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Internet Marketing Numbers
by John Kremer

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This report is divided into four parts, one dealing with editorial, one dealing with trends and their effect on editorial, the third dealing with marketing, and the fourth dealing with Internet marketing numbers. This is the fourth part of this report.

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Internet Marketing Numbers

Online Ads

In a 2003 study by TechnoScout.com, they discovered that 40-50% of their online sales were brought to them by online ads. Catalogs accounted for 25% of online sales, offline advertising for 8%, and word of mouth for the rest.

The Power of Broadband

The 23 million Americans with broadband Internet access account for 31% of all consumer online spending in 2002 ($15 billion), despite representing only 19% of online adults. They are also 64% more likely to buy toys or games online (Scarborough Research).

Online Games and Music

Revenues from online games are expected to reach $1.8 billion by 2006 while revenues from digital music will reach $1.7 billion (Jupiter Media Metrix). Those categories accounted for $260 million and $30 million respectively in 2001. By 2005, there will be 800 million users of mobile entertainment as compared to today's 150 million global users. Income from mobile entertainment games will grow from $124 million currently to $4.4 billion by 2006 (The Art Group).

In December 2004, the Audio Publishers Association estimated the size of the audiobook market at $800 million. CD format revenue was 45% of audio sales in 2003 as compared to 35% in 2002. Downloadable audiobook sales at Audible.com were $5.1 million in 2001, $10.9 million in 2002, and $18.4 million in 2003.

John's Comments: Should you be expanding your product offerings to tap these markets? If these markets grow, will the market for online audio offerings also grow? If you are not now offering online downloads of audio content, get ready to.

Paid Content

Revenues for paid online content will grow from $1.4 billion in 2002 to $5.8 billion in 2006 (Jupiter Media Metrix).

John's Comments: Consider splitting your web site into two areas (or starting up a second web site): one catering to promotion and publicity, the other featuring exclusive content that you make available for a fee. The culture of the Internet, thus far, has encouraged, expected, and even demanded free content, but that culture will change as people seek more reliable information and deeper entertainment. Be ready for that change.

Internet Sales

Fourth quarter 2002 online sales of non-travel products are projected to hit $13.8 billion, a $3 billion increase over fourth quarter 2001 (comScore).

John's Comments: Online sales continue to grow. While major publishers are probably not getting a large percentage of their income directly from their web sites, most still report 10% of their income coming from online sales (especially through Amazon.com and other online retailers). For many smaller publishers, especially of special-interest titles, online income can run as high as 50 to 80% of all income. Where does your company fall within this spectrum?

Overseas Online Sales

E-commerce revenues are expected to hit $338 billion in the Asia-Pacific region by the end of 2004 (Jupiter Communications). 36 million European consumers shopped online by the end of 2001. By 2007, 56% of European Internet users will shop online. More than 10 million Britons will shop online for the holidays this year, spending around $1.6 billion in November and in December (Interactive Media in Retail Group).

John's Comments: Seven years ago, I used to tell publishers to get online for one reason, if for no other — sales and promotion overseas. Before the Internet, publishers did not have an economical way to reach overseas consumers. Now they do. And they will have even more reasons as the years go on - not only in Europe and Asia, but also in Latin America and Africa.

Online Surfers at Work

According to Nielsen/NetRatings, the active U.S. Internet population at work grew 17% in the past year (from August 2001 to August 2002). Women increased their surfing at work by 23% while men increased their use by 12% during that time. More than 45 million Americans surf at work. Their peak times for surfing are between 10:00 a.m. and noon. Advertisers with the most impressions include Amazon.com and Bertelsmann.

John's Comments: When designing your web site and email promotions, don't forget that many people do their web surfing at work, not at home.

Email Marketing

How often do people buy something based on email marketing? According to a survey by Digital Impact and Harris Interactive, 7% buy via email once a month, 42% once a year, 22% less than once a year, and 29% never. Why do people sign up to get email communications? According to the same survey, 73% sign up to receive information on a topic of interest, 59% to receive discount or special offers, 33% for the chance to win something, 19% for reminders of special events or holidays, 13% for other reasons.

John's Comments: Email newsletters are one of your best Internet promotional vehicles. If you want people to sign up for your email communications, give them a good reason why they should. The best reason by far is to offer them additional information of interest to them. Give them more of the information, inspiration, or entertainment your web site already offers.

Email Publicity Contacts

In a recent survey conducted by Bacon's Media Guide, 70% of editors indicated their pitching preference was email followed by mail, fax and then phone. Check out the following stats:

• Email — 70%
• US Mail — 14%
• Fax — 11%
• Phone — 5%

HTML vs. Text Email Promotions

Have you wondered whether to use HTML fancy email promotions versus the plain text variety email? When direct marketing expert Herschell Gordon Lewis worked with a client to test whether HTML email would be more effective than plain email for a promotion, he found the following (reported in the November issue of Internet Retailer):

1. American Online users often have a hard time reading HTML-formatted email.

2. Macintosh users often have trouble decoding HTML-formatted email created by a PC.

3. More people opted out of further mailings when the email was HTML-formatted (probably due to the slowness of downloading HTML-formatted email and/or the difficulty with reading HTML email that doesn't translate properly).

4. Both email versions pulled about the same number of orders.

5. HTML-formatted email was more expensive to produce and email.

6. His rule: “An absolute rule for retail e-marketing: The more work you require, the lower will be the value of the response.”

In later tests, Lewis reports the following: “HTML outpulled straight text the message was artistry … but text outpulled HTML when the message was urgency.”

John's Comments: Given his conclusions, when should you use fancy HTML-formatted email promotions and when should you use straight text email promotions? Below are some guidelines to help you decide.

Use Fancy HTML Email

• When the product has to be seen or visualized to be desired.
• When a special layout can help facilitate understanding of the promotion.
• When you need to include a photo or illustration (which can be incorporated into the HTML email rather than attached only).
• When you are appealing to an upscale audience.
• When you have time to create HTML that will work over most platforms.

Use Straight Text Email

• When the email promotion is tied to a holiday or deadline.
• When the promotion offers a sale, closeout, special, or discount.
• When you want to create a sense of urgency.
• When you don't have time to make the email fancy.
• When you want to create the feeling of “just us folks” — people talking to people rather than a company talking to a customer.
• When you are unsure of the technological sophistication of your audience. When in doubt, assume the worst.

If you still can't decide which format to use, then do an A/B split. That means, send half your list an HTML-formatted email promotion and the other half a straight text email promotion. Code each list in some way so you can verify which promotions generate orders or responses.

Make sure that your list is randomly split into two parts. Do not vary the actual text of the promotion or the offer you make in either sample - otherwise you are attempting to test more than one variable at a time, and you won't generate any real information from your results. A valid A/B split test will tell you which format is most effective for your customer list (at least for similar promotions).

Maximize Your Returns on Web Search Engines

In a study by SEEKS, 78% of Internet searchers preferred to use one search engine — Google. Since 70 to 80% of your website traffic comes from search engines, that means that almost 60% of your total web traffic is coming from Google. In the same study, they discovered that only 3 out of 50 searchers view second page results. If you want to increase your web site traffic, these two statistics mean that you need to do two things: 1) Be sure you are listed on Google. 2) Optimize your pages so you show up in the first 20 listings in Google so you will be seen.

If you can't optimize your pages for Google key word searches, then you should consider paying to be featured in the key word searches that are most likely to attract people to your website. According to iProspect, 60% of the clicks on search engines are from natural search results, while the other 40% come from paid listings. In fact, according to these results, it's clear that you should be listed in both places (natural and paid results) if you want to get the maximum click-through rate to your web site.

More Statistics: Sources of Reliable Statistics

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