Simple economics compels companies to win the hearts, minds, and wallets of young consumers. However, young consumers’ preferences for leading brands don’t correlate with traffic to these companies’ Web sites. According to a new Technographics® Report from Forrester Research, Inc. (Nasdaq: FORR), certain companies don’t need mass-appeal sites at all and should redirect their online efforts to banner advertising and sponsorships. Brands dependent upon high-traffic numbers should focus on providing young consumers with functionality and utility.

“In comparing 16- to 22-year-olds’ brand preferences with their actual online behavior, we discovered a paradox,” said Ekaterina O. Walsh, analyst in Technographics. “Although Coke, Nike, and Pizza Hut are still among the favored brands of today’s young adults, these companies do not generate high traffic to their sites. Since brand leadership doesn’t necessarily yield the most clicks, companies must determine whether they need a Web site at all — or if they will gain brand equity by establishing a persistent online presence using other means.”

To help companies assess whether a branded product needs its own mass-appeal, high-traffic site, Forrester developed the Site Need Index (SNI). SNI measures product characteristics like price, purchase frequency, online configurability, and intensity of research required. Applying the SNI to different product categories reveals that consumer packaged goods are among the least in need of proprietary sites due to low price and because the purchases occur frequently and impulsively. Conversely, the SNI demonstrates that technology companies are most in need of high-traffic sites to build their brands and sell their products, followed by online retailers, travel, financial services, and automobiles.

Forrester’s analysis of the most visited sites shows that companies requiring mass-appeal Web sites should focus on functionality and utility, including strong customer service and technical support — not on games, chat, or sweepstakes. When describing the features of their favorite sites, 70% of young consumers highlight “quick loading,” but they also want sites that grab their attention. Striking a balance between cutting-edge technology and ease-of-use is crucial, as the sites most frequently visited feature the latest in animation, MPEG videos, and rich audio, while remaining easy to navigate and quick to load.

Companies that depend on high-traffic sites and those that don’t should both build their brands online with contextual banners. Eighty-six percent of surveyed young consumers have clicked on banner ads — 47% more than adults. Club or association sponsorships are another means of building brands online, as well as synchronized messages in more trusted channels like newspapers, magazines, TV, and radio.

“Assumptions that the young and wired are novelty-obsessed, time-wasting teens are off-base,” added Walsh. “Young consumers use the Net for everything from communicating with their teachers to managing their financial lives, and they are online 10 hours a week, which is three hours more than wired adults. Since they represent big numbers and dollars, marketers must use this new channel to build their brands and sell their products to the Net generation.”

For the Report “Branding For A Net Generation,” Forrester surveyed nearly 8,500 16- to 22-year-olds in the United States from Greenfield Online’s young consumer panel. The survey was fielded online from mid-May through early June 1999. Forty-seven percent of the young and wired are online, a rate that will reach 62% by 2003. These young online users earn a combined income of $37 billion a year, $1.5 billion of which they spend online. Forty percent buy online versus 30% for adults.