North America Online:

Transcription

1 North America Online: Demographics & February

2 This report is the property of emarketer, Inc. and is protected under both the United States Copyright Act and by contract. Section 106 of the Copyright Act gives copyright owners the exclusive rights of reproduction, adaptation, publication, performance and display of protected works. Accordingly, any use, copying, distribution, modification, or republishing of this report beyond that expressly permitted by your license agreement is prohibited. Violations of the Copyright Act can be both civilly and criminally prosecuted and emarketer will take all steps necessary to protect its rights under both the Copyright Act and your contract. If you are outside of the United States: copyrighted United States works, including the attached report, are protected under international treaties. Additionally, by contract, you have agreed to be bound by United States law.

3 Table of Contents 3 7 The emarketer Difference 8 The Benefits of emarketer s Aggregation Approach 9 Benchmarking and Projections 9 I 11 II 13 A. Worldwide 16 B. in the US 18 Comparative Estimates: in the US 22 III 23 IV 27 A. Gender 32 B. Age 38 Kids & Teens 43 College Students 49 Baby Boomers (b ) 54 Seniors Online 58 C. Income 62 D. Education 67 E. Race & Ethnic Origin 71 Market Size 71 Internet 78 Online Shopping 80 F. Region 82 G. Location Work, Home & School 85 At-Work 88 School Access 94 3

4 V 95 A. Time Online 96 B. Activities 102 Most Popular Web Properties 106 Online Shopping 108 VI 109 Broadband Market Size VII Devices: PC, TV 133 A. PCs 136 By Income 138 By Gender 139 By Age 140 By Race/Ethnic Origin 141 By Education 142 B. TV 143 Game Consoles 144 C. Mobile Devices 145 Market Size 145 Demographics & 150 Age 154 Gender 158 Income 158 Race 159 Mobile Internet 160 VIII 169 IX 173 4

5 A. 174 Comparative Estimates: in Canada 175 Online Households B. PC Penetration 183 C. 185 Gender 185 Age 187 Income 190 Education 193 Family Type 194 Geographic Region 196 Location Work, Home, School 202 D. 204 Time Online 204 Activities Online 206 E. Online shopping 210 F. Mobile and

6 February 2003 Welcome to emarketer Dear Reader: Ben Macklin Senior Analyst, emarketer emarketer, inc. 821 Broadway New York, NY T: F: North America Online 2003 is an atlas of who is online in the United States and Canada. The report details the number of internet users in the region, their methods of internet access, the demographic makeup and usage patterns of these internet users and the important trends in the online population which will greatly assist marketers, retailers and service providers in better understanding and targeting this audience. Key metrics covered in this report include: Internet users in the US and Canada and projections for the future Online households in North America Broadband vs. dial-up internet users At-work, at-home and at-university internet users Internet users by race, gender, income, education and age PC penetration Mobile internet users In addition to the presentation of data from emarketer and a wide variety of other sources, the report contains original analysis of key demographic segments such as: Kids and teens College students Baby boomers Seniors Hispanic and African American internet users At-work internet users Broadband users And much more. If you have any questions or comments concerning emarketer or any of the material in this report, please call, fax or us. Ben Macklin Senior Analyst Written by Ben Macklin Also contributing to this report: Yael Marmon, director of research Tracy Tang, researcher Brian Aningalan, researcher David Berkowitz, senior editor Allison Smith, senior editor Kwanza Osajyefo Johnson, data entry associate Dana Hill, production artist Reuse of information in this document, without prior authorization, is prohibited. If you would like to license this report for your organization, please contact David Iankelevich at diankelevich@emarketer.com, or

7 7 The emarketer Difference 8 The Benefits of emarketer s Aggregation Approach 9 Benchmarking and Projections 9 I 11 II 13 III 23 IV 27 V 95 VI 109 VII Devices: PC, TV 133 VIII 169 IX

8 emarketer s approach to market research is founded on a philosophy of aggregating data from as many different sources as possible. Why? Because there is no such thing as a perfect research study and no single research source can have all the answers. Moreover, a careful evaluation and weighting of multiple sources will inevitably yield a more accurate picture than any single source could possibly provide. The emarketer Difference emarketer does not conduct primary research. Neither a research firm nor a consultancy, emarketer has no testing technique to defend, no research bias and no client contracts to protect. emarketer prepares each market report using a four-step process of aggregating, filtering, organizing and analyzing data from leading research sources worldwide. Aggregate Analyze Filter Organize 2001 emarketer, Inc. Using the internet and accessing a library of electronically-filed research reports and studies, the emarketer research team first aggregates publicly available e-business data from hundreds of global research and consultancy firms. This comparative source information is then filtered and organized into tables, charts and graphs. Finally, emarketer analysts provide concise and insightful analysis of the facts and figures along with their own estimates and projections. As a result, each set of findings reflects the collected wisdom of numerous research firms and industry analysts. I think emarketer reports are extremely useful and set the highest standards for high quality, objective compilation of often wildly disparate sources of data. I rely on emarketer s research reports as a solid and trusted source. Professor Donna L. Hoffman, Co-Director, elab, Vanderbilt University 8

9 The Benefits of emarketer s Aggregation Approach Objective: information is more objective than that provided by any single research source Comprehensive: gathered from the world s leading research firms, consultancies and news organizations Authoritative: quoted in leading news publications, academic studies and government reports All in one place: easy to locate, evaluate and compare Readily accessible: so you can make quick, better-informed business decisions Above the hype: accurate projections that business people can use with confidence Time saving: there s no faster way to find internet and e-business stats, online or off Money saving: more information, for less, than any other source in the world Benchmarking and Projections Until recently, anyone trying to determine which researcher was most accurate in predicting the future of any particular aspect of the internet did not have a definitive source with which to do this. For instance, over 10 firms predicted e-commerce revenues for the fourth quarter 1998 online holiday shopping season, and yet no single source could be identified after the fact as having the correct number. In the Spring of 1999, however, the US Commerce Department finally began measuring e-commerce B2C activity so business people and others could have a benchmark with which they could compare and evaluate projections. emarketer has adapted its methodology to recognize that certain government and other respected, impartial sources are beginning to provide reliable numbers that can be consistently tracked over time. Most of these established sources, however, only measure past results; typically, they do not make predictions. 9

10 Today, emarketer formulates its Essential E-Business Numbers by first identifying the most established, reputable source for a given sector being measured and then adopting that organization s figures as benchmarks for the historical/current period. For instance, emarketer s US internet user figures will be based on a combination of the most recent data from the US Census Bureau and the International Telecommunication Union. Using this data as the benchmark for 2000 and 2001, emarketer will make projections for subsequent years based on the following factors: a comparative analysis of user growth rates compiled from other research firms additional benchmark data from internet rating firms, e.g., Nielsen//NetRatings, comscore Media Metrix, which use panels to measure internet user activity on a weekly and monthly basis an analysis of broader economic, cultural and technological trends in the US Similarly, US e-commerce revenues are being benchmarked using historical data from the US Department of Commerce, and broadband household and penetration rate forecasts are being built off baseline data from the Organization for Economic Cooperation and Development (OECD). Through this benchmarking process, emarketer will be holding itself and our projections accountable. When I need the latest trends and stats on e-business, I turn to emarketer. emarketer cuts through the hype and turns an overabundance of data into concise information that is sound and dependable. Mark Selleck, Business Unit Executive, DISU e-business Solutions, IBM 10

11 7 I I 11 II 13 III 23 IV 27 V 95 VI 109 VII Devices: PC, TV 133 VIII 169 IX

12 Who is online now in North America and how will the mix of users shift in the future? Who is not online and why? What is the demographic profile of the North American internet user? How many individuals and households are online now and in the future? What are the important trends to look out for? Where are users accessing the internet from? Why are they accessing the internet? What devices are being used to access the internet? Who is using broadband, and how many users are there? What are the most popular activities conducted by internet users? What segments of the online population are growing strongly? 12

13 7 I 11 II II 13 A. Worldwide 16 B. in the US 18 III 23 IV 27 V 95 VI 109 VII Devices: PC, TV 133 VIII 169 IX

14 Before we can measure or forecast the number of internet users, we first have to answer a basic question: What is an internet user? Research firms, analysts, consultancies and other trusted sources disagree on how to answer this seemingly simple question. Part of the meaning of an internet user has to do with how frequently the person goes online. emarketer identifies four general levels of internet usage: Four Levels of Internet Anyone with internet "access " "Ever used" or Currently use" the internet Accessed the internet in the "last 30 days" Accessed the internet in the "last 7 days" or "weekly access" Source: emarketer, emarketer, Inc. 14

15 The Department of Commerce, in its report A Nation Online September, 2001 examined internet use from a number of perspectives. For example, 43.6% of the population were using the internet at home in September 2001, yet 56.7% of the population had internet access at home. This clearly illustrates that different definitions translate to different results. Household and Internet Use in the US, December 1998, August 2000 & September % 43.6% 41.5% 50.5% 32.7% 44.4% 53.9% 30.0% 46.7% 56.7% 22.3% 22.6% 13 Persons using home access Household internet subscribership Person using internet anywhere Persons with internet access at home Source: US Department of Commerce, February emarketer, Inc. For the purposes of examining and comparing internet users on a global basis, emarketer adopts International Telecommunication Union (ITU) estimates as its benchmark. The ITU subscribes to a definition of an internet user as someone aged 2 years old and above, who went online in the past 30 days. The Department of Commerce, in contrast, defines internet users as those 3 years or older who currently use the internet. 15

16 A. Worldwide emarketer estimates there were 566 million internet users worldwide in 2002, rising to 725 million by North American internet users (which includes Canada and the US) will number nearly 200 million in 2004, up from 168 million at the end of Worldwide, by Region, (in millions) North America** 2000* * CAGR % Europe % Asia-Pacific % Latin America % Africa % Total Worldwide % Note: *emarketer's year 2000 and 2001 baselines are from the International Telecommunication Union's estimate of internet users aged 2 years and older, who have accessed the internet within the previous 30 days; **North America includes the US and Canada. Mexico is included in Latin America Source: emarketer, May emarketer, Inc. The Asia-Pacific region contains the largest share of worldwide internet users at nearly one-third. Europe and North America follow closely behind with Latin America making up a growing worldwide share. Worldwide, by Region, (as a % of total internet users worldwide) 2000* 2001* North America** 35.5% 31.3% 29.6% 28.4% 27.1% Europe 28.1% 29.0% 31.1% 31.0% 30.5% Asia-Pacific 30.1% 33.1% 32.1% 32.4% 32.5% Latin America 5.0% 5.3% 5.9% 6.8% 8.4% Africa 1.2% 1.3% 1.4% 1.5% 1.5% Note: *emarketer's year 2000 and 2001 baselines are from the International Telecommunication Union's estimate of internet users aged 2 years and older, who have accessed the internet within the previous 30 days; **North America includes the US and Canada. Mexico is included in Latin America Source: emarketer, May emarketer, Inc. 16

17 Compared to other countries within the G-7 group of nations, Japan is a distant second to the US in terms of sheer numbers of internet users at the end of 2002, with approximately 61 million compared to the US at million. Germany and the UK follow Japan with 37 million and 29 million internet users, respectively. emarketer expects France to be one of the fastest growing internet markets within the G-7 in the next few years due to its slow internet adoption in the 1990s. in G-7 Countries, (in millions) 2000* 2001* CAGR Canada % France % Germany % Italy % Japan % UK % US % Note: *emarketer's year 2000 and 2001 baselines are from the International Telecommunication Union's estimate of internet users aged 2 years and older, who have accessed the internet within the previous 30 days Source: emarketer, May emarketer, Inc. At the end of 2002, the US had the highest internet penetration rate of any country in the G-7 at nearly 55% of its population, followed by Japan, the UK and Canada, which are approaching 50% penetration. By 2004, emarketer expects Canada to have the highest internet penetration in the G-7 at nearly 66%, followed by the US at 61% and Japan at 55%. in G-7 Countries, (as a % of each country s total population) 2000* 2001* Canada 40.6% 42.7% 46.5% 55.3% 65.8% France 14.3% 26.4% 35.5% 41.7% 44.4% Germany 29.0% 36.1% 44.1% 48.8% 50.8% Italy 22.9% 27.7% 33.3% 36.5% 37.9% Japan 29.4% 45.7% 47.9% 51.2% 54.7% UK 30.2% 40.2% 47.8% 52.4% 54.3% US 45.0% 51.4% 54.5% 57.2% 61.3% Note: *emarketer's year 2000 and 2001 baselines are from the International Telecommunication Union's estimate of internet users aged 2 years and older, who have accessed the internet within the previous 30 days Source: emarketer, May emarketer, Inc. 17

18 B. in the US Using the ITU estimates as a benchmark for 2000 and 2001, emarketer forecasts million internet users in the US in 2004, up from million in The number of internet users in the US continues to grow, but at an ever decreasing growth rate. in the US, (in millions) 2000* * Note: *emarketer's year 2000 and 2001 baselines are from the International Telecommunication Union's estimate of internet users aged 2 years and older, who have accessed the internet within the previous 30 days Source: emarketer, May emarketer, Inc. comscore Network s panel-based measurement shows a steady growth of internet users in the first nine months of 2002, from 131 million in January to 136 million in September. in the US, January-September 2002 (in millions) January March May July September Note: inlcudes users from home, work and university Source: comscore Networks Inc., emarketer, Inc. 18

19 Nielsen//NetRatings data shows that between January 2001 and August 2002 internet users have grown between 2% and 5% at home, but at work, internet user growth has been between 5% and 18%. Year-over-Year Growth of US Internet User Populations at Work and at Home, January 2001-September 2002 January 2001-January % 3% February 2001-February % 6% March 2001-March % 5% April 2001-April % 14% May 2001-May % 18% June 2001-June % 14% July 2001-July % 11% August 2001-August % 17% September 2001-September % 24% Internet growth at work Internet growth at home Note: Figures are based on the year-over-year growth rates for number of internet users who get online at least once during the month measured Source: Nielsen//NetRatings, emarketer, Inc. 19

20 emarketer estimates that million people are online, but there is a certain percentage of this population who access the internet more regularly than others. The Conference Board, in conjunction with other research firms, reported that over 37% of its respondents used the internet daily. Frequency of Internet in the US, Q1-Q (as a % of respondents) Q Q Q Q Daily 35.7% 35.6% 35.3% 37.4% Several times a week 14.8% 15.2% 14.9% 14.0% About once a week 5.1% 4.9% 5.4% 4.3% At least monthly 5.2% 5.1% 5.2% 5.2% Less than monthly 6.3% 6.4% 6.2% 5.6% I have never been online 32.9% 32.8% 33.1% 33.6% Source: The Conference Board, NFO WorldGroup, Forrester Research, January emarketer, Inc. Extrapolating from The Conference Board findings, emarketer estimates that 80.5 million US residents access the internet daily, an additional 34 million access it several times per week and about 12 million access the internet monthly or one time per week. Frequency of Internet Use in the US, 2002 (in millions and as a % of internet users) # of internet users % of internet users Daily % Several times per week % About one time per week % Monthly % Less than once per month % Note: Based on million users at the end of 2002 Source: emarketer, extrapolated from The Conference Board, NFO WorldGroup, Forrester Research study, January emarketer, Inc. 20

21 comscore MediaMetrix measures both at-home, at-work and at-university internet users in the US. Its data, as of October 2002, shows million internet users across all locations and approximately 50 million at-work internet users, compared to 124 million at-home users. in the US, by Access Location, October 2002 (in millions) University 9.5 Work 47.9 Home Total* Note: *total unduplicated home/work users plus university users Source: comscore Media Metrix, November emarketer, Inc. 21

22 Comparative Estimates: in the US Different definitions of an internet user account for the disparity in projections from a the variety of research firms listed below. Comparative Estimates: in the US, (in millions) Computer Industry Almanac (CIA), March 2002 comscore Networks Inc., November 2002 (1) Datamonitor, March 2002 emarketer, May 2002 (2) GartnerG2, August 2001 (3) Harris Poll, April 2002 (4) International Data Corporation (IDC), April 2001 (5) Ipsos-Reid, July 2001 (6) Jupiter Research, October 2002 Kagan World Media, December 2001 Mediamark Research Inc. (MRI), April 2002 (7) Morgan Stanley, May 2002 Netsizer: Telcordia Technologies, October 2001 NetValue, January 2002 (5) Nielsen//Netratings, May 2002, August 2002 (8) Pew Internet & American Life Project, March 2002 (9) Strategis Group, 2001 (10) Note: (1) used internet from home, work or school; (2) emarketer's year 2000 and 2001 baselines are from the International Telecommunication Union's estimate of internet users based on US Department of Commerce data for internet users aged 3 years and older who "currently" use the internet; (3) internet users aged 18 and older; (4) number of people aged 18 and older using internet from all locations; (5) home users only; (6) internet users aged 18 and older online within the past 30 days; (7) internet users aged 18 and older using the internet within the past 30 days from home, work or other location; (8) number of people who have logged in and used the internet from home or work during the past month; (9) number of people aged 18 and older who have "ever" used the internet from all locations; (10) number of people aged 18 and older who have "ever" used the internet Source: emarketer, May 2002; various, as noted, 2001 & emarketer, Inc. 22

23 7 I 11 II 13 III III 23 IV 27 V 95 VI 109 VII Devices: PC, TV 133 VIII 169 IX

24 The US Census Bureau finds that, as of 2000, there were million households in the US. This number is likely to rise to over 111 million by 2004 based on current growth rates. emarketer forecasts over 73 million households will be online in 2004, up from 63.5 million at the end of Total and Online Households in the US, (in millions) Total online households Total households* Note: *Total households in 2000 is million as recorded by the US Census Bureau. Following years are emaketer estimates Source: emarketer, January emarketer, Inc. Comparative estimates from PricewaterhouseCoopers, Jupiter and Forrester all show a steady growth in internet households over the coming years. emarketer s estimates are slightly more conservative than Jupiter s or Forrester s, but more optimistic than PricewaterhouseCoopers. Comparative Estimates: Online Households in the US, (in millions) emarketer, December Forrester Research, May Jupiter Research, October PricewaterhouseCoopers (PwC)/Wilkofsky Gruen Associates, May Source: emarketer, December 2002; various, as noted, emarketer, Inc. 24

25 Jupiter Research forecasts continued growth in household internet access over the next five years, so by 2007, the research firm predicts 90 million online households in the US, which equates to 78% of all households. Online Households in the US, (in millions and as a % of US households) (58%) (62%) (66%) (69%) (73%) (76%) (78%) Source: Jupiter Research, October emarketer, Inc. By 2004, approximately two-thirds of all US households will have internet access, according to the leading research firms. Online Household Penetration in the US, (as a % of total households) % % % % % Source: emarketer, January emarketer, Inc. A survey of 7,000 US households by The Conference Board, NFO Worldgroup and Forrester Research shows that 61% of all households go online at least once a month in 2002, compared to 59% a year earlier. US that Go Online At Least Once a Month, 2001 & 2002 (as a % of respondents) % % Source: The Conference Board, NFO WorldGroup, Forrester Research, October emarketer, Inc. 25

26 In 2001 the number of online households surpassed the number of offline households for the first time. By 2004, there will be nearly twice as many online households as there are not online. Online Households in the US, 1998, 2000, 2002 & 2004 (in millions) Online households 27.2 Households not online 76.5 Households not online 56.5 Online households (1) 2000 Household not online 45.4 Households not online 38.0 Online households 63.5 Online households Source: emarketer, January 2003; (1) Department of Commerce, emarketer, Inc. 26

27 7 I 11 II 13 III 23 IV IV 27 A. Gender 32 B. Age 38 C. Income 62 D. Education 67 E. Race & Ethnic Origin 71 F. Region 82 G. Location Work, Home & School 85 V 95 VI 109 VII Devices: PC, TV 133 VIII 169 IX

28 Internet user growth continues to outpace population growth by a considerable margin. Census data indicates that the total population in the US at the end of 2002 was approximately 290 million, up from 281 million in 2000, a growth of less than 2%. In contrast the compound annual growth of the internet population at the same time was 11%. Total Population and in the US, (in millions) Total internet users (1) Total population (2) Note: Total population CAGR=1.5%; Internet users CAGR=11.0% Source: (1) emarketer, January 2003; (2) US Census Bureau, emarketer, Inc. The Department of Commerce, in its most recent release on online demographics, paints a picture of the US internet user in September While the demographic characteristics of an average US internet user closely resembles that of someone in the general population, income, education, race and age continue to be important factors in the makeup of the online population. For example: 60% of white and Asian Americans were online in September 2001 compared to only 40% of blacks and 32% of Hispanics. Families with incomes above $35,000 per year are twice as likely to be online than families with incomes below $25,000 per year US residents with a Bachelor s degree or better are twice as likely to be online compared to those with only high school education. Internet penetration across all age groups is over 60%, but the 50+ age group is below 40%. 28

29 Demographic Profile of US Internet User, September 2001 Total internet users Gender Male Female Race/origin White Black Asian American and Pacific Islander Hispanic Employment status Employed (2) Not employed (2) Family income <$15,000 $15,000-$24,999 $25,000-$34,999 $35,000-$49,999 $50,000-$74,999 $75,000 and above Educational Attainment Less than high school (1) High school diploma (1) Some college (1) Bachelors degree(1) Beyond Bachelors degree (1) Age group Age 3-8 Age 9-17 Age Age Age 50+ Geographic location Rural Urban Household type Married children w/children under 18 yrs Male householder w/children under 18 yrs Number (millions) % 51.3% 78.4% 9.2% 4.5% 7.1% 75.6% 24.4% 6.3% 7.1% 10.1% 16.5% 24.2% 35.7% 3.8% 24.5% 30.5% 26.6% 14.6% 4.6% 17.9% 12.4% 45.6% 19.5% 25.0% 75.0% 45.3% 2.4% Distribution Penetration 53.9% 53.8% 59.9% 39.8% 60.4% 31.6% 65.4% 36.9% 25.0% 33.4% 44.1% 57.1% 67.3% 78.9% 12.8% 39.8% 62.4% 80.8% 83.7% 27.9% 68.6% 65.0% 63.9% 37.1% 52.9% 54.2% 62.0% 45.8% continued on page 30 29

30 Female householder w/children under Family household without children under Non-family household 20.1 Note: (1) Age 25 and older; (2) Age 16 and Older Source: US Department of Commerce, February % 29.0% 14.1% 45.3% 50.5% 47.6% emarketer, Inc. The following chart shows the significant increase in internet use, across all demographic segments, between August 2000 and September Some of fastest growing demographic segments have been Asian American households, the age group 3 to 17 and those with incomes between $35,000 and $49,000 per year. Internet Penetration in the US within Demographic Segment, August 2000 & September 2001 August 2000 September 2001 Gender Male Female Race/origin White Black Asian American and Pacific Islander Hispanic Employment status Employed (2) Not employed (2) Family income <$15,000 $15,000-$24,999 $25,000-$34,999 $35,000-$49,000 $50,000-$74,999 $75,000 and above Educational attainment < High school (1) High school diploma/ged (1) Some college (1) Bachelors degree (1) Beyond Bachelors degree (1) Age group Age % 44.2% 50.3% 29.3% 49.4% 23.7% 56.6% 28.9% 18.9% 25.5% 35.7% 46.5% 57.7% 70.1% 8.8% 30.6% 54.2% 72.5% 78.5% 15.3% 53.9% 53.8% 59.9% 39.8% 60.4% 31.6% 65.4% 36.9% 25.0% 33.4% 44.1% 57.1% 67.3% 78.9% 12.8% 39.8% 62.4% 80.8% 83.7% 27.9% continued on page 31 30

31 Age 9-17 Age % 56.8% 68.6% 65.0% Age Male Female 55.4% 54.1% 56.5% 63.9% 61.8% 66.0% Age 50+ Male Female 29.6% 32.7% 26.9% 37.1% 39.9% 34.6% Geographic location Rural 42.5% 52.9% Urban 45.0% 54.2% Urban not central city 47.9% 57.4% Urban central city 40.6% 49.1% Household type Married Children w/children under 18 years 50.6% 62.0% Male householder w/children under 18 years 34.5% 45.8% Female householder w/children under % 45.3% Family Household without children under % 50.5% Non-family household 42.7% Note: (1) Age 25 and older; (2) Age 16 and Older Source: US Department of Commerce, February % emarketer, Inc. 31

32 A. Gender In most emerging internet markets around the world, male users far outweigh female users. Wealthy, young males are the classic early adopters of technology, and this was no different in the US internet market in days past. Widespread adoption of the internet, however, has seen women reach parity with men online. Census figures indicate that 49% of the total US population is male and 51% female. This ratio very closely reflects the online population with emarketer estimating that of the million internet users in 2002, 80.7 million were female, and 74.9 were male. in the US, by Gender, 2002 (in millions and as a % of total internet users) Male 74.9 (49.0%) Female 80.7 (51.0%) Note: Total internet users=152.8 million Source: emarketer, January emarketer, Inc. comscore Media Metrix s panel measurement service reports that in December 2002, there were million internet users. Females made up 50.5% and males, 49.5%. in the US, by Gender, December 2002 (in millions and as a % of internet users) Female 73.1 (50.5%) Male 71.6 (49.5%) Source: comscore Media Metrix, Janaury emarketer, Inc. 32

33 Of those 18 years or older ( adults ), the ratio of men to women is even further skewed toward women, with 52% of the adult population female compared to 48% male. Total Population and in the US, by Gender, 2002 (in millions) Total population (1) Total internet users (2) Adult population (18+) (1) Adult internet users (18+) (2) Male Female Total Source: (1) US Census Bureau, 2002; (2) emarketer, January emarketer, Inc. Data from Harris Interactive, likewise, shows the adult online population mirroring very closely the total adult population. Distribution of Adult vs. Adults in the US, by Gender, February-March 2002 Male Female 49% 48% 51% 52% Adults online All adults Note: Base=all adults Source: Harris Interactive, April emarketer, Inc. 33

34 Data from Taylor Nelson Sofres indicates that 61% of all US males are online compared to 62% of all females. This is significantly higher than emarketer s own analysis, which shows 54.6% of all females accessed the internet within the last 30 days compared to 52.7% of males. in the US, by Gender, 2002 (as a % of each gender) Male 61% Female 62% Source: Taylor Nelson Sofres (TNS), June emarketer, Inc. The UCLA Internet project has been surveying the internet sector for three years, and in contrast to many other surveys, it has found more males online than females with very little change over the three year survey. in the US, by Gender, (as a % of respondents in each gender) % 66.0% 74.3% 70.8% 73.1% 69.0% Male Female Source: UCLA Center for Communication Policy, February emarketer, Inc. 34

35 A detailed gender analysis by Mediamark Research further reinforces the fact that there is little or no disparity within the online population when it comes to gender. What the research does show, however, is that slightly more men access the internet from work than do women. and General Population in the US, by Gender, 2002 Total adults 47.9% 52.1% Any online/internet usage* 49.1% 50.9% Have internet access anywhere 48.7% 51.3% Have home internet access 50.2% 49.8% Have work internet access 50.5% 49.5% Used internet in past 30 days from anywhere 49.0% 51.0% Used internet in past 30 days at home 49.7% 50.3% Used internet in past 30 days at work 51.0% 49.0% Male Female Note: *Any online/internet usage is a net of those who looked at or used the internet or any online service at home, work or other Source: Mediamark Research Inc. (MRI), May emarketer, Inc. 35

36 UCLA s 2001 survey shows that it is not until the age of 55, when a significantly greater percentage of senior men are online compared to women. in the US, by Gender and Age, 2001 (as a % of respondents) < % 88.1% 98.3% 99.0% 81.3% 80.7% 80.0% 80.9% 78.4% 83.5% 76.2% 76.8% % 66.7% % 29.2% Male Female Source: UCLA Center For Communication Policy, November emarketer, Inc. 36

37 What is emerging as an important demographic characteristic, and one, which marketers and retailers should take note of, is that an increasingly larger share of online shoppers are women than men. Pew Internet & American Life Project s annual internet survey shows that in 2000 more men than women purchased online, but a year later the trend was reversed with 52% of online purchasers being women. This shouldn t come as a great surprise, considering that women control up to 80% of all householdpurchasing decisions, they shop offline more than men, and there are now more women online than men. Online Shoppers Who Have Purchased Online, by Gender, 2000 & 2001 (as a % of online shoppers) % 48% 48% 52% Male Female Source: Pew Internet & American Life Project, January emarketer, Inc. 37

38 B. Age Census data shows that nearly half of the US population (44%) is between the ages of 25 and 54. The US population is aging and as the internet penetrates every age group, the internet population will increasingly resemble the wider aging population. US Population, by Age, 2000 (in millions and as a % of total population) < (6.8%) (7.3%) (7.3%) (7.2%) (6.7%) (14.2%) (16.0%) (13.4%) (4.8%) (3.8%) (6.5%) (5.9%) Source: US Census Bureau, emarketer, Inc. emarketer s break-down of internet users by age shows that those between the ages of 35 and 54 make up over one-third of all internet users, closely followed by 18 to 34 year olds at approximately 30%. While this breakdown largely reflects the general population breakdown, it is users below 18 years and above 55 that are growing the most quickly. in the US, by Age, (in millions) Total Note: based on internet access within the last 30 days; numbers may not add up to total due to rounding Source: emarketer, January emarketer, Inc. 38

39 comscore Media Metrix s recent data shows that nearly three-quarters of all US internet users are between 18 and 54. Those below 18 make up 14.9% of the internet user population, while those over 55 make up 12.7% in the US, by Age, December 2002 (in millions and as a % of internet users) (6.3%) (8.6%) (16.6%) (17.7%) (20.1%) (18.1%) (8.0%) (4.7%) Source: comscore Media Metrix, January emarketer, Inc. 39

40 UCLA s recent release shows that since 2000 the internet penetration within each age group has grown. The 12 to 15 age group as well as the age groups over 55 have grown particularly strongly over the last three years. in the US, by Age, (as a % of respondents in each age group) % 91% 97% 91% 99% 97% 82% 81% 87% 81% 81% 82% % 81% 83% % 76% 72% % 59% 64% >65 29% 31% 34% Source: UCLA Center for Communication Policy, February emarketer, Inc. 40

41 MediaMark s historical data reveals that adults over 55 years of age made up 14% of the online adult population in 2001, compared to only 8% in This coincides with emarketer s analysis, which predicts a growing percentage of those 55+ making up the online population in the years to come. Distribution of Adult in the US, by Age, (as a % of adults online) % 46% 46% % 43% 49% % 41% 49% % 14% 40% 39% 48% 47% Source: Mediamark Research Inc. (MRI), emarketer, Inc. 41

42 Their more recent study shows that 38.6% of 18 to 34 year olds accessed the internet in the past 30 days, compared to 46% of 35 to 54 year olds and 15.4% of those over 55. and General Population in the US, by Age, Total adults 31.7% 40.5% 27.8% Any online/ 38.1% 46.0% 15.8% internet usage* Have internet access from anywhere 34.8% 44.3% 20.9% Have home internet access 33.2% 47.6% 19.2% Have work internet access 34.3% 54.2% 11.5% Used internet in past 30 days from anywhere 38.6% 46.0% 15.4% Used internet in past 30 days at home 35.8% 47.7% 16.5% Used internet in past 30 days at work 34.3% 54.9% 10.8% Note: *Any online/internet usage is a net of those who looked at or used the internet or any online service at home, work or other Source: Mediamark Research Inc. (MRI), May emarketer, Inc. Data from Jupiter Research also shows that significant growth will occur in internet users over 50 years of age, and particularly those over 65. Internet users over 65 will almost triple between 2002 and 2007, according to Jupiter. in the US, by Age, 2002 & 2007 (in millions and CAGR) CAGR % % % Source: Jupiter Research, January emarketer, Inc. 42

43 The Department of Commerce in 2001 reported there were million internet users in the US. The data indicates that the 9 to 17 year-old age group had the highest internet use penetration above all others at 68.6%, followed by 17 to 24 year olds at 65%. in the US, by Age, September 2001 (and as a % of total population) Age (27.9%) Age (68.6%) Age (65.0%) Age (63.9%) Age (37.1%) Source: US Department of Commerce, February emarketer, Inc. Scarborough Research s data indicates a far higher internet penetration across all age groups compared to the Department of Commerce. Different definitions of access and internet users account for different penetration rates. Internet Penetration in the US, by Age, % % % % % % Source: Scarborough Research, emarketer, Inc. Kids & Teens The vast majority of kids, teenagers and college students today are as comfortable surfing the web as they are surfing channels on the TV. It has become an important daily part of their lives and will continue to be so. They are accessing the internet from home as well as at school. Whether for chatting, playing games, researching homework or downloading music, the internet is a medium where age is now no longer a barrier to the variety of options and activities open to them. 43

44 The Department of Commerce provided a detailed demographic profile of the US internet user under 18 years of age, as of September US Home Computer and 3 to 17 Years of Age, September 2001 (in millions and % of population segment ) Total 3-17 year olds Home computer Home internet use Outside home internet use Total % 41.2% 38.9% Age 3-4 years % 11.5% 5.4% 5-9 years % 28.3% 25.3% years % 51.1% 49.8% years % 61.4% 60.7% Gender Male % 41.1% 38.7% Female % 41.2% 39.0% Race/Hispanic origin White non-hispanic % 50.2% 44.5% Black % 24.7% 31.8% Asian/Pacific Islander % 51.6% 37.3% Hispanic (any race) % 20.1% 24.5% Household type Married couple household % 46.6% 40.0% Male householder % 33.0% 37.8% Female householder % 26.8% 35.9% Nonfamily household % 31.7% 32.7% Family income Under $15, % 14.3% 25.9% $15,000-$24, % 21.4% 31.5% $25,000- $34, % 28.9% 33.6% $35,000 - $49, % 42.4% 41.7% $50,000 - $74, % 52.1% 44.0% $75, % 63.4% 48.3% Not reported % 37.1% 34.4% Source: US Department of Commerce, February emarketer, Inc. 44

45 Jupiter Media Metrix indicated in 2001 that Kids and Teens were two of the fastest growing online segments of the population. Kids and Teens Online in the US, 1998 & 2002 (in millions and % increase) Kids (5-12) Teens (13-18) (155%) 16.6 (97%) Source: Jupiter Media Metrix, emarketer, Inc. The Department of Commerce data shows that internet use for 3 to 17 year olds has increased dramatically between 1998 and Even in the age group of 3 to 4 year olds, the Department of Commerce data shows nearly 15% are internet users. Internet among Youth in the US, by Age, 1998 & 2001 (as a % of the population) % 14.3% % 38.9% % 65.4% % 75.6% Note: use at any location Source: US Department of Commerce, National Telecommunications & Information Administration (NTIA), Economic & Statistics Administration (ESA), February emarketer, Inc. 45

46 Widespread internet access at school is ensuring that those without access at home will not miss out. The Department of Commerce data shows that in the 10 to 17 age groups, internet penetration is significantly higher than the national average across all age groups. Internet among Youth in the US, by Age and Access Location, 2001 (as a % of the population) % 25.3% 38.9% % 49.6% 65.4% 61.4% 60.7% 75.6% National average 34.8% 43.6% 53.9% Home Outside home Any location Source: US Department of Commerce, National Telecommunications & Information Administration (NTIA), Economic & Statistics Administration (ESA), February emarketer, Inc. 46

47 UCLA s recent internet report indicates that internet access for children under 18 has grown significantly over the last three years at school, home and other locations. The data shows that accessing the internet at home is the most favored access point among children. Internet Use by Children in the US, by Access Location, (as a % of respondents) Home 59.4% 64.0% 84.7% School 52.7% 63.6% 73.3% Somewhere else 20.6% 30.1% 60.0% Note: under age 18 Source: UCLA Center for Communication Policy, February emarketer, Inc. Playing games is the most popular internet activity for 5 to 9 year olds. Once children reach 10 to 13, however, schoolwork becomes the most popular activity for this age group, followed by games and . Once they hit 14 to17, school work still dominates, but and chat takes on more prominence than games, and using streaming media becomes more popular. Online Activities of Youth in the US, by Age, 2001 (as a % of the population under 25 years old) Chat rooms Listening to the radio/ watching movies Playing games Schoolwork % 43.2% 11.0% 66.4% 46.9% % 63.8% 17.9% 64.7% 76.6% % 82.1% 26.9% 61.0% 86.1% Source: US Department of Commerce, National Telecommunications & Information Administration (NTIA), Economic & Statistics Administration (ESA), February emarketer, Inc. 47

48 Interestingly, Kaiser Family Foundation indicated that the most popular activity for US internet users between the ages of 15 and 24 was searching out health information online. Online Activities of Young People in the US, September-October 2001 (as a % of internet users between the ages of 15 and 24) Searched for health information 75% Played games 72% Downloaded music 72% Participated in chats 67% Shopped 50% Checked sports scores 46% Source: Kaiser Family Foundation, December emarketer, Inc. Recent evidence would suggest that teens and kids are an increasingly attractive demographic to target because they are spending more money online. According to Jupiter Communications, online spending by teens will increase to $1.3 billion by 2002 and kids will account for $100 million of e-commerce dollars spent. 1 According to SpectraCom s recent study of kids on the internet, 60% of the kids they surveyed have asked their parents to buy things they ve seen online. Additionally, a quarter of parents say their kids have made a purchase on the internet, while another third say their kids have helped with finding or researching purchases in the internet. The Zandl Group, which specializes in the study of kids and teens, reported in December 2001 on the differences in online purchasing between girls and boys. 48

49 Girls between the ages of 8 and 24 seem most interested in purchasing clothes, books and CDs. Boys, however, have more marked differences by age. Boys aged 8 to 12 purchased collectible cards and Gameboy games; 13 to17 year old boys bought clothes and sporting equipment; and 18 to 24 year old boys bought plane and concert tickets, car accessories and movies. Most Recent Online Purchase for Ages 8-24 in the US, by Gender, December 2001 Ages 8-12 Male Female Collectible Books cards Gameboy games WWF Smackdown t-shirt CDs Swimsuit Ages Male Female Clothes Clothes Sports equipment Books CDs Car parts Magic cards Books CDs Puppy care kit Games Source: Zandl Group, emarketer, Inc. Ages Male Female Ticketsplane/ Clothes concert Car accessories Movies Clothes Paintball gun CDs CDs Movies Household items Books Plane tickets Kids and teens are among the most internet savvy groups online and are an audience worth targeting for e-commerce dollars. College Students The generation that grew up with the personal computer relies on the internet in every dimension of college life. Center for Media Research, Sept 2002 There are nearly 14.5 million students enrolled in colleges and universities across the US, according to figures from the 2002 Chronicle of Higher Education. They are predominately white (68%), with the majority (56%) being women. 49

50 College students have long been voracious internet users. The Department of Commerce indicates that over 80% of 18 to 24 year olds in school or college have a home computer, and 68% have home internet access and 72% use the internet outside the home. This is in stark contrast to those within this age group who are not at school or college. US Home Computer and 18 to 24 Years of Age, 2001 (in millions and as a % of population segment) Total year olds Home computer Home internet use Outside home internet use In school or college % 68.0% 71.9% Not in school or college % 24.0% 13.3% Gender Male % 69.4% 73.7% Female % 66.8% 70.3% Race/Hispanic origin White non-hispanic % 74.3% 76.2% Black % 47.0% 59.7% Asian/Pacific Islander % 77.5% 72.5% Hispanic (any race) % 49.7% 61.1% Household type Married-couple household % 73.8% 69.3% Male householder % 53.8% 69.3% Female householder % 46.5% 58.7% Nonfamily household % 68.6% 81.4% Family income Under $15, % 56.1% 73.9% $15,000-$24, % 53.8% 65.2% $25,000- $34, % 56.1% 73.0% $35,000 - $49, % 37.5% 67.8% $50,000 - $74, % 34.5% 74.0% $75, % 83.0% 75.6% Not reported % 62.8% 64.7% Source: US Department of Commerce, February emarketer, Inc. 50

51 More recent research from Pew Internet & American Life in September 2002 indicated that 86% of college students use the internet, compared to 59% of the overall US population. The following chart breaks down college student internet use by gender and race showing almost ubiquitous internet usage amongst this demographic. Percent of US College Students that Have Ever Gone Online vs. General US Population, by Gender and Race/Ethnicity, 2002 Male 62% 87% Female Whites 56% 61% 85% 90% Blacks 45% 74% Hispanics All respondents College students 60% 59% General population 86% 82% Note: n=2,501 for general population; n=1,092 college students Source: Pew Internet & American Life Project, September emarketer, Inc. 51