Welcome to 2008! Another year wraps up and a new year of digital marketing evolution lies before us. It’s an exciting time to be a marketer, and an even more exciting time to be part of the digital marketing community. I’ve been doing a lot of public speaking and agency training lately, and the one thing I’ve been saying for the last few months is that the next 18 months will unveil more change and evolution than the last few years. Consumers and technology companies have been driving the evolutionary bus the last couple of years and the gestation period for most digital channels has transpired, it is time for the marketers to grab the baton. Some of us have been running with it all along, but most marketers (and agencies) have only had their feet wet digitally. Granted, there is an entire industry of digitally committed clients and agencies out there, but the marketing patterns and trends differ from those of traditional media. In theory the largest advertisers in other media should be bubbling to the top of the lists of largest digital advertisers, but this is not yet the case. With agencies it is a little more-so. However – we’ll get there!
I can go into each of these for hours, or maybe even days or weeks – in fact I will, but not today…Here is an overview on what to expect for 2008 and beyond.
1. Social Media: A Journey Not a Destination:Social media is already a growing part of the digital media budget allocation and this trend will continue. Integrated advertising programs allow you to become part of the social networking experience versus just an advertiser sitting on top of it. Micro-targeting, a la search, will emerge by the end of the year, if not sooner. This is great news for large and small advertisers alike. Custom [commercial] pages are already selling for mid six figure numbers at MySpace, and Facebook just rolled out a business page program this past quarter as well, providing marketers the ability to directly engage with the audiences of the top two social networks. Demand and cost for these integrated opportunities will continue to increase. This year the social networks will also figure out how to effectively tap into the vault of consumer data and expand hyper-targeted advertising options for advertisers of all sizes, the likes of which we have not seen before at such scale.
All eyes have been on Facebook after the #2 social network upped the ante in the social media space in 2007 by creating a truly open back end followed by rolling out some controversial ad programs (and some very cool ones) months later. But let’s not forget that the social media ecosystem is greater than that of just the social networks. Social networking destinations are still the largest share of social media reach (the torso if you will), while the journey, the integration of social media into all aspects of the web experience (the long tail) is becoming more ubiquitous and important every day.
The internet has always been driven by an undertone of community, but social media is far more than the two dimensional concept of community of yesteryear. Now that new tools and technologies have made it easy and intuitive to share and create media and experiences, consumers are doing so in droves (ok you know that, of course). The aggregate of these actions act as a collective community publisher, if you will – it’s like the borg of media. The mathematics behind networks (social networks included) is actually quite interesting. This is far more than a consumer trend, but the actualization of the math behind networks, as driven by socioeconomic needs and forces.
Video sharing, commenting, social bookmarking, mashups, and of course the formal activity we know today as social networking, as examples, are all interoperable gateways for the consumer, to discover, consume, share and create relevant content and experiences. Although a number of large portal type social networks have emerged as true social places to “hang out” and engage with “friends” of varying degrees, ultimately it is the integration of social media and web 2.0 technologies that will inject new life into digital businesses of all kinds – publishing, commerce or otherwise.
Oh yeah – please, don’t ‘jump the digital shark’on a branded social network. Ok, some brands can do it. Most can’t. Deal with it. Social media aspects should be integrated, not forced. Do you really believe that consumers want to create an active community around your brand? Integrate aspects of social media into your existing content. Don’t force it. You’ll add an extra dimension to what you stand for.
2. Recession Hits The Ad Industry Too: Economists and naysayers alike all agree that we’re heading into a recession this year. Make no mistake about it, the recession will affect the ad industry. However, this may actually be a good thing for the digital side of the industry. Amidst the maelstrom of the writers strike, fast paced technological innovation and rampant change in how consumers interact with media, marketers were just getting into the swing of it. Beyond media, focus a little more energy on loyalty and advocacy programs. Use this time to help create stronger consumer relationships, and do it efficiently.
3. Evolve or Be Displaced: New Media Continues to Drive Shifts in Industries: It’s inevitable – new technologies create consumer shifts and economic shifts that displace old ideas, inefficient process, companies and even entire industries. Look no further than the travel or music industries for two prime examples of massive industries changed forever due to digital distribution and marketing. Of course the ripples are being felt in just about every industry, from massive to cottage, and by every exec from corporate to mom and pop. Have you dug into how it has affected your business? Do you have a plan to evolve proactively, or are you responding to the changes in the market?
Even within the digital media ecosystem itself, we see examples of displacement and evolution. If the AOL’s, Yahoo!’s and MSN’s of the world do not adopt some of the new web2.0 technologies and approaches, they too are susceptible of becoming old media and displaced by the new guard. So the new can now become the old proportionately as quickly as the unknown became the new. However, they are adopting new technologies, and with Yahoo!’s reach as one example, there is still an opportunity to leverage social media, content syndication (video and other), mobile experiences, and generally interoperability, all of which are increasingly expected from a major digital media brand.
4. Agency Structure Morphing: Through a combination of acquisition and organic growth, the large agency holding companies have begun the inevitable transformation. Some of the acquisitions, WPP’s in particular, have been quite interesting (buying technology companies, ad networks, as well as grass roots and mobile agencies), crossing the once holy fence separating buyer and seller, or advertiser and publisher. As Google continues to push the line into ‘co-opetition’ with agencies, expect this type of acquisition activity to continue as agency holding companies must have specific technology assets to compete and offer marketers an updated version of the strategic support they always have. Of course now they have to be more nimble with an integrated approach to the fragmented. Within the holding companies, some agencies won’t make the transformation and will be displaced – but many others will morph, organically or via smaller acquisitions, and these agencies will continue to thrive in the digital era. So the portfolios that these holding companies are building are key to their survival and strength. The addition of profitable and/or complimentary technologies, networks or specialized agencies skews their bets towards the ever nearing future. I wonder to what degree the new assets, structure and vision of change helped WPP win the Dell business, which is now becoming a case study of applying a combination of new and legacy holding company assets (agencies) to work collaboratively in a truly integrated fashion in a web2.0 world.
What about small and mid sized agencies you ask? There sure are a lot of them out there. It’s really no different, only on a smaller and more competitive scale. Educating existing staff, attracting and retaining key digital talent, leveraging new technologies and collaborating with a number of partners will be the key to ongoing success. Otherwise, in today’s competitive climate and with a recession ahead, if any of those components are missing, the structure will break down. All general agencies who have not implemented new ways of working will succumb to the market forces driving the polarization of hyper-specialization or skilled integration.
Media agencies will (or at least should) continue to develop analytic and creative capabilities, as the bundled approach to digital media has proven fruitful in creating efficiencies in agency pricing, this will benefit both agency and client. Media agencies
are becoming have become the Nexus of a growing number of digital marketing efforts. In a medium where margins and budgets are not as healthy as we’d like them to be (but getting there), offering creative, expanded analytic services and other ‘below the line’ services like grassroots/buzz marketing, makes for a greater margin for the agency and a potentially lower “per project equivalent” fee for the client – a win win.
Expect a lot more from me on this topic (there’s so much for me to say here) in the upcoming weeks…
5. New Mobile Devices Will Drive Marketing Growth:If I hear another person proclaim that the day of mobile marketing is upon us I will bang my head against a wall. 2007 was barely a transition year. We are so great at evangelizing our new ideas and platforms, that we often start believing some of this stuff. 2008 will indeed be the transition year when the device manufacturers [and hopefully carriers] begin improving access to a pleasurable mobile web experience. The iPhone was the start of the momentum, and similar devices are already hitting the market, making the mobile internet experience easy and intuitive. The speed of the carriers’ networks will still be the weakest link, and it seems that they already fear bandwidth headaches in their/our futures.
SMS programs, including triggered messaging, and personalization will continue to drive the mobile market. SMS programs will act as an increasingly more popular form of marketing activation and enegagement via integration into traditional media.
Don’t get me wrong, many consumers do use their WAP browsers, and view WAP content and advertising, but it really is a clunky consumer experience, particularly with today’s mobile devices (sans several great smart phones of course) and the average person is just not going to put up with it, with some very useful exceptions. Let’s improve the experience and the ad formats. 12 pixel tall static ads on a 2.5 inch screen don’t excite me! Granted, these ads do seem to garner high response rates, but they are expensive and the targeting opportunities are limited. Let’s use 2008 to improve the experience, experiment with new formats and ideas and go into 2009 as the year of mobile marketing (not the tipping point, but it’s possible retrospective historic breakout year).
6. Ambient Findability & The Semantic Web:I find it hard to mention one of these terms without the other. Simply put, Ambient Findability is the concept of being found anywhere, any platform, any format, any time. The Semantic Web is a layer of information that decribes web content itself, universally, so it can be be databased, integrated, networked and understood by different systems.
I actually consider widgets a key component of both the Ambient Findability concept as well as a new form of digital distribution (see #7). Widgets allow us to deliver content or functionality from one place to another, whether it be a website, blog, social network page, desktop or mobile device. In the future that may/will/should include your TV, your car navigation system, refrigerator, clock radio…ok I’m getting ahead of myself, but check back in 3 to 5 years and I bet we’ll be using our mobile devices to program feeds of customized wake-up messages into a wi-fi connected device that evolved from a clock radio, which can tell our mood based on our recent activities as recorded by our mobile device and PC, and heart rate , and the amount of sleep we’ve had (from the monitors in the mobile handset), which when all criteria are combined, will automatically adjust the volume and type of audio/visual message used to wake you from your categorized slumber.
Sound far fetched? We’ll see! But I digress…
The lines between media, marketing and technology are all blurring once again. The challenge at small companies is time and budget to deal with it all. The challenge at large organizations is the assignment or assumption of responsibilities for some of the areas that sit in that blurry area. Whose responsibility is it at your company? Which aspects fall in-house versus at the media agency, digital agency, PR agency? New media is involved media. New media presents new monetary models that are different from those of old. Gone are the days of limited or exclusive distribution. Gone are the days of set it-forget it-then analyze-it campaigns. Just as we are ubiquitously connected to the web through our growing number of devices, everywhere and all the time, our digital presence must follow – and that goes for publishers and marketers alike.
The only solution to fragmentation is ubiquity (you can quote me on that one!). I think it was Confucius who said “Being platform agnostic is a lot of work”.
7. Digital Content Distribution & Associated Ad Spending (“Video and more”): As the networks continue to experiment and refine their approaches to digital content distribution, the ad budgets will follow, and not just the experimental budgets. But we’re possibly more than a year away from this this.
The inability of premium content creators and distributors to develop methods for distributing and marketing content in digital channels while generating the equivalent revenue as existing traditional channels, such as television has prevented them from being able to determine a fair compensation for the digital usage of content originally produced for another medium, with a different economic scenario. I know this is all hard for the striking writers to understand. Surely when the networks tout that they are making digital strides, but then cry broke to the talent and writers, it is understandable how we ended up with a writers strike!
TV networks in particular have a difficult time experimenting with the handful of models currently in market – selling ad-free episodes, streaming episodes on network and/or 3rd party websites, aggregating content in a hub, creating short web-bite-sized portion clips of longer content, all while consumers care less and less about the the source of relevant and compelling content.
Hopefully the writers strike will help to force network executives to sit with their marketing, sales and programming departments and discuss ways to develop high quality digital content with predictable revenue streams. But that’s easier said than done. Hence the prolonged strike. Ultimately the networks still have no idea how to accomplish this, but they’re working on it. So far the efforts have been embraced by consumers, and to a degree by marketers, but the current digital models just haven’t provided the same monetary return for the networks, nor the level of accountability or interactivity possible with most other forms of online advertising for advertisers. 2008 should see a big change in that regard – as they say, necessity is the mother of invention….
8. Google will test first display ads on SERP pages:That’s right, we’re going old school – but better. I predict that by Q3 or Q4 that Google will experiment serving display ads on the SERP pages. This will mark an increased focus on the value of display advertising.
Search has always been a big part of the mix, since the days before Google even existed. Back in the days we purchased display ads triggered by keywords, on a cpm basis, often high cpm’s! Heck, if you knew where to look you could even leverage a layer of behavioral targeting. One of the old big search engines, Infoseek, used a company called Aptek to deliver ads based on previous searches…and I’m talking 1998. I was enthralled with the concept and it was the first item on every one of my clients’ media plans for that year. With Google’s daily reach and wealth of consumer data, I have to imagine that they can introduce the targeted delivery of rich display ads and command a serious premium for them, most likely a high cpm. Alternatively, this can become part of a bigger universal search picture. As search engines focus on delivering relevant results from various content types (web, images, video, blogs podcasts, etc) in a cohesive universal manner, it is changing the look and layout of SERP’s. Adding display ads can make the experience far more cluttered, not to mention having a serious impact on the performance or volume of existing ad words campaigns. So I imagine that this is a difficult path to navigate. The acquisition of Doubleclick doesn’t necessarily facilitate this process. If Google wanted to build an ad server to deliver display ads on Google SERP pages, they would have built one for far less than $3 billion. So the Doubleclick merger has far deeper reaching implications.
Speaking of…Late last month the FTC approved the Doubleclick/Google merger, what I like to refer to as DoubleGoo. Now it all rests on the European antitrust authorities to allow the deal to happen. We are all hoping for it (ok most of us). It is troubling that it has taken this long. I feel like a Star Wars geek a year before the first “new” Star Wars movie came out, except instead of wondering about what a young Greedo might look like, I find myself pontificating about all the wonderful targeting opportunities and digital media dashboards that the Doubleclick/Google merger will bring to us.
Ok, so there you have it – 8 predictions for 2008. Let’s check in at the end of the year and see how I did. But far more importantly, these are all issues that you should be cognizant of and thinking about. They affect each and every one of us to different degrees. How do they impact your organization and what are you doing about it?