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Marketing in the internet - as seen from Italy


No. 42 – December 18, 1999

 

 

loghino.gif (1071 byte) 1. Editorial: The bogus millennium

 

This is the last issue of Netmarketing in 1999; but not the last in the century or the millennium. The reason is quite simple: the 20th century will end at midnight in December 31, 2000; not in a few days' time. The worldwide "millennium craze" is a mistake in arithmetic. As such, it isn't important; but it's an example of how almost anything, no matter how absurd, can be perceived as "true" if it's repeated often enough.

Serious writers all over the world have been pointing out the mistake. An association of Spanish astronomers, AstroRed, has published a manifesto on this subject. But we continue to read about it in the same newspapers, and hear about it on the same television networks, where there have been reports about why it's a mistake. The nonsense is everywhere, on candy boxes and wine bottles, in all sorts of advertising (from beer to jewels, from banks to food), on businesslike diaries or on countless calendars with pictures of undressed mannequins.

Some people think it's a deliberate commercial swindle. Not a very successful one, in any case; people seem prepared to believe in the fake millennium as a theory, but not to pay real money for it. In my country there is a pending case against some travel agents for misleading advertising; I dont' know if it will be judged to be misleading, but it hasn't been effective: here as elsewhere, overpriced travel services and hotels aren't selling and are rushing to offer discounts. Of course when anything is as loudly proclaimed as this there are commercial interests trying to exploit it. But I don't think it started as a deliberate plot; it looks more like just a stupid mistake, picked up and repeated by careless broadcast media on an unbelievable global scale.

This isn't very important. It will soon be forgotten and won't come up again until 2099. But it's a symptom of a serious problem. Before I draw any conclusion, lets' look at another legend. In all sorts of books, presentations, etc. (including a report by the US Department of Commerce in 1998) there is a comparison of the speed of growth in three communication systems.


Growth from 0 to 50 million users

radio – 38 years

television – 13 years

internet – 4 years


It's quite easy to prove that it's nonsense. Most people say the internet was born 30 years ago. That's questionable; we could pick other dates for its birth, between 1965 and 1983. We don't know when it reached 50 million users, but it wasn't before 1995. Therefore the period could be anything between 12 and 30 years – but, in any case, not four. This isn't quite as irrelevant as it sounds. The fact that the internet did not grow faster than other communication systems proves that it's much more solid than any passing fad; it's here to stay, and will continue to grow. It's in its early stages of development and most of its worldwide growth is still ahead of us.

The real problem isn't which particular piece of nonsense we are "believing" at this time. It's the way information spreads. It's our "gullibility" in accepting the most ridiculous statements as "true" if they are repeated often enough. It's the unforgivable superficiality of broadcast media in hardly ever checking what they are picking up from a source and delivering to their readers or viewers. The problem is not so much the information overload as the fact that such a large part of that information is misleading. The strongest tool we have to overcome this problem is the internet. But even that won't work unless a large and growing number of people learns to use it effectively to look beyond the smokecreens and under the surface and find what is really useful for whatever any one of us is trying to learn or do.


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loghino.gif (1071 byte) 2. More numbers and more changes in Europe


Let me start with the usual disclaimer. Of course all statistics have problems; also hostcount data are not immune from glitches. It doesn't make much sense to report data every month; we need to follow trends over a longer period before we can have a meaningful picture. However, there are changes in Europe at this time that are worth checking. So here is an update based on November data published by RIPE on December 13. The most relevant change is that we are, at last, seeing the results of the commitment by the French government and economic leaders to shift the traffic from the old minitel to the internet.

This is what we see now in a chart including the 13 European countries with over 200,000 internet hosts.


Internet hosts in 13 European countries

  1998 1999 Growth
in a year 		Hosts per
1000 inhab.
United Kingdom 1,436,478 1,747,727 + 22 % 32.7
Germany 1,429,538 1,635,076 + 14 % 19.3
France 486,839 1,207,817 + 147 % 20.7
Netherlands 594,547 896,246 + 51 % 57.5
Italy 370,424 733,108 + 96 % 12.8
Spain 298,730 539,113 + 81 % 13.8
Sweden 417,894 539,113 + 25 % 59.0
Finland 465,335 492,513 + 6 % 96.0
Norway 319,628 375,212 + 17 % 85.5
Denmark 293,927 347,127 + 17 % 65.6
Belgium 203,660 331,951 + 63 % 32.8
Switzerland 231,094 300,249 + 30 % 42.5
Russia 193,837 240,752 + 24 % 1.6
European Union 6,330,690 8,923,088 + 41 % 22.6
Total area 7,815,458 10,215,307 + 31 % 14.5

Note: data are adjusted as indicated in issue 40


Only five of these countries (France, Italy, Spain, Belgium and the Netherlands) and only one more country in the European Union (Greece) grew faster than the European average in the last twelve months. There are still considerable differences in density, but they are not as large as they used to be. It will take years before the situation in Europe is "balanced", but there is a definite trend in that direction.

Now let's look a the same three graphs that we saw in the issue 41. The first shows growth in the five "large" countries in the European Union. "Weighting" criteria are somewhat changed and as a result trends are somewhat more believable; though of course we shall need results for the entire third quarter, and later for the first quarter of year 2000 (as well as worldwide data that will be available in February or March) to have a more relevant picture.


Internet hosts in 5 European countries – 1997-1999

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


Note: figures for he last quarter of 1999 are based on October-November data, as of course December statistics are not yet available. The figures for each quarter are the highest reported in the period (following the criteria explained in issue 40). Some figures are adjusted to reduce the effect of temporary fluctuations.


Of course the biggest change is in France. But, if the data in the next few months follow the same trend, we may be seeing the beginning of a reduction in the traditional gap between the two leading countries and the other large markets in Western Europe.

Now let's see the two usual graphs. The fist shows density.


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

28 countries (of 100 in the RIPE area ) with over 20,000 hosts


The picture is more or less the same as in past months, except for France now being ahead of Germany even if we don't consider the minitel.

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


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

28 countries (of 100 in the RIPE area ) with over 20,000 hosts



Spain and France are gaining ground. The United Kingdom, that has always been the strongest of the "large countries", is improving even further. Germany remains weak. At the low end of the scale, the difference now is smaller between Portugal, Greece and Italy.

Finally, let's look again at the map of Europe. The position of France is the only difference with what we saw a month earlier; but there are relevant changes compared to the maps that appeared on this site in August 1999 and October 1998.


Internet hosts per 1000 inhabitants

Analysis on statistics by RIPE (Réseauz IP Européens) – "weighted" data up to November 1999


The average density in Europe (14.5 per tousand) is just above the area shown in light green;
the average in the European Union (22.6) is above the dark green area.


The picture continues to change. In the meantime, it's interesting to note that there are relevant similarities between this map and the list of "candidates" for the European Union. That's no coincidence. It makes sense to think that internet density is a relevant measurement of a country's economic, social and political development.


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loghino.gif (1071 byte) 3. Internet "users" in Italy


More detailed studies on internet "users" in Italy will be available in the next few months. In the meantime, here are a few observations from surveys in September-October.

There seems to be no change in the total number of people online compared to June-July. Also the general demographic patterns are basically the same as we reported in issue 37. That's no surprise. People have been on holiday and busy with back-to-work or back-to-school. It seems likely that there will shall see relevant growth when we have results for the last two months of the year.

Some interesting, and relatively new, indications come from recent research on attitudes and behaviors. The general impression is that users are much smarter than most service suppliers or e-business operators think. Here are a few highlights.

  • "New" users include an increasing percentage of people that aren't really interested. They reluctantly adjust to the net being "forced" on them at their workplace, or they feel that they must "live up" to a widespread trend though they don't understand "what's in it for them". The ever-increasing availability of "free" internet connection contributes to the growth of this factor.

  • Experienced people use the net selectively, tailor their behavior to their needs and don't want to waste time. Also new users that initially wander around out of curiosity get tired quite soon; after a while they either become selective or drop out. Aimless "navigating" is generally seen as "naive" and silly.

  • Most people aren't interested in having their own website or "homepage". They either think it's useless or understand that it takes a lot of effort because it needs to be updated. In the younger segments there is a relatively larger number of people (individuals or groups of friends) who think it's fun to try.

  • Experienced users understand quite well the function of FTP and the usefulness of downloading good software that is free or has a reasonable price.

  • The use of search engines is quite frequent but generally aimed at very specific objectives. Most people understand that their effectiveness is limited and rely more on personal contacts or other sources of information to find what they want.

  • People are not very happy with the quality of service offered and generally find most sites too cluttered and slow.

  • Though the "scare" campaigns are not as frequent as they used to be, they have left a feeling of uneasiness. People (especially families with children – and of course mostly people that have limited experience of the net) are still concerned about hackers, viruses, bugs, pornography, intruders etcetera. That is given by some people as a reason (or an excuse) for using the internet in the office but not at home.

  • The perception of "portals" is confused and unfocused. Most people know the word but don't know what it means (and don't care). There is hardly any loyalty, except for specialized resources that are perceived as reliable on specific subjects (especially in professional areas).

  • The concept of "community" is well understood by experienced users. New users are interested in the idea but don't understand well what it means.

  • People are interested in the idea of "electronic commerce" but generally disappointed with what is offered. The perception is that there isn't much online that is really worth buying; while, at the same time, people are concerned that exaggerated "commercialization" of the net could get in the way of its value as a source of information.

These are only early impressions; further research will probably tell us more. But it's interesting to notice that the attitudes of people are based much more on their personal experience of the net than on the hype. "Customer empowerment" isn't just a theory in business books. It's actually happening.


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loghino.gif (1071 byte) 4. What's wrong with the audiweb


For about a year in Italy there were proud announcements that advertisers online would have a wonderful tool for audience measurement, called the audiweb. Several big business and media associations joined in the effort; a number of quite serious and competent people worked on the project. The first results were supposed to be published in September, 1999. Nothing happened – and no explanations were given.

"Technical problems", some say in a low, embarrassed voice. Maybe. But the truth is somewhere else. A few sites were actually audited, but obviously someone was unhappy with the results and refused to publish them. Some large organization refused to join the system; but they don't explain why. There is a pretty obvious explanation. Conflicts of interest, with each of the major operators wanting whatever system best suits his needs. They will probably try to reach a compromise and get the act on the road some time next year, but under these circumstances the reliability of the data will be quite questionable.

This, of course, isn't much of a problem. The internet (unlike broadcast media) can be used (and measured) quite effectively without any external standardized source. The real problem isn't that audiweb data are not available, but that companies were told to hold their investments until they had a proper measurement tool; and found it convenient to do so. Of course that makes no sense, but it was an excuse to "wait and see". Now there is a large and increasing number of potential customers online; and there are investors ready to pour large amounts of money into e-business stocks – if and when they can find something that seems worthwhile. But there are very few companies in between with a really clear idea of what to do about it.

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