Security Focus: Online Commerce's Fear Factor

Professional hotties like Jessica Biel or Brad Pitt might tell you that sex sells. But real marketers know that fear, or one of its many shades -- worry, jealousy, uncertainty, anxiety -- is what moves cars in Detroit, sells soap in Cincinnati, and decides who sleeps in the Lincoln bedroom.

But could fear's selling formula be in flux? In the strange new world of Internet video, absolutely. Out of the mountain of statistics supporting digital media's star turn, two new studies are worthy of note. Research outfit Points North Group reports that 20 percent of Web users watch news online three to four times a week. EMarketer reports that, based on comScore data, 56 percent of the U.S. online population viewed streaming media content, with each person watching around 70 minutes per month.

That's the good news. But there is growing evidence that fears over personal security, identity theft, and technologies that seek to expose private information are eroding confidence in Web media. In a study commissioned by Consumer Reports WebWatch, Princeton Survey Research Associates International found that 9 out of 10 users changed their Internet use because of concerns over identity theft, and 30 percent of users reduced their overall Web exposure.

Web research firm TRUSTe found that while 78 percent of Internet users said they shop online, 69 percent would limit their purchases because they fear misuse of personal information, with 22 percent opting not to make any purchases at all.

The researchers also found this fear unevenly distributed across different sites. Here, at least, it pays to be a traditional media outlet with a Web presence: TV news and newspaper sites were rated among the most trusted online, consumer-created blog sites among the least.

"The Internet is based on trust, the very thing that makes it flexible and interesting," says Evans Witt, CEO at Princeton Survey Research. "But once (online users) get burned they are gone." Some researchers argue that the risks are limited. Phil Rist, vice president of strategy at BigResearch, thinks the fear is limited to credit-card use. Once that concern is managed, he says, Internet users are enthusiastic about consuming online.

"Just look at the explosive growth in usage," Rist says. "These are not the numbers of a scared population. The sky is the limit as far as we are concerned."

Other experts have a darker view. They see today's enthusiasm for online content limited to early adopters, and see a gap forming between more aggressive users and the wider market. "We are still in the fat part of early usage," says Craig Leddy, contributing analyst at Points North Group. "There are several challenges for media companies and advertisers as they grow into the mainstream. Security and building trust are one of them."

Beau Brendler, director at Consumer Reports WebWatch, says there is a "clumping" of worries about smaller fears like phishing attacks, credit card theft, and spam that are coalescing into larger concerns about the Web. "We are putting an enormous security burden on the computer in people's homes," says Brendler. "You do not have to protect the TV in the same way."

Leading advertising executives are paying attention.

"In 2006 there is exactly one thing I am talking about: confusion. [For the consumer], it is, 'What am I getting, how am I getting it, and how long can I keep it?' " says Mitch Oscar, senior vice president at Carat Digital. "The process will be explaining that with minimal stress."

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