Gas Prices and Measuring Internet Sensitivity

Bill Tancer, the general manager of Hitwise and author of Click: What Millions of People Are Doing Online and Why it Matters, blogged here earlier this week about Internet trends and data. This is the second of three posts on the subject.

One of the things that I’ve learned from monitoring the Hitwise aggregate search behavior of 10 million Internet users in the U.S. is that, as a group, we have a remarkably short attention span.

Take any big newsworthy event, if gore or nudity is not at play in the story; expect the spike in Internet searches and resulting site visits on that event to last no more than one week. Rising gas prices are no exception — until recently.

If we chart the visits to sites that provide gas station comparison shopping (sites like gasbuddy.com) against average U.S. gas prices (all grades), we find examples of short-lived hyper sensitivity in September 2005 when retail prices crossed the $3.00 per gallon line, and then again in May 2006 as we approached that same price. It’s interesting to note that subsequent surges past $3.00 per gallon have been met with ever declining visits to gas comparison sites.

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Even though gas prices maintained their high levels for several weeks, as Internet searchers we were on to other topics beyond finding the cheapest place to fuel up.

Since this Spring however, gas comparison shopping is showing steady increases indicating that as we hover around $4.00 per gallon, we may have reached a point where getting the most fuel for our money becomes a more integral part of our lives.

To understand this trend further, I analyzed the demographics of visitors to the most visited gas comparison site, gasbuddy.com, over the last four weeks. Visitors to the site were predominantly older (49.57 percent of site visitors were 55 years old or older) with fixed or lower incomes and 47.34 percent were from households earning under $60,000 per year).

This is a dramatic departure from the demographics of that same site in June 2007. At that time, the largest income segment of visitors to the site was households earning over $150,000 per year (25.69 percent). Today the upper income segment accounts for only 9.6 percent of Gasbuddy’s site visitors.

Historically — adding validation to the adage that you have to save money to make money — households earning over $150,000 per year were the most likely to visit comparison shopping sites like Shopping.com, Shopzilla, and Beyond.com, but in the case of surging gas prices, Internet behavioral data indicates that finding the best price is becoming more of a necessity for those on lower or fixed incomes.

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  1. Jason B says:

    Just eyeballing the chart, I’d say the rate of change in gas prices versus the gas shopping site traffic might be an interesting relationship to examine.

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  2. Drew Lessard says:

    I find this pretty interesting; however, a far more interesting question to answer with data is: How much of the increases in e-commerce can be attributed to spikes in gas prices? And, therefore, are shoppers turning their shopping carts in for “shopping carts”?

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  3. G Pendergast says:

    Grasp a man’s wallet or his testicles and his heart and mind will follow

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  4. Dave Zawislak says:

    Could be that after a certain price, going almost any distance furthur eats up in gas usage more than the savings.

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  5. Witty Nickname says:

    I think the main reason visits don’t keep up is because these sites suck. The cheap gas stations fluctuate prices every few hours and these sites can not keep up. No wonder they don’t get repeat visitors.

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  6. Black Political Analysis says:

    Let’s face it. Most, but not all Americans still don’t have access to the Internet and even all those that have the Internet, don’t necessarily grasp how to make the Internet useful for themselves. I would guess plenty more down-income folks would benefit from this, if they were aware of sites like this.

    http://blackpoliticalanalysis.com

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  7. HardyW says:

    Does it just reflect the amount of time it takes for the idea to penetrate that even apparently large differences in gas price like $0.10 per gal don’t actually add up to much over the volume of a whole tank?

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  8. A.S. says:

    There could be many other confounding factors.

    If one goes to a gas comparison website and finds the stations that sell gas cheaper, then one can commit these stations to memory, e.g., on one’s route, near one’s home. The presumption is that stations that sell cheaper continue to do so.

    The increase in searchers may be people who are less sufficiently educated or motivated or both as intelligent shoppers and only in the face of economic stress are they driven to adopt prudent purchasing behavior.

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