Web Shoppers Point & Clip E-Coupons

Consumers Want Advertisers To Pay For Information Services

Half Of Internet Firms Have No IPO Plans

Continuing to feed off the growth of e-commerce, almost a third of Internet shoppers used online coupons last month, according to a study done by marketing firm NPD Online Research. The survey found that 30 percent of Web shoppers used the coupons, compared with 23 percent six months ago.

The report said increasing awareness is helping to drive e-coupon usage. Fifty-nine percent of those polled in October were aware of online coupons versus 49 percent in March.

"Pointing and clipping is just easier than cutting coupons with scissors," said Pamela Smith, vice president of NPD Online Research. "This is a positive trend for both online coupon sites and manufacturers issuing their own coupons."

The top online coupon site in the survey was Coolsavings.com (http://www.coolsavings.com), which accounted for 51 percent of the responses.

Next was Valuepage.com (http://www.valuepage.com), which tallied 35 percent of the responses. Web sites offering their own coupons were the third most popular among electronic clippers.

The survey, which polled 3,125 people, found that 80 percent of those aware of the e-coupons said their usage will increase in the future.

More than half of the respondents said they found out about e-coupons just by browsing, while 27 percent said it was online advertising. Seven percent were recommended by friends and family.

Fifty-five percent of the e-coupon users were between the ages of 25 and 44. Almost a third of them have household incomes over $75,000, 35 percent have incomes between $45,000 and $75,000 and 33 percent earn under $33,000.

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Consumers Want Advertisers To Pay For Information Services

Information may not always be priceless; but it almost always costs. According to data acquired by the Kelsey Group/ConStat’s Wireless Commerce Monitor, a majority of wireless users indicated that they would be more willing to accept advertising to pay the cost for information services than to pay for these services themselves.

According to The Kelsey Group, a provider of research and analysis focusing on local advertising and electronic commerce, information providers are gearing up to start delivering traffic, weather, and shopping information to wireless phones on top of such basic needs as 911 or directory assistance. The big question, The Kelsey Group said, is who will pay the cost of providing this information, and how it will be paid for.

"Web content is free, TV is free, and consumers are clearly telling us they expect to see wireless media sponsored in similar ways," said Mark Plakias, program director of The Kelsey Group.

While no one is suggesting that subscribers hear or view a brief advertising message before being connected to 911, Plakias revealed some innovative thinking in providing other forms of information services via wireless telephones. In fact, these forms would also have application on landline-based instruments as well.

Directory assistance was one area mentioned by Plakias. He points out that according to his data, one out of every four business listing requested over wireless directory assistance leads to a purchase from the requested business. One way to pay for providing this directory assistance is for the business to pay an amount for each caller referred to that business by directory assistance.

In addition, Plakias noted that, "Wireless offers the advertiser a chance to know exactly where the customer is and tailor promotional offers that are highly relevant to the wireless consumer." As an example, he said that existing technology could easily determine a caller’s exact geographic location and refer specific businesses and services near to that location.

"There’s a lot of work to be done educating merchants," before this form of advertising becomes popular, he said. "The awareness of local merchants is still low." However, once advertisers understand this, he feels that the present 25 percent ratio of directory assistance purchases to inquiries will be surpassed.

The Kelsey Group’s Web site is at http://www.kelseygroup.com.

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Despite the growing popularity among Internet executives of taking their firms public, a new study found that half of the online companies polled have no intentions of initial public offerings (IPO).

The "Netrepreneur Survey" by Ernst & Young LLP reveals a possible cooling in the recent surge of stock offerings by Internet start-ups.

The study, which queried 150 Internet company founders, revealed that 69 percent of those companies surveyed are profitable, despite published reports that most online companies are not making money.

"It’s interesting because the average investor thinks that all these Internet companies want to do is go public and that’s just not the case," Ernst & Young spokesman John Johmann said.

Of those who reported their companies turning a profit, 64 percent had a sales volume of $500,000 or less and 69 percent had 10 or less employees.

Forty-one percent of those companies surveyed that are not making money expected to be profitable in the next two years, while 11 percent anticipate profitability in the next three to five years.

Johmann said one reason these Internet companies are profitable is because they have lots of financial backing, usually by venture capitalists.

The respondents said that independence and fun are more important than stock options in order to attract and maintain talent. On average, the netrepreneurs said they will start five online businesses in their lifetime.

Internet companies in New York City’s Silicon Alley and the Eastern Seaboard had the highest profitability numbers in the study with 72 percent. The South reported 71 percent profitability, while the Midwest posted 70 percent. Half of the companies polled in Silicon Valley and the rest of the West reported being profitable.

Sixty-seven percent of the netrepreneurs see themselves as pioneers because the Internet represented a new frontier, the survey found.

The netrepreneurs have a different mindset from their traditional entrepreneur counterparts, with two-thirds believing they need to be more resourceful, creative and innovative. Most cite their biggest challenge as the rapidly evolving nature of the Web.

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The future looks good for online digital cash transactions, a report released today says, but it warns that a shakeout is on the horizon for companies that develop and deliver virtual money technologies.

In its report, "The Dash to Digital Cash," the Aberdeen Group says the drive to support micropayments typically sub-$10 transactions without the disproportionate processing fees of an ordinary credit card - is expected to gain significant momentum over the next two years or three years.

"Although the Web is able to distribute very granular content and services, until now the costs of processing small financial transactions has effectively blocked the emergence of low cost, pay-as-you-go content models that require low-value transactions," said Judith Rosall, an Aberdeen research director and the author of the report.

"Our research indicates that digital cash technologies will begin growing in adoption and acceptance in (the) year 2000 and will contribute to significant worldwide e-commerce market growth, particularly in the sales of digital content, digital music, and online gaming."

The Aberdeen report looked at a number of approaches to digital cash, including credit card aggregation (often through "electronic wallet" technologies), stored-value smart cards, and billing through Internet service providers (ISPs) or telecommunication companies.

"Aberdeen predicts a greater chance of success over the long term for credit-card companies with large, global installed bases of cardholders, along with a few well-funded digital cash vendors," the report says. "Aberdeen bases this prediction on these companies’ high brand recognition, high trust or acceptance factors, company financial resources...and marketing clout."

While companies such as credit-card heavyweight Visa International have conducted trials of smart cards that can be loaded with digital cash and, in some cases, be used online via PC interfaces, such technologies have yet to take off in the US, Aberdeen says. The report sees digital cash catching on as embedded "smart" chips for secure transactions show up in personal digital assistants, cellular phone devices, set-top television boxes, and laptop computers.

Aberdeen says the banking industry has been slow to move on the concept of digital cash The field is looking increasingly attractive to ISPs and telecom firms which can add their customers’ online micro-transactions to their regular bills without the need to pay fees.

The Aberdeen Group can be found on the Web at: http://www.aberdeen.com