Broadband Users Spend More Money And Time Online

Broadband is the fuel that drives the e-economy, a massive survey just published by Forrester said, citing numbers that showed broadband users lead the American trend toward spending both more money and time online. Although only 31 percent of U.S. households connected to the Internet with some sort of broadband connection in 2004, that percentage is expected to climb to over 71 percent by the end of the decade, said Ted Schadler and Charles Golvin, a pair of Forrester analysts who compiled the results from polling over 68,000 homes. Continuing lower prices will be the key driver. In 2004, for instance, consumers spent an average of $2.55 less per month on broadband than they did the year before.

And broadband is one of the biggest determiners of online spending and time online, added Forrester. "Broadband households remain a great target for marketers and retailers because they spend 31 percent more online than dial-up households," wrote the analysts in their report.

Broadband users are also more likely to own other digital devices and use more online tools and services than Americans connecting through slow dial-up. They're more than 40 percent more likely to have a laptop for home use, for example, and twice as likely to use ad-blocking software when they surf. They're also far more likely to scan their systems for viruses and to back up their computers in case of disaster or crashes.

In the fight for those users, said Forrester, DSL is slowly closing the gap on cable Internet service providers. In 2004, the mix was cable at 61 percent, with DSL at 37 percent; by the end of 2005, however, the research firm's predicting that cable will fall to 58 percent and DSL will climb to 41 percent.

Broadband is also what drives adoption of such activities as online banking and online bill paying, with cable and DSL users forming the majority of every e-financial transaction type that Forrester tracked, from tracking account balances to trading stocks. Fifty-six percent of online bill payers, for instance, connect via broadband, while 60 percent of online traders do.

"The rise of consumers' adoption of personal devices, home networking, and broadband, combined with the increasing importance of the Internet in media, retail, banking, and healthcare, means that every consumer-facing industry must better understand the intricacies of technology adoption and use," said Schadler in a statement. "Missing from most marketers' toolboxes is an understanding that consumers' attitudes toward technology determine a lot about how they receive marketing messages, get service online, adopt new technologies, and spend their time."

For broadband users, that time is better spent online that watching TV, it seems. Those with broadband spend a half hour less per week watching television than do people living in dial-up households, and two hours per week less than those who don't go online at all.

Consumers who Forrester calls "tenured networkers" -- those with at least five years experience with online -- are even less likely to stick with traditional media, like TV and print newspapers. Compared to the group which doesn't have an Internet connection, tenured networkers spend 24 percent less time reading newspapers and 23 percent less time watching the tube.

"Advertisers take note: As households move from dial-up to broadband to tenured networker status, they spend far more online and are more likely to research products online," said the report.

"The differences are eye-popping."