Ten Key Online Predictions for 2008

Ten Key Online Predictions for 2008

eMarketer has issued predictions for 2008 in key online areas, including those related advertising, videos, social networks, e-commerce and entertainment, saying online advertising will ride out potential economic storms in the US - and YouTube will decide political elections.

1. Online ads remain resilient.
2. Video surge slows.
3. Social-network advertising hits $1.6 billion.
4. Networking goes beyond MySpace and Facebook.
5. YouTube decides the election.
6. Beijing Olympics pumps up ad spending.
7. Buy online, pick up in-store becomes expected feature.
8. Movie downloading hits the mainstream.
9. Music marketers roll out new business models.
10. Dynamic ads heighten gaming revenue potential.
11. Online Ad Spending

The surge in online video growth is expected to slow in 2008 with a 74% growth (down from 89% in 2007) and a spending increase of $1.35 billion.

In 2008, the array of video available online will jump dramatically, both from professional content producers - such as TV networks - and from of amateurs churning out user-generated content.

Online video players such as Google, Microsoft and the TV networks will fortify their video offerings by buying small, ad-related companies.However, ad dollars on video will remain small relative to the total US online ad spending.

US ad spending on social networks will climb to $1.6 billion in 2008, from $920 million in 2007 - a 70% growth rate.

Although targeted advertising is getting the lion’s share of attention and will continue to be hot in 2008, other forms of social-network marketing, such as search advertising, widgets and e-commerce, will draw marketer interest.

In addition, self-serve advertising systems will create a new market for local and small businesses to promote themselves via social networks.

Social networking will remain a key online activity, with 44% of US consumers using social networking at least once a month in 2008. While MySpace and Facebook will continue to dominate the market, changes are taking place that will extend social networking activities beyond a single destination site.

Profiles will eventually become portable, meaning consumers need only create one and be able to use it in many places on the web. Widgets that today work with only one social-network site will be designed on an open platform, extending their reach.

Activities such as online shopping, searching and even sending email will be enhanced with social-networking features.

YouTube attracts the most online traffic and is consistently rated the favorite social media site by US Internet users.

YouTube will play a decisive role in the 2008 US presidential election by either airing a user-submitted clip that embarrasses a leading candidate or setting the tone of the campaign through its series of sponsored debates.

Events of 2008 - the Beijing Olympics, along with the US election - will spike advertising spending in all channels but will give a particular boost to the online sector.

As the internet market matures, the growth rate of online ad spending will taper off, dipping to under 30% in 2007 for the first time since 2004. But in 2008, growth will surge upwards to 29%, before declining to 18% the next year.

Multichannel retailers will begin rolling out more “buy online, pick up in-store” services, joining big-name retailers such as Circuit City, JC Penney and Sears. Consumers like the service because it allows them to avoid shipping fees.

A Forrester Research survey found that 79% of multichannel retailers ensure consistent pricing across their channels.

US consumer spending on movie downloads will more than double from 2007 to 2008, from $114 million to $245 million.

The result is that digital services, such as iTunes, Netflix, Amazon Unbox, Movielink/Blockbuster, Vongo and others will become more popular with the mainstream.

Music labels and marketers will step up their experimentation with new and emerging business models as the CD continues to fade away. Worldwide recorded music spending has declined year after year - from $32 billion in 2006 to $28 billion in 2008, hitting a low of $26 billion in 2011.

Expect to see more ad-supported sites, monthly subscription services, full-track mobile download offerings and use of social networks as music discovery and sales tools.

Old videogames will have new life breathed into them by companies such as Double Fusion, which serves ads in real time.

Advertisers will purchase advertising that is served on free casual games that consumers download.

The same concept will apply to console games distributed online for Xbox and Wii, with firms such as Microsoft’s Massive providing the technology.

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