US Internet Audience Growth Slowing

The US Internet audience is growing significantly slower than
it used to, according to recent research from Cyber
Dialogue, forcing online marketers to focus more attention on
attracting visitors from competitive sites and to raise the
customer service standard necessary to keep existing

Cyber Dialogue based its conclusion on its analysis of online
audience growth since 1995. The findings reflect the gradual
maturing of the Internet, and are published in a report by
Cyber Dialogue entitled “Cybercitizen Sea Change: Declining
Growth in US Adults Online.”

“Cyber marketers can no longer count on a rising tide of new
users in the US to float all boats,” said Thomas Miller, VP of
Cyber Dialogue. “Some online marketers can feasibly target
global markets to expand their audience, but most must begin to shift resources to better
emphasize online customer retention, cross-selling, and persuading customers to
purchase more expensive products at their Web sites.”

According to Cyber Dialogue’s report, the decline in Internet audience growth is not
merely a seasonal aberration, but rather, the result of a series of constraints. One
persistent barrier is the so-called demographic “digital divide” between consumers who
can afford PCs and online access and those who cannot.

The research has also
identified two other important non-users segments, one of which is a solid pool of adults
who simply believe they have no need for the Internet. Roughly one-third of all US
adults fit this description.

More disturbing, according to Cyber Dialogue, is a growing segment of adults who have
tried the Internet and discontinued use. This segment totaled 27.7 million adults in
September of 1999, up from 9.4 million in early 1997. Only about a third of these past
users expect to go online again any time soon.

“The name of the game today is to increase your share of your online customers’ wallets,
not just your share of online eyeballs,” Miller said. “Effective customer relationship
management strategies are much more important today than in the past.”

The report concludes that an important implication of declining online audience growth is
increased importance attached to building online user segmentation modules capable of
predicting site visitors’ contribution to value, however value may be measured for a
particular Web site.

For one site, value may be defined by stimulating visitors to spend
more time on the site. For others, bigger spenders may actually prove to spend less time
on the site, according to the company’s research.

Cyber Dialogue’s findings come as part of its American Internet User Survey (AIUS),
which consists of random in-depth interviews with 1,000 Internet users and 1,000

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