timone NetMarketing
disponibile anche in italiano

Marketing in the internet – as seen from Italy

No. 67 – December 27, 2002

Other articles on similar subjects
are published in English
in the monthly Offline column


loghino.gif (1071 byte) 1. Editorial: The “dotcom” syndrome

It’s quite surprising to notice how many people think that everything online is a “dot com”. This isn’t just a matter of not understanding how the domain name system works – or how the internet is organized. It’s also an assumption that everything online is “commercial”.

There are even non-commercial organizations (including some that run training programs on how to use the internet) with websites or mail systems based on “.com” domains. (On other oddities in the use and trading of internet domains see Domain carpetbaggers.)

Since mainstream media, around 1994, began to discover the existence of the internet, attention has been concentrating on “commercial” use of networking. By doing so, they confused the issue. The resulting cycles of hype and hangovers have done considerable harm and no good. In spite of so many failures, the misunderstanding continues.

It’s boring, and somewhat depressing, to repeat it once again. But the fact is that the basic structure of the internet isn’t commercial. The more it’s good for humanity, the better it is for business. A dotcom-based network wouldn’t be much of a market. It would be just another basement section of a department store. What the internet really is – a vast and ever-growing complexity of countless human communities and relationships – provides a much more interesting and rewarding potential also for business. As long as its vital, organic structure is understood, respected and treated with genuine care.

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loghino.gif (1071 byte) 2. Christmas thrift

In many places around the world people have spent less on seasonal gifts. Shopkeepers may be disappointed, but there is wisdom in that trend. Time will tell, in months and years to come – this may be more than the temporary effect of uncertain times.

In business environments that have always been in favor of growth as such, and consumer spending as a need for economic recovery, there begins to be a perception that things may be changing. In “affluent” economies people and families are cluttered with more goods than they need. They are beginning to realize that they don’t have enough room for all the stuff they are buying (or receiving as presents.)  They are getting tired of adding to clutter just for the sake of “more.”

The sellers of high-tech gadgets have been particularly disappointed this year. Prices are likely to drop after the holiday season. But, even so, it remains to be seen if large numbers of people will still be interested in buying the latest device “just because it’s new.”

This isn’t poverty and it isn’t recession. It’s just a feeling that “enough is enough.” . Nobody can predict if it will develop into a consistent attitude over time, or there will be more ups-and downs with some fashions and fads finding a market while others fade out. But that fact is that not everyone is willing to buy or give things that nobody really wants.

It was somewhat comforting, this year, to read less of the usual nonsense about the Christmas season being the crucial test, the “win or die” event for online selling. With less noise and hype, some e-commerce traders did quite well, with people using the net to find better value and more comfortable shopping.

That may be more than a seasonal whim. Where more “mature” buying patterns prevail, more people are likely to use the net to check and compare price, quality and value. That’s an interesting opportunity, as long as we all understand that success is not based on hasty and shallow gimmicks, but on the gradual building of mutual trust and long-lasting relationships.


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loghino.gif (1071 byte) 3. Decline and fall of online ads

This short report is based on Italian data – but similar trends are reported in several other countries. Advertising spending, as a whole, declined in 2001 and 2002, though a year-end summary was less disappointing than several sources had indicated in previous months. The deflation of the 1999-2000 “bubble” caused a less dramatic decrease than could have been expected. It remains surprising that the media owners and business circles sere caught by surprise – analyses published in January 2001 were still projecting increases.

On December 10, 2002 (as every year) a report on advertising expenditure in Italy was published by UPA (the advertisers’ association.)  It showed a decline in mainstream media in 2001, and more so in 2002, with projections of no increase in 2003 and some possible growth in 2004 (international sources are somewhat more optimistic about next year, though predictions are always uncertain – and even more so in a troubled economic environment.)  Figures are online in the Italian version of this report.

Online advertising suffered more than any other category. That, of course, isn’t surprising – but there is a dramatic difference between the actual trend and what the business environment was expecting. As shown in this chart.

Online advertising in Italy

and 2003 “forecast”
(millions of euros)

online advertising

The green line shows the forecast that was published in January 2001.
A new estimate for 2003 (red “dotted” section) is a revised projection
by the same source based on 2001-2002 results.

Projections made by the “most reliable” sources at the beginning of 2001 appeared to be “conservative” compared to much more ambitious expectations in previous years. But, even so, they turned out to be grossly exaggerated. For several months in 2002 business sources (and comments in newspapers and magazines) indicated that, while mainstream advertising was decreasing, online ads were growing. They were wrong on both scores. The decrease in advertising as a whole is less than they expected – while the decline of online ads (from a very small “peak” in year 2000) is proportionally much larger that in any other category. Online advertising is around 0.2 percent of the total in “traditional” media.

Even the “verified” data for past years aren’t accurate. The blue line shows a more realistic estimate (considering the fact that at least half of the online advertising expenditure isn’t “real money” but an exchange between companies that are, at the same time, sellers and buyers of web ad space.)  The total amount of money available for the entire online advertising market is substantially less than the revenue that was expected a few years ago by each one of the large “portals.”

Spam, flashy design, animations, pop-ups, a variety of invasive tricks and other gimmicks, often combined with poor content, have accelerated the catastrophe of online advertising. It’s hard to predict the future. Growth is possible, over time, but it needs some radical re-thinking of strategies and much greater care in development.

Earlier comments on this subject are online in issues 6, 16, 44 and 56.


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loghino.gif (1071 byte) 4. European data (update)

There are no major changes since a summary of European internet data was published in issue 65 (August 2002.)  As usual, a more detailed analysis is online in the data section.

The total hoscount in Europe is close to 25 million. This is an update of the situation in the 21 European countries with more than 100,000 internet hosts.

  Number of hosts
November 2002
% of
Per 1000
Netherlands 3,054,236 12.3 193.3
Italy 2,958,899 11.9 51.6
Germany 2,923,327 11.8 35.6
United Kingdom * 2,711,078 10.9 46.1
France 2,052,770 8.3 34.7
Spain 1,682,434 6.8 42.5
Finland 1,217,983 4.9 234.2
Sweden 1,187,942 4.8 133.5
Denmark 872,328 3.5 164.6
Belgium 832,853 3.4 81.7
Russia 800,277 3.2 5.5
Poland 731,371 2.9 18.9
Austria 720,587 2.9 87.9
Switzerland 667,509 2.7 90.2
Norway 634,098 2.6 140.9
Czech Republic 362,083 1.5 36.2
Portugal 266,991 1.1 27.0
Hungary 228,303 0.9 22.8
Greece 184,716 0.7 17.4
Ireland 136,463 0.6 36.9
Ukraine 130,569 0.6 2.6
European Union 20,776,471 83.4 55.6
Europe 24,902,774   35.5

* The figure for the UK is probably “underestimated”
(and therefore it’s slightly adjusted in the graphs)

This is an update of the graph on density (hosts per thousand inhabitants.)

Internet hosts per 1000 inhabitants
in 21 European countries


Let’ look at the density picture as a map.

Internet hosts per 1000 inhabitants


And here is, as usual, a graph of hostcount in relation to income.

Internet hosts in relation to income (GDP)
in 21 European countries


There is continuing evolution in several countries. But the general picture, of course, doesn’t change in a few months. A more relevant update will probably be available in February or March 2003.




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