01 Dec 2016
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Research Brief: So Many Sites, So Little Time


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Shane Greenstein
(photo by Russ Campbell)

Understanding how people spend their time online is essential for any organization hoping to capture and keep consumer eyeballs—yet what we know about internet behavior is just beginning to take shape. A new working paper by Professor Shane Greenstein with Andre Boik of UC Davis and Jeffrey Prince of Indiana University offers surprising—and helpful—insights for advertisers or anyone else hoping to win online attention.

Greenstein and his coauthors analyzed activity on the primary home computer of more than 40,000 US households in 2008 and over 30,000 in 2013. The first surprise? Despite the expansion of online content between 2008 and 2013 (think Netflix, Hulu, and YouTube), the number of sites and amount of time spent on them remained stable, even as the types of sites visited changed, from chat rooms and news to social media and video.

That stability becomes easier to understand if you take into account that internet use inside most homes is an activity that takes place in little moments of free time that don’t change much. This “bursty” or “plastic” quality (as anthropologists describe it) helps define what makes for effective advertising or promotion.

“If you have a concept to communicate that is 20 minutes long, you will be competing with other instances of 20-minute content,” Greenstein explains. “Don’t expect households to take two 10-minute slots and put them together for you. That’s not going to happen.”

Also of note, households with yearly incomes of $25,000 to $35,000 spent an average of 92 minutes more time online than households making $100,000 or more. So while internet adoption does skew to high-income households, the window for catching their attention is smaller. When projected to US demographics, however, the study’s findings indicate that an advertiser is still slightly more likely to capture the attention of a higher-income household than a lower one.

Understanding how households allocate their scarce attention could have implications for other markets, Greenstein adds, such as television and radio. “Online advertising is still a work in progress, with considerable effort being invested in improving its cost-effectiveness,” he says. “Those efforts—and lessons learned—are relevant across many formats, not just PCs. There is so much more to come.”

“The Empirical Economics of Online Attention,” by Andre Boik, Shane Greenstein, and Jeffrey Prince, NBER Working Paper.

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