Weiner, keeping traffic flowing to a website while relying less on user growth is an approach as old as marketing itself.

"Ultimately it will come down to branding," he said. "If you're an online merchant in terms of video-on-demand, for example, it will come down to content and who offers a movie that I want to see. Assuming there are multiple sources, which door do I go to? It just comes down to branding — and then price, of course."


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