• by Joe Mandese  @mp_joemandese, January 19, 2005

The media marketplace in 2005 will transformed by a "steady disappearance of the 'mass' market, replaced by an ever-growing number of 'micro' markets that cater to the needs of specific groups or individuals," predicts Tony Kern, deputy managing partner of Deloitte's Technology, Media and Telecommunications practice in a media industry report released by the group late Tuesday. "New devices and media will flourish, along with new forms of advertising, including embedded advertisements in video games, software, and even mobile phones."

Among the reports predictions are greater convergence among media, an acceleration of the legal music download marketplace, and the rapid expansion of the mobile media marketplace, especially cell phone related media.

The report also predicts that a number of new sources for content "will explode," including digital TV, which will bring terrestrial broadcasters "back into the game, giving consumers one more source for TV programming."

Deloitte also predicts a steady migration of print media to digital platforms, echoing a sentiment made last year by Aegis Group, which predicted that half of all media would be digital by 2007.

"An ever-increasing number of print publications and niche journals will be available in electronic form over the internet. And more and more people will express their opinions to the world through blogs and wikis," predicts Deloitte.

These shifts will accelerate the trend toward embedded advertising strategies, including text hyperlinks, software toolbar buttons, on browsers and mobile phones, as well as in-game advertising in videogames.

"These ads will be very precisely targeted as advertisers learn more about each group of consumers," predicts Deloitte, noting, "They will be dynamic, updated via an internet connection based on time of day and user activity, and they will need to be far more subtle and sophisticated and less intrusive than the banner ads and pop-ups that currently plague the internet, in order for consumers to accept them."

While new forms of embedded advertising will "reinvigorate" Madison Avenue, the consultant said it will increase pressure on agencies to stay ahead of technological developments, and how they are impacting consumer use of media: "[Agencies] will need to know when the audience is available, what its members are likely to be doing, and most important, how to capture their interest within that context."