Who is Using the Internet

Who is Using the Internet? This is an excerpt from Internet Marketing in Real Estate, by Barbara Cox, Ph.D. and William Koelzer, CBC, APR, published by Prentice Hall,© 2000 (excerpt available only @ RealEstateABC)

It's Here to Stay!

Approximately 98 million American adults had access to the Internet by late 1999, according to the same report, up 54 percent from the previous reporting period. Media Mark also reported that 50.8 percent of these users are men, 49.2 percent women.

Reports vary, however. The Nielsen Corporation, known best for its TV-ratings reports, calculated that in November of 1999 the universe of U.S. Web surfers over the age of two reached 118 million, with 74 million active during that month. These users spent 11.1 million hours on line.

Nielsen also reported that U.S. Web users logged six sessions per week, visited six unique sites, spent just over 2 hours and 46 minutes online per week, and viewed a page for an average of 56 seconds. To keep track of statistics such as these, visit the Nua Ltd. (well-publicized Internet strategic consulting firm) site at http://www.nua.net/surveys/how_many_online/n_america.html.

Time magazine (March 22, 1999) reported that approximately 21 million U.S. households had more than one personal computer and predicted that by 2003 that number will jump to 31 million.

Home offices will grow from 37 million to 50 million by then, and the most frequent use for all those millions of PCs is, as you no doubt have already guessed, the Internet.

America Online now has over 22.2 million users—and that’s only one access provider, although it is the largest single source used for connecting people to the Internet.

Boston-based Yankee Group (http://www.yankeegroup.com) reports that Internet access should grow at a compound annual rate of 21 percent over the next 5 years, during which U.S. users will spend $56 billion for access.

The Internet already penetrates one-fourth of U.S. homes, and that figure is expected to rise to one-third by the end of 1999 and to two-thirds by 2003. Yankee Group says it found that "the Internet is now the No. 1 use for home computers."

Internet usage is also growing outside the U.S. Nua Ltd. estimated that as of September 1999, 201 million users were connected to the Internet worldwide. Of these, 47.15 million were in Europe and 33.61 million in Asia and the Pacific Rim.

The Computer Industry Almanac (http://www.c-i-a.com) predicts that by the year 2002, 490 million people around the world will have Internet access.

Access for What?

How are these millions of users putting the Internet to work? What do they use it for? At one time, casual observers expected the Web to be a playground dedicated to games and entertainment. Some generously noted its potential as a general information resource. But the Internet has far surpassed such notions. Fast and inexpensive communication via e-mail has become a major use, as has the buying and selling of goods and services, or "e-commerce."

Based on an analysis of multiple research sources, eMarketer (http://www.emarketer.com) concluded that 3.4 trillion e-mail messages were delivered in 1998. This equates to 9.4 billion messages exchanged every day of the year in the U.S. alone.

In 1998, 81 million Americans used e-mail. The average American sends or receives 26.4 e-mail messages every day. This, according to eMarketer, equates to 9.4 billion messages exchanged every day of the year in America alone.

Consumers have grown to trust—and expect—online commercial resources. eMarketer estimates U.S. online sales for 1999 as high as $18.6 billion and predicts that worldwide e-commerce revenues will grow from $98.4 billion in 1999 to $1.2 trillion by 2003.

The number of small businesses with Web sites has nearly doubled since 1998 and quadrupled since 1997, according to research by Prodigy Biz Corporation (http://www.prodigy.com). In November 1999, Prodigy reported that approximately one-third of small businesses in the U.S. were online.

The December, 1999, eAdvertising Report from Advertising Age reported estimated that U.S. Web advertising spending will grow from $3.1 billion in 1999 to $4.82 billion in 2000 and to $13.3 billion by 2003. While that sounds like a lot, eMarketer says that this amount will only represent 4.7 percent of the total advertising media spending for the respective years.

A January, 2000, ABCNEWS.com poll found that 44 percent of Americans plan to buy online during year 2000. That’s three times the number who did so in 1999. Furthermore, these online shoppers fit a real estate agent’s dream: They tend to be better educated and earn higher incomes. Among people who earn more than $75,000 in household income, for example, 72 percent say they’ll buy online in the future.

How much do they buy? Ernst & Young’s Third Annual Online Retailing Report, December, 1999, predicted 1999 holiday-time shopping revenues of $12 to $15 billion, a figure representing nearly half of the online retail revenues for the entire year. This puts 1999 online spending at $24 to $30 billion—and the year 2000 projection at $72 to $90 billion.

What does Internet use have to do with real estate professionals? Plenty. These Internet users are potential homebuyers or sellers in your marketing area. Never before could you reach so many prospects so easily and inexpensively.

Consumers Use the Web for Real Estate

That homebuyers and sellers are using Internet resources to aid them in their transactions has become abundantly clear. The Economic Research Council of the National Association of Realtors® (NAR), in its June 1999 report entitled "Realtors® and the Internet: The Impact of Online Technologies on the Real Estate Industry" (see full report at http://www.onerealtorplace.com), reported that 23 percent of all potential homebuyers used the Web to search for a home. Furthermore, the study found that even potential homebuyers who do not currently use online services expect their Realtor® to be Internet-savvy and have clear opinions on what they expect from online real estate services.

A 1999 study conducted by Weston Edwards & Associates, Laguna Beach, CA, concluded, among other things, the following: "By 2000, half of all homebuyers will use the Internet to help them find a home and the money to finance it, compared to 40 percent last year.

Realtors®, lenders, and title insurance companies are struggling to catch up with the demand for Internet services."

In some areas of the Northwest, according to a 1999 survey by John L. Scott Real Estate (http://www.johnlscott.com), up to seven of every ten homebuyers used the Internet during their property search.

Inman News (http://www.inman.com), citing the Atlas Van Lines 32nd Annual Survey of Corporate Relocation Policies in June of 1999, reported that 71 percent of 214 relocation executives are accessing the Internet to research, administer, and track employee relocations.

Three years previous to this report, only 6 percent of these executives used the Web for such purposes. The increase was steady: 19 percent of this group used the Web in 1997 for relocation assistance; 48 percent did so in 1998.

Why are homebuyers and sellers using the Web? How do they find the Internet useful? Users of the home-search site, Realtor.com, appear to be "performing the early stage of their home search on line. Yet, once they find a set of homes in which they are interested and/or they become more serious in their home search, users of online services contact a Realtor® to assist them in the home search."

In its May 1999 study, "A Profile of the Internet Buyer," the California Association of Realtors® (CAR) found that Internet-using homebuyers spend far less time on the home buying process. In fact, the study said that "Internet buyers spend half as much time (two and a half months) as do traditional buyers (five months) on the buying process—starting from the point of considering buying a home, to the time spent looking for the home with a Realtor®, to the decision to purchase."

The study also indicated that online buyers spend half as much time looking with an agent for a home (a median of 4 weeks). Furthermore, an online buyer previews and visits only four homes, compared to eight homes viewed by a traditional buyer.

The same study reported that 71 percent of Internet buyers surveyed strongly agreed that the Internet gave them better understanding of the homebuying process; 52 percent said the Internet helped them shop for the best deal; 76 percent claimed the Internet put them in better control of the home buying process; and 56 percent claimed the Internet helped them locate the best possible neighborhood.

The CAR study also concluded that "89% of Internet buyers used the Internet to locate real estate firms, 87% to find a specific real estate agent, 82% to preview homes, 77% to learn about rights and obligations and 75% to identify specific homes to view. Almost all (93%) of the buyers are ‘very likely’ to use the Internet in the purchase of their next home. The remaining 7% stated that they were ‘likely’ to use the Internet in the future."

Excite (http://www.excite.com), a portal and search engine (see Chapter 5) with high stakes in the Internet behaviors of consumers, provides a profile of "the average Internet user who is interested in real estate," based on a Spring, 1999 study.

If Excite’s profile of users is correct, these are the Internet users whom you need to attract to your site and make happy when they get there.

Excite’s Profile of the Average Internet User Interested in Real Estate

Slightly More Often Female

• 54% are women.

Tend To Be Affluent and Educated

• 66% have a household income of $50,000 or greater.

• 25% have a household income of $100,000 or greater.

• 65% have attained a college degree or higher.

Likely To Be Married

• 71% are married.

Often Avid Online Users

• 55% go online for entertainment.

• 72% go online for personal research.

• 39% are on the Web every day.

Tend To Be Active Online Consumers

• 75% go online for shopping.

• 51% shop online for real estate.

Possibly Active and Social

• 30% entertain informally at home.

• 30% repair or renovate their homes.

Real Estate Agents on the Internet

Tomorrow’s Successful Agents Will Be Web-Proficient Agents

Most top-selling agents still rely on traditional, time-proven forms of promoting themselves—mailings to neighborhood "farms," print ads, cold calls, door hangers, etc. They devote little time or budget to Internet promotion, except perhaps to purchase a page on Realtor.com or to get a "template" Web site and put its address and that of their e-mail on their business cards.

In a handful of years, however, very few agents will fall into the top-producer category unless they have learned effective marketing on the World Wide Web. Web marketing will soon be an absolute necessity.

According to The Industry Standard magazine (http://www.thestandard.com), in 1994, only 35 percent of public schools were connected to the Internet. In 1998, that figure jumped to 89 percent, with individual classroom connections shooting up from 3 percent to 51 percent during the same period.26 Very soon all schools and classrooms will be connected.

So what? The "so what" is that individuals entering real estate professions now and in years to come see the Internet as an obvious marketing medium. They’ll use the online tools to their best advantage ... and where will you be? Hopefully, you’ll have already mastered the arts of online marketing and established yourself as the top online real estate professional in your area.

The Internet is transforming the relationship between consumers and agents, including the process of selecting an agent. Out-of-area buyers have access to far more information about agents than ever before, and they are now more likely to consider the quality and helpfulness of information provided on an agent’s Web site in their decisions.

Could the tidal wave growth of the Internet as a marketing tool actually threaten the continued sales results of successful agents? Most certainly it does—not just for top producers and not just from new and computer-comfortable agents. Unless agents act swiftly to continue being the primary contact on the Internet for property buyers and sellers, loan, title, escrow and other firms will gladly fill the gap. With huge Web sites and millions to spend on promotion, they will eagerly become a consumer’s first contact in a realty transaction, perhaps even charging agents a fee to gain a customer or hiring agents as employees or subcontractors to handle the more sensitive face-to-face aspects of certain sales.

Can Non-Web-Savvy Agents Survive By Learning This "New Stuff"?

Will tomorrow’s top producers be those who have embraced Web technology and are already "out there" waiting for the property buyers and sellers who are demanding ever-faster advice and transactions? Will tomorrow’s top producers be the real estate professionals with significant "presence" on the Web, those who have "positioned" themselves as Web-wise agents, those who dominate real estate Web marketing for their immediate marketing area?

Of course. What’s the solution for the non-Web-initiated? Learn. Learn, learn, learn. Also, be prepared to allocate an increasing, though highly cost-effective, amount of your promotional or advertising budget toward positioning yourself and getting "found" on the Web—becoming recognized and remembered when it comes time for that homebuyer or homeseller to "get serious."

Starting in early 1998, huge numbers of agents purchased and/or created a Web page or site and established e-mail accounts. But having is definitely not the same as using effectively, and the sad situation is that most of those agents only have! Countless times in seminars we’ve heard agents say, "Well, I paid for one, but I’ve never seen it" or "Yes, I have e-mail, but I don’t know my address and I can’t check it." You can be better at Web marketing than most of those other agents who market in your area—and right now it won’t take a lot of doing. The short story: If you’re going to spend the time and money to market yourself on the Web, you might as well use a little of that time to learn how to do it right.

Can you do it? Of course you can do it. In Internet marketing, once you know a few basics, the rest comes quickly. If you apply good marketing principles that you already know, you’re half way there. Reading this book is a good start. Use the checklists and plans in this book to establish and build your effective Internet marketing presence; then follow the e-mail communications models and strategies to become a top Web marketing real estate professional.

Do it now.