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Five More Media Predictions for 2004

  |  January 13, 2004   |  Comments

Broadband will drive the changes this year.

Welcome back, everyone! Hope you had a great break. I know I did. Time with the family, snowmobiling, ice fishing, more food and drink than I thought possible, and a New Year's Eve wedding. So now, I'll do the cliché and write the list: my top five interactive media predictions for 2004.

1. Home broadband penetration will far outpace projections.

Most sources project household broadband penetration this year in the 25-28 percent range. Depending on the source you consult now, it stands around 20 percent. eMarketer, which lists many sources, provides the following 2004 projections:

  • Gartner G2: 28.2 percent

  • Morgan Stanley: 26.0 percent

  • World Bank: 25.0 percent

  • Jupiter Research: 35.0 percent

I'm as bullish on the near future of broadband as Jupiter (a unit of this site's parent corporation). Broadband penetration will outpace what the pundits project because of the war waged between cable companies and telcos. Each is battling for not just their share of the Internet connection, but the entire bundle of services they can offer.

Cable companies can offer VoD, TV, Internet, PVR, and more. Telcos can give you wireless phones, landlines, ISP service, and so on. The war is driving prices to a point at which they almost reflect something government subsidized. DSL in my locale is $20 per month. That kind of pricing will drive increased adoption.

2. File sizes will increase, improving online creative.

As broadband proliferates, ad file sizes will grow. That will allow for significantly improved creative product. Now we have a lot of creative people trying to work with pretty small palettes. If broadband grows like I think it will, that will change.

Take MSN's redesign (nice job, by the way). It has one experience for broadband users, another for dial-up. It has ad products to match. We'll see more of that. The winners? Creatives, end users, and ad-serving companies.

3. Home networking will grow and change media consumption.

Home networking will also evolve, thanks to increased broadband penetration. Everything from simple wireless home networks to smart homes with integrated media centers will become more commonplace. The result will be a complete change in the way those households consume media.

With an always-on connection; a laptop that can follow a person around (or a touch screen in most rooms); a media server that can send music, photo, and video files from a basement closet to the main viewing room's home theater; and a Web-enabled PVR to corral it all, no wonder people will break old habits. According to a 2003 Arbitron/Edison Media Research study, broadband households consume three times as much Internet media and one third the amount of TV as the average U.S. household. See the inverse relationship? Imagine what this means for the media industry as broadband continues to roll out.

4. Online ad spending will increase (but not as much as you think it should).

I'm with everyone else in thinking we'll see more money this year. We'll see sold-out inventory, and prices will rise. We won't see TV budgets decline to match the reduction in audience; we won't see long-time marketers abandon what they've grown comfortable with over the past two decades. So the much-anticipated uptick this year may disappoint a lot of us. But this will get us where we want to go, eventually. It's still pretty early.

5. I'll be predictable, sort of.

I won't take all my allotted vacation, despite best intentions to do so. I'll be found in Herreid, SD, on the third weekend in October with my dad and my dog in pursuit of the wily ringneck pheasant; I'll put my house on the market but won't sell it (again); and, finally, I will not satirize my clients in any columns again. Despite what I may have lead you to believe, that came back and bit me in the rear.

Happy New Year!

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Mark Redetzke Mark Redetzke is vice president of online media for Zentropy Partners, a unit of MRM (McCann Relationship Marketing). He's led Zentropy's Minneapolis online media department since 1999, where he develops integrated online contact strategies and oversees all planning and buying. Current clients include Nestle Purina, General Mills, H&R Block, Microsoft, Overture and Sprint. Earlier, Mark planned traditional and online media for Campbell-Mithun. He's a frequent guest lecturer at conferences and graduate advertising and communications courses at St. Thomas University; the University of Minnesota; Minneapolis School of Communication Arts & Design and the 4A's.

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