3 Reasons Why Online Marketing Is Headed for Turbulent Times

2011 looks like it’s going to be an interesting year for the Internet. As online marketers, we’d better start worrying.

Why? Because there seems to be some disturbing trends arising from activities of the U.S. government, telecom companies, and ISPs – all entities which have a role in the way the Internet works – that point to a tumultuous future. These stories have been out there for a while (in one form or another), but have often been overlooked by online marketers because they have to do with the underlying technologies that run the Internet…something a lot of us don’t have the time or expertise to think about much. Unfortunately, it seems that we may have to.

Government’s Strong Arm: Shutting Down Sites

The recent hubbub over WikiLeaks’ release of embarrassing (well, to the U.S. government) diplomatic cables provides the first example of why the tech matters. Not long after the release, WikiLeaks was brought to its virtual knees by a mysterious DDoS (distributed denial of service) attack designed to flood its servers and take the site offline. WikiLeaks responded by moving to Amazon’s cloud but was soon kicked off after Amazon bowed to political pressure lead by U.S. Senator Joe Lieberman. WikiLeaks was finally “killed” on Friday, December 3 when its DNS service was revoked by EveryDNS.net, which withdrew its domain name service.

Regardless of your political views on the subject, the WikiLeaks saga exposes vulnerabilities that should have online marketers worried. The site was brought down not by overt government action but as a consequence of being a magnet for controversy. The same vulnerabilities that brought down WikiLeaks are the same vulnerabilities that major brands (and minor brands, too) face. As the WikiLeaks story shows, all it takes is one person with a grudge to effectively take any site off the Web. Some may applaud that this happened to WikiLeaks, but as online bad guys get better tools in the future, the likelihood of the same thing happening to other highly visible brands will continue to increase.

But we don’t have to look into the shadows of the Web to find miscreants shutting down sites: the Department of Homeland Security seems to be doing quite well out in the open. At the end of November, a combo of the Department of Homeland Security, the U.S. Department of Justice, and the U.S. Attorney’s Offices shut down 82 websites for “copyright infringement” violations. Ostensibly, these raids were designed to shut down illegal file sharing sites, but unfortunately at least two legal sites – OnSmash.com and RapGodfathers.com – were caught up in the dragnet. Again, this might seem like a simple mistake or an isolated incident, except that it comes as a preview of the new Combating Online Infringement and Counterfeits Act (COICA) recently approved by the Senate Judiciary Committee. This act allows the government to “disappear” websites that even link to infringing material.

“So what?” you say, “My company (or client) doesn’t promote illegal file sharing!” Well, maybe you don’t officially, but the explosion of social media and the rise of consumer-generated content (and our integration of these communication tools into our online communications plans) now presents some major vulnerabilities. The COICA act means that companies can now become targets if they link to “infringing” materials. All it takes is a few bad links chucked into your social media stream and all of a sudden you’re vulnerable to law enforcement action. When the corporate counsel hears about this, you may find that your forays into social media are shut down because the risk has now become too high.

Don’t believe it can happen? Just ask Justin Bieber, who was recently blocked from uploading his own videos to YouTube. If it can happen to Bieber, it can happen to you.

Telecom’s Strong Arm: Adopting New Fees

But it’s not just the U.S. government that’s using strong-arm tactics in a way that may end up making our lives difficult. In another end-of-November-surprise, The New York Times revealed that Comcast basically extorted additional fees out of Netflix partner Level 3 Communications, effectively making Level 3 pay a “toll” in order to keep streaming video content. Comcast has claimed that the whole thing is nothing more than a “good old fashioned commercial peering dispute” and has denied that the move has anything to do with an open Internet. However, while Comcast thinks that charging selected content providers more (providers who – just coincidentally, of course – pose a threat to its lock on content), a new plan by the FCC being billed as “promoting” “Net Neutrality” actually will allow ISPs to utilize differential pricing and speed throttling, effectively creating a tiered system and moving us away from an open and neutral Internet if passed next year.

Marketers should really worry about this one. Why? Because it threatens the convergence we’ve been seeing over the past year between video content and the Internet and the advertising that goes with it. In October 2010 alone, 176 million consumers watched 4.6 billion video ads. And if these huge numbers weren’t enough to put a smile on the face of online marketers, new studies have shown that video advertising is highly effective in engaging consumers and building brand awareness. I think that Old Spice would agree.

So why worry? Because a non-neutral Internet means that it may become a lot harder to get video content and a lot harder for content providers to make money providing such content. If Comcast can economically block its competition, video advertising starts to look a lot less attractive to advertisers. And if they start to advertise less, the revenue stream goes down. And if revenue goes down…well, you get the picture. Hopefully.

ISP Inertia: New Standard Needed for IP Addresses

Finally (to end this on a cheery note), we’re about to run out of IP addresses.

If current trends continue, we’re set to run out of 4-byte IP addresses (the ones that we all use) on March 12, 2011. After that, countries will be able to use up their remaining stores of IPv4 addresses, but then…that’s it.

Not all is lost, however. A new standard called IPv6 has been in the works for a long time and will replace IPv4. Unfortunately, ISPs seem to be dragging their heels when it comes to actually implementing the new standard. We’ll basically have until the end of 2011 to do so. If we don’t – no new sites!

Yes, 2011 looks to be an interesting year for the Internet.

Happy Holidays! Maybe it’s not too late to ask for some antacids in your stocking…

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