Predict This! 2008 is going to be…

Friday, December 28, 2007
Posted by Jim Hedger @ 9:53 am

Yesterday, Dave Davies and I used our weekly WebmasterRadio.fm show Webcology to predict the key trends and fortunes of the coming year. When we agreed to do a predictions show two weeks ago, I figured it would fairly easy. I have been writing an annual predictions column for at least five years and each one rolled off my fingers quickly. It should be as simple as it was last year, right?

I was wrong. While we did a fine show, it tended to be more of a conversation about how search and social media was faring and less about predicting where it was going. For a number of reasons, the predictions have been far harder to make this year.

The world we work in is changing quite rapidly. Change has been a dominant theme in my thoughts in 2006 and 2007 and entering 2008, we see those changes seriously manifesting all around us. The pace of evolution in the market, the greater economy, the environment and in global politics is going to get faster. Each of these meta-areas has a direct effect on the business of search and Internet marketing as we know it and each has to be factored into every prediction. As we are starting to realize about Global Warming, the pace of change is accelerating exponentially. In 2008 what we have known to be solid ground is going to get rather swampy, much like the permafrost around Hudson’s Bay.

Advertising is the last thing to be cut when hard times hit. That’s an important thing to keep in mind as we move into 2008. The online marketing world will actually benefit from the coming economic chaos though the longevity of that benefit and the breadth of it is subject for debate. The transition from traditional marketing venues of television, radio and print will accelerate in 2008. Ad-spend online will increase dramatically as a greater number of viewers become users, accessing their programs on the Internet and vicarious entertainment through video gaming. This is not a prediction as much as it is a trend-line but when the advent of HDTV is included into the mix, the sandbox Internet marketers play in is going to get quite a bit bigger. In fact, we will no longer be solely search or Internet marketers but will begin our own industry evolution into digital marketing. How quickly this progression happens depends on a couple of factors but one that starkly stands out is the current Writers strike. Viewers are going to look somewhere else when the pool of scripts runs dry and a new season of TV is cut short for lack of new lines.

2008 is an election year in the United States. Things always get strange in election years and this one promises to be extremely intense. America is sorting itself out in this election and the effects of their choices will cast a long shadow over the evolution of the Internet.

In the present Internet economy, everything evolves around the state of the States. Politically, economically and socially, America is working through some of its darkest and nastiest days in decades. Virtually bankrupting itself in an intractable conflict and massively in debt to China, America is teetering on the edge of an economic recession. A large number of American citizens are on the verge of losing their homes in the sub-prime financing debacle, the fallout of which is being bourn by financial institutions around the world. Retail sales are down as these debt-ridden consumers find themselves with less disposable income from month to month due to rising refinancing rates. Many of us who have not yet been affected by the economic volatility watch as our neighbors and friends find getting by more difficult and it worries us enough that we spend a little less money. These things have a way of gathering their own momentum.

We work in a global economy but the infrastructure supporting it has always been financed and heavily subsidized by the greenback. They who pay the piper call the tune and the democratic and open culture of the Internet owes everything to the philosophical and entrepreneurial underpinnings of American society.

So what happens when someone else starts paying the piper? In 2008, I suspect we are going to start to find out. The influence of Chinese government policy is going to be felt outside of China as that market expands and China assumes a role as a global leader. We already see this happening politically and economically. Digital marketers will soon see the clients we work with demand deference to the sensibilities of the Chinese government as their operations become further intertwined with the Chinese market. This too is more of a trend-line than a prediction.

Other geopolitical events to watch for include the outcome of the chaos in Pakistan, the solidity of the Western alliance, continued turmoil in the Middle East and Africa, the strength (or weakness) of the American dollar and the effect of hosting the summer Olympic Games on Chinese society. Any one of these issues could send our assumptions into the gutter of poorly considered ideas.

Talk of geopolitics and economy aside, 2008 looks like it could be a year in which the habits of Internet users shift on a number of fronts. As developers create a greater number of applications which make the Web more interesting for users that transcend the typical web-site, the Internet will be a remarkably different place to work and recreate in. The longevity of any one of these applications is always in question however as user-habits have proven extremely fickle in previous years. (Does anyone remember MySpace?)

If 2007 marked the rise of social media, 2008 will show us how deep the true marketing potential of the myriad of social networks really is. Avid readers will recall how Facebook was recently forced into retreat over its Beacon advertising system. While the majority of other social networking systems rely on ad-content from Google (and its Open Alliance), Yahoo Search Marketing or MSN, Facebook attempted to create its own ad-serving system which seriously compromised the privacy of its users. What comes next is anyone’s guess but my senses tell me that Facebook is going to make at least one more attempt at introducing its own contextual advertising program, likely in concert with one of the major networks whose name does not begin with a G.

One thing that is a virtual certainty in the coming year is the rise of ubiquitous Internet access anywhere in North America for an increasing number of access devices. As users in Canada and the United States are presented with rational cell phone plans, the mobile web will become a well used noun and an adverb (no puns intended). This anytime/anywhere access will include those times we find ourselves at 35,000 feet above the ground. If your city council is not talking about allowing for free WiFi in your community, it is time to elect a new city council. Similarly, if your air-carrier of choice does not invest in providing in-flight access it is time to sign-up for a new air-miles plan.

Speaking of Internet access at 35,000 feet, one of the most exciting trends in tech is being dubbed “Cloud Computing”. For years, I have used the term, “server-side software” to describe the advent of work-flow applications like Google Docs. Combining virtually unlimited storage space with powerful Web based applications, Cloud Computing (server-side software) will allow users to log-in to their storage and work-space accounts from any where in the world and work collaboratively with others in their task-groups. Cloud-computing, specifically Google Docs, is a great threat to the current computing establishment (read: Microsoft and Mac) which is organized around user-owned software stored on a user’s personal hard-drives. Microsoft, for instance, makes about half its annual income on licensing its Office suite of products to businesses around the world. When Google gives similar products away for free, and makes them easier to use and access, the writing on the wall for Microsoft can be seen by watching the shape of the clouds.

There is a cost to everything and, as billowy and beautiful as clouds may be; Cloud Computing is anything but free. What makes a killer application popular however is no-cost access to that application for the consumer. In order to keep the cost of providing the service to the low, low price of ZERO, Google is likely to introduce advertising into the accounts of those using the free version of Google Docs. (Those who choose to purchase and pay for access will likely not see contextual advertising) Expect to see numerous new advertising opportunities spring up around what are everyday office-work activities.

Advertising on the Internet isn’t exactly what it used to be but it is likely going to be like it used to be again. I know how that last line reads but there is logic to the statement. Banner advertising is going to make an enormous comeback in 2008. Realistically, it never actually went away but with the rise of SEO and SEM in the late 1990’s and early 2K’s, banner advertising took a back-seat to a more verifiable form of marketing. Today, with each of the major three search networks acquiring their own banner-serving systems, digital marketers must learn more about CPM as well as keeping up with CPC.

Lastly, everything that is sold in the new world of digital advertising must be measured with the most versatile yardsticks possible. Digital marketers will be deluged with various analytic programs, most of which give only a segment of the story. Look for a few of the established analytic firms such as Enquisite or Click Tracks to introduce new features and improved coverage in the coming year (note: both are extraordinary in their coverage right now). Analytics has long been an important word in the search marketing sector but we should expect it to become a critical buzz-word in the mainstream business community. Given the state of the economy, analytics will increase in importance as the finding of efficiencies will be a survival skill-set for start-ups and established companies alike.

2008 is going to be a very interesting year and likely one of the most challenging since the dot-com crash of 2000. For the search and Internet marketing community (henceforth referred to as the digital marketing community), the impact of global politics and economics will be softer than for most other sectors. In some cases, a slowdown might actually be beneficial but only for those ready to work harder and smarter. As the year progresses towards the third and fourth quarters, expect to see consolidation in the ad-serving networks as clear winners and losers are delineated and in some cases, decimated. Yes Virginia, this is a zero-sum game but fortunately, there are an awful lot of zeros attached to the end of sums our sector works with. Hopefully many of those zeros will follow the numbers we generate for our clients. For SEO/SEM firms like Metamend, that is also more of a trend-line than a prediction.

Best wishes to all for a safe and highly prosperous New Year. It is going to be a bumpy ride so; be smart, be brave and make the right decisions. Everything is going to turn out fine.

2 Comments »

  1. I agree with the article that advertising is one of the last item to be cut during an economic downturn. In face, our clients at http://www.cisframework.com are increasing their online presence, advertisements and marketing to compete better in a slow economy.

    Irving Sarreal
    CIS Framework
    http://www.cisframework.com

    Comment by Irving Sarreal — Thursday, April 17, 2008 @ 2:30 pm

  2. [...] a step away from reviewing the major news stories of the year, I thought I would take a look at the predictions I made for 2008 at this time last year. I didn’t do too badly by my loose scorecard though I was way off on [...]

    Pingback by Predict That – Reviewing my 2008 Precitions » Search Engine Optimization Blog — Monday, December 22, 2008 @ 2:58 pm

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