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Popularity rises for broadband, rich media ads

By Katie Hamm, IDG News Service
January 08, 2004 04:50 PM ET

IDG News Service - As prices decline and more ISPs promote broadband connections, the number of home Internet users connecting via broadband has increased by 27% in six months, according to a report by Nielsen/NetRatings released Thursday.

The Internet audience measurement and analysis group found that 49.5 million Americans, or 38% of all home Internet users, connected via broadband in November 2003, compared to 39 million in May 2003. Narrowband connections did not change during the six-month period.

"Prices have been dropping, and a lot of the larger players like AOL and Earthlink are pushing the broadband side. With broadband being pushed quite heavily, the buzz around it alone will cause people to go out and get it," said Marc Ryan, director of analysis at Nielsen/NetRatings.

"At some point there has to be saturation, but I think to some degree we’ll see further discounting," Ryan said about the price drops for broadband.

Ryan also noted that people are more likely to go online and purchase items over the Internet if they are connected via a fast broadband service.

"There are specific reasons why people get broadband; some for online gaming, some for online video. Maybe people even want to take the experience they have at work with broadband and take broadband access into the home," Ryan said.

An increase also occurred over a longer period of time in the use of rich media advertising, Nielsen/NetRatings reported. In November 2003, 17% of all online advertising impressions were rich media ads, compared to only 7% in November 2002. Simultaneously, non-rich media ads decreased by 10 percentage points.

"The ability to create rich media is tied to broadband usage. Rich media advertisements are generally more effective. It becomes more like a TV experience, and you need broadband connections to make some of the rich media technologies possible," Ryan said.

However, Ryan did not feel that businesses advertising on the Internet necessarily felt pressure to create a rich media ad to be successful.

"You can still have an effective ad with a narrowband connection," he said.

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