Inside Scoop

You're Talking, But is Anybody Listening?

Oh those wacky consumer surveys. Just when we thought we could pin our hopes and dreams on the ever-so-reliable results of market research surveys, they go and bite us in the ass.

What I'm referring to is the recent revelation from a national survey on Internet use, that throws into doubt all the euphoric speculation about Net marketing and Web-created millionaires that's sent Netscape stock into the ionosphere. Without getting into the details, this is the gist of it: a major consumer survey conducted last year showed that about 26 million people in the U.S. were Internet users. A significant number; no argument there. The news sparked an uproar of Net optimism, sent an Amazon of venture capital dollars white-watering toward any company with an ISDN line, and set off a blaze of predictions about multi-billion dollar online economies by the next election.

Now, however, the truth has come out. A more recent survey with a sounder methodology has thrown some cold water in the faces of some of the would-be Great Gatesbys. This newer survey revealed that the earlier study simply asked computer owners if they had access to the Internet. That's it. Anyone with AOL, Compuserve, or a modem could have truthfully said, "Yes." These results were then interpreted to mean that all these 26 million John Q. Publics logged onto the Information SuperHighway with regularity. What the more recent survey asked was "Do you log onto the Internet at least once a week?" With this more focused question, the positive responses dropped to almost one-third of the previous survey's results.

That sound you heard a couple of months ago was the air being let out of the Internet balloon of a whole lot of service providers and would-be Netscape clones. One-third! This means, very simply, that there are nowhere near as many U.S. consumers viewing online ads, reading online sales pitches and buying products online as the pundits have promised. The very notion has started a wave of uneasiness in the stock market which is almost certain to lead to a freefall of stock prices for many high-tech corporations. Watch out when you walk by those high windows near the stock exchanges...

But what does all this mean for the advertiser? For you, who thought that by putting your ad on the World Wide Web you'd be reaching millions of sociophobic Pentium-heads with greenbacks burning holes in their pockets, it means that you're not going to be reaching the number of folks you hoped to, at least not yet. So perhaps in light of this inevitable coming-down-to-earth of the Internet Pie in the Sky, it's time to look at what kind of traffic you can really expect from your Web advertising.

What I've done is construct something similar to the Drake Equation, the formula used by scientists to determine the probability of extra-terrestrial life. Since we already know there's not much intelligent life on the Web, we can use this method to see how much of it is checking out your advertising. We start with the basic assumption: there are about 9 million people surfing the Net every week from the US. Now, how many of those people are surfing the Web? Since the Web is enormously popular, you can figure that 75% of those surfers hit the Web during their activities. So 9 million X 75% equals 6.75 million weekly Web users in the U.S. Okay so far?

Next, how many of those Web users are looking for information on products or services and not just checking out "The Spot" or playing a MUD? Given that advertising sites are far outnumbered by sites for organizations or weird personal fetishes, it's safe to assume that maybe one-third of users are actually looking for facts on products or services. So if you take 6.75 million X 33%, you get 2.25 million.

Now, how many of those users actually looking for product information are going to see your site? This is the tricky part, and it requires some assumptions about your promotion of your site, as well as some blind figuring about random hits. Assuming you are promoting your Web page through other advertising media, such as direct mail and print, what kind of return can you expect? Let's say you're a medium-sized company and you've been promoting your site through mailings, ads and online postings. If we take the average return rate for direct mail and print ads and apply it to Web traffic, we get a figure of 1.5%. That's typical for direct mail. And you thought you were the only one tossing that junk mail every day! Anyway, if we assume that figure can be applied to Web surfers, we take 2.25 million X 1.5%, and we get 33,750. Wow! That's quite a come-down! Welcome to the real world. But we're not done...

You've got to add the potential random hits your site gets from people just surfing around or using search engines. Since there are about 120,000 sites available right now, a one-in-120,000 chance equals about a .000000833% chance of a user randomly hitting your site. Take that 2.25 million X .000000833 and you can add a whopping 2 hits to your total, for a figure of 33,752 weekly hits.

Sounds good, huh? But wait, there's more. For your site to have any effect, the user has to read it. We all know that with many sites, we don't get past the home page and intro copy. How many users actually stay and check out your site in detail? It really depends on how good your site is: if the graphics are interesting, if there's entertainment for the user, if it's more than just a boring sales pitch. But we'll be charitable and assume that 1/2 of the users who hit your site stick around. Take our 33,752 and divide it in half and you've got 16,876 surfers who actually get your advertising message. Right?

Wrong. There's one more step. Servers have a habit of being too busy to allow access, or just simply being down. What's the probability of a user being unable to access your site at any one time? Let's assume that your maintenance is pretty good and you're able to keep your server up and running 75% of the time. All together now, 16,876 times 75% equals 12,657 users who can access your site and actually give a damn when they do.

More than 12,000 hits a week from U.S. consumers? Most companies would love that kind of traffic. But for this example, we assume that you're advertising your site heavily on a national or at least a regional level. If you're not promoting the site much, the numbers drop dramatically. Fact is, this is guesswork at best. But it illustrates the realities of advertising on the Web. You're probably not going to get the kind of traffic the glowing market reports have been promising. But if you keep your expectations sensible and promote your site effectively, Web advertising can be a powerful supplement to your mainstream marketing efforts.

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