Good News–And Some Bad–for Online Marketers

The number of active Internet users in the United States stands at only 37 million, well-below the figures widely claimed in most published reports, according to the 1998 eOverview Report.

Contrary to other Internet research firms, which put the number of U.S. Net users in the range of 50 to 70 million, The eOverview Report estimates there are 37 million active net users in America, as of June 1998, representing 18.5% of U.S. adults (aged 18+).

The report, issued by eMarketer, an authority on business online, projects by year-end 1998, however, the number of active users will increase to 47 million, and account for 23.5 percent of U.S. adults.

Why are eMarketer’s estimates lower? “The reasons are two-fold,” said Geoffrey Ramsey, eMarketer’s Statsmaster, noting that eMarketer’s approach is more objective and employs a stricter set of definitions for what is considered an active Net user.

“The report only considers people who regularly get online–real users–at
least once or twice a week, and at least for a period of one to two hours per
week,” said Ramsey. “We call it the dabbler factor.” The report estimates that
the dabbler factor–people who say that they have been “on the Net,” when in
reality their experience consisted of only one or two trials–overstates
figures of those online by about 10 to 15 percentage points.

According to Ramsey, when analyzing the size of the net market, eMarketer also
eliminates the drop-outs–people who try the Internet, and then, for
whatever reason, drop out. Based upon 1997 and 1998 net user figures, the
eOverview Report calculates a churn rate of 28 percent, meaning that over one-quarter of all U.S. users have dropped off the Net within the past 12 months.

Ramsey explained, “When you eliminate the Dabblers and Drop-Outs, suddenly the
Net doesn’t look quite so big. And yet,” he adds, “eMarketer predicts huge
growth on the horizon, both in the United States and other parts of the world
such as Western Europe, the Asia/Pacific Rim, Scandinavia and other regions.”

The eOverview Report takes an in-depth look at Internet market size and
growth, Net geography, user demographics, usage patterns, e-commerce, Internet
advertising and also discusses trends and practical information for online
business people.

The report predicts that the number of U.S. households and individuals will
continue to rapidly increase through the year 2002. “Never before has a new
medium ramped-up so quickly,” said Sam Alfstad, eMarketer’s Publisher. “By
year-end 1998/early 1999, roughly five years after the Net began evolving into
a viable commercial enterprise, the 50 millionth American will be online.”

Thirty-six first-time users–or one every 1.67 seconds–jump online every
minute of the day in America, according to the report. That breaks down to
52,000 users every day, 365,000 per week and 1.58 million new net users each

The report projects that, based on year-end figures, the number of Americans
using the Internet will grow 300 percent from a base of 28 million in 1997 and 47
million in 1998, to a total of 85 million by 2002.

eMarketer aggregates, analyzes and filters online business information turning
it into business intelligence.

For copies of the 1998 eOverview Report, contact: Geoffrey Ramsey,
Statsmaster, eMarketer, at 212-677-7137, fax 212-777-1172, or e-mail
[email protected] Pricing was not disclosed.

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