Thursday, January 15, 2009

2009 Outlook

2008 is finally over! Time for new ideas, hopes and beginnings. I don't think there has been such a potentially pivotal time period on this planet since World War 2! So many things are happening at one time that reading the news is a dizzying experience daily. Where do we start? First there is Obama, then the global capitalistic meltdown, potential collapse of OPEC, more conflict and tension in the Middle East and the almost weekly reports of wealthy individuals who decide that suicide is better than being broke! What does all of this mean for Internet Marketing in 2009? I'm not clairvoyant but here is my take on what to expect in the coming months:
  • Yahoo! will Fade Away - The stage is already being set for Microsoft to finally take over Yahoo! However, the economy is so bad that it may not be economical for Microsoft to make such a sizable investment unless Yahoo! becomes a total "fire sale." If Microsoft does not purchase Yahoo! it does not appear that it can survive the fight against Google. It isn't clear is if a Yahoo! acquisition by Microsoft is enough to eat away significant market share from Google. The outlook for both companies is not positive. Additionally, the landscape of search is changing so quickly that Yahoo!'s fate might already be sealed. At the present time more searches are conducted on YouTube than Yahoo! I'm certain that Facebook searches are rapidly approaching search engine levels.
  • Online Video will Monetize and Standardize - Over 80% of internet users are viewing video's online. Online video as an advertising medium is significantly more effective than other forms of interactive media. The CTR for online video can be as hight is 35%. History has proven that where there are masses of people then dollars will follow. Emarketer is forecasting that online video ad spending will increase to $4.6 billion in 2013, up from $587 million in 2008. In order for that to happen Online Video must standardize its advertising formats. At the present time, no two online video promotions are alike. In the past 2 years there have been a lot of video syndication companies appearing on the web which have helped to standardize the promotional format. I expect this trend to continue this year.
  • Government will Embrace Technology -For the first time in US history we have a President who is addicted to his Blackberry. Another first is witnessing Internet Marketing propel an individual into the White House. If anyone still questions the power of the Internet as a promotional medium then I have a bridge to sell them. I expect the Obama administration to continue to embrace the Internet as they settle into leading the free world. For the first time the US executive branch will have a Chief Technology Officer. There will be both positive and negative implications for having a tech savyy government. The positive: The internet will continue to stay "free." Additionally, barriers will be lowered for conducting business on the internet. The Obama team has already announced that they will inject billions of US dollars into communications related technology. The negative: State governments and Federal governments will likely work more closely together and the "big brother" phenomenon will slowly become more of a reality.
  • Touch Screen Trend will Phase Out Again - We can thank Apple introducing the iPhone and the iPod Touch for creating this Touch Screen craze. We've been down this road before with the Z80 Computer (1984) with its flat keyboard; the Palm Pilot (1997) with is touch screen UI; the Tablet PC (2001). When will people learn that a touch screen is a poor substitute for a keyboard that exists in 3 dimensions. I will admit that there are some applications where a touch screen is perfectly acceptable, but not where significant typing is required.
  • BtoC E-Commerce will Flourish - Everyday it is becoming increasingly clear for retail establishments that unless they add signicant value to the products and services they sell, it is very difficult to turn a profit with a bricks and mortar storfront. At the present time e-commerce is only 3.4% of total commerce but this number has more than doubled in the last 5 years. Since information is readily available on the web, all products have become essentially commodities. The only reason to go to a "store" are: 1. If you have an immediate need for a product (ie. grocery store, drug store). 2. To obtain a physical social experience (ie. movie theater, restaurant, coffee shop). 3. To save money (ie. walmart). Otherwise, it usually make sense to purchase online.
  • Social Networking Ad Revenue will be Flat - It is really facinating to me that the most popular forms of media seem to consistantly have relatively low advertising revenue. This is certainly true for Mobile Phones with over 2 billion users worldwide and only $2.7 billion (USD) in ad revenue. Facebook alone has over 150 million members but social network advertising was $1.2 billion (USD) in 2008. When you compare that to Television which has ad revenues on the order of $45 billion (USD) it is clear that the newer forms of media a miniscule in comparison. The big question is why. It is my opinion the passive nature of TV contributes to its effectiveness as an advertising medium. Interactivity doesn't always translate to effective advertising unless the product itself can become the promotion.
Regardless of what actually happens, 2009 will most certainly not be overlooked by history. Lets make it a great year!!