2009: Peering Past the Post

Tuesday, December 30, 2008
Posted by Jim Hedger @ 4:37 pm

24 hours from now most North Americans will be tipping glasses in high hopes of a prosperous new year. Before arriving at any of the parties however, many of us are already feeling somewhat hungover. Remember when you were a little kid and you made yourself giddy, dizzy and nauseous by spinning around and around as fast as you could and then stopping suddenly? That’s how 2008 felt. For the past six years the western world has been on an economic merry-go-round upon which everyone was tempted by big brass-rings without noticing the strings attached turned into ropes which then became chains. Now we feel like we’re left grasping straw. That’s how the end of ‘08 feels.

So now we’re moving into 2009. The good news, nines are easier to write than eights are. We have that much going for us. Aside from that small blessing, 2009 is going to be anybody’s guess. I’ve never felt intimidated making a list of predictions in previous years. Sure I realized I would be wrong on many points but I always figured scoring above .500 was a fairly good batting average. In previous years, I’ve scored higher than 50% right but this year is different. This year, nobody knows what will happen past February when tens of millions of credit card statements come due.

So Comes the Depression?
The world is in economic chaos and is literally teetering on the edge of a full blown depression. That doesn’t mean we still can’t avoid a depression but we are closer now than we’ve been in generations. Anyone in a position of authority who says different is either an optimist, is seeking re-election, is incompetent, or is fully aware they are lying through their teeth. This economy is going to get a whole lot worse before anything gets better.

To avoid falling further, expect western governments to start handing out money for specifically targeted projects. North America’s municipal infrastructure is decaying and the Keynesian model suggests the smartest thing to do to stimulate economic growth is to spend tax monies improving and redeveloping it. Roads, bridges, water systems, sewers, and highways need upgrading however our governments have spent the past twenty years gutting the taxation system while following the Supply-Scale market economy model. American citizens in particular are likely in for a nasty surprise when their local, state, and federal governments suddenly raise taxes to fund these projects.

Assuming world governments wise up and apply the Keynesian model, there will be increased opportunities for search engine marketers. It all depends on what types of clients your SEO/SEM company serves. One of our clients, for instance, provides electrical and construction supplies in the Greater Toronto Area and southern Ontario. If the government floodgates open and money pours forth, our client will find themselves deluged with new business and we will find our task list as their search marketing firm of record growing.

The recession has taken a bite out of smaller shops with less diverse services. A few years ago it was easy enough to learn a bit about SEO, hang a shingle above your door and call yourself an optimization expert. Today, the field has segmented so thoroughly that SEO is only a fraction of the work a full scale digital marketing service offers. Being a full scale service provider is going to be a good thing in the coming year.

Think about this for a second. Search and digital marketing are mainstream. We are THE HOT marketing channels right now. Advertising firms from Madison Avenue to Mayfair Plaza are clamoring to jump on board with a good search and digital marketing agency. Two or three years of half-hearted in-house search marketing has taught them the lesson that outsourcing is faster, cheaper and more effective. Problem is, if the agencies available to accept outsourced work can’t do a complete job, it is easier for the ad-buyer to have a project approved in-house. 2009 is not going to be a good year for flakes, and flaky SEO firms will fall fast in the first few months of the year.

Mid-sized SEM shops like Metamend should do well in 2009. I know that thinking runs counter-intuitive to the present economic conditions however having worked for almost eighteen months preparing for what we knew was inevitable when the housing bubble started bursting in August 2007, we’re in a pretty good spot right now. Expect other SEO/SEM shops to follow Metamend’s lead and expand their skill sets and services to meet the needs of agencies instead of smaller clients.

That said, anyone who forgets how to serve smaller clients will feel an awful pinch in 2009. While the economy is killing small businesses across America, there are several niche focused small businesses that will thrive. For almost every SEO firm, small business is both bread and butter.

Some awfully large companies will also feel pinched in 2009. Expect to see major layoffs at Microsoft in the coming weeks. This actually isn’t as much a prediction as it is fact however where those layoffs come will speak volumes about where Microsoft sees itself going in the future. I expect to see a significant shift at Microsoft’s search engine Live, which is unfortunate given the passion of the extraordinary personalities there now. Microsoft’s problem isn’t in its search division, its in its overall outlook. Microsoft doesn’t know what it should be in a world where search and the Internet are displacing the desktop and operating system.

Speaking of companies who don’t really know what to do with themselves, Yahoo! might not exist at this time next year, at least not as we know it today. Desperately weakened by a year of high stakes business dealings, Yahoo! is an ancient boxer on the ropes, too punch-drunk to know which way to turn next. With Carl Ichan and his cronies sitting on the board, I expect Yahoo! will begin the painful process of selling parts of itself off to the highest bidders.

As for Google, 2009 will be a year of slowed but very real growth. The introduction of the Android mobile operating system gives Google a new platform to dominate and I fully expect them to spend much of 2009 trying to do just that. Mobile should take off this year with the advent of the iPhone and HTC Dreamphone.

On a hopefully positive note, I expect we will see the US government make moves towards strengthening or even codifying Net Neutrality provisions. Regardless of one’s political stripe, all have to agree that Obama is the first American President who truly understands the Internet. He has appointed several pro-Net Neutrality experts to review the FCC and is going to name a Chief Technical Officer as a cabinet position.

I generally write much longer prediction pieces but again, what happens after February is anybody’s guess. Optimists see the markets correcting themselves by the end of the second quarter though I question exactly what gives them that rosy impression. Before anything changes for the better, America has to get its financial house in order and Americans have to start buying homes and spending money with confidence. Even with an expanded bail-out package for the automakers and some debt relief for those living under the fear of foreclosure, I am not sure where that confidence will come from.

One prediction is know will come true is that 2009 will eventually morph into 2010. In the next twelve months, our society and our systems will be tested like they’ve never been tested before. President-elect Obama is going to have a trial by fire no President since Roosevelt has faced. It will be a difficult and frustrating year however the sun will rise again on the western economy. The thing to remember about recessions and depressions is that they do end eventually. This one will too though I am among the pessimists when predicting when. I expect we’ll see turn-about in the spring of 2010 when the American real estate debacle starts to work itself out.

Until then, have a happy and safe New Year. Though we might not be looking forward to the difficulties of 2009, we do look forward to helping our clients grow and sustain their businesses. It will be a weird year, likely weirder than 2008 but 2009 will set the stage for a new era of business practice and tradition. For many of us, that is worth looking forward too.

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