by Craig Hordlow, Chief Strategist, and Ed Kim, CEO
The senior thought leaders at Red Bricks Media gathered in the beginning of the year to hold a round-table discussion about 2009 digital marketing and online trends.
There are some very common predictions made by search marketers for 2009, most notably advertising budgets taking a hit as a result of the economy. Our list of predictions explores the nuances of some of the blanket statements made about 2009.
1. Online ad spending gainers and losers: There has been a lot of talk about the impact of the economy on online ad budgets, the theme typically being that traditional marketing budgets will be cut if not re-appropriated to measurable online campaigns. We made the following predictions by channel, based on our observations of the industry and hands-on experience managing client campaigns:
a. Paid search advertising spending will increase from $10B in 2008 to $12B in 2009.
b. Display ad spending will barely increase: from $4.6B in 2008 to $5B in 2009. As ad rates decrease, publishers will increasingly offer more performance based buys.
c. Video will experience the most explosive growth, from $587M in 2008 to $850M in 2009.
d. Classifieds will take a hit, from $3.1B in 2008 to $2.9B in 2009.
e. Lead generation spending will be about the same ($1.6B)
f. Sponsorships will decrease from $590M (2008) to $510M (2009)
2. More attention to SEO: SEO will become more competitive as companies (finally!) begin adequately investing in organic search. Previously perceived as a long-term investment, SEO will become necessary for companies facing slashed marketing budgets and the challenge of accountability.
3. Data portability will become a movement: What is data portability? Simply put, as users traverse the web, they often have numerous user accounts, passwords, and profiles. According to Dave Morin, a senior platform manager at Facebook, “[data portability] is about giving users the ability to take their identity and friends with them around the Web, while being able to trust that their information is always up to date and always protected by their privacy settings.” It’s also about being able to cross-leverage tools. For example, a Skype user on Craigslist might be able to click a telephone number and have Skype begin dialing that number. The possibilities are both seemingly endless and very realistic.
4. Social networking will see several transformations:
a. Facebook Connect – This is Facebook’s foray into data portability, which launched with partners Amiando, CBS.com, CNET, CollegeHumor, Disney-ABC Television Group, Evite, Flock, Hulu, Kongregate, Loopt, Plaxo, Radar, Red Bull, Seesmic, Socialthing!, StumbleUpon, The Insider, Twitter, Uber, Vimeo and Xobni.
b. Enhanced self-service advertising platforms will be developed to increase revenue and lower overhead.
5. Google will make significant enhancements to its tools:
a. Google AdPlanner will offer display buyers more tools (whereas before, the tools catered mostly to PPC marketers)
b. AdWords editor (currently at version 7.0) will have many more features developed (watch for geo-targeting enhancements)
c. Google Analytics will continue to expand and minimize the differentiators between itself and its fee-based competitors
6. Print will continue its Titanic sink into digital:
a. In October 2008, the Christian Science Monitor became the first national newspaper to announce a move to a Web-only daily distribution strategy. More publishers will go this route or reduce their publishing frequency.
b. Amazon’s digital reader, the Kindle, sold out in December 2008 and is currently unavailable until late April 2009. It represents the first giant step forward in a migration towards digital reading. We predict that electronic readers will be one of the top selling items in the 2009 holiday season, consequently setting up 2010 as the “iPod” year for digital readers.
7. Startups in survival mode: The lack of capital, as evidenced by Sequoia Capital’s alarming message to its investment strategists, will place an emphasis on survival strategies rather than startups with innovate ideas. 2009 will be a “lock down” year with far fewer startups introducing new ideas into the market.
8. We will see a convergence between the internet and TV:
a. The FCC has mandated that all TV signals must switch to digital by February 2009, a move which coincides with the increasing interplay between the television screen and the internet. Heavy TV users are also heavy internet users, often using both mediums at the same time. According to a recent Nielsen study, “early trends seem to indicate that online usage is complementing, not substituting for, traditional television viewing.”
b. There is an opportunity for communication across these channels which before seemed so separate and siloed. Consumers are hooking their TVs up to their computers to enjoy a movie or TV show streamed from the internet. They are also going online to vote on TV shows that they are watching in real time. In the not-too-distant future, we may see shows like reality TV further harnessing the convergence between the two mediums by offering polls on a website that update in real time on TV, or vice versa. One device that is bridging the gap is the Roku, which allows users to download movies from Netflix to the Roku device and upload that content to the TV.
c. The live video streams of Obama’s inauguration prove that audiences are turning to the internet for high-quality, up-to-the minute news. It also shows that video content providers have not yet figured out how to scale for a large volume of viewers; in 2009, they will need to find a solution.
9. Video will continue on a path of explosive growth:
a. As high-speed internet connections become the norm (broadband penetration is currently at 91.54 % in the U.S.), the demand for video content will grow. In 2008, the iPhone also paved the way for consumers to enjoy video content while on mobile phones. In 2009, consumers will continue enjoying video content both at home and on the go.
b. We also predict that 2009 will be the year that video content distribution sites figure out a successful advertising and revenue model. Whether it’s a pre-roll, post-roll, or pop-up ads during the video, this is the year that video advertising will finally start to make sense.
10. Agency consolidation will accelerate:
a. With the recession, companies will move marketing dollars towards proven performance channels, demanding accountability on their marketing campaigns. Often, digital and performance-focused agencies provide the results that companies are looking for. Large holding companies and traditional advertising agencies will scramble to acquire digital shops to meet client demand and gain subject matter expertise.
