The two big waves are social sites and online video
By Heidi Dawley Dec 18, 2007
The wonderful thing about the internet for users is that it's ever-changing.
The not-so-good thing is that the pace of change is hard for marketers to keep up with, and that's no more so than with social networking.
Social networking exploded in 2007, led by MySpace and Facebook, but marketers are still struggling to figure out how to capitalize on that growth, even as they hike their ad spending on those sites. That will be among the big challenges of 2008.
“We are in a period of experimentation,” observes David Schatsky, president of JupiterResearch, the research outfit.
“Social media as a phenomenon, and what a social media experience is, continues to evolve. If Facebook and MySpace didn’t change, then 2008 would be a year when marketers could figure out how to use them. But they keep changing.”
As it was, social networking dominated 2007, following several years of huge growth, and it will again dominate in 2008, as the big internet wave. This will occur against a backdrop of rising broadband penetration and double-digit growth in ad spending.
“If I had to choose the most interesting thing about 2008, the social media and social marketing stuff has the greatest buzz around it. It is compelling,” Schatsky says.
The second big wave will be internet video, which started with the success of the user-generated video sites but quickly spread to all manner of web sites. Two-thousand-seven was a huge year, and 2008 will be huge as well.
Yet it will be a challenging year for marketers, and in ways not dissimilar to those for social sites. The challenge will be in coming up with an advertising model uniquely suited to online video.
Is it TV? Is it the movies? Is it the internet? Or is it something entirely different? What forms of ads work best?
Of the two, social media and video, social media has the deeper roots. MySpace launched in 2003, and by 2005 it had grown so that Rupert Murdoch’s News Corp. jumped in to purchase it for $580 million.
In 2007, the momentum of social media was picked up and carried by the surging growth of Facebook, following a change in rules that expanded its user base from college kids to anyone over 13.
More strong growth is ahead. EMarketer is forecasting that the percentage of U.S. adult internet users visiting social networks at least once a month will grow from 37 percent in 2007 to one half of the adult internet population in 2011.
Among teens, eMarketer forecasts a rise from 70 percent to 84 percent in the same period.
As for ad spending on these sites, eMarketer expects that to nearly double in 2008, to $1.6 billion from $920 million in 2007. And even then it will be but a small part of total internet ad spending, pegged to reach $27.5 billion in 2008.
For online video, both JupiterResearch and eMarketer are forecasting that ad spending will quadruple over the next four years up from $775 million this year, while also remaining but a small part of total online ad spending.
Borrell Associates, a company that researches local internet, also sees fast growth. “There are a lot of conditions combining to make that a rapid growth area,” says Colby Atwood, president of Borrell, who cites the high uptake of broadband as one.
In fact, Atwood sees the move into online video as part of a larger trend. Advertisers, he believes, are beginning to move their ad money away from traditional forms of online advertising, like popups, banner ads and listings. Instead they are moving more money into paid search, email and online video. This is something that he expects to continue in 2008.
“These areas are all popular because they are easier to measure, and easier to calculate return on investment,” says Atwood.
It is also a symptom of the fact that folks are learning how to use the web in ways they hadn’t thought of initially.
“As people learn how to take advantage of the web, we will see more and more advertising that we just couldn’t have done in the past medium. A lot before has looked like TV or newspaper advertising," says Atwood. "We are growing past that now."
Meanwhile, in online ratings for the week ended Dec. 9, according to Nielsen Online, Microsoft reclaimed the top spot among parent companies, followed by Google, Yahoo, Time Warner and News Corp. Online. For the second straight week, the top five brands were Google, Yahoo, MSN/Windows Live, Microsoft and AOL Media Network.
NexTag was the No. 1 advertiser with 8.5 million impressions, followed by No. 2 Countrywide Financial Corporation at 6.9 million. With nearly 36.7 million ads served, Yahoo was again the top advertising site, well ahead of No. 2 MySpace at 3.9 million.
Sessions per person per week were even to last week at 17, and domains visited per person were down two to 41. PC time per person slipped 1 percent from the previous week to 18 hours and 5 minutes.
Top 25 parent companies Through Dec. 9
#
Parent
Unique Audience (000)
Reach %
Time Spent per Person (hh:mm:ss)
1
Microsoft
87,081
62.3
0:43:03
2
Google
86,344
61.8
0:36:13
3
Yahoo!
78,589
56.2
1:07:41
4
Time Warner
69,717
49.9
1:25:20
5
News Corp. Online
42,507
30.4
0:49:08
6
eBay
37,984
27.2
0:56:45
7
Amazon
34,537
24.7
0:19:17
8
InterActiveCorp
31,341
22.4
0:13:03
9
Wikimedia Foundation
22,475
16.1
0:09:13
10
Apple Computer
21,721
15.5
0:29:22
11
Walt Disney Internet Group
21,619
15.5
0:20:17
12
New York Times Company
20,796
14.9
0:11:24
13
Landmark Communications
20,499
14.7
0:10:23
14
AT&T Inc.
19,007
13.6
0:21:01
15
Wal-Mart Stores
15,923
11.4
0:12:57
16
E.W. Scripps Company
15,889
11.4
0:05:34
17
Target Corp.
15,855
11.3
0:07:17
18
RealNetworks, Inc.
15,851
11.3
0:20:25
19
Bank of America
13,210
9.5
0:22:11
20
Verizon Communications
12,435
8.9
0:20:12
21
CNET Networks
12,328
8.8
0:07:49
22
Comcast Corp.
12,097
8.7
0:33:23
23
United Online
11,863
8.5
0:32:04
24
CBS Corporation
11,589
8.3
0:15:42
25
Viacom Digital
11,398
8.2
0:26:53
Source: Nielsen Online
Top 25 brands Through Dec. 9
Parent
Unique Audience (000)
Reach %
Time spent per person (hh:mm:ss)
1
Google
80,048
57.3
0:27:29
2
Yahoo!
77,632
55.5
1:07:54
3
MSN/Windows Live
63,416
45.4
0:41:45
4
Microsoft
57,571
41.2
0:18:39
5
AOL Media Network
56,333
40.3
1:36:52
6
Fox Interactive Media
36,669
26.2
0:52:47
7
eBay
32,116
23.0
1:00:36
8
YouTube
31,262
22.4
0:24:07
9
Amazon
30,804
22.0
0:19:22
10
Wikipedia
22,191
15.9
0:09:10
11
Apple
21,721
15.5
0:29:22
12
Weather Channel
19,053
13.6
0:10:27
13
Ask Search Network
17,938
12.8
0:13:17
14
CNN Digital Network
16,534
11.8
0:16:18
15
Real Network
15,851
11.3
0:20:25
16
Target
15,567
11.1
0:07:15
17
Blogger
15,122
10.8
0:08:21
18
Wal-Mart Stores
14,536
10.4
0:13:00
19
About.com
13,681
9.8
0:04:42
20
AT&T
13,629
9.8
0:24:53
21
Bank of America
12,757
9.1
0:22:20
22
PayPal
10,791
7.7
0:12:53
23
Comcast
9,855
7.1
0:39:50
24
Chase
9,769
7.0
0:17:24
25
ESPN
9,273
6.6
0:21:16
Source: Nielsen Online
Top 25 advertisers (excludes house ads)
Through Dec. 9
#
Company
Impressions (000)
1
NexTag, Inc.
8,497,580
2
Countrywide Financial Corporation
6,870,762
3
Low Rate Source
4,878,905
4
InterActiveCorp
2,700,276
5
HSBC Holdings plc
2,425,041
6
Sprint Corporation
2,356,057
7
AT&T Corp.
1,478,407
8
eBay, Inc.
1,470,024
9
Experian Group Limited
1,381,246
10
Wachovia Corporation
1,311,299
11
Boost Mobile LLC
1,133,221
12
Verizon Communications, Inc.
1,096,095
13
Netflix, Inc.
1,073,901
14
Dell Computer Corporation
813,516
15
General Motors Corporation
791,021
16
Low.com
775,409
17
E*TRADE FINANCIAL Corp.
563,433
18
Scottrade, Inc.
514,168
19
American Express Company
512,251
20
Hydroderm Beverly Hills
511,318
21
Ford Motor Company
505,822
22
Fidelity Investments
457,959
23
Vonage Holdings Corp
451,543
24
Bose Corporation
427,349
25
Privacy Matters
419,844
Source: Nielsen Online, AdRelevance
Note: Nielsen Online, AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Also, Nielsen Online, AdRelevance reporting data reflects advertising activity served on pages accessible via the World Wide Web and not within AOL's proprietary service.
Top 25 advertising sites (excludes house ads)
Through Dec. 9
Company
Impressions (000)
1
Yahoo!
36,694,926
2
MySpace
3,942,271
3
MSN
1,527,132
4
eBay
1,365,210
5
AOL.com
1,066,511
6
MSNBC
970,159
7
FOXNEWS.COM
658,683
8
Facebook
587,065
9
The Weather Channel
569,587
10
Juno
553,420
11
New York Times
522,661
12
Comcast.net
496,357
13
NetZero
479,910
14
Amazon
471,306
15
ESPN.com
386,927
16
CBS SportsLine
382,651
17
YouTube
378,707
18
MyPoints
356,483
19
NeoPets
342,129
20
IMDb
298,144
21
Photobucket
254,422
22
Excite
243,881
23
iWon
223,417
24
CNN Money
204,486
25
NFL.com
179,050
Source: Nielsen Online, AdRelevance
Note: Nielsen Online, AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Above data does not include any house advertising activity. Also, Nielsen Online, AdRelevance reporting data reflects advertising activity served on pages accessible via the World Wide Web and not within AOL's proprietary service.
