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Marketing in the internet - as seen from Italy

No. 40 – October 24, 1999



loghino.gif (1071 byte) 1. Editorial: The net is a biological system


Three or four years ago, when I said in a convention or a lecture that the internet is a biological system, I met embarrassment and perplexity. Now, much more often, I hear comments like «I hadn't quite thought of that, but it sounds right.» I guess that's because there are many more people with practical experience of the net,

But his concept is not as popular as it should be, in spite of the fact that many of the best writers on the subject talk about biology, agriculture and cultivation of the internet. Even CAIDA (Cooperative Association for Internet Data Analysis - University of California, San Diego) in a very technical paper (Internet measurement and data analysis: topology, workload, performance and routing statistics) says: «The infrastructure of the internet can be considered the equivalent of an ecosystem.» This isn't just a theoretical concept. It has practical relevance for anyone (person, organization or company) that wants to operate effectively in the network economy.

It isn't just more reasonable to think of the net as a living system rather that an aggregation of machines, software and protocols. It's much more effective. It's also useful to think of farming and cultivation. Of course we are not going back to an agricultural economy. But there are relevant traits of pre-industrial society in the new economy. Here are a few examples.

  • Where and how we live and work. Urban concentration, large factories and huge offices, as dictated by the needs of the industrial age, are no longer needed. Home and workplace can be much closer - often the same place, as was the case in a farming society.

  • A new way of producing and selling (well rooted in our past) based on personal relationships rather than "mass" communication.

  • The return to communities (with no geographical boundaries).

  • A new perception of diversity, as more of a value and less of a problem. This is happening slowly, because 98 percent of humanity is still outside the network society – and because it takes time and effort to overcome cultural prejudice.

  • Greater nomadism (that takes us back to a pre-agricultural society). Modern transport makes us much more easily mobile; the net allows us to stay in touch with our work and our relationships wherever we are.

A friend of mine, and a critical reader of my comments, told me that the comparison of the internet and agriculture can't be taken too far, or too literally. Of course he is right. But I don't agree completely when he says that in the network economy there are no such factors as ground and meteorology. We don't cultivate the internet in soil, but there are territories; there can be deserts and wetlands, plains and mountains, high grounds and canyons. Fields can be more or less fit for what we are planting. There can be a more or less favorable climate. The meteorology of the net is not made of sunshine or rain, hail or snow; its temperature is not measured in fahrenheit or celsius; but there are seasons. There are storms, tides and winds (sometimes in the technologies, sometimes in the relationships) that, as in meteorology, can't always be predicted accurately. We need to be ready for unexpected problems or opportunities; but also to understand the "natural laws" of human relationships.

And finally... it's not just a philosophical thought, but a very practical need, to treat the net as an ecosystem. A "common heritage" of all humanity, that can not, and should not, be controlled by any government or private interest; but should be protected and cultivated as a resource that we are only beginning to understand and develop.

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loghino.gif (1071 byte) 2. New data and new analyses


As far as Italy is concerned, I hope to have some new data in the next weeks or months, but it's pretty obvious that since I reported the results of prior research in August the number of people online has increased quite considerably – probably 50 percent over the first quarter.

On European scale, it's time to take another look at hostcount statistics; with a change in the way they are analyzed. I don't want to get into technical details, but all technologies and all statistics have problems; hostcount is the most reliable and comparable information available, but it's not perfect. There are occasional problems in DNS checks in most countries. A careful analysis of this problem led to a clear conclusion: figures reported in the statistics may be smaller, but not larger, than the "real" count. Therefore it's reasonable to use, for each country, the largest figure that was reported at any time (in most cases that's in the last two or three months).

The September 1999 statistics by RIPE (Réseaux IP Européens) were published on October 18. These are the figures (adjusted as indicated above) for the 22 countries in the Europe-Mediterranean area with over 50,000 internet hosts.

of hosts
% of
total area
per 1000
United Kingdom 1,610,833 16.9 27.4
Germany 1,609,995 16.9 19.6
Netherlands 816,723 8.6 52.4
France 647,166 6.8 11.1
Italy 554,098 5.8 9.7
Sweden 519,642 5.4 58.6
Spain 514.028 5.4 13.1
Finland 492,513 5.2 96.0
Norway 367,429 3.8 83.7
Denmark 318,020 3.3 60.8
Belgium 311,960 3.3 30.8
Switzerland 294,103 3.1 41.7
Russia 240,752 2.5 1.6
Austria 208,429 2.2 25.8
Poland 170,134 1.8 4.4
Israel 141,584 1.5 25.1
Czech Republic 112,339 1.2 10.9
Hungary 110,820 1.2 11.0
Turkey 85,700 0.9 1.4
Greece 72,054 0.8 6.9
Ireland 67,259 0.7 18.7
Portugal 66,783 0.7 6.8
European Union 7,189,224 81.9 21.3
Total area * 9,550,014 13.6

* The RIPE area includes 100 non-European countries, but the number of hosts in those countries
is too small to make a relevant difference in the density index, that is based on the population of Europe.

There are relevant differences compared to a year or two ago. Italy has overtaken (in total figures) the Scandinavian countries; Spain has fast growth. The Netherlands are getting much stronger and France is growing (from now on the minitel factor will no longer be considered in these analyses, though the "French peculiarity" is still there).

Now let's look at an update, based on the new criteria, of three graphs that we have been using to summarize data in the past (for instance see issues 32 and 36 ). The first shows a four-year trend in the five "large" countries in the European Union.

Internet hosts in five European countries – 1996-1999

Source: RIPE (Réseaux IP Européens) – quarterly data (adjusted) – numbers in thousands

There are no substantial changes; though Italy, and especially Spain, seem to be accelerating. It will take at least another three month to understand if this is a relevant trend.

The second graph shows density (hosts per 1000 inhabitants) in 28 countries with over 20,000 internet hosts.

Internet hosts per 1000 inhabitants
in 28 countries in the Europe-Mediterranean area

(Countries in the RIPE area with over 20,000 internet hosts) – "adjusted" 1999 data

Scandinavian leadership remains, but the Netherlands are getting closer. Spain shows considerable improvement (and may benefit from fast growth in Latin America).

The next graph, as usual, shows hostcount in relation to income (GNP).

Internet hosts in relation to income (GNP)
in 28 countries in the Europe-Mediterranean area

(Countries in the RIPE area with over 20,000 internet hosts) – "adjusted" 1999 data

As usual, Germany appears weak in relation to its economy, and several Eastern European countries are well placed. Here again we see improvement in Spain. France, if we don't consider the minitel, is as weak as Italy.


A somewhat whimsical worldwide hostcount update is offered by Netsizer. The real-time "counter" on this site is a fake, and quite meaningless. But they seem to be checking fairly frequently (though not daily). According to this source, there are over 63 million internet hosts and over 30 million web servers worldwide.


Some of the .com domains are outside the US. According to an analysis by Nic France, there are 263,194 .com domains in Europe. That doesn't change the hostcount picture significantly, especially when comparing countries; but for what it's worth let's see what happens if we add a standardized estimated number of hosts based on the .com domains – for the nine countries considered in the French analysis.

% of total
hosts per
1000 inhab,
Europe * 10,189,575 6.3 14.5
United Kingdom 1,766,100 9.8 30.3
Germany 1,693,514 4.9 20.6
Netherlands 848,260 3.7 54.4
France 730,805 12.4 12.5
Italy 596,067 7.0 10.4
Sweden 571,048 9.0 64.4
Spain 565,476 9.1 14.4
Denmark 337,506 5.8 64.5
Switzerland 318,179 7.6 45.1

* The total includes all of the RIPE area but (as poointed out in the previous table)
the number of hosts in non-European countries is too small to make a relevant difference.

The figures look somewhat different if we consider this factor, but the relative positions of countries are essentially the same as in the basic hostcount analysis. Of course there are also European .net and .org domains, but the numbers are much smaller.

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loghino.gif (1071 byte) 3. Permission Marketing (Seth Godin)


Seth Godin (vice president direct marketing – Yahoo) has written an interesting book on net marketing. He's a bit over-emphatic in promising to "show us the future", but many of his comments make sense. Like other recent books, such as The Caring Economy and High tech - High touch, it helps us to understand how network marketing and communication can be really effective if we care about relationships with people.

In Permission Marketing Seth Godin explains that corporate communication and marketing are in trouble. The traditional way, which he calls interruption marketing, has reached saturation. There are simply too many products, too many messages, for anyone to be able to pay attention. I think he overstates the point (traditional marketing isn't dead, it still works in many cases) but he is right in pointing to the new options offered by the internet.

Even direct marketing and data based marketing, in the traditional sense, have serious limitations. The segmentation tools are clumsy, there is considerable (and growing) refusal. «These techniques – says Godin – are astonishingly wasteful.»

Applying the same concepts in the internet isn't just wasteful; it can be harmful. This is what Seth Godin says about trying for "large numbers" on the internet.

This is a very, very big haystack, and interruption marketers don't have that many needles.
At last count, there were nearly 2,000,000 different commercial web sites. That means that there's about 25 people online for every single website... hardly a mass market of interest to an interruption marketer.
Alta Vista, one of the most complete and most visited search engines on the internet, claims to have indexed 100 million pages. That means that their computer has surfed and scanned 100 million pages of information, and if you do a search, that's the database you're searching through.
It turns out that in response to people who do searches online, Alta Vista delivers about 900 million pages a month. That means that the average page that they have indexed in their search engine is called up exactly nine times a month. Imagine that. Millions of dollars invested in building snazzy corporate marketing sites and an average of nine people a month search for and find any given page of information on this search engine.
Marketers have invested (and almost completely wasted) more than a billion dollars on web sites as a way of cutting through the clutter. General Electric has a site with thousands of pages. Ziff-Davis offers a site with more than 250,000 pages! And a direct result of this attempt to cut through the clutter is the most cluttered, least effective marketing of all.

People don't have the time to pay attention. The more bells and whistles are added to try to attract attention, the more they add to the clutter. The solution is to deal with people who are interested in what we have to say. This is how Seth Godin defines "permission marketing".

Interruption Marketing is the enemy of anyone trying to save time. By constantly interrupting what we are doing at any given moment, the marketer who interrupts us not only tends to fail at selling his product, but wastes our most coveted commodity, time. In the long run, therefore, Interruption Marketing is doomed as a mass marketing tool. The cost to the consumer is just too high.
The alternative is Permission Marketing, which offers the consumer an opportunity to volunteer to be marketed to. By only talking to volunteers, Permission Marketing guarantees that consumers pay more attention to the marketing message. It allows marketers to calmly and succinctly tell their story, without fear of being interrupted by competitors or Interruption Marketers. It serves both consumers and marketers in a symbiotic exchange.
Permission Marketing encourages consumers to participate in a long-term, interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages. Imagine your marketing message being read by 70% of the prospects you send it to (not 5% or even 1%). Then imagine that more than 35% respond. That's what happens when you interact with your prospects one at a time, with individual messages, exchanged with their permission over time. Permission marketing is anticipated, personal, relevant. Anticipated:-people look forward to hearing from you. Personal: messages are directly related to the individual. Relevant: the marketing is about something the prospect is interested in.
I know what you're thinking. There's a catch. If you have to personalize every customer message, that's prohibitive. If you're still thinking within the framework of traditional marketing, you're right. But in today's information age, targeting customers individually is not as difficult as it sounds. Permission Marketing takes the cost of interrupting the consumer and spreads it out, over not one message, but dozens of messages. And this leverage leads to substantial competitive advantages and profits. While your competition continues to interrupt strangers with mediocre results, your Permission Marketing campaign is turning strangers into friends and friends into customers.

There are two ways, Seth Godin says, of getting married.

The Interruption Marketer buys an extremely expensive suit. New shoes. Fashionable accessories. Then, working with the best databases and marketing strategists, selects the demographically ideal singles bar.
Walking into the singles bar, the Interruption Marketer marches up to the nearest person and proposes marriage. If turned down, the Marketer repeats this process on every person in the bar.
If the Marketer comes up empty-handed after spending the entire evening proposing, it is obvious that the blame should be placed on the suit and the shoes. The tailor is fired. The strategy expert who picked the bar is fired. And the Interruption Marketer tries again at a different singles bar.
If this sounds familiar, it should. It's the way most large marketers look at the world. They hire an agency. They build fancy ads. They "research" the ideal place to run the ads. They interrupt people and hope that one in a hundred will go ahead and buy something. And then, when they fail, they fire their agency.
The other way to get married is a lot more fun, a lot more rational, and a lot more successful. It's called dating.
A Permission Marketer goes on a date. If it goes well, the two of them go on another date. And then another. Until, after ten or twelve dates, both sides can really communicate with each other about their needs and desires. After twenty dates, they meet each other's families. And finally, after three or four months of dating, the Permission Marketer proposes marriage.

Like all the best people writing about the internet, Godin is very critical of "dreaded" spamming. He is also against any violation of privacy and any attempt to capture, sell or buy personal data; which isn't only a waste – it's also a way of antagonizing people and destroying relationships before they can grow into binds of trust.

He also talks about the advantages of opensource software.

When there's an abundance of any commodity, the value of that commodity plummets. If a commodity can be produced at will and costs little or nothing to create, it's not likely to be scarce, either. That's the situation with information and services today. They're abundant and cheap. Information on the web, for example, is plentiful and free.
Software provides another example. The most popular web server is not made by Microsoft or Netscape. And it doesn't cost $1,000 or $10,000. It's called Apache, and it's created by a loosely knit consortium of programmers and it's is totally free. Free to download, free to use. As resources go, information is not scarce.


Seth Godin practices what he preaches – up to a point. On his website he offers, free of charge, the first four chapters of his book (and he is wise enough to send them as "plain text"). He promises: «I'll never rent or sell your email address.» (I would like to see more companies making that promise clearly and boldly).

But... if you write to his mailbox you get a standardized and irrelevant automatic reply. That doesn't make his reasoning less interesting or valuable; but it shows that good management of interactive communication isn't quite as easy as he says.

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loghino.gif (1071 byte) 4. Information is too "homogenized"

The issue has been discussed for years – but there seems to be no solution in sight. There is a disease in mass communication media, called "homogenization".

Umberto Eco wrote about it several times, over the years. Eugenio Scalfari, one of Italy's best known journalists and publishers, re-opened the debate in the October 14, 1999 issue of his newsmagazine L'Espresso.

For a while I've been wanting to put a question to Umberto Eco, as a recognized authority on the science of communication. He has criticized newspapers many times and he is often right when he points to their mistakes, superficiality and laziness. But my question is about something else. Over the years, also as a result of new production techniques, there has been a process of homogenization that makes newspapers – and even more so radio and television newscasts – less and less distinguishable from one another.

A week later, Umberto Eco answered.

Eugenio Scalfari asked me, in this same page of this magazine, to comment on the destiny that leads our newspapers to indulge more and more in gossip and sensationalism, following what has become a standardized model. That's a nasty trick, because he knows how many times I've written on this subject. So he's in the role of saying something sensational, announcing his severe self-criticism, while I'm left to be the preacher that tiredly repeats the same commandments.

He then described one more recent episode of distorted information and opinion, and once more came to a general consideration.

What can a newspaper gain from making me believe that people said things they didn't say, and that it's scandalous news? Nothing, if readers were demanding. But we all want to relax reading something entertaining, as when in a barber shop we read those magazines that, if two people meet casually in a bar, tell us that they are having an affair. Nobody believes it, but it's amusing. If readers play the game, and the paper sells, the disease is incurable.

So there's a vicious circle. Homogenized media and resigned readers nourish a circuit of information that is not only "homogeneous" and repetitive; it's also often distorted or irrelevant – or both.

Of course one of the solutions – probably the best – is the internet. For instance, an online newspaper is no longer dependent on what was on television last night. Actually, it can be ahead of television. And there's no limit to depth. It can give us a brief summary and an unlimited amount of support information. It can also let us choose if we really want to spend our time reading pointless elaborations about the cleavage of one more mannequin, or the gossip about endless political skirmishes – or we'd rather concentrate on a less boring subject. What's missing (as in many other things) isn't the technology. It's the culture. Do journalists and publishers know how to get out of ingrained habits and re-think their role? We as readers, too, should change our attitude; get out of the cul-de-sac of repetitive homogenized pseudo-news and go actively looking for what we want. It's out there, somewhere, on the net – though it takes a good miner to find the best vein..


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List of links

For the convenience of readers that print the text before they read it, here is a list of the links.

Internet measurement and data analysis http://www.caida.org/Papers/Nac/
The cultivation of the internet http://gandalf.it/offline/off19_en.htm
Italians online http://gandalf.it/netmark/netmar37.htm#heading02
European data – February 1999 http://gandalf.it/netmark/netmar32.htm#heading04
European data – July 1999 http://gandalf.it/netmark/netmar36.htm#heading03
RIPE – Réseaux IP Européens http://www.ripe.net/statistics/hostcount.html
Latin America http://gandalf.it/netmark/netmar38.htm#heading03
Netsizer http://www.netsizer.com/daily.html
"Com" domains in Europe http://www.nic.fr/Statistiques/auto/Com/index.shtml
The Caring Economy http://gandalf.it/netmark/netmar36.htm#heading02
High tech - High touch http://gandalf.it/netmark/netmar32.htm#heading02
We can forget "segmentation" http://gandalf.it/offline/off17_en.htm
Permission marketing http://www.permission.com