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 customers.

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 non-users.