The Coming Year in Online Marketing

‘Tis the season for weighty predictions. Each year around this time, ClickZ asks big brains in interactive marketing to gaze into the crystal ball and forecast what’s ahead.

What follows are seven prognostications for creative, video, search and other important segments.

Creative :: John Rich, Interactive Creative Director at TM

Over 50 percent of all pages on the Web are consumer generated. I think what we’ll see in ’06 is less of the traditional linear marketing messages. The best ideas are going to be powerful ideas that we allow consumers to execute against.

Technology and the digital medium are allowing this to happen. The benefit from the advertiser’s standpoint is the level of interaction with the brand. It’s becoming part of your life.

A technology I think will have a huge impact this year is Flash 8. It’s got some wonderful things going on. Its video compression is amazing. It’s got transparent layers. What that means is we’re going to have live video in a translucent layer interacting with people.

And then, this may be more like ’07, another development creatively is going to be when all the DVRs are IP addressable. That’s going to allow for some amazing creative delivery.

RSS :: Dick Costolo, CEO of FeedBurner

First, the tools for managing and measuring RSS subscription and reach will get far more sophisticated, providing marketers with a more detailed understanding of feed consumption.

Second, 2006 will be the year that RSS subscription gets shoved “down the stack”. That is, more and more subscribers will not have to know that they are subscribing to something specific called an RSS feed. They’ll just say “I want to subscribe to this thing with one of the apps I normally use everyday” and it will just work. People who subscribe to feeds will no longer need to know to look for the little orange button and right click.

Third, marketers will continue to trial a number of podcast efforts in an attempt to embrace this more immersive and high-bandwidth customer experience, and a breakout marketer will emerge that “gets” the time-shifted and subscribed nature of this new medium. This breakout campaign or approach will change the way marketers perceive what can be accomplished with podcasts.

Video :: Chris Young, Klipmart CEO

With the May 2006 TV upfront, we’re going to see a shift of the media mix from television to interactive. Back in 2002 we had two percent [of budgets]. In 2005, I think we can honestly say we have five percent. I think we’re going to see it bump up to eight percent. There’s going to be a major shift.

We’re going to see a lot of video assets move online. We’re doing a lot with original video, and that’s going to increase.

ClickZ: Do you think the shortage of in-stream video ad inventory will continue to be a large problem in 2006?

Yeah, I do. There’s so much demand for in-stream advertising. We’ve got to put good content out there, and get people viewing that content. A lot of the big players are putting their content online. That’s going to create a lot of eyeballs. But video’s got to get cleaner, it’s got to get easier, it’s got to get more routine. [Video content owners] need to be technology agnostic.

Search :: John Lustina, Chairman of IntraPromote

PPC just keeps getting bigger. The budgets, which a couple years ago were difficult to come by, are now opening up, no questions asked. The onrush took some of the focus away from natural optimization for a while. People are realizing there’s so much traffic to be had by natural, but also that if you’re going to spend so much on PPC, you should invest some money to make sure you’re getting the whole picture.

A big problem I see are the scraper sites. They really muck up organic results. It’s not something that’s going to be solved in ’06, because that incentive is always going to be there.

ClickZ: Do you expect local advertisers to get much deeper into search?

I think it’s going to take a little more time. Local most often means small business. One of the biggest budget expenditures for small business has been the phone book. I always think of that basic atomic element: the small businessperson who is terrified to move his money from the ad in the phonebook to spending it online. It’s a real leap of faith.

Abuse :: Trevor Hughes, Executive Director of the ESPC

I think 2005 has been a warning shot across the bow for the marketing industry that third party relationships will come under greater scrutiny. In 2006, it will become absolutely imperative for marketers to understand how their offers, brands and products are being presented, wherever they’re presented.

One of the things that’s striking to me is that tiered marketing structures, and we could probably call them affiliate marketing structures, are fraught with risk.

In the case of Hypertouch media and Gevalia coffee, Gevalia had set up a relationship with some affiliate marketers… who were doing a lot of spamming. What ended up happening was that not the affiliate marketer but Gevalia was sued. Under the CAN-SPAM Act, it is the advertiser who is responsible. Affiliate marketers created real challenges for an otherwise upstanding brand.

In the telemarketing world, the FTC announced their largest fine ever against DIRECTV. DIRECTV had gone out and told their telemarketers: We will pay you per conversion. It was nothing DIRECTV was doing directly. They were not watching their affiliate enough.

We’ve seen it in online advertising, with Intermix.

E-mail :: Al DiGuido, CEO of Epsilon Interactive

One of the big ones I talk a lot about is customer optimization management replacing customer relationship management. The whole idea is leveraging the power of customer data to build more relevant communications with customers. 2006 is going to be the year the top-tier players leverage what they have in their customer databases.

It’s kind of a segment-of-one communication, as opposed to geographic or psychographic segmentation.

Spam continues to be redefined as irrelevant messaging. In ’06, this is all going to come home to roost. Unless you’re relevant, you’re going into the spam folder.

Mobile :: Nihal Mehta, ipsh! CEO

Integrated campaigns will be the future, mixing print, online, radio, street marketing, events, and the like. Time sensitive campaigns will also thrive, where users would have to text in to win within a certain period.

Direct response is taking off. Users text in to receive quick information on products, albums, movies and video games. Mobile coupons will continue to expand.

2006 will also be the year when small to medium sized enterprises will be able to use mobile marketing.

ClickZ: After years of hype, most of us have learned to expect less from mobile than its boosters promise. In terms of marketer adoption, what do you think is the worst case for mobile in 2006?

I would kindly disagree with your assessment. 2005 was a breakthrough year for mobile marketing. Many major brands experimented with the medium and many saw tremendous results, like Starburst and McDonalds. Even major agencies recognized the opportunity, resulting in key acquisitions such as ours by Omnicom.

The worst case for mobile in 2006 would have to be from some external forces or trends outside of the core conversions and commerce of the medium. For example, if a major mobile spam lawsuit broke the industry then that could be a worst case, but thanks to guidelines from the MMA and carriers, there is a low chance of this.

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