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In Vancouver, companies such as hyperWallet have partnered with Las Vegas based Gravitas to provide political parties and nonprofit organizations with point of sale systems enabling them to use the Internet to receive payment at fundraisers. The companies plan to target the nonprofit market, which comprises 10% of the US economy. 

Despite a decline in the number of investor transactions since 2000, Royal Bank Action Direct reports growth in self-managed investments with almost a 100 per cent increase in visits to the web site.  The Interactive Advertising Bureau and eMarketer forecast 6.3% in online advertising in 2003. Havas, in France, expects an 11.3% increase, while the London School of Business expects a 23.3% increase in online advertising expenditures. These optimistic outlooks occur in spite of concerns raised by Neufeld at the International Internet Marketing Association that the Internet has “over promised and under-delivered.” With marketing executives clambering to justify online advertising expenditures, it’s a wonder that research based organizations such as eMarketer remain so optimistic. 

In the world of search engines, Yahoo! has offered to buy  Inktomi for $235 million. AltaVista has redesigned its search engine, which remains awkward and cumbersome but offers some nice jewels in the form of 24 hour refreshes and improved relevance. HotBot has remodeled itself and, in some ways, is the best search engine alive! 

Search engines continue to be the way that people find what they are looking for. People are a greedy bunch, however. As Freud once conjectured, we need immediate gratification. If we do not find what we want in the first three pages of search results, 78% of us abandon our search. Google, Fast, and Inktomi, therefore, will continue to battle on factors such as relevance and freshness to hold our interest. But, paid advertising which drives the capitalist machine – the reason Yahoo! but Inktomi, will win in the end. 

1. Internet Use Remains Flat in Canada
2. Canadian Demand for Online Government Services
3. Canadians Want Voting Online
4. hyperWallet Takes Transactions for Nonprofits and Political Groups
5. Online Investing Grows at Royal Bank
6. Buying Groceries Online
7. Online Advertising Expected to Rise
8. The Internet Over-Promised and Under-Performed
9. Yahoo! to Buy Inktomi
10. AltaVista Search Engine Re-Designed
11. Search Engine Users Seek Instant Gratification

Internet Use Remains Flat in Canada

Internet use in Canada has not grown since 2000. In 2002, 62% of Canadians adults reported going online. In 2001, 60 per cent of Canadian adults reported going online. This result suggests relatively flat growth in overall Canadian Internet use.

In the United States, in contrast, 72 per cent of adults reported going online in the past 30 days. In 2000, 59 per cent of US adults reported going online. This result comprises a substantive increase in US Internet use. Overall, the results for both Canada and the US suggest that Internet marketers should target US based sales, sticking to traditional performance based online programs in Canada.

Strong Canadian Demand for Online Government Services

In 2002, 48 per cent of Canadians reported using the Internet to access government services online during the last 12 months. The results vary across provinces as well: Ontario (55%); Quebec, BC, and Alberta (46%); and Atlantic provinces (38%), as well as  prairie provinces (37%). These fluctuations may be a function of paid advertising programs by governments as well as consumer interest in government activities. The results suggest that efforts to migrate government activities online have proven well received.

Canadians Want Voting Online

Roughly, 2 out of 3 Canadian voters say they would vote online if the option were available to them. In response to interviews, (89%) of Canadians who support online voting, claim that it would be more convenient than heading to a polling booth. Another 63 per cent believe that election results would be tabulated faster than through traditional methods. The 2 main factors that may dissuade Canadians from voting online are as follows: (1) privacy concerns and (2) security issues. One respondent reported that “people are concerned about entering sensitive information online.”

HyperWallet Takes  Transactions for Nonprofits and Political Groups

HyperWallet is a privately held company in Vancouver, Canada. This company provides services that include real time online payment, point of sale solutions, automatic currency conversion, and mass remittance solutions for the North American market. Recently, HyperWallet partnered with Gravitas Inc in Las Vegas to provide instant fundraising technology for nonprofit and political groups. This union means that nonprofit organizations will be able to raise money in real time from remote locations without having to wait for a follow-up phone call to secure funding. Importantly, the nonprofit sector accounts for between 8 to 10% of the total US economy.  Furthermore, recent research suggests that 76 per cent of US consumers are likely to switch brands or retailer due to being associated with a reputable charitable cause. The implications of this information for Internet marketers are as follows: (1) hyperWallet provides real time payment fulfillment solutions for trade shows and conventions; and (2) organizations engaged in brand wars may partner with nonprofit organizations to maximize brand switching behaviours.

Online Investing Grows at Royal Bank

Financial markets have cooled since 2000. Grant Rasmussen, the president and CEO of Royal Bank Action Direct Inc, claims that the average number of transactions has dropped from a high of 11 per year to 5 in 2002. But, the good news is that Canadians are sold on the idea of managing their own investments. Typically, Canadians share more than one relationship with a financial institution – managing personal investments and dealing with a banker or financial planner. The number of Action Direct accounts has grown from about 460,000 to 600,000. The company reports getting 100 per cent more hits on its web site than 2 years ago, despite overall trading being down about 40 per cent.

Buying Groceries Online

Online shopping for groceries was thought to be the wave of the future. Unfortunately, this business model never took off the way it was expected too. Many businesses such as Giunta’s Thriftway in East Bradford have realized that getting orders was only a piece of the online shopping process. Companies would need to explore new models: (1) “bricks and clicks” model in which Internet companies work with food retail companies; (2) Grocery stores buying Internet companies (Safeway buying Genuaradi’s); (3) corporate branding initiatives such as the “Open Pantry” by Clemens Family Markets in Delaware; (4) customers picking up items purchase online; (5) warehouses just for online orders; and (6) taking items of shelves for customers. 

In the US, online groceries account for less than $1 billion of the US grocery business. Forrester Research suggests that in 2005, 8 per cent of the $500 billion US market or $40 billion will take place over the web. Presently, retailers are struggling to find the model that will work best for their business. Promisingly, the new “Open Pantry” concept from Clemens Family Restaurants is offering shoppers a way to purchase hard-to-find ethnic regional and specialty foods as well as jewelry, fragrances, and pet products, gift items and other products not traditionally found in the supermarket.

Online Advertising Expected to Rise in 2003

All over the world, marketers are forecasting increases in online advertising expenditures. The results are as follows: (1) a 6.3% increase was forecast by US based Interactive Advertising Bureau and eMarketer; (2) an 11.3% increase was forecast by Havas in France; and (3) recently, Yahoo!, ESPN, and New York Times, similarly, have reported bullish results for online advertising revenues. The two-year slump in online advertising expenditures has been blamed on factors such as a sluggish US economy, dot com crashes, advertisers abandoning huge portals, and industry confusing metrics. The London School of Business argues that the United States, United Kingdom and France were key drivers in Interactive marketing’s global growth. The London School study, further, forecasts 12.7 per cent US growth, 23.3 per cent UK growth, and 14.2 per cent growth in France. Respondents in the study reported online marketing’s cost-effectiveness and accountability as two reasons for increasing spending in this area. 

Yahoo! to Buy Inktomi

History repeats itself at Yahoo! Following a decision to use Google search, its ally and nemesis, Yahoo! has bought Inktomi for $235 million. The move gives Yahoo! access to the pay-for-inclusion market through Inktomi’s Index Connect and Search Submit, enabling retailers such as Amazon and Wal-Mart to host their wares online. The purchase revives Inktomi, which powers search engines such as Lycos/HotBot, MSN, and Overture.  

Inktomi entered the search engine market in 1986, specializing in algorithmic Web Search technology. Last year, however, Inktomi lost market share to Google, which provides search results for portals such as AOL, iwon, and Yahoo! In terms of Internet marketing strategy, the Yahoo! and Inktomi relationship may lead to the following: (1) blended Inktomi and Google search results in Yahoo; (2) Yahoo will target paid inclusion results from e-tailers with large databases; (3) MSN may consider a merger with Fast or LookSmart to withstand market penetration from Yahoo and Google; and (4) search engine marketers may expect to see Google drop DMOZ as its central directory and partner with Yahoo! and JoeAnt as prime sources of directory listings. 

The Internet Over-Promised and Under-Delivered

The Internet has over-promised and under-delivered. As an advertising medium, the Internet has missed the four-year window of opportunity to prove itself, claimed Neufeld at a meeting of the International Internet Marketing Association. “And in all the research we’ve done, the Internet has not clearly defined itself. Executives don’t know why they’re using it. It doesn’t always present a clear value to them.” The reality is that the Internet is about high-consideration goods and products. People on the Internet are focused on looking for information and looking for buying decision support. In terms of Internet marketing strategy, this information suggests that marketers should utilize consumer information and education as a way to augment the sales process online – especially, for long-term big value items such as cars. Similarly, 89 per cent of people online say they are going to buy or research automotive purchases in the next 12 to 24 months.  

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AltaVista Search Engine Re-Designed

The search engine that changes its appearance every two years – AltaVista – has changed again. While the company boasts some promising modifications such as full 45-day refreshes and 24-hour refreshes for frequently requested URLs, the adjustments seem moot. AltaVista is not competitive with Google, Fast, or the newly redesigned HotBot.

The company is working on the idea of increasing personal search relevancy without being too intrusive. This sounds like a strategy that will employ hidden cookies or user registration mixed with artificial intelligence algorithms to determine user interests. The Chief Scientist at AltaVista, Jan Pedersen, claims that “ . . . the real question going forward is whether people can get answers to their questions rather than what’s in the index.” This explanations sums up the problem at AltaVista: it assumes that users want information, which is a research based way of interpreting the world, instead of products, services, fun, and concepts that run the full gamut of human experience. Until AltaVista emphasizes the need for a relevant search engine mixed with a keen understanding of human motivation, the company will not reach the values provided by other search engines. 

Search Engine Users Seek Instant Gratification

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