Just An Online Minute... Parting Shots

by Tobi Elkin, Dec 23, 2005, 2:30 PM

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Until we meet again in 2006, here are a few thoughts and trends for your consideration:

Interactive media is hot and getting hotter: We see no reason to believe that the heady exuberance of the last great Internet push will happen this time around. There are actual business plans in place and some marketers are committing as much as 10 to 12 percent of their media budgets to online media and marketing. This percentage is much higher in some categories, particularly where search advertising programs are concerned.

Looks for new business models to spring up around podcasts, RSS feeds, broadband video, video-on-demand online, and syndicated content. Music, video, movie, and other forms of content downloads on any device or platform will become more pervasive.

Parks Associates' rather conservative forecast indicates that the Web will double its share of the U.S. advertising market to 10 percent by 2010. The forecast assumes Web advertising, now a $12 billion market, will grow 14 percent a year, about half the current pace. Piper Jaffray analyst Safa Rashtchy sees growth more in the range of 20 percent a year in the U.S. and 40 percent internationally. If Safa's prognostications bear out, the global Internet advertising market will hit $55 billion by 2010, up from the current $19 billion.

They call it mellow yellow: Think the Yellow Pages are a bore? Think again. The U.S. Yellow Pages market is a $15 billion a year business. Analysts at Kelsey Group project that $5 billion of locally targeted, small-business advertising will segue online by 2009. Yellow Pages companies sport margins of some 40 percent or more, and lots of dedicated sales reps. Don't count the big books we used to sit on as a child at the dinner table out!

Marketers go online, in droves: Yes, marketers will continue to shift dollars online and to other nontraditional media venues. Finally, finally, finally, they are realizing the power the Web has to target the right consumers with the right message, and the ability it has to measure the performance of media dollars. Look also to pickier premier advertisers to reduce their dependence on price cost per thousand ad buys. Looks like sales reps will need to sharpen their deals and their understanding of what marketers want and why. Performance-based pricing models will begin to demonstrate the value of search engine marketing as an effective channel for lead generation.

"We are the marketer, and we are the producer": Marketers will take a more active role in entertainment production, insisting on more creative control. This will happen across a range of media from video-on-demand programming and podcasts, to online video games, concerts, live Internet specials, films, contests, and other types of events. Look for more godawful reality-show fare with brand messaging deeply embedded and intertwined.

Finally, on the 3rd day of the New York City transit strike, we said, "Hallelujah!" when yesterday (Thursday afternoon), word came that the union leaders voted to have workers return to their jobs--albeit without a contract. We hope the workers ultimately get what they deserve--decent contributions to healthcare and pensions on behalf of their employer, the Metropolitan Transportation Authority. From this here Minute's standpoint, the fight is well worth a few inconveniences if the workers can strike a deal that is a bit closer to what they want. The MTA supposedly had a surplus, after all.

We must say that the strike in NYC is a sharp indicator of what is happening at all companies--large and small. You know them. In fact, yours could be among them-- media companies, marketers, Internet companies, public sector/private sector. Stock is great, but is absolutely no replacement for tangible employer-contributed benefits.

Best wishes for a wonderful holiday season, fun gifts, good company, and no fights with family. Cheers!

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