Finnish Direct Marketing Takes Internet in Stride

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HELSINKI, Finland - More than half of Finland's 5.2 million people were on the Web in the past three months, and last year, Finns bought goods and services -- both business-to-business and business-to-consumer -- worth 800 million Finish Marks, or $135.2 million.

Penetration in the 15- to 24-year-old group is a staggering 95 percent, according to the Finnish Direct Marketing Association, SSML, while the steepest increase in 1999 occurred among the 50 to 64 group that went from 25 to 35 percent.

Home penetration, however, is much smaller. A recent study found that only 400,000 households, about 20 percent of the total or 1 million people, have computers at home that are linked to the Web.

The bulk of users have access at work or at libraries and other public facilities where computers are connected to the Web and their use is free for as long as a surfer wants to stay online.

Internet banking is the most widely spread Web activity, with Merita the world's largest in relative terms -- it has 750,000 customers, 54 percent of the bank's total -- compared to Wells Fargo's 1.4 million, 9 percent of its total number of customers.

But despite the high penetration, Finnish consumers are still hesitant about buying much from the Web. Most of the activity seems to come from the BTB sector. One reason for their caution: online payment safety.

Surprisingly, according to Kari Alander, an executive at a major Finnish direct marketing agency, companies have warned consumers about safety. Indeed, one of them is the firm that issues Visa cards in Finland.

Alander warned, however, that numbers are fluctuating, with penetration in one study as high as 67 percent compared to the SSML estimate of 52 percent.

"What we do know," Alander said, "is that the growth rate in online penetration is enormous and that the ways people use the Net are diversifying rapidly."

Through Nokia, Finland's global telecommunications manufacturer, the country has become a leader in WAP technology, but its actual use is still limited.

"Lets put it this way," Sakaria Virtanen, SSML's managing director, said, "WAP is an opportunity not as widely used as the hype around it would suggest." The main reason is production lines can't keep up with demand so that not enough WAP-related devices are on the market.

Internet banking uses WAP, Virtanen said, "and recently it became possible to book and pay for movie tickets via WAP." Also, major IT firms like IBM, ICL, Siemens and Hewlett-Packard have WAP development units in Finland.

One reason WAP use is likely to surge here is that Finland has more mobile than wired phones -- 2 million Finns have them and the number is rising steadily, Alander said.

The display of goods online is broad, covering everything from airline tickets, banking services, mail order, groceries, construction materials and automobiles to plant and seed sellers, books, compact discs, computers and software.

Although eBay is not active in Finland, QXL is through its recent acquisition of the Swedish Bidlet, known here as A local Finnish house is, while the German and magazine subscription service are also active.

But the Web has not curtailed more traditional direct marketing activities like direct mail, direct response television and telemarketing. Indeed Finnish direct marketers consider the Internet as another tool they can use in their business.

"From the DM industry's point of view," Virtanen said, "both Net advertising and e-commerce are just new means of communications and commerce, yet the basic concept of taking care of customer relationships is the bottom line.

"I don't see the traditional ways of doing direct marketing and the Internet colliding. It's more a matter of the product in question to see which one is used."

Direct mail volume continues to rise as applications spread from traditional business communication to customer relationship management and customer information systems. Growth rates are about 7 percent a year, double that of other forms of advertising.

Direct mail is almost always opened. Virtanen cited a SSML study that found some 95 percent of all addressed direct mail was opened and 90 percent of unaddressed mail. Only 1 percent of the population has registered for Finland's mail preference service.

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