User statistics

In the following section, general statistics on German, European and world-wide Net penetration and usage are presented. Starting with Internet access rates, the focus then moves onto specific types of Internet usages, namely E-Commerce activities, searching and finally E-commerce-related searches.

Onliners

Well-known data sources on German online behavior are provided by the Destatis (Statistisches Bundesamt) — the official statistics agency in German —8, the ARD/ZDF- Online Studies9 and the W3B Studies10. While there are numerous statistics for In- ternet penetration on large geographical scales, these aggregated views do not provide the same level of granularity in observations, especially not covering a longer period of time, as the above mentioned succession of surveys conducted for the German market do.

In general, Internet usage in Germany has seen a consolidation in recent years with a sinking growth rate in online population. The number of off-liners did not substantially shrink and is not likely to do, unless Net access comes in a different shape, cloaked in traditional devices such as TV sets. However, the group of offliners cannot simply be identified as being only elder and less well-to-do people. Many offliners choose to stay disconnected from the Internet willingly11. In this context, it is elucidating to

8 http://www.destatis.de. 9 http://www.daserste.de/studie/. 10 http://www.w3b.com. 11

See “Digital Divide could deepening”, online at http://news.bbc.co.uk/1/hi/technology/ 6085412.stm [Nov. 1, 2006].

note how the Net has lost the property of being a medium for the youth over the last decade.

Comparing the age distribution of Net users in Germany from 1995 to 2005, it is striking how the percentage of young users has declined, thus making the Net users more similar to the overall population12:

Age User distribution in 95 2000 2005

19y and below N/A 4.8% 4.0%

20y to 29y 62,6% 30.4% 22.5%

30y to 39y N/A 38.9% 25.8%

40y to 49y N/A 18.6% 25.9%

50y and above 2.5% 12.4% 21.9%

On an European scale, German represents the upper average of EU countries in terms of broadband penetration, onliners and percentage of E-Commerce users13.

Globally, the distribution of Net penetration is rather skewed; penetration rates span from 2.6% (Africa) to 68.6% (North America)14. However, if the growth rate is also taken into account, one can observe approximately an inverse proportional relationship between penetration rate and usage growth. Although one cannot infer from these figures that the digital divide will close down fully, they indicate that it has not become larger in the last five years:

Continent Internet penetration 2005 Usage growth 2000-2005

Africa 2.6 % 423.9 % Asia 10.4 % 232.8 % Europe 36.4 % 179.8 % Middle East 9.6 % 454.2 % North America 68.6 % 110.4 % Latin America/Caribbean 14.7 % 350.5 % Oceania / Australia 52.6 % 134.6 % World total 16.0% 189.0%

Within one society of one country, a social digital divide that deprives in general the poor, lesser educated or female part of the population from Internet access and usage can be often observed. In general, such deprivation seems to follow general discrimination that holds for most aspects of public life, especially commercial life. The recent figures for Germany reveal a closing down of the male/female digital divide. Although the ratio of all male users to female users runs still at ca. 55:45 (figures for 200515_{), the ratio of all teenage male users to female users is virtually 50:50}16_.

12_{See W3B study 21, online athttp://www.w3b.org/ergebnisse/w3b21 [Nov. 1, 2006].} 13

Seehttp://www.destatis.de/presse/deutsch/pk/2005/ Statement IKT.pdf [Nov. 1, 2006]. 14

Seehttp://www.internetworldstats.com/stats.htm [Nov. 1, 2006]. 15_{See ARD/ZDF Online-Studie 2005.}

16

See the JIM study 2006, online at www.mpfs.de/fileadmin/JIM-pdf06/JIM-Studie 2006.pdf [Nov. 1, 2006].

On a personal level, there are indications from surveys that most users are accus- tomed to the Net to such an extent that depriving them of online connections causes considerable strain. The “Internet Deprivation Study”(Ipsos-Insight) demonstrated how users accustomed to the Net became psychologically strained and restless if it they are deprived from it. Test subjects were reluctant to resort to off-line alterna- tives such as telephone books17.

Summing it up, it is not only remarkable how quick the Net has achieved high penetration rates in developed countries, but also how thoroughly and apparently irreversibly it has changed information and communication patterns both on a business as well as personal level.

E-Commerce users

With a deep-ingrained Internet usage shaping many people’s daily life, it is obvious that different spheres of live are affected through the Net. One of these spheres is shopping.

The number of online shoppers in Europe is predicted to increase from 100 million to 174 million by 2011, according to a Forrester Research study. In total, this would lead to an E-Commerce market in Europe worth 263 billion EUR18. Until 2008, Germany’s market is expected to grow to over 85 billion EUR in 200819.

Although E-Commerce is already widely established in European countries, many voices still point to the typical worries and shortcomings that prevent people from using E-Commerce20:

• Presence of shopping guide

• Happy with the current offline retail — no need for change is felt • Physical experiences of purchases

• Distrust in paying methods

However, in the broader understanding of E-Commerce that goes beyond mail-order and also includes interaction enabling in the pre-sales and after-sales phase, most of these and similar claims no longer prevail. In contrast, information online has a considerable impact on deciding what to buy in many domains. The 20th W3B study revealed that more than two third of Net users search for product information and comparison, while over 60% of these went to an offline shop for the actual transaction21.

17

Seehttp://docs.yahoo.com/docs/pr/release1183.html f [Nov. 1, 2006].

18_{See http://www.forrester.com/Research/Document/Excerpt/ 0,7211,38297,00.html [Nov.}

1, 2006]. 19

http://www.infoedge.com/product type.asp?product=EM-2222& c1=nav&source=maintopic [Nov. 1, 2006].

20

Seehttp://www.destatis.de.

Other studies report the percentage of onliners that use the Internet to get informed on products and services at 82%22.

The following figures are taken from the same W3B survey and indicate the percent- age of online users that stated online information had beenvery important in deciding purchases.

Percent of Users Domain

46,2% Automotive

40,5% Phones and Mobiles 36,0% Entertainment Electronic 24,1% Domestic Electronic 15,6% Furniture 12,9% Pharmaceutics 11,1% Fashion 9,1% Cosmetics

While the top position for Automotive is explainable by the high item costs, the selection of other domains is a wide range of the so-called Slow Moving Consumer Goods (in contrast to Fast Moving Consumer Goods typically offered in a super- market). Some of these domains are also areas of high competition between paid keyword advertisers (see Part D). The broad range of these domains should once again illustrate that E-Commerce is not restricted to retail through letterboxes. E-Commerce related Search Engine usage

Browsing the Web without any use and help of search engines can be a most eclectic experience. Doubtless, there are people who do not go beyond their providers’ portal content and link offers, not aware of the Net’s essential pull mode that is invoked by typing in queries. For the year 2002, a 91 % usage of search engines for internet users has been reported 23.

It is conceivable that some users do not even use the URL field of their browser, but type in URLs in a Search Engine to get a clickable link. The high occurrence of perfect URLs in a query log (about 3%-5% of all query tokens, see Part C for details) suggest that this behavior is not totally uncommon.

The percentage of E-Commerce-related queries is hard to determine. While [Spink et al 2002] report 12.7% Commerce, travel, employment, or economy topic queries on Alltheweb in 2002, a report by U.S. Bancorp Piper Jaffray state that 36% of Web queries have a commercial background24. However, [Spink et al 2002] other top- ics (such as Computers or Internet ) might contain E-Commerce-relevant queries as well, however. Looking at the top 193.195 Web search queries taken from a German search engine query log, however, only a meagre 24.5 % do not produce adwords on

22_See

http://www.destatis.de. 23

See [Machill/Welp 2003]. 24_{See [Rashtchy/Avilio 2003].}

Google, and many of these for policy reasons, for example against advertising hardcore pornography or gambling25. This means that 75.5 % of top searches have a potential E-Commerce value, given that advertisers decided to reserve these keywords for their ads. It should be noted that most gaps are because of Google policies (adult terms or brand names). Detailed figures of this campaign database will be presented below in Part D.

A complementary figure runs at 70% of all online transactions springing from a search query26_{. This means that at the beginning of an online transaction (purchase,}

download, subscription etc.) a search query of the user initially opened up the way towards the vendor’s site. A GFK study in 2005 revealed that out of the 27.4 million Germans that use the Net for gathering information before purchasing items — both at online and offline shops—, the vast majority (about 90%) go to Google first27.

On online shops, it is reported that more than 50% of users go straight to the search box before looking at navigational elements and that one third of users experience a failure in searching for a product, even though it is in stock28_.

In summing these figures up, it is indisputable that firstly E-Commerce-related activities have a considerable share in users’ interests on the Net and secondly, E- Commerce cannot be disentangled from search.