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Tax Prep Providers Enjoying Healthy Marketing Return

14 Mar, 2012 By: Jackie Jones

RESTON, Va. – The online tax preparation category has seen a noteworthy increase in activity compared to 2011, driven in part by ramped-up ad expenditures among online tax preparers as well as increased marketing activity, according to a new analysis by comScore Inc.

In January, one in seven U.S. Internet users visited the category to compile information and begin filing their 2011 tax returns, a 15-percent gain when compared to January 2011, according to comScore’s data.

“While a large segment of Americans have become comfortable with filing their taxes online, the strong gains in the category this year seem to be propelled by increased marketing activity on the part of the key tax prep providers,” said Brian Jurutka, comScore senior vice president. “During the first several weeks of 2012, we saw the top three DIY online tax prep providers dominate the category, representing more than 90 percent of all online filings, with Intuit alone accounting for a majority of the market. It will be interesting to see whether the overall growth in the category is sustained and how market shares among tax prep providers may shift as we approach tax filing day on April 17.”

Among online do-it-yourself tax preparation providers, comScore data indicated that Intuit leads the market with nearly 60 percent of all tax units or returns filed online between Jan. 1 and Feb. 18. The three largest DIY online tax preparation providers – Intuit, TaxACT and H&R Block – accounted for more than 90 percent of DIY tax units filed online, according to comScore.

A demographic analysis of visitation to the taxes category shows growth throughout all segments, with consumers ages 35 to 44 boasting the highest growth rate. Thirty-five- to 44-year-olds’ use of online tax preparation increased 24 percent from January 2011 to January 2012, with users between 25-34 years old and 45-54 years old following behind, each increasing 15 percent. Online tax preparation users ages 35-44 now account for the greatest share of the category at 25 percent, according to comScore.

“The significant growth we’re seeing among 35- to 44-year-olds suggests that advertisers may be focusing their media plans on this age segment as an area of growth,” Jurutka said. “In particular, tax prep services seem to be pushing the message that they can offer assistance to help consumers file correctly online, which may be appealing to a segment of the market that prefers conducting transactions on the Web but may also have more complex filing needs.”

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