New media
For the web, a year to crank it way up
By Diego Vasquez
Jan 8, 2008 - 1:10:10 AM

The past few years have produced incredible growth in spending for online advertising. With the increases finally forecast to start plateauing in the coming years, the challenge for the web goes beyond attracting new advertisers to giving them new ways to get their message out, in ways that integrate better with content and achieve a broader reach than traditional web marketing techniques. User-generated content will continue to grow, with social networks becoming more widespread. Video will only get bigger. At the same time, users will become more guarded about their privacy as sites try to find ways to improve their advertising relevance. Geoff Ramsey, CEO of eMarketer, talks to Media Life about trends in new media for 2008, why the social networking craze hasn’t peaked, and why mobile’s still struggling to break through. This is the second in a week-long series of 2008 previews with experts in different fields of media.

 
What are three online trends to watch for in 2008?
 
There are three things that I think will be presenting themselves in 2008.
 
The first one is the consolidation and simultaneous expansion of ad networks. There’re going to be more mergers and acquisitions, and also a growth in the distribution or reach of ad networks.
 
And tied in with that is they will become increasingly sophisticated and efficient at delivering larger audiences that are essentially stitched together from hundreds or thousands of diverse web sites.

The big challenge sites face is there are lots of folks online, but they’re all over the place. So advertisers can have the reach they’re looking for, as well as the relevancy that they don’t always get with TV.
 
While search has been the big growth driver, it will be essentially matched by branding or display ads, and that’s a big change. Now there’s going to be two pistons going at full strength. Search isn’t going away, but growth will slow.
 
And that ties us into the second trend, the explosion in video content. I see it coming not just from amateur short clips but from all the TV networks, and in fact just about any other content producer. I would look for a flurry of new ad models and business models even. I think Hulu is a nice start there, but what every network and every other content producer is realizing is you have to get content distributed on as many different platforms as possible.
 
That brings us to the third thing, which is integration. We’re going to look for new ad models that will emerge on social networks, as well as new sites that will challenge MySpace and Facebook. I think what we’ll start to see is more vertically oriented social network sites. Leading content brands will take on social network applications and tools, and I think what will be interesting is, and it may not happen this year, but social network sites as destinations will be less important, because the tools will all be interchangeable.
 
If everybody’s going to be everywhere online and it’s all fluid, how do you integrate advertising into the space? It will require advertising that’s so compelling that it’s a part of the content and people embrace it. We’re going to have to become clever.
 

What will be the single biggest change facing the industry over the next few years?
 
I think all of these changes mount on top of one another, but I think a signal of the change that’s coming was the whole Facebook issue when it got in trouble with Beacon [in which it posted details of users’ purchases and activities without offering a simple way to opt out]. How much is too much information that they know about me, and how much control do I have over it?
 
The key aspect to this is that line between sharing information and having too much personal information out there. It’s also indicative of a broader issue, which is the speed at which technology evolves eclipses our ability to deal with its social implications.

What was the biggest story in the industry in 2007?
 
I think it was the Facebook thing, although at the same time there’s the time bomb story of Google’s acquisition of Doubleclick. I think we’re going to start seeing major changes coming out of that merger, because what Google and other engines have done through search, we’re going to see the same thing happen to the graphical or display sides of the web.
 
It started in 2007 but it wasn’t activated. Now that it is, I think we’ll start seeing some stuff happening.

What is the single most important thing for media buyers and planners to know about the internet in 2008?
 
It relates back to something I said before, but the internet is going to become the central hub of most media and marketing campaigns. And integration is again the key word. Everybody needs to better understand the roles of other media, the strengths and weaknesses of TV, newspapers, etc., because they’re all going to tie together. It’s tying all the pieces together.
 

We've seen the rise of social networking, online video and blogs the past few years. What do you think will be big trends to emerge in 2008?
 
It’s hard to predict something like that. I think some things come out of the blue, but much more of the changes we will see will be incremental. So video and social networks will continue to evolve. I also think what we’re going to see is the next generation of virtual world sites, which are less geek-oriented and have a little more utility for people.
 

Do you think the social network craze is finally starting to cool, or is there room for more growth in that area as businesses and even the government begin to embrace it?
 
There’s totally room for more growth. Every major ecommerce site, every major media site, will have social networking as a core to what they offer. You won’t be able to compete unless you have social networking aspects. It will be the tools with which people can communicate with each other around this brand or service or whatever it is.

What will be the hottest format of web advertising in 2008 in terms of growth?
 
That’s tough, it’s hard to measure because I think social networking will be very pervasive, but it won’t be all advertising. I guess I would put my bets on online video because I look at what’s happening in the consumer-generated realm, as well as with TV networks. And that shakes up the whole media universe, because it puts some pressure on TV.

Advertisers have begun to embrace web video advertising. What sort of technological advances have spurred its adoption, and what kind of format (pre-roll, etc.) do you think advertisers will start leaning toward over the next few years?
 
I’ll go out on a limb here and say pre-roll is not going to be the model going forward. I think that the overlay that Google came up with is a great start, because it lets the user be in control. I think the model going forward has not been invented yet, but I think we’ll see more options come out in 2008. I think a whole range of ad formats will prevail; there won’t be one silver bullet.
 

Has search advertising hit its peak, or is there still room for growth?
 
It’s still growing strong for a few reasons. One is search is going graphical. You can increasingly search for videos and other forms of content, so it’s more universal, or richer. No. 2, it will get more intuitive, or smarter. It will know who you are and what you’re interested in so it will interpret where you’re coming from using keywords. Third, search will go everywhere. It’s just in its early days on mobile devices, so there are a lot of things driving the growth of search.
 

After years of growth for web advertising, are there still those marketers who are wary of a bust, or would you say it's reached mainstream acceptance?
 
I don’t think there will be a bust; marketers are realizing this thing isn’t going away. There may be a downward trend in the overall economy, but I don’t think anybody’s thinking this is another bubble. It’s much more sustainable this time around.

If the media market takes a downward trend in 2008, will the internet still grow at the rate it’s been growing? Just because of the law of large numbers, it may take a hit, but I think there will be more experimentation this year than even in 2007. Even if overall budgets take a dip.
 
We’re using the internet as a source of entertainment, not just a utility, so I’m very confident in the predicted growth rate going forward.
 

What year 2007 prediction made about the web failed to come true?
 
For every year we predicted the explosion of mobile, and I don’t think it really took off in 2007.

It’s going to be an exciting growing media, mobile, but there are still some things to figure out. I think the carriers are going to have to cede some control to marketers and other players. One of the problems is there are so many operators and doing a mobile campaign is incredibly complex. People throw up their hands and say it’s not worth it, but I think those barriers will start to erode.