Net performs to a limited public

Most UK advertisers now have an Internet site, and most of those that don’t are planning to. Why? Part of the reason is it can be cheap and easy to create a site: as little as 200 a year to buy an Internet address, create a site with a few pages, and launch it. Another typical reason is competitors are doing it.

For a large number of advertisers with sites, a simple presence is all that is required. Many small companies, and some big ones, have launched sites with a few pages of information, some addresses, contact names and basic pictures. Several of these sites haven’t been changed in months. Some have even been completely forgotten about. And actually it doesn’t really matter very much. To understand why, you have to step back and see the Internet in perspective.

The main reason a low-key approach may initially be sensible is the Net is still only reaching a small number of people and single advertiser sites generally only attract a few of these. At the moment there are about 750,000 connections to the Internet in the UK and, maybe, though nobody really knows, 2 million Internet users. Many “users” never go near the Internet. They just have it at work. There are also infrequent users who may look at it once a month out of curiosity. Then there are the real users.

The people who go online every day, surf around, download software, chat over their keyboards and maybe even buy things. These people are generally technically literate, young and male. What are they looking at?

Firstly, they’re looking at search engines – these are huge databases containing easily searchable details about most Internet sites and the pages within those sites, of which there are now over 60 million. The primary use of the Internet is searching. That’s because every day thousands more sites come online so you can never be sure you’re not missing out on a new useful site.

The sites with the largest number of users are the big US-based search engine companies like Yahoo!, Alta Vista and Infoseek. These sites typically attract a few million visits a day, with about 80 per cent of the visitors being American.

Unsurprisingly, such sites also attract the largest advertising revenues on the Net. Yahoo!, the most popular of them all, received about $20m (12.5m) in ad revenue last year.

The next most popular sites are computer company sites, particularly those associated with the Internet such as Netscape and Microsoft: sites where people can download free software and keep abreast of developments in the industry – remember most users are computer enthusiasts.

Netscape was the largest ad revenue earner on the Internet last year, attracting about $25m (16m). But, interestingly, the largest ad revenue earners are also the largest ad spenders. Microsoft, the biggest Net advertiser, spent about $10m (6m) in 1996. A total of about $200m (125m) was spent on Internet advertising last year, primarily in buying banners, with the great majority of it originating in the US.

The third group of sites that attracts a large number of visitors is the major Internet publisher sites such as Time Warner’s Pathfinder, CNN’s CNN Interactive, Ziff-Davis’ ZD Net, and ESPN’s Espnet. Importantly, these companies are already major mainstream media players. They are also predominantly American. In the UK, there are no Internet publisher sites that are capturing large audiences on a daily basis.

So why does it make sense to take a low-key approach for many advertisers? Use of the Net outside the main search, computing and publishing sites is fragmented, resulting in small numbers of visitors. For many companies, a few hundred visitors a month could be a sign of success. Unfortunately, however, many of those visitors may have accidentally stumbled across the site.

But even for the smallest companies, it is still a good idea to have a site. Given the low cost of entry, even a handful of new customers reached through the Internet is worthwhile.

Time-sensitive sites need to be continuously updated. But maintenance can be expensive. First-time visitors may be so put off by an out-of-date site that getting them back in the future is twice as hard. An Internet site is a continuous broadcasting message. If you want people to come back regularly to it you have to change it all the time, giving them new reasons to return.

As an advertising medium, the Internet still has a long way to go. Most importantly, it has to reach more people. The Internet must deliver really attractive entertainment, which probably requires video-on-demand and full-screen, full-motion, electronic games. But these things require a completely new low-cost technology. A technology that currently doesn’t exist.

While we wait for that holy grail to emerge, as it will, the Net will remain the world’s most powerful data retrieval system.