Researcher Questions Value of Web Ad Expenditures

In the February 19th issue of the Internet Advertising Report, a technology market researcher, citing a recent international survey of nearly 2,000 respondents that highlights fundamental weaknesses in the Internet, is questioning the wisdom of advertising on the Web.

Jeffrey Peel, who recently joined Response Analysis Corp. in Princeton, NJ, cited user frustrations with Internet access and poor levels of usage within the adult populations in several countries surveyed.

Peel argues that the Internet is still confined to a select few: "Our data show that in Japan, for example, just 7% of the adult population use the Net. Even in the U.S., less than a third of the adult population goes online at home or at work. And for many of these users, usage is limited to business needs. The popular perception that everyone is spending more and more time surfing the Web is simply a myth.

"This causes me to question the logic of major global advertisers diverting their expenditure, at this time, away from traditional media to the Web. Our data, collected from respondents in 12 countries, indicate that in many countries telephone call tariffs still mitigate against extended Web surfing. In Germany and Italy, for example, those who use the Web tend to access it less frequently and for shorter periods.

"High percentages of Internet users, in all countries surveyed, report that their usage is actually declining. Indeed, in all but one country surveyed, the majority of respondents indicated that their usage is staying the same or declining. Users increasing their access time were in the majority only in Greece—a country with a very low base of current usage."

The firm’s study confirmed suspicions that slowness of response—given the usage of relatively slow speed modems—is frustrating many users, the company said.

According to Michael Campbell, the report’s author and a senior research director at Response Analysis, the study is further ammunition for those arguing that the telephone companies should be accelerating their development plans for digital subscriber line services.