The Long Tail's Shortcomings

Chris Andersen's book "The Long Tail" has been regarded as a sacred text among many Internet industry execs since it was first published in 2006. In it, Andersen claims that the Internet is shifting society away from mainstream media "hits"--products that sell enormously well and appear at the top of the demand curve--toward an expanding number of niche products appearing in the curve's long tail. Thus, "narrowly-targeted goods and services can be as economically attractive as mainstream fare," Andersen said.

However, a new article from Harvard marketing professor Anita Elberse offers evidence that mainstream "hits" are not going away. In fact, she claims that the Internet has helped make successful products and services even more successful. In other words, people like sharing in the experience of blockbusters; it's a social phenomenon. Moreover, she suggests that most of us are happy to receive others' recommendations.Wall Street Journal writer Lee Gomes agrees. He says the Long Tail theory flattered readers, who were mostly techies, into thinking that the Internet was changing everything. That group tends to have a "contemptuous" view of mass media anyway, he says, and was thusly predisposed to appreciating anything undermining its power.

Meanwhile, Gomes claims the blogosphere, supposedly the shining example of The Long Tail, is the perfect example of where the theory falls short: it's as hit-driven as the rest of the world, with a tiny percentage of blogs receiving huge traffic. Read the whole story...

Source: The Wall Street Journal

What Kids Really Do Online (Despite What Parents Think)

US moms and dads estimate their children spend only two hours a month on the internet, but kids say they actually spend 10 times more time — or 20 hours — according to a recent study, the first Norton Online Living Report by Symantec (via MarketingCharts).

What's more, 41 percent of respondents age 13-17 say their parents have no idea what they do online, and only 33 percent of parents worldwide say they set parental controls and monitor their children's online activities.

Conducted by Harris Interactive, the study sheds light on what kids are really doing when they log on:

Making friends. About a third (35 percent) of US online children age 8-17 have made friends online. That percentage increases as kids get older: 50 percent of US teens age 13-17 report making online friends. Some 33 percent of kids 8-17 report that they prefer to spend at least as much time with their online friends as their offline friends.

Social-networking. More than three fourths (76 percent) of US teens age 13-17 "constantly," "frequently" or "sometimes" visit social-networking sites. Worldwide, about half of boys (51 percent) and girls (48 percent) do so.

Shopping. About one in three US children (35 percent) report being "very confident" or "confident" in shopping online. That number is 69 percent among children in China.
Fielding requests for personal information. About four in 10 (42 percent) US teens age 13-17 say they have received an online request for personal information.

Being approached by strangers. Though US adults estimate that 6 percent of their children have been approached online by a stranger, 16 percent of US children report being approached.
The study also revealed interesting online behaviors of online adults - see MarketingCharts for those findings.

Source: MarketingVox

Number of U.S. Computers Accessing the Internet Via Mobile Broadband Soars 154 Percent in 2007

comScore a leader in measuring the digital world, released the results of a study of U.S. Internet usage via mobile broadband. The study examined the usage and characteristics of mobile broadband users through data collected from computers where Internet access via mobile broadband Internet service providers (ISPs) occurred.

Mobile broadband employs cellular networks, where users pay subscriptions for access and the connection is made with a PC card, built-in adapter, or connections can be tethered via a cell-phone or PDA, and is different than Wi-Fi access, which is predicated on the availability of short range “hot spots” where access fees often apply incrementally for each connection. In 2007, Verizon and Sprint accounted for the majority of the mobile broadband market. AT&T has announced it will increase its coverage in 2008.

The number of computers using mobile broadband technology to access the Internet grew by 154 percent in Q4 2007 versus the same period in 2006.

“Though mobile broadband access is currently used by about 1 percent of the total U.S. Internet population it is poised for significant growth over the next few years,” said Serge Matta, senior vice president of comScore. “As consumers increasingly demand and depend on portable Internet access, the demand for mobile broadband should continue to increase.”

Work Computers Account for Most Mobile Broadband Access
At this early stage of mobile broadband, usage appears to be more a function of “need” than “want.” In particular, mobile broadband shows a significantly higher presence on work computers (59 percent) than home / personal computers (41 percent).

Mobile broadband is also somewhat of a luxury, skewing strongly towards the highest income households. Those making at least $100,000 were 37 percent more likely than average to use mobile broadband and those with incomes below $25,000 were 41 percent less likely to do so.

“The mobile broadband market is ripening as we speak, and ISPs can benefit by increasing awareness that they have the services to meet their consumers’ demands,” added Matta. “Those ISPs that get ahead of the curve in understanding this emerging market will be best positioned to reap its rewards.”

Apple Goes Corporate

On Mar. 6, at its Cupertino (Calif.) campus, Apple (AAPL) is expected to announce a strategy to use its Web-browsing iPhone to move into the corporate market. Apple will likely unveil plans to spur development of more software for the phone, to improve security on the device, and to make it compatible with popular e-mail systems such as Microsoft's (MSFT) ubiquitous Outlook. Such steps may make corporations more willing to approve the iPhone for use by their employees. The moves will put Apple into direct competition with Research In Motion (RIMM), whose BlackBerry devices now dominate the wireless e-mail market.

Mobile Broadband Use Soars, Poised for Expansion

The number of computers using mobile broadband technology to access the internet increased 154 percent in Q4 of 2007 compared with the year-earlier period, according to a comScore study of US Internet usage via mobile broadband*, MarketingCharts reports.


The number of computers using mobile broadband increased from 854,000 in 4Q06 to nearly 2.17 million in 4Q07, comScore said.

"Though mobile broadband access is currently used by about 1 percent of the total US Internet population, it is poised for significant growth over the next few years," said Serge Matta, SVP of comScore.

Among other findings:

At this early stage of mobile broadband, usage appears to be more a function of "need" than "want." In particular, mobile broadband shows a significantly higher presence on work computers (59 percent) than home/personal computers (41 percent).

Mobile broadband is also somewhat of a luxury, skewing strongly toward the highest-income households:
Those making at least $100,000 were 37 percent more likely than average to use mobile broadband.
Those with incomes below $25,000 were 41 percent less likely to do so.
In 2007, Verizon and Sprint accounted for the majority of the mobile broadband market. AT&T has announced it will increase its coverage in 2008.

"The mobile broadband market is ripening as we speak, and ISPs can benefit by increasing awareness that they have the services to meet their consumers' demands," added Matta. "Those ISPs that get ahead of the curve in understanding this emerging market will be best positioned to reap its rewards."

*Mobile broadband uses cellular networks, and users pay subscriptions for access; the connection is made with a PC card or built-in adapter, or connections can be tethered via a cell-phone or PDA.

Mobile broadband access differs from Wi-Fi access, which is predicated on the availability of short-range "hot spots" and access fees often apply incrementally for each connection.

Source: Marketing Vox

Online Video Audience to Hit Critical Mass in '08

Nearly 80 percent of US internet users will watch online video at least once a month in 2008.
That's 52.5 percent of all Americans — or 154 million people — an indicator that online video has reached mainstream audiences, according to projections from eMarketer, MarketingCharts reports.

The proportion of '08 online video viewers is 12.1 percent more than '07 levels but represents slowing growth:

By 2012, there will be an estimated 190 million video viewers - or a mere 3.8 percent increase from the prior year, according to eMarketer's report, "Online Video Content: The New TV Audience."

That's because the proportion of online video viewers is expected to plateau somewhat as the proportion of internet users reaches saturation levels (i.e., nearly 90 percent of the US population).

The most popular online video content, watched by more than 40 percent of the US online video audience, are clips of five minutes or less, consisting of news, jokes, movie trailers, music videos and TV shows, eMarketer said:

With nearly four out of five US Internet users watching online video at least once a month, the potential internet TV audience is both large and ready for more content, eMarketer said, citing survey findings that people prefer to watch professional programming online.
"From the video provider's perspective, online video is not scalable, which means that the more people viewing video at a website, the more it costs that site to serve video and/or the slower the video gets served," says David Hallerman, eMarketer senior analyst, who authored the report.

The big traditional companies are therefore in the best position to show video online and as viewers demand full-length TV shows and clips, as firms that already produce countless hours of video content, such as movie studios, are best positioned to fill the need, according to eMarketer.

Online advertising revenues exceeded $21 billion for the first time in 2007

Online advertising revenues exceeded $21 billion for the first time in 2007, although preliminary data compiled by an industry trade group also suggest growth is slowing.The Interactive Advertising Bureau said its estimates show ad revenues grew 25 percent last year from nearly $17 billion in 2006. In dollar amounts, the estimated gain was $4.2 billion -- less than the 35 percent and $4.3 billion growth seen in 2006 over 2005.

Analysts have said the growth rate was bound to slow as the Internet commands a larger share of the advertising pie, taking dollars away from traditional media like newspapers. By most accounts, the Internet still represents less than 10 percent of all U.S. ad spending, meaning there's room for a lot more growth, even at a slower rate.PricewaterhouseCoopers LLP, which conducts a quarterly survey for the advertising trade group using data from the 15 largest online ad sellers, said fourth-quarter revenues totaled about $5.9 billion, topping the previous record of $5.2 billion in the third quarter.David Silverman of PricewaterhouseCoopers said the latest record numbers demonstrate that interactive media continue to be important to consumers and marketers.The

IAB said final data and breakdowns by ad types would be available in May. Typically, the most lucrative are keyword ads such as those displayed alongside search results at Google Inc. and other search engines.

U.S. Searches up 9% in January

Americans conducted over 10 billion core searches last month, a 9 percent jump in searches from Dec. 2007, according to the monthly comScore qSearch analysis of the search marketplace in January (via MarketingCharts):

Google Sites marginally extended core search market share to 58.5 percent, with shares essentially unchanged from December - and only Yahoo losing some ground:

Yahoo Sites ranked second with 22.2 percent, followed by Microsoft Sites with 9.8 percent, AOL LLC* with 4.9 percent, and Ask Network with 4.5 percent.
Americans conducted 10.5 billion searches at the core search engines - 8.9 percent more than in December.

Some 6.1 billion core searches were performed on Google Sites, while 2.3 billion were performed on Yahoo Sites. The number of searches at each of the five core search engines was at least 5 percent more than in the previous month.

Companies must change their strategies to succeed online

Companies will need to abandon traditional ways of selling to customers in order to succeed in the online world.That is according to Gartner, the IT research and advisory company, which maintained that new skills and techniques will be required to engage with modern consumers.

Gartner said that a "Generation Virtual" (or "Generation V") had emerged, which could not be defined by demographic information such as age and gender.Instead, this new generation is identified by a preference for discovering information via the use of digital media channels.

Adam Sarner, principal analyst at Gartner, commented: "Conventional wisdom has focused on customer identification as the foundation for one-to-one marketing campaigns."The reality of Generation V creating anonymous online personas, and the sheer power of their growing influence in an online environment, means companies must change their methods of acquisition and relationship building."Customer relationship management (CRM) –focused companies and particularly their marketing departments must take notice of this change and engage with online personas."

Source: EquiMedia

Small Companies Finding a Home On The Web

The Web site for Sophia Brodsky’s day spa in Philadelphia, the Body Klinic, was pretty rudimentary until a college student walked into the spa a little more than two years ago with an irresistible offer.

Sophia Brodsky, top, owner of the Body Klinic in Philadelphia, talks about products for sale while a customer receives a manicure. Ms. Brodsky now maintains three Web sites.
As she tells it, the student, Nathaniel Stevens, said that for $10 he would take her existing site and redesign it to drive traffic to her salon. If she got more business, they agreed, he would get additional money. Ms. Brodsky, a Russian immigrant whose interests run more to cranberry facials than the Internet, thought why not.

Ms. Brodsky now maintains three Web sites and estimates that they have brought in thousands of dollars in business. “Now,” she said, “people are coming to my Web site daily.”
But small-business owners like Ms. Brodsky who have a Web presence are still a minority. In its first survey of small-business Web sites last April, Jupiter Research found that just 36 percent of all businesses with fewer than 100 employees had a Web presence.

Still, the Web as an alternative yellow pages, along with blogs and social networking, is drawing increased attention. The Kelsey Group, a market research company in Princeton, N.J., estimates sales revenue from Internet yellow pages, searches for local businesses and searches on wireless devices will increase to $13 billion in 2010 from $3.4 billion in 2005. Those small-business owners who venture online say the experience is generally worth it though the learning curve may be steep. Recognizing this, online advertising companies with names like Yodle, Weblistic, WebVisible and ReachLocal are springing up to help in managing the sites.

The Web was not on Ms. Brodsky’s mind when she put down $165,000 in 2004 in the Rittenhouse Square area for a spa that grossed about $6,000 a week. The spa was not even computerized at the time and had a staff of seven that she felt was not adequately trained for the upscale clientele she wanted to serve.

Experts generally advise small-business owners not to establish a Web presence unless they have time to keep it updated. Jean A. Pratt, assistant professor of information systems at the University of Wisconsin, Eau Claire, said, “If someone doesn’t maintain a Web site, it does become more of a detriment because competitors are keen on making theirs part of a marketing strategy.” A static site may damage the credibility of the business, she added.
Jody DeVere, president of askpatty.com, an automotive advice site for women that started in 2006, said she was determined not to let that happen when she was developing the site. To avoid spending $50 to $200 an hour for a Web developer, she spent several weeks learning how to blog, which included posting feature articles and tagging entries properly.

To gauge the site’s effectiveness she enlisted a group of 20 women, including her daughter and two daughters-in-law; forwarded links; and asked for comments.
The reaction was positive though at least one participant said she was not sure what she was viewing, asking, “Is the site geared for women’s questions about the car business?”
Steve Krug, author of a Web usability guide, “Don’t Make Me Think” (New Riders Press, 2000), says what looks great to a business owner may be totally lost on a user unfamiliar with the site. He suggests business owners watch their site being tested, devoting several hours a month to the effort.

That’s a feeling K. Rudolph knows well. She runs Native Intelligence Inc. in Bethesda, Md., which sells computer security and security awareness training courses.
The company started a Web site about a decade ago; she took a workshop based on Mr. Krug’s book in 2003.

During his presentation Mr. Krug singled out her site’s graphics and asked participants if they knew what business Native Intelligence was in. The first person to answer thought bright colors and cartoons meant it was designed for children. “Watching someone use your site for the first time can be a humbling and enlightening experience,” she said.
Ms. Rudolph and her business partner at the time, Sam Carter, spent about three-quarters of their time over the next two weeks totally revamping the site trying to answer questions Mr. Krug posed like, “What can I do on this site?”

Now Ms. Rudolph sets aside several hours a month to watch as many as three users in succession navigate links on the site. She enlists friends and acquaintances to cast a critical eye.

Click here for the rest of this article

Source: NY Times

Seach advertising grows 29%, ROI improves 13% in Q4

Search advertisers spent 29 percent more on search engine advertising in the fourth quarter of 2007 compared with the year-earlier period, and they improved their return on investment (ROI) 13.1 percent in the same period, according to Efficient Frontier's Search Engine Performance Report: Q4 2007, writes MarketingCharts.

The factors considered by EF were search engine spend, click through rates (CTRs), cost per click (CPC), and return on investment (ROI).

Among the findings of the report:

Of the top three search engines, Google made the most gains, increasing its share of total market spend by 8.6 percent to reach 76.6 percent, improving ROI 7.5 percent and capturing 97 percent of the total increase in search spending from 4Q06 to 4Q07.

ROI on Yahoo improved 39.4 percent since the launch of Yahoo's Panama platform (4Q07 versus 4Q06); however, overall spend on Yahoo declined 3.8 percent during this period, leaving it with 17.9 percent of search engine spend in 4Q07.


Yahoo Search Assist launched in October 2007, and the resulting impression increase may have contributed to a 34 percent drop in CTR on Yahoo search from Q3 to 4Q07.
MSN maintained its lead in driving the highest ROI for advertisers; its ROI was 27 percent greater than the average return across all engines in 4Q07.
MSN also leads the major search engines in average click-through rate (CTR). It maintained its 5 percent share of search engine spending in 2007.
About the study: Efficient Frontier analyzed nearly 17 billion impressions and more than 270 million clicks to determine how shifts in the search marketplaces in 2007 affected overall spending and campaign effectiveness.

The Search Engine Performance Report: Q4 2007 was completed based on data from a fixed sample of Efficient Frontier's US clients from 4Q06 through 4Q07 and includes data from large search engine advertisers across multiple verticals.

Source: MarketingVOx

Jupiter Research: Local Advertising A Key Battleground on the Web

NEW YORK--(BUSINESS WIRE)--JupiterResearch -- a leading authority on the impact of the Internet and emerging consumer technologies on business, has found local display and search advertising have found life on the Internet and are leading among all online advertising categories for significant growth. As a result the cyber stage may be set for increased competition that spans well beyond a local market.
According to the US Online Local Advertising Forecast, 2007 – 2012, released by JupiterResearch, local advertising will increase by 13 percent from 2007 to 2012, faster than online advertising as a whole, of which a 12 percent growth rate is anticipated during the same period. But it will be local display and search advertising that are poised to make the biggest impact. With compound annual growth rates (CAGRs) of 18 percent and 16 percent, respectively, during the next five years, the categories will gain lift from an ongoing strategic push by newspaper and yellow pages publishers as well as improved local performance by the major search engines. While this trend represents a shift from old media to new media, it in no way suggests tactics of the past are becoming extinct.
“Although traditional media such as newspaper and local broadcast are facing new challenges regarding their business models, local advertising in these media mainstays is not a dying market,” explained Lead Analyst Barry Parr, Media Analyst for JupiterResearch. “The ability to assemble relatively larger general audiences will remain a principal advantage of traditional media.”
As search engines, local sites, and local businesses continue to improve their use of simple search engine optimization techniques, the use of search to find businesses and services in the local market will continue to grow. Because the local online market is fragmented and depends on search engines for traffic, local media must learn to work in an environment increasingly dominated by the search bar and prepare for an eventual face-off with national competitors. During the next five years, JupiterResearch believes local advertisers will become increasingly aware of online advertising as an option, have more opportunities, and gain access to improved tools for creating and managing their online marketing.
"At this point, most local advertisers are not marketers and do not have the time or resources to manage, let alone optimize, online advertising campaigns," said David Schatsky, President of JupiterResearch. "Although search is increasing its impact on the local market, it still demands a degree of sophistication unavailable to most local advertisers."
The complete findings of this report are immediately available to JupiterResearch clients online at www.jupiterresearch.com.
Source: Business Wire

Find out your "importance rating" on the internet

British firm Garlik has unveiled a new way to gauge a person's importance on the internet.
The "QDOS" digital status rating system factors in how many times a name appears in a search, as well as an individual's popularity, impact, and activity, among other criteria.
In its late startup phase, Garlik draws revenue from identity-protection software. It launched QDOS as a way for users "to take ownership of their digital status," according tothe International Herald Tribune.
The new system plays on a new era of transparency, "vanity searches" and "googling" oneself and others, either for personal or professional reasons.
By creating a rating for one's online popularity, QDOS allows users to compare themselves to each other. Celebrity comparisons are reportedly quite popular among early users.
Garlik ultimately hopes to use the tool to guide people into investing in identity protection services.

Source: MarketingVox

Outlook 2008: Online Marketing

Commercials are alive and well—at least on the Internet.Among all of the online ad formats, advertising during video content is expected to grow the fastest in 2008, according to eMarketer, New York.Video advertising, often attached as pre-roll ads, is expected to spike by more than 70%. Part of the reason the medium is exploding is because “mainstream advertisers are more comfortable with traditional ads, but they know eyeballs are moving online,” said Kris Oser, director of strategic communications at eMarketer. “Creating commercials is something they understand. Now they can just do them online.” Still it’s only a sliver of U.S. online spending, which is expected to hit $27.5 billion in 2008, up from $21.4 billion in 2007, per eMarketer. Search engine marketing (aka buying keywords) continues to be the dominant force in online advertising. A full 40% of online ad budgets are expected to be spent on paid searches next year compared with 9.5% on media/video. The problem: “As good as search is, conversion rates for surfers who hit your site are still only at about 10%; which means 90% of the time, [customers] don’t do what marketers wanted them to do,” said Stephen DiMarco, CMO at Compete, Boston.Static display ads (at 21.5%) and classified ads (17%) will also receive significant marketing dollars.“Video will be big, search continues to be big and behavioral targeting continues to be very interesting,” said Greg Stewart, former president of the Internet Advertising Bureau, New York. “The big agency holding groups will finally start to get it.”Social networks will continue to be a strong part of the marketing mix despite the backlash to Facebook’s Beacon.In November, Facebook launched the service, which automatically alerted members about their friends’ online purchases. CEO Mark Zuckerberg apologized to members and installed an easier opt-out mechanism. “Some advertisers were concerned initially, but we think they’ll all get on board eventually,” said DiMarco. “Our research showed they loved Beacon and the whole concept of social ads. It’s the Holy Grail of advertising.”John Paulson, president of agency G2 Interactive, New York, agreed. “For 2008 ad plans, I’m not sure the Beacon story is going to have that significant of an effect.” Whether video ads or social networking, this year “there will be so much opportunity for companies to spend more money online,” DiMarco said.

Source: Brandweek

Cyber Monday Online Retail Spending Up 26% Over 2006

comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released an update of holiday season e-commerce spending covering the first 26 days (November 1 – 26) of the November – December 2007 holiday season, including spending totals for Cyber Monday (November 26). More than $10.7 billion has been spent online during the season-to-date, marking a 17-percent gain versus the corresponding days last year. Cyber Monday saw $733 million in online spending, representing a 21-percent increase versus last year and an 84-percent jump from the average daily online spending totals during the preceding four weeks.

2007 Holiday Season To Date vs. Corresponding Days* in 2006 Non-Travel (Retail) Spending Excludes Auctions and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc.
	Billions ($)
Holiday Season to Date	2006	2007	Pct Change
November 1 – 26	$9.14	$10.74	17%
Thanksgiving Day (November 22)	$0.21	$0.27	29%
“Black Friday” (November 23)	$0.43	$0.53	22%
“Cyber Monday” (November 26)	$0.61	$0.73	21%

* Corresponding Shopping Days, Not Calendar Days

“Cyber Monday is an important day during the online holiday shopping season, representing the first significant spike in online holiday spending activity,” said comScore Chairman Gian Fulgoni. “Cyber Monday once again set a record with $733 million in sales, the first time a single day of online retail spending has broken the $700 million threshold. While that makes it the heaviest online shopping day on record, we expect that a number of individual shopping days during the coming weeks will surpass the Cyber Monday total, with some days potentially surpassing $800 million.”

Some other notable findings for Cyber Monday 2007 include:

· The number of online buyers was up 38 percent compared to Cyber Monday 2006, while the average dollars spent per buyer was down 12 percent. The decline in dollars per buyer may be due to two factors -- deeper and broader price discounts offered by online merchants this year and the fact that “new Cyber Monday buyers” tended to spend less online than returning buyers.

· 6 percent of the Internet users on Cyber Monday made an online purchase.

· 44 percent of Internet users on Cyber Monday shopped online (i.e. visited an online retail site or used a comparison shopping engine)

· 60 percent of dollars spent online on Cyber Monday came from work computers, with the balance coming from home and university computers.

Cyber Monday Sees Rise in Traffic at Top Retail Sites

On Cyber Monday, most of the top online retail sites experienced significant gains in the number of visitors. Amazon Sites saw the most visitors on Cyber Monday 2007, up 26 percent gain versus the same day last year and up 50 percent compared to the average daily visitors during the four weeks leading up to Cyber Monday. Six out of the top ten retail sites saw their visitors more than double compared to the daily average over the four weeks preceding Cyber Monday. Apple’s modest gains are the result of consistently high traffic levels during the weeks preceding Cyber Monday.

Top 10 Retail Sites Ranked By Visitors on Cyber Monday (November 26, 2007) Total U.S. – Home/Work/University Locations Source: comScore, Inc.
Retail Site	Percent Change
	vs. Average Daily Visitors during 4 Weeks Preceding Cyber Monday
Amazon Sites	50%
Wal-Mart	103%
Target Corporation	86%
Dell	106%
Best Buy Sites	110%
Yahoo! Shopping	85%
Apple Inc.	5%
Overstock.com	139%
Circuit City Stores, Inc.	136%
MSN Shopping	261%

Please contact press@comscore.com to receive the data behind the above for use in graphical representation.

comScore 2007 Retail E-Commerce Forecast

Online Non-Travel (Retail) Holiday Consumer Spending Excludes Auctions and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc.
	Billions ($)
	2006	2007	Pct Change
January – October	$77.5	$93.6	21%
Holiday Season (Nov-Dec)	$24.6	$29.5*	20%*

*comScore forecast

1 in 3 Plan To Do More Shopping Online This Season

Buysafe.com, the leading trust and safety company for e-commerce transactions, and Vizu Corporation, the company democratizing market research, today announced a benchmark survey on consumer online shopping behavior for the 2007 winter holiday season. The survey, sponsored by buySAFE and conducted by Vizu, revealed several key insights into consumer behavior:

• over 30% of U.S. shoppers plan to do more shopping online this season compared to last year and compared to their normal retail patterns.
• merchant performance remains the most important factor to online shoppers when making an online purchase... MORE important than price.
• 2 out of 3 shoppers would spend more online if all online purchases were guaranteed.
• an overwhelming 65% of shoppers feel more comfortable buying from a Bonded Merchant.
• one half of respondents have experienced at least one serious problem when buying online (e.g., item never arrived), and nearly one third of those have had at least three or more problems with online purchases.

“This survey confirms that merchant trust continues to be the leading factor in a shopper’s decision about which merchants to buy from, particularly when multiple sites sell the same product at the same price,” said buySAFE CEO, Jeff Grass. “Shoppers want to be confident that they will receive what they pay for, and that it will arrive in good condition in the time frame they expect. We’ve found that this is true year round, but it’s perceived to be even more important by consumers during the holiday shopping season. The results confirm that consumers will buy more items, more often, when they feel comfortable and confident in the shopping experience.”

The survey reveals that 35% of shoppers are more likely to shop online this holiday season compared to their normal retail patterns and 33% plan to do more online shopping this year than last year. Shoppers place more importance on merchant performance than other factors like selection of merchandise and ease of transaction, with 48% citing merchant performance as the most important factor to them, followed by 38% citing price, 9% citing amount of selection, and 6% citing ease of transaction. The survey also indicates that a full 50% of online shoppers have encountered a serious problem when making a purchase, for example never receiving merchandise or receiving the wrong item.

What would make more shoppers spend their hard-earned money online? 66% said they would be more willing to buy online if every purchase was guaranteed and close to 65% said they would feel more comfortable if a merchant were bonded.

Other interesting findings from the holiday shopping survey include:

• 73% or respondents said they would spend more online this holiday season because of lower shipping costs.
• 46% of respondents said they’d rather shop online this holiday season than face the hassle of malls or pay the high cost of gas.
• 34% said procrastination (e.g., buying items at the last minute) is the reason they plan to shop OFF-line this holiday season.

“buySAFE approached Vizu because of our reputation for providing Web 2.0 companies with a fast, accurate and affordable market research,” said Dan Beltramo, CEO, Vizu Corporation. “For this survey, we polled over 2,000 online shoppers via our network of hundreds of websites.”

Polling for the report was conducted via the Vizu Answers online market research network between November 5 and November 13, 2007. The report is one of a series of market research surveys Vizu Corporation conducts on various issues of public interest. For a complete copy of the report click here.

Source: Buysafe.com