Click / Counter-Click: 2006 Predictions

Although next year is still a month away, Jason and Paul have cleaned off their respective crystal balls and agreed on a few of the top trends and predictions for 2006.

TV--only not TV. The entertainment industry has quietly and not-so-quietly been experimenting with various models of broadcasting video content over digital IP-based media. Television networks ate still trying to figure out whether consumption via online and wireless channels is simply driving interest, or is a new viewing trend. Of course the advertiser-supported channels that are currently and for the foreseeable future the main distribution channels for high- quality multimedia content (broadcast and cable TV), may not be the model for digital distribution of the same content. The pay-for-play, on-demand model seems to be an interesting alternative, and possibly a lucrative one. Can mobile handsets, PSP's, and video iPods begin to lead to a bigger ad-free, pay-for-play revolution? Probably not--but it sure has the noodle working a little harder these days.



The proliferation of innovative devices with new capabilities has created opportunities for content providers and marketers alike. Digital music will thrive in 2006, but for television content, 2006 should be the year that answers many questions. Will a sufficient number of consumers feel that TV content is valuable enough to purchase? Will digital channels drive interest or consumption? Will there be an advertiser backlash from the sale or digital broadcast of ad-free programming? It's a little early to tell, but one thing is for sure--we'll be seeing more innovative and high-profile deal-making coming from the television industry as its members try to figure out the answers to these questions.

RSS for the Masses With the upcoming release of Microsoft's Internet Explorer 7 and Microsoft Live, the vast majority of consumers will have an RSS reader for the very first time. Now granted, Yahoo has offered consumers the ability to aggregate RSS feeds for some time now within the My Yahoo service, Still, though Yahoo is broad-reaching, it is not Microsoft. Giving consumers the ability to set their trusty Internet Explorer homepage to aggregate all of their feeds may be the straw that breaks the camel's back for widespread introduction of RSS. At the very least, it's enough to exponentially increase the universe of consumers actively using RSS, which would be similar to the explosion in podcasting after the release of iTunes version 4.9 earlier in 2005.

The seller's market continues Rising prices, minimum buys, sold-out inventory... depending on your category, you may have heard some of these phrases during 2005. Expect the seller's market to continue in 2006. More categories will begin to raise cpms and enforce minimums as online advertising budgets increase and the laws of supply and demand kick in. Publishers have been trying to figure out ways to increase their audiences to keep up with the demand for targeted inventory.

Continued proliferation of consumer generated media (CGM) creates more opportunity for marketers CGM will begin to compete with established media for consumer mindshare. Marketers now have the tools to monitor relevant CGM and embrace an active involvement in consumers' online experiences by participating within the communities and conversations, as opposed to watching from the outside. Next year will bring an increase in this involvement. Marketing to the ever so informed and empowered consumer will continue to require more engagement and alternative approaches to complement what has now become "traditional online media."

Video specifically, whether amateur video or mobile video, is where the growth is headed. Of particular interest are mobile blogs with pictures and video, which are already popular in Asia and Europe, and becoming popular with early adopter segments in the U.S. The popular consumer blogging sites already provide mobile posting options for text, audio and pictures, with video rolling out very soon . This is creating the framework for explosive growth in usage of these tools. Of course, the video aspect rides on the coattails of the U.S. carriers making 3G phones the standard during 2006. New marketing opportunities are soon to follow.

I wonder how far away Google may be from offering video pre-roll ads on videos within blogs on, some or all of which would be available on Google Video as well. It seems that Google is positioned to take full advantage of and reap many of the benefits of the video revolution, consumer-generated or otherwise.

Privacy and cookie issues come to a crossroad.The spyware problem doesn't seem like it's getting better anytime soon. Computers are being hijacked or scammed at an alarming rate, and most consumers are paranoid about online privacy. Much of Microsoft's focus these days is on developing security upgrades to IE and Windows. Many research and tracking companies have moved to first-party cookies, away from third-party ones, which have been blocked at an increasing rate in 2005.

Cookie deletion however, is another story. Consumer education efforts are slow-moving because seemingly no one in the industry wants to own the responsibility for this costly and difficult task. However, 2006 will be a pivotal year for us as an industry to ensure that consumer perception of cookies changes. We need to save the central component of most online tracking and research. Consumers must perceive cookies as positive, experience-enhancing elements of their online lives, or we will lose one of the key components of digital media--accurate measurability.

Search grows, of course. The search market, now expanded with MSN in the mix, will continue to grow as more small businesses, local advertisers, and brand marketers seek accountable media options. Unfortunately, some categories are becoming very expensive due to increased competition, poor tracking and bid management by many of these competitors, and click fraud. However overall, search marketing will continue to be the proverbial low hanging fruit to match consumers' demand with marketers' products and services.

In 2006 the major search players will continue to expand their offerings to entice advertisers. Many of the major ad networks have shifted away from selling ads on a cpc model, which opened the door for the search engines' contextually relevant content products and their more sophisticated targeting capabilities to increase their stronghold on a cpc market which they already dominated. These targeted ads are not only integrated into content sites small to large, but also integrated into many blogs, which brings us one step closer to the promise of a world of relevant advertising. We also expect to see search engines evolving their video products, which will begin to attract initial dollars from brand marketers.

Rich Media Differentiators Rich media companies must continue to develop differentiating features and benefits, or eventually fall victim to the widespread adoption of the centralized rich media tools within the major third-party ad servers. The increased competition has driven prices down this year, and we expect to see that trend continue in 2006. Although there is a lot of talk about engaging with consumers online, most ads are not "rich" and definitely not engaging. We'll see an increase in the use of rich media and improvements in engagement evaluation in 2006.

2006 is right around the corner. Have you started to think about how to allocate your budgets? The media landscape is changing, and it's an exciting time to be in the digital media industry!

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