This isn’t just the holiday and flu season, it’s also the prediction season. Who am I to fight tradition? Following, two of my own predictions for what will happen to the digital marketing industry in 2004.
Search marketing will go on steroids in 2004. It will become local, personal, persistent, integrated… and far more powerful.
Many in the industry (including myself) have questioned at times whether search marketing deserved all the over-the-top attention in 2003, not to mention credit for saving the industry. That attention and adulation will be even more intense in 2004.
More important, it will be fully deserved. I believe next year will bring a host of complete and more mature search marketing tools, products that very likely will have an impact as big as, if not bigger than, search was in 2003.
Predicting local and personal will be important components of search marketing next year is like predicting there’ll be a presidential election next November. It’s a done deal. Everyone’s already talking about it. The major players are moving in and staking their claims.
The over $90 billion spent annually by local advertisers on local newspaper, radio, TV, and yellow pages is why. Google has already incorporated Zip Code search and directory listings into its system. It’s just a matter of time before all the search engines offer higher-value services (i.e., more personally relevant search results) to users who provide basic personal information, such as postal code, age, gender, and interests.
Persistence will be a key innovation in search next year. Search firms are learning they must leverage users’ historical search data to maximize the relevance of future search results. By storing a user’s historical searches, including recency and frequency, search engines will be able to provide users with more relevant and valuable results.
Results of a restaurant search could, for example, be related to a previous search for theaters in the same area. Knowing a person who’s searching for information on baby strollers has also searched for small car pricing could be used to order results, featuring the most compactable strollers up top.
Integration between search, other content, and applications will be much more important next year. Google’s AdSense program, in which contextual ads are placed on partner sites according to the type of content on the page, is just one example of what’s possible when search is integrated with Web site content or applications. Private-label paid listings companies such as IndustryBrains have proven keeping search within certain contextual confines improves cost per lead for advertisers and produces higher revenue for publishers. Advertisers bid more aggressively for placement in front of more targeted audiences.
We’re likely to see search firms leverage much more of their partners’ data and applications to create more value for consumers and advertisers. Search firms could serve contextual ads on a content site targeted according to user registration data or records of previous purchases on that site.
Earlier this week aQuantive announced it will acquire search optimization technology firm GO TOAST and combine it with its Atlas DMT ad-serving division. This gives notice the market is heading toward more integration.
Audience fragmentation in traditional media will be dramatically more pronounced in 2004. In response, traditional incumbents will position interactive television (iTV) as a serious future marketing platform. They’ll take control of those products from the online media and marketing players.
“Where have all the boys gone?” Throughout the media community, 2003 will be remembered as the year when the chinks in traditional media’s armor were revealed. Nielson told us the TV networks lost 750,000 teenage boys in a single quarter. The Rosie O’Donnell/Gruner & Jahr trial made the industry question the veracity of magazine circulation numbers. And daily newspapers across the country finally owned up to the fact young readers have been abandoning them for decades. They began launching scores of niche and alternative products to try to win back that lost generation.
Many believe traditional media’s loss is online media’s gain, and billions of traditional ad dollars will shift online. It won’t quite work that way, largely because network TV won’t give up easily. In ad buying, the laws of physics tend to favor inertia.
Both the buyers and sellers of TV advertising have plenty of incumbency and power. Rather than let the online channel (the consumer Internet) snatch their money away, they will work hard to build up their own interactive channels and value-add them into current packages. That could keep buyers more or less content for years to come.
Instead of being continually pummeled by multiple system cable operators (MSOs) such as Comcast and Time Warner Cable, VOD, DVRs, DVDs, or video gaming, TV and cable networks will use their tens of billions of dollars to take control of iTV products’ perceived value.
iTV was heralded in the late ’80s and early ’90s as the salvation of all media and marketing. It’s been scorned since the Internet assumed commercial prominence. Today, the few iTV product (e.g., remote-controllable icons from Wink or short VOD commercial films) media companies are controlled by online departments, mostly because nobody else wants them. Despite the fact these products reach tiny audiences and are light years behind the Web in delivering advertiser value, they’ll become hot products next year. The core TV ad sales and buyer groups will seize control and take them away from online units.
Should Anyone Care?
Online media is more than ads on computer screens. It’s the power of an interactive back end that delivers integrated, addressable, and measurable advertising to the right person at the right time. Money within the media marketplace will ultimately be controlled by whoever controls that back end.
If online media divisions control it, money’s more likely to flow to those channels that deliver the most value.
If traditional media divisions assume control, the goal will be to preserve yesterday’s ads: 30-second spots, full-page glossy ads, and print-based displays in classifieds sections.
Where do you want to go next year?
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