2003: What's Hot, What's Not

Remember the beginning of 2002, when we were so happy to shrug off the weight of 2001? Unfortunately, that burden didn’t lift entirely in 2002, and a similar sentiment seems to have taken hold in interactive advertising and marketing as we begin 2003. This year, there’s much more reason to be hopeful.

Most forecasts predict more spending will flow into advertising and marketing — especially interactive — this year. Certain industry segments will be more successful than others, so you’ll need to align your efforts accordingly. My predictions of what’s hot and what’s not in 2003.

Text Links — Hot!

Bigger may be better in the eyes of some folks, but understated, cost-effective text links have won the minds and the hearts of many marketers and publishers. We’ll see more growth in 2003. Included in my definition of this category are paid search listings and paid inclusion listings, as well as gray-area forms of advertising (some call them advertising while others dub them paid content): personal ads, job listings, and other classifieds.

For evidence of the mounting prominence of these hardworking little links, witness Overture’s continued industry prominence. The company, as of its latest quarterly report, says it expects to bring in between $875 and $925 million in 2003, with net income (that’s profit to you and me) of $60 to $70 million.

Yahoo, an Overture distribution partner, is so impressed by the sector’s potential it’s purchased Inktomi for $235 million, apparently aiming to further develop a paid-inclusion program. The portal giant has already seen its fortunes improve tremendously since the purchase of recruitment site HotJobs.

Text links are so successful that sites such as My Way, HotBot, and AltaVista are paring down banners and skyscrapers on their sites (or eliminating them altogether). They’re abandoning big and flashy in favor of less-intrusive text.

Brand-Oriented Advertising — Not Hot!

Although forecasters predict a rise in the fortunes of the advertising business (both traditional and interactive), branding is not where it’s at this year. With budgets still tight and immediate return on investment (ROI) more important than ever, branding is too nebulous to be hot. Look for direct response advertising with branding as a by-product. You might see programs with a side order of branding accompanying a main course of direct marketing.

Witness Levi’s new campaign for the launch of “Type 1” jeans. The campaign, which revolves around a sweepstakes, starts with a big interactive push, wherein visitors to www.levi.com can get “clues” (and win prizes) for playing games and answering questions.

The main branding element, a spot in the second quarter of the Super Bowl, also ties into the sweepstakes, providing viewers with a final clue to the mystery Levi’s is building. We’re talking classic direct marketing with the sweepstakes. The TV spot, though expensive and designed to reach a mass market, is a complement.

Customized, Targeted E-Mail — Hot!

When has customized, targeted email not been hot? This year, we’ll see the medium evolve even further, as companies’ relationships with their customers grow closer. The more data marketers have, the more power they have to personalize and segment their databases so they can better deliver relevant information to each individual.

With the spam problem looming, delivering customized, targeted, and relevant messages is more important than ever. Legitimate marketers struggle to ensure their messages make their way past spam filters. You’d better be delivering something good if you want to get recipients to add you to their personal whitelists.

Customer Service — Hot!

Though e-commerce spending came in at an all-time high in 2002, some studies suggest consumer satisfaction rates aren’t tracking at record levels. When consumers hold high expectations, delivering on your brand promise (with reliable shipping, prompt resolution of problems, and clear communications) is key to holding on to existing customers. With so many folks shopping online in 2002 (62 percent of Internet users had shopped online by the start of October 2002, compared to 48 percent in March of 2000, according to the Pew Internet & American Life Project), a concentration on retention is critical. You can’t rely on swelling e-commerce adoption rates to buoy your customer list.

Even if you’re not selling online, you should be serving your customers online, at least by providing them with information. Recent news from Pew researchers shows 63 percent of all Americans expect to find information about a product they may want to purchase or learn more about at a store’s Web site. Even if they couldn’t buy the product at the Web site, about half of all Americans (46 percent) said the presence of that Web site would make it more likely they would go to the physical store to make the purchase.

Other Hot Trends

• Wireless (as in phones). I’m still waiting for SMS messaging to dramatically take off, but we’ll likely see more entertainment-oriented marketers using SMS to build excitement around their brands this year. New Line Cinema’s use of SMS for the latest “Lord of the Rings” installment was an excellent use of the medium. Also, look for the first location-based services to be offered by wireless carriers as the first location-sensitive phones begin to gain ground in the market.
• Wi-Fi. Surely there’s a way of exploiting this burgeoning technology for marketing purposes. Perhaps it will be a positioning tool for retailers such as Starbucks, which has used the technology as a point of differentiation (and, of course, as a source of revenue).
• TV marketing-on-demand. As cable providers take the wraps off video-on-demand services, few have noticed on-demand channels (offered by Time Warner Cable, for example) of purely promotional content, the BMW Films series and film trailers are examples. Like the “showcase” areas of personal video recorders (PVRs), these channels allow users to select marketing messages they want to see, when they want to see them. Whether this trend makes up for all of the commercials elided by the TiVos and ReplayTVs of the world remains to be seen.

No, these aren’t wild predictions of revolutionary trends. I don’t believe 2003 will be a year of major change in interactive marketing. We enter the year amid continued economic difficulties (a slow recovery does not a boom make), harbingers of war, and a hangover from slow holiday spending overall. Online, we’re not making dramatic changes, just learning from experience and going with what works.

Keep ClickZ bookmarked, and come back daily throughout the year. The learning continues, and our columnist-practitioners share their insights. Happy New Year!