Ten Trends to Drive Traffic and Sales in 2007

Looking forward, the dominant online marketing trends for 2007 include increased consumer relevance, improved execution, and enhanced focus on testing and metrics. Driving these trends are evolving technology as broadband use becomes ubiquitous and a maturing interactive marketplace where gains come from improved efficiency.

2007 Trends

To increase traffic and revenue, the top 10 trends for 2007 are:

• Online video advertising keeps growing. Rich media and custom programs will yield the biggest opportunities. “Publishers and advertisers will look beyond pre-roll and test different ad types to maximize revenue,” says About CEO Scott Meyer. “However, it’s unlikely that pre-roll will disappear anytime soon.” Cymfony CMO Jim Nail sees marketers creating more product demonstration and expert advice video (e.g., Kraft sponsoring Rachel Ray recipe videos).
• Social media evolves. Social media will play a more important role as marketers better utilize and test this medium to drive advertising and search results. As a basis for this growth, NetConcepts president Stephan Spencer cites the fact MySpace already drives more traffic to retailers’ sites than MSN Search and over 50 percent of MySpace users are 35 or older.
• User-generated content continues deepening engagement and giving users a voice. From a marketer’s perspective, authenticity and transparency are critical to succeeding with this approach.
• Search marketing keeps expanding. Companies will learn to leverage dynamic content for search optimization and tap into search’s long tail in terms of expanded, unbranded search terms, in Spencer’s opinion. Reprise Media managing partner Josh Stylman views Yahoo’s Panama launch as the end of the true auction-based search buy since gaining top position in the search marketplace will be based relevant to what the user was doing. This will cause advertisers to evolve their search and contextual ad program management to focus more on the user experience. Jeff Cutler, Answers.com’s CRO, sees improved branding opportunities through search and contextual advertising with greater options for contextually relevant content.
• Improved e-mail execution builds customer relationships. By enhancing lifecycle messaging and other trigger messages, marketers can make e-mail efforts more relevant. Return Path CEO Matt Blumberg recommends proactive reputation management to increase e-mail to the inbox. Marketers must understand how both customers and ISPs view their companies and how to improve those perceptions.
• Online content continues evolving. This is due to lower distribution and production costs and their ability to meet changing consumer needs and preferences. In contrast, Tacoda chairman Dave Morgan notes traditional media companies’ heavy cost structures and accelerating audience and advertising losses make managing declines in their businesses increasingly difficult.
• Alternative content distribution channels such as RSS and tagging expand. Increasing RSS adoption has implications for distributing user-generated content and new ad formats. Publishers will become more adept at blending their content into services that allow users to aggregate multiple sources into a meaningful whole. Shore Communications’ John Blossom foresees an increase in ad-supported feeds and more sophisticated packaging of XML-based Web services with content and functionality.
• Second Life continues to live while gathering competitors. Second Life’s success to date and the speed with which advertisers have embraced it are important drivers for Revenue Science SVP Jeff Hirsch. According to Second Life’s home page, people currently spend about $500,000 a day buying virtual items with real-world names.
• Increased real-time testing and analytics sophistication drive bottom-line improvements. With more multivariable testing and other real-time optimization processes, Optimost CEO Mark Wachen notes the focus moving from audiences at-large to specific target segments. This shows the interactive market is maturing because a portion of bottom-line increases are made through incremental improvements rather than market expansion.
• Integration with other channels improves. Marketers will reach and engage consumers where, when, and how they want to be communicated with. This is another sign that the online market continues to evolve. Stylman notes search’s self-serve ad model spreading offline to more traditional formats, such as print and radio. Silverpop strategy VP Elaine O’Gorman sees the move toward a more channel-agnostic marketing approach. “Marketers need to be where their customers are,” she says. To this end, messaging must be consistent and relevant across channels.

Analytic Implications

Since 2007 holds a combination of new technologies/ad formats and efficiencies, marketers should:

• Monitor the environment for new trends and competitive changes. Given the online environment’s dynamic nature and the potential for significant changes, continue tracking emerging trends to determine their impact on your business. Also, watch competitor activity and relative market share to ensure your business continues to grow.
• Track the critical metrics that drive your business. These metrics vary based on business and marketing mix. Focus on your business’ key drivers.
• Continue testing different aspects of your marketing mix. You’ll improve efficiencies in driving traffic and increasing revenues. As the online market continues maturing, growth will come in increments from improved marketing.

Overall, 2007 will be a year when marketers focus on improving their execution of the more mature aspects of their marketing mix, such as e-mail and search, while finding better models for engaging consumers with newer forms, such as online video, user-generated content, and social media.

And best wishes for the coming year!