From cautious acceptors to Web embracers

Editor’s note: Everett Hernandez is executive vice president at TNS Market Development, a San Diego research firm.

While still much lower than in the U.S., Internet penetration in Latin America is increasing rapidly. One forecast is for annual growth of 38 percent, which translates to millions of new Internet users each year. With a half-billion people in Latin America, global marketers are clamoring for more information on this potentially lucrative region.

Up to now, research on Latin American Internet usage has focused on measuring penetration, cataloging demographics and describing basic online behavior. But TNS Market Development recently completed a research project to discover how Latin Americans feel about using the Internet, and their hopes and concerns for this powerful technology. The study identifies common attitudes toward the Internet and how it is used, and then creates segments around groups having statistically similar attitudes. The results provide a look at these Internet user segments, profiling them on attitudes, online behavior and demographics.

Sample and methodology

An online survey methodology was used for this research, and a total of 14,162 qualifying Latin American Internet users from 19 different countries participated in the survey. Respondents were recruited online using banner and pop-up ads placed on a variety of Spanish and Portuguese-language Web sites popular in Latin America. Potential respondents were offered an incentive in the form of a chance to win a cash prize.

The sole criterion for inclusion in the study was being a Latin American Internet user. Those residing in the U.S. who completed the survey were excluded from this analysis. The questionnaire length was approximately 20 minutes, and respondents were given their choice of completing the survey in Spanish, Portuguese or English. The data was weighted by country of residence in proportion to the estimated number of Internet users in each country.

A primary component of the survey was a series of statements about the Internet that respondents rated based on their level of agreement with the statements. Factor analysis was used to group these statements into a set of six underlying attitude factors. These factors were then used as input into a cluster analysis, which grouped the respondents into six segments.

The following are the six attitude factors and the statements that define them:

Factor 1: opportunity and convenience

  • The Internet saves me a lot of time.
  • I believe that the Internet provides me with new opportunities.
  • It is important for children to have Internet access in order to succeed in school.
  • The Internet is a valuable tool for business.
  • The Web gives me access to information I never had before.
  • I would rather get news from the Internet than from newspapers or television.

Factor 2: e-commerce confidence

  • It is safe to purchase and pay over the Internet.
  • It is safe to do my banking online.
  • Shopping on the Internet is more convenient than going to a store.

Factor 3: global connection and change

  • The Internet is breaking down barriers among countries.
  • The Internet is uniting people from around the world who speak my language.
  • People should be able to publish anything they want on the Internet.
  • Eventually everyone will be connected to the Internet.
  • The Internet is my primary connection to the rest of the world.
  • The Internet is revolutionizing the way companies in my country do business.
  • The Internet is easy to use.
  • The Internet has the potential to drive social and economic change in my country.

Factor 4: online entertainment

  • I use the Internet more for fun than to learn things.
  • I use the Internet to relax.
  • People I meet on the Internet are as much my friends to me as those I meet in person.

Factor 5: information-gathering

  • I use the Internet to find out what is going on in my city or community.
  • I use the Web to get information about products and services.
  • The Internet teaches me about other countries and cultures around the world.

Factor 6: Internet concerns

  • It is dangerous for children to use the Internet unsupervised.
  • Most people spend too much time on the Internet when they should be doing other things.
  • I am concerned about objectionable content like pornography on the Internet.
  • I only use the Internet to obtain information on products but never to make purchases.
  • People who can’t afford a computer should have free access to the Internet.

Segment profiles

Segment 1: Detached Transactors (20 percent)

The defining Internet attitude for this segment is no desire to connect with others online. They are trusting and confident about e-commerce transactions, but are somewhat concerned about parental supervision and objectionable online content.

They have the most experience using the Internet among all the segments. They are the most likely to perform financial transactions online and the most frequent online purchasers. They are also most likely to have investments, insurance and credit cards. They are least likely to interact with others online (e.g., chat, games, file sharing, personal ads). They have the least frequent home e-mail use, but are most likely to use e-mail at work. This segment indexes high in Brazil.

Segment 2: Practical Seekers (16 percent)

Members of this segment say they mostly go online to get information, and they believe the Internet saves them time and provides new opportunities. There are no concerns about child Internet use and objectionable content.

When online they are most likely to visit sites about business/economy, local events, and technology. They also frequently research products and download music, and are above average online purchasers (both in frequency and amount spent). They are the most frequent e-mail users from home, and they also have the highest ownership of a DVD player, digital camcorder, digital camera and cable TV. This segment is demographically close to average.

Segment 3: Personal Connectors (11 percent)

The prominent attitude for this segment is viewing the Internet as a force of global change and personal connection. They do not feel the Internet saves them time or offers them opportunities.

They are below average on accessing most types of online content, with the exception of chatting online, where they are above average. They index below average on online financial transactions, online purchasing and using online classifieds or yellow-page advertising. This segment indexes highest in Argentina and Mexico, lowest in Brazil. The segment also skews toward more male and single.

Segment 4: Young Funsters (10 percent)

This segment feels the Internet is for relaxing and having fun. They do not see the Internet as creating global change, and do not use it for information.

They are the most recent Internet users, and are below average on most types of online content visited except communities, entertainment and adult sites, where they index high. They are also above average for playing games, chat sessions and downloading videos. They are infrequent online purchasers and low spenders. This segment indexes average by country. It is by far the youngest segment, and the most likely to be single, a student and unemployed.

Segment 5: Cautious Acceptors (18 percent)

Members of this segment have the strongest concerns about parental supervision and inappropriate online content, and they do not trust online transactions. They do not use the Internet for fun, though they understand Internet’s potential to connect the world and feel the Internet can be convenient.

This segment is above average for visiting education sites, and below average for shopping and finance content. They do very little online purchasing or other financial transactions and have below average e-mail use. This segment is the only segment with more females than males. This is also the oldest segment.

Segment 6: Web Embracers (25 percent)

Attitudinally, they are confident that e-commerce is secure and convenient. They find the Internet very entertaining and have some concern about children viewing objectionable content.

This segment is above average on visiting most types of Internet content, especially automotive, weather and family-oriented sites. They have the most frequent use of many online activities, especially online auctions, online dating, phone calls and watching streaming videocasts. They spend an above average amount of time online at work and are also the most frequent e-mail users from home. They are by far most likely to say they would go online to set up a digital wallet, conduct a stock trade, sign up for a credit card, and buy from an auction site. This is the largest segment of Latin American Internet users. They have an average distribution by country and are most likely to be employed.

Marketing opportunities

Each of these segments presents marketers with a range of opportunities. But it’s important to know how best to reach them.

Web Embracers are the largest segment and the one with the most online activities. They respond to e-mail solicitations and are very reachable through ads on a variety of sites. However, their lower incomes make them a better target for bargain offers on everyday goods than for luxury items.

Detached Transactors are the most frequent online purchasers, and are especially interested in online finances. They are good candidates for offers for investments, insurance and credit cards, but only from a trusted name. They are best reached through finance and investment sites, especially those catering to Brazilians. You will not find them at entertainment-oriented sites.

Cautious Acceptors are probably the least attractive segment for marketers. They are unlikely to make online purchases and they visit most types of sites far below the average. One of the few opportunities for this segment could be advertising for Internet site-blocking software on education-related or women’s sites.

Practical Seekers are above average on purchasing online and are the primary target for high-tech equipment like digital music and digital imaging. Advertising on sites that provide business, local entertainment and technology information will reach them best. The communications should focus on informing them rather than making an emotional appeal.

Personal Connectors are not a strong segment for online marketers, since they seldom purchase online and use the computer mostly for chatting and e-mail. They may be interested in online dating or products that promise to make them more appealing to the opposite sex.

Young Funsters do not currently have the income to command much attention from marketers but they are likely to be key consumers in the near future. Advertisements for entertainment such as music, movies and video games will be most effective now, while those for products targeting young adults will lay the groundwork for future purchases. Communications should stress fun and leverage their identification with the youth culture.

Although this article is free for personal use, it is still coyrighted and can not be copied or distributed without proper authorization from Quirk's Marketing Research Review.