Top trends for 2007
Online marketing will build on recent innovations and continue strong growth in 2007.
A lot of things happened in the online world in 2006 that no one could have predicted - that Google would pay $2 billion for an amateur video network, or that almost 2 million people would take up virtual residence in Second Life.
Of course, that doesn’t stop us from making predictions about the things we think are likely to happen next year. So without further ado, here are my thoughts on online trends to watch out for - and capitalise on – in 2007.
Company websites and branded sites will become cool
This is the trend that corporates the world over have been waiting for – customers flocking to your website to see what you have to say.
In the US, the Proctor & Gamble website is boasting six million unique visitors a month, while Unilever is reaching three million customers a month. That’s a lot bigger than the audiences for many of the magazines and TV shows where they advertise.
How do they do it? Advertising Age reports that “much of the traffic to the big package-goods marketers’ sites appears to be coming the way originally envisioned in the online advertising model: as a response to online display advertising.” Ad-heavy sites such as Yahoo are driving more traffic than search traffic from Google.
In the case of Unilever, a lot of the traffic is being generated by its “Dove Evolution” viral video, which shows an ordinary-looking woman getting the full make-up and Photoshop treatment to turn from frumpy to thin and glamourous. It clocked up more than three million views in the first two months after its launch in October, and helped generate a 34% overall increase in visitors to Unilever websites.
Brands are also driving traffic by participating in the growing community activities available on the Web, such as user-generated videos. Coke has introduced branded video holiday cards in a promotion on YouTube that has been taken up by hundreds of thousands of customers.
A recent Nielsen BuzzMetrics study showed that one-third of creators of consumer-generated media (think YouTube or bloggers), also provide email feedback to companies or brands via their websites, and 13% participate in brand or company blogs - well above the norm for the general population.
There’s money in those online customers. Another study by McKinsey for an unnamed consumer brand showed that while its website reached only 800,000 consumers a year, those consumers were generating $40 in profit on average, compared with $5 for consumers reached by traditional media.
Podcasting will grow, but don’t call it a revolution
The number of Internet users who report that they have downloaded podcasts to listen to something (music, a radio show, a speech, etc.) at a later time has practically doubled over a six-month period this year, according to the Pew Internet & American Life Project. However, it’s still only 12% of Internet users (up from 7% early in 2006), and only 1% of those users tune in regularly to podcasts, according to Forrester Research.
It is estimated that there are more than 60,000 podcasts available for users to sample, which could account for the lack of regular use – maybe there is just too much choice at this point in the evolution of podcasting.
About half of iTunes’ top 100 podcasts are from traditional media companies (see also my prediction about traditional media companies below), indicating that radio has little to fear and much to cheer about podcasting.
The Pew study’s author, Mary Madden, says, “Podcasting is still in its infancy. It is unlikely that it is going to usurp traditional media. It is more likely that it will become one of the many different ways that we get content in an increasingly mobile environment.”
Better TVs will hasten PCs dominance
This one is counterintuitive. Why would improvements in TV picture quality such as LCD screens strengthen the growth of computers? Because LCD screens, which offer better quality, clarity, brightness and movie-screen ratios than plasma screens (as well as an even flatter screen), can easily be plugged into the back of a computer and used as a monitor.
For people who don’t have the room or the inclination to give up tens of square metres of space for a home theatre setup, LCD screens used with computers are a good compromise in these situations, and they are already cheaper than equivalent-sized plasmas.
ClickZ columnist Gary Stein writes, “Consumers will begin to realise they can buy a movie on iTunes, plug their computer into the TV, and watch the movie on TV. From there, it will be a short step to realise that a cheaper, purpose-built computer may be better for the job, and the path to our digital television future is paved.”
In Australia, a University of Sydney study shows that 25% of people already download TV programs twice a week or more (many of them illegally), and downloads are now the main form of TV viewing for more than 20% of respondents. How many of them will be watching on an LCD screen in 2007?
Newspapers will have a revival - online
The Newspaper Association of America (NAA) is predicting that ad spending in newspapers in 2007 will be flat or even negative, pulled down by a decline in classified advertising and no growth in demand from national advertisers.
But while that decline can be laid firmly at the feet of the boom in online advertising, don’t feel too sorry for newspapers, because they are also cashing in on online ad growth. The NAA also predicts spending for ads on newspapers’ website will increase by 22% in 2007, following on from a 34% increase in 2006.
Media research firm Borrell Associates has predicted with within 10 years, ad revenues from many newspaper websites could be as large as the newspapers themselves.
Mobile entertainment content will skyrocket
All this talk about computers - let’s not forget about mobile phones. The increasing use of 3G networks means that the total global mobile entertainment market (including gambling, adult content, mobile games, mobile music, mobile TV and entertainment) will grow from $17.3 billion in 2006 to nearly $50 billion by 2009.
While today music downloads makes up the largest proportion of mobile entertainment content (and 80% of the music content is ringtones), music will be overtaken by mobile gaming, mobile TV and mobile gambling by 2011.
This is one area where the Asia-Pacific is dominant over North America, with 41% of mobile entertainment revenues currently being generated in our region.
Virtual worlds will become immersive marketing platforms
There is an enormous difference between the first generation of brand placement in computer games and what is now possible with 3D worlds like Second Life. Executed properly, this is a very clever way of infusing brands into online life.
More and more companies will launch extensions of their businesses in virtual worlds which will be used as super-charged, technology advanced marketing and communication tools.
And to some extent many of the virtual products and services developed for consumption in online worlds will become blueprints for new products and services in the real world.
There is one common theme through these predictions - in 2007 the magic will continue online. Good content drives traffic and effective branding. Cleverness and creativity is more important to marketers than ever before - not in terms of advertising messages, but giving consumers what they want so they will visit you online. Companies that understand this will prosper in 2007.
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