Retailers shift their ad spending from TV, radio and print ads to digital ads.
According to a new study by management consulting firm McKinsey & Co., and Media Metrix Inc., an Internet measurement company, just half of online consumers are active users, logging on at least once a month.
Among those active users, six distinct segments have emerged, reinforcing the basic marketing rule: "Know your customer." The six segments identified in the study were based on users' time spent online, pages and domains accessed and the amount of time spent per Web page. The segments are simplifiers, surfers, connectors, bargainers, routiners and sportsters.
"Companies can use this data to establish a strong and ultimately successful presence on the Web," says John Forsyth, principal of McKinsey's e-marketing practice. Because Internet profitability depends heavily on repeat purchases and higher transaction sizes, winning customer loyalty in one segment is more likely to be profitable than skimming all six segments. "Marketers who try to reach all six at once, or approach them as if they were all alike, do so at their own peril," Forsyth warns.
The study maintains that simplifiers, who spend just 7 hours per week online but account for half of all online transactions, need "end-to-end" convenience. Surfers want "what's new" and constitute only 8% of the active user population, but account for 32% of online time and access four times as many pages as the average user.
Connectors are novices seeking reasons to use the Internet, the study shows, while bargainers are devoted to the quest for the best deals. Connectors account for 36% of the active user population and 40% have been online less than two years. And compared with the active user average of 61%, only 42% of connectors have made online purchases, instead using the Internet for e-mail and chat services. Bargainers on the other hand, represent 8% of active online users and spend less time online than the average user, but they represent 52% of eBay visitors.
Routiners and sportsters go online mainly for content and only half of rountiners have made purchases online and visit fewer domains. They do, however, spend twice as much time per page as average users. Sportsters represent just 4% of active users and spend much of their time on sports and entertainment sites. They spend 7.1 hours online each month and are drawn to fresh, colorful and interactive sites.