Global Trend

Reaching Next-Generation Consumers Where They Work and Buy

Contrary to what some alarmists were predicting when the Internet hit critical mass, the popularity of Web surfing in the workplace has not caused American business productivity to crumble. For many employers, a reasonable amount of personal Internet usage during the workday is accepted.

In fact, a survey of “Internet Usage in the Workplace” by Xylo Inc. found that 97 percent of employees say that it does not hurt their performance, and 70 percent claim that it helps them to be more productive. Another survey, by comScore Survey Research, found that one-third of 18-to-34-year-olds believe that using the Internet “allows employees to spend more time at the workplace because they do not have to leave to take care of as many personal needs.”

But now, there’s another reason why U.S. companies should try to understand this growing practice: People who use the Internet at the office just might be the prime target for advertising campaigns.

Consider the following statistics:

Twenty-five percent of employees report that they are addicted or compulsive Internet users at work, and the average worker spends 8.3 hours per week visiting Web sites for personal reasons, according to a Harris Interactive survey reported at Bankrate.com.

Sixty-seven percent of employees visit Internet news sites, 37 percent log on to shopping or auction sites like eBay, according to the Harris Interactive survey. And while only 2 percent confess to going to gambling and pornography sites from their employers’ computers, it’s likely that the numbers are much higher, based on the huge profitability of such sites.

About 53 million people went online for non-work-related reasons while they were at work in 2001, according to a study by market research firms Millward Brown IntelliQuest and Lightspeed Research. That figure is probably on the low side, because the study looked only at surfing Web sites; it did not count the millions of employees who use their computers at work to send personal e-mail.

Internet users in the workplace get most of their media exposure from the Web, at 34 percent, rather than from TV, at 30 percent, according to the same study, which was reported in American Demographics.

The workplace Web surfers are attractive to advertisers because of their demographic profile: 70 percent of them have at least a Bachelor’s degree, compared to 50 percent of at-home users; and 45 percent of at-work users have annual household incomes of more than $75,000, versus 22 percent of people who use the Net at home. Also, 44 percent of them fall into the key age range of 18-34, versus 26 percent of Internet users at home.

Most appealing of all to advertisers, the at-work Internet users place a strong emphasis on the Web for information. Fifty-seven percent would rather learn about new products on the Internet than via any other medium. Significantly, 43 percent say that the advertising on the Web is rich in information, versus a mere 18 percent who feel the same way about TV commercials. Internet advertising also helps 42 percent of at-work users decide what to buy, which represents a greater impact than TV at 35 percent, magazines at 33 percent, newspapers at 27 percent, or radio at 14 percent.

Moreover, they are more likely to visit retail shopping sites than at-home users, at 45 percent to 34 percent; more likely to log onto financial services sites, at 44 percent to 34 percent; and more likely to click on travel-related sites, at 33 percent to 23 percent.

Another study found that 18- to 34-year-olds who use the Internet at work consider such access a right, not a privilege. They contend that it allows them to take care of personal tasks more efficiently. They are also more likely than older employees to find various Internet activities at work acceptable, such as reading news, visiting dating sites, booking travel, downloading music, or shopping for products.

American marketers are responding to this attitude shift by focusing on reaching customers where they work, rather than where they live. In 2003, Internet advertising revenues hit $7.3 billion, according to the Interactive Advertising Bureau and PricewaterhouseCoopers Internet Ad Revenue Report.

In the first quarter of 2004, the upward spiral in ad revenues continued, reaching $2.3 billion. This is a 40 percent increase over the first quarter of the previous year.

It’s not that companies are increasing their advertising budgets by 40 percent. Instead, they’re cutting back on TV ad campaigns and pumping up their spending for online ads. Forty-five percent of firms are reallocating their ad dollars away from TV, and two-thirds are reallocating them toward the Internet, according to a survey by the Association of National Advertisers.

Not only are consumers more receptive to online ads, they are also more easily targeted by Internet advertisers. Consider the perspective of Tom Lynch, the head of online marketing for the financial services firm ING, which spent about $9 million on Internet ads in 2003. “If (viewers) are watching Friends, they’re really a mass blob of people,” he explains. “But online, it’s very different. They may be going to the Jennifer Aniston site and they may be registered for it and we know exactly who they are.”

Looking ahead, we foresee three developments emerging from this important trend:

First, Internet advertisers will have to overcome the challenge posed by employers who block their employees’ access to various types of Web sites. Currently, 78 percent of companies block access to pornography sites, which is to be expected, but 20 percent keep employees from visiting shopping sites, and 4 percent block news sites.

Second, advertisers will continually increase their ability to reach customers at the precise time when they are most susceptible to their messages. For example, McDonald’s has traditionally advertised Big Macs and other lunch-time menu items in the morning, hoping that customers would hear the ad on the way to work and remember the jingle at noon. With the help of a research firm called Marketing Evolution, McDonald’s found that it could break down the effectiveness of an ad based on when people received it. By tempting potential customers with banner ads when they were using the Internet at their offices just before lunchtime, McDonald’s marketing made a bigger impact on purchasing decisions.

Third, by 2012, advertising to workplace Web surfers will become the single most important marketing approach that companies will use. In that year, spending on advertising campaigns aimed at workplace Web surfers will multiply because the tail end of the generation that grew up with personal computers ? Generation Y ? will reach the age of 18. Assuming that the usual percentage of them will end up in the labor force at that age, nearly 20 million 18- to 34-year-olds will be going online from the workplace. As American Demographics points out, this market is equal to the entire population of Australia ? and advertisers simply won’t be able to ignore them.

References List :
1. To access the report "Internet Addicts in the Workplace Go Unnoticed," visit the Bankrate website at:www.bankrate.com/brm/news/biz/thumb/ 20021115a.asp2. American Demographics, July 1, 2004, "Move Over Prime-Time!" by Noah Rubin Brier. ⓒ Copyright 2004 by Primedia Business Magazines & Media. All rights reserved.3. www.bankrate.com/brm/news/biz/thumb/ 20021115a.asp4. American Demographics, May 2002, "Surfing 9-to-5: Personal Internet Usage at Work," by Katarzyna Dawidowska. ⓒ Copyright 2002 by Primedia Business Magazines & Media. All rights reserved.5. ibid.6. American Demographics, July 1, 2004, "Move Over Prime-Time!" by Noah Rubin Brier. ⓒ Copyright 2004 by Primedia Business Magazines & Media. All rights reserved.