• by George Simpson , Featured Contributor, January 4, 2008

The only thing you can predict about predictions is that people will make them, and some will end up right and some will end up wrong. While I have my own ideas about what will happen in the interactive space during 2008, I took my own advice from last week and stood in front of the mirror and repeated this important new-media-age mantra: "I am Nobody. No one cares what I have to say." 

On the other hand, I am surrounded by some of the smartest folks in the businesses (if for no other reason than they have hired me).  So I asked them what will happen in 2008.

"Consolidation will continue. Yahoo will be bought by Microsoft or AT&T or it will merge with AOL. AOL will be spun off from Time Warner in an IPO. ValueClick will bill itself as the last independent advertising platform," Jay Sears, senior vice president, strategic products, at the ADSDAQ ad exchange, tells me. "Branded sites will build extended distribution with in-category publishers and buy vertical ad networks to do it. Ad holding companies will invest in technology, platforms or agencies that will help move client brand dollars online and hedge against the frenemy."

Others agree with Jay. "2007 was the year of realization and recognition of how audience fragmentation is both a significant threat and an opportunity for big media/traditional media leading to nearly $10 billion in M&A activities. 2008 will be the year of 'execution' by big media, so expect more M&A of smaller sizes as big media is forced to build significant scale online to keep pace with ad budgets moving to the medium," says Peyman Nilforoush, CEO of NetShelter Technology Media (a vast collect network of tech-oriented Web sites).

"Networks will acquire and be acquired, and niche and focused networks will emerge and command more budgets. Everyone and their sister will launch a network because--hey--running a network is easy, right?" jokes Cree Lawson, CEO of Travel Ad Network. "Google will retract its tentacles from being everything to everyone and zoom in on online advertising and will keep more of its traffic--rather than delivering it to the sites that it shows on Search Engine Results Pages. Microsoft/Aquantive will not make a lot of noise but quietly create a bigger and bigger footprint. The world will get a taste of the combined might of Google and DoubleClick, and ad-serving costs will plummet (as a result)."

Mark S. Zagorski, CMO for local media ad network MediaSpan Group Inc., also sees more takeover activity: "The consolidation trend in online advertising will continue--particularly in the vertical network segment, where niche publishers will be snapped up by larger brands looking to strengthen their foothold and expand sellable inventory. The 70/10 rule (70%+ of online dollars concentrated amongst the top 10 properties) will become the 80/8 rule."  On a more fanciful note, Mark adds: "A user-generated news portal will launch and will become the most highly trafficked news Website in the world. Google will purchase it and will finally do what they said they wanted no part of--become a content producer--but will do so without hiring a single writer."

"As 2007 was the year that validated the online medium as a crucial part of the advertising mix, 2008 will be a defining year of how online ad inventory will be brokered. The major media portals and networks will attempt to become clearinghouses of online advertising, while media sellers and buyers will be jiving with marketplace exchanges for direct ad placements. All in all, ad dollars will find the best ways of reaching content-specific sites rather than increased spending in broader strokes," says Dana Ghavami, CEO of CheckM8, the largest remaining independent ad-serving company. "The vacuum created by substantial conflicts of interest and sensitivity of data in ulterior interest-owned hands will give rise to new independent leaders to service the major media brands."  

I also asked about predictions for the industries where these forecasters have large customer bases.

Mitch Lowe, CEO of Jumpstart Automotive Media, notes: "The auto industry will spend at least 8% of its advertising budget--more than $3 billion in total--on digital advertising."

Cree says lots of changes are in the works for the travel industry: "Hotels and airlines will compete more on services, less on price. At least one more international lowfare carrier will launch. The stuff you find in hotel rooms will increasingly be for sale (i.e., retail), and loyalty programs will see more promotion. More international travelers will visit the U.S. (because of low currencies), and hotel rates will go higher and higher. Tons of new travel Web sites will launch, and the major online travel agencies will continue to lose market share to innovators like Kayak and Sidestep." He ends with some good news for you and me: "Airport lines FINALLY get shorter and friendlier."

"Pharma marketers will begin to develop best practices for participating in online social media," predicts Robert Kadar, President of Good Health Advertising Inc.

In the ad exchange space, Jay says, "a handful of leading ad exchanges will emerge--Yahoo's RightMedia as the leader for high-volume remnant and direct response; ADSDAQ by ContextWeb as the leading independent with a focus on premium inventory and control; and DoubleClick's AdX as a solution for large publishers. Microsoft's AdECN will be more active in the second half of 2008 as an exchange for ad networks only. Other providers will start to say they are exchanges--buyer beware! Each exchange will become known for its area(s) of expertise--large publishers or long tail; remnant or premium inventory; a spot (bidded) or futures (reserved) market; direct response or safe for brands."

"Riding the mid and long-tail will be the story for 2008, as significant partnerships are created between traditional media/big media and vertical advertising networks that capture the mid and long-tail. Vertical ad networks that offer significant scale will find themselves playing the role of 'new media companies' by helping traditional media distribute and monetize their content where the majority of the growth lies," says Peyman of NetShelter. "Internet traffic to mid and long-tail sites will continue to grow significantly as search and social media continue to improve on driving Web traffic to the most relevant content and UGC continues to grow both in quantity and quality. Despite concerns with the health of the overall economy, the online advertising sector will beat all forecasts, as a weaker economy will force marketers to shift significant budgets to the only truly measurable medium. Traditional media will increasingly turn to the online distribution channels to monetize their offline content both new and archived."