French Web Use Growing but Lagging

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Internet use in France last year grew rapidly across a wide spectrum from customer relationship management applications to banner advertising but was stymied by a continued reluctance to buy more heavily and more widely online.


These developments were made clear by a rash of recent studies by French and U.S. research companies looking at the state of the Web in Europe's second-largest economy.


PricewaterhouseCoopers conducted its third study on the state of Internet advertising in France and found that revenue reached 1.2 billion francs ($163.4 million), up a whopping 134 percent over 1999 totals.


Banner advertising continued to dominate the French Web but nowhere near as much as it had in 1999 -- 76.7 percent of all online ad spending in 2000 versus 87 percent the previous year. Sponsorships rose from 10 percent to 12.6 percent, while e-mail, co-production of content and other forms of advertising moved from 2 percent to 10.7 percent.


"The year was marked by greater seasonal fluctuations than in the past," said Duc Pham-Hi, PWC's director of risk management. "The traditional summer slowdown was much greater than in previous years. The impact of a turbulent stock market led to an unusual downturn in October, which was followed by accelerating new growth at the year's end."


While dot-coms tended to dominate online advertising, the year also saw many other sectors of the economy represented, signaling the arrival of the "old economy" on the Internet, the PWC study concluded.


An IDC study on the growth of CRM in France last year credited the opening of the Internet as a channel of client interaction with helping to boost growth of CRM sales by 73 percent to 7 billion francs ($1 billion).


"Technological developments have allowed creation of Internet portals that are in effect platforms for managing client relationships," the study said. "They have made the Internet a privileged channel for managing client relationships on a self-service basis."


IDC noted that financial services, telecoms and energy were sectors of the French economy that had invested most heavily in CRM development.


Growth of the CRM market this year should be carried by the continued development of marketing tools and management of client relationships on a self-service basis, made possible by the Web.


Another factor boosting French Web use is the growth of mobile phones and the attendant capability to access the Internet in wireless fashion. Reuters reported that mobile phone sales in the first quarter totaled 1.6 million units.


That boosted the number of mobile phone clients in France past 31 million users, some 52 percent of the total population. The increase during 2000 amounted to 38 percent.


On the negative side of the ledger was a study by research firm Sofinco-Ipsos published in the French business daily La Tribune. It said Europeans in general and the French in particular regarded e-buying with "prudence."


The study found that only 34 percent of the population has access to the Internet -- barely ahead of Italy and Portugal, with 33 percent and 32 percent, respectively, and far behind the Netherlands and Germany, with 57 percent and 47 percent, respectively.


Ipsos CEO Eduard Lecerf cited several reasons for the French lag: concerns about Internet security; the Minitel effect, which slowed e-commerce (Minitel was a primitive online device introduced in the 1980s); and the negative impression many nonbuyers had about Web purchasing.


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