• by Tom Hespos , December 13, 2004

This is the time of year my fellow columnists tend to make their prognostications about the year ahead. Before I follow suit, I think it's important for us to first take a look back at 2004 and take stock of where we are.

When we look back on 2004 several years from now, I believe we'll think of it as a monumental turnaround year for online marketing and advertising. (Actually, I think it was a huge year for most alternative media.)

Whereas in the first few months of this year, we gave search a ton of credit for pulling online media back from the edge of the abyss, it has since become clear that our industry's rebound wasn't driven entirely by search. Sure, search's popularity helped, but online advertising in general did rather well in other areas - even run-of-the-mill banner advertising.

How were we able to pull back from the edge and defy the cries of "online advertising is dead" and rejuvenate a medium that many looked upon unfavorably? If I had to attribute success to only one thing, it would be our industry's ability to prove that online media picked up portions of the fragmented audiences that fled television, radio, and print over the past several years.

Across the board, online is very effective at reaching folks that are light users of traditional media. I see the same story across many of my agency's accounts, whether they market to mainstream consumers or niche business-to-business audiences.

One of our clients is coming to understand that even the niche print books that were read religiously by their target are losing audience in the dead tree editions of their publications. In most cases, these publishers have been able to make it up on the online side (and then some).

We're finding that books that have been losing qualified audience slowly but steadily over several years can reach more members of their target audience by adding in newsletters, advertising on their Web site, and digital versions of the print publication delivered via e-mail and the Web. Folks aren't abandoning the publisher, they're just electing for a different distribution channel.

If said client never did the audience research to understand the fragmentation of their audience, they'd still be advertising solely in print, talking to fewer and fewer people each month, and wondering why sales were slowing. Isn't that what many advertisers did in the months following the dot-com crash?

But now mainstream advertisers are coming to understand that their missing audience is still reachable, but it will take more channels to reach people. This realization may have come prior to 2004 for many, but from where I'm sitting, most of my clients chose to actually act on it in 2004.

But no new medium has earned a permanent seat at the table. Fragmentation will continue as more media choices become available to consumers. While old habits die hard, it doesn't take much for a new medium to seriously compete for attention and time spent.

I think back to how my own consumption habits have changed just in this year alone. All I did was move from Manhattan to the 'burbs and my media consumption has been turned on its ear. I read more books, listen to more radio (in the car), and play more PC games. I watch much less television, read most magazines via the Web, and don't go to the movies as often as I used to. Who knows what my consumption habits will look like this time next year? (Although I suspect it will include a sizeable helping of satellite radio.)

I think 2004 will go down in history as the year mainstream marketers acknowledged the fragmentation problem, and gave online media a shot at addressing it. So far it has performed well, but that may change as consumption habits change. Keep that in mind.

My "2005 Predictions" column next week will focus not only on what I think will come to pass in 2005 in online media, but what might happen to us when we're no longer the new kid on the block.