What a year 2008 was! How could things get much crazier than the past year? For better or worse, and I imagine we will have some of both, I think we have an even more interesting year ahead of us in 2009. Here are some predictions, hunches and thoughts on what we might see in 2009 with a eye towards the use of technology in the realm of business. Please add comments below with your addendums, additions and thoughts. Happy New Year!
- The Mini-Depression- the economy is going to tank, briefly, then begin a swift recovery. The reason I think we aren’t going to have a prolonged depression like the 30s is that we are smarter now (in terms of how to navigate out of this mess) and have the web connecting a global economy and creating opportunities to help a quick rebound. But for 6-12 months I think it’s going to hurt and hurt pretty bad.
- Consolidation Of Everything- with the economy hurting many good companies with borderline cash positions will go down. Other companies in stronger positions will snatch these weaker companies up for pennies on the dollar. This will happen locally as we are already seeing nationally. In the tech sector could even see surprises like Twitter being bought by Facebook or Google. Look for major consolidation in TV, Radio and Print but you probably already know that since it has been happening for a while now!
- Numbers Don’t Lie- companies that were once just fascinated or mildly interested in viewing their website’s analytics will begin demanding demonstrable ROI with all marketing spends. The era of 15% media buy commissions and “throw everything at the way to see what sticks” marketing will pass, finally. Every penny will need to be accounted for. The web is the only platform that can accommodate this. Money, what is left of it, will be shifted to the web strangling traditional media.
- The Death of Traditional Ad Agencies- with companies requiring accountability for their marketing budgets, a general reduction in marketing spends and more companies moving their marketing in house or to smaller firms we will see a mass extinction of traditional ad agencies. My definition of a traditional agency is one that only uses the web in a peripheral way, has a large staff with many older employees, high payroll and generally high overhead. These companies will begin to fall like dominoes. The upside is that agile, smaller agencies will spin off from these dinosaurs with some old dogs learning new tricks.
- The Rise, And Eventual Fall, Of DIY Marketing- with money tight, traditional ad agencies facing extinction and online tools making marketing more accessible I see more companies and start ups going DIY when it comes to marketing. Most of them will use Social Media and Pay Per Click ads since they are the obvious low hanging fruit for a beginner. They will also realize, shortly after jumping into the Social Media waters, that their website isn’t meeting their need to have a meaningful online conversation with their customers. This will be a factor pushing newly minted DIYers back into the arms of the web marketing firms left standing.
- Flood Of Start Ups- with mass lay offs and general employment upheaval and uncertainty there is an opportunity for highly skilled workers to venture out on their own. Look for the Obama administration and local governments to encourage these kinds of start ups with a preference on Green technologies, infrastructure, energy independence, etc. Tax breaks, incentives and straight up cash will start to circulate mid-2009 and there will be a little bit of a gold rush. Start-ups will pop up like mushrooms to capitalize on these incentives.
- Everyone’s Going Green- this is no secret but once Obama is settled in office and congress starts pushing through legislation there will be funds and incentives for everything “Green”. This plays into my previous point about Start Ups. Companies need to start positioning themselves now for this change. It will be similar to our build up to WWII in the sense that the entire country is going to be mobilized around this objective of green technology and energy independence.
- It’s All About Mobile- the iPhone was just the beginning. Mobile devices will get smaller, faster, cheaper and in wider circulation. This means a few things. More people will be accessing the web content via mobile devices. Mobile browsers (i.e. Safari on iPhone) will improve and hopefully Flash functionality will start showing up on most smart phones (i.e. iPhone or Blackberry Storm) within the year allowing even more multimedia to be viewed on mobile devices. Businesses will be wise to have websites that are built with mobile browsers in mind. They will also need to make sure that their listings are showing up for local searches in Google and other search engines since smart phone users are increasingly using their phones to locate products and services. Here is a great article from Marketing Vox with some statistics and additional information about the impressive growth in smart phone search usage. If you aren’t listed in Google Local then you will be left behind. This is the engine that drives many of the smart phone location searches (Maps).
- Think Local- beyond mobile devices local web search is going to play an increasingly important role in connecting businesses with customers. In fact this past year saw local Internet search finally pass the Yellow Pages as the first stop for local searches- read the study. So getting to the top of your local search keywords has never been more important. Do you own your “city and service” search? We have built our business at Small Box by owning “Indianapolis Web Design” and related searches. Being the first, second or third listing for your product and service in a locally modified search equals more business. Some new companies are going to grow quickly using this strategy, other well established companies are going to shrink or die by ignoring it.
- The Ad Wars: Facebook vs Google- advertising next to search results has been Google’s bread and butter. It’s the reason they can offer sushi and childcare to their employees. It’s the reason they are the envy of almost all other tech companies. But can they compete with demographically targeted advertising on Facebook? If you were a dealership selling hybrid cars which route would you go to seek new customers? The first is to target your metro area and specific search phrases including your product’s name, etc. The other option is to target Indianapolis users 25-40, interested in “green” products, single or married, employed at Lilly or Wellpoint, college grad, etc. The dealership knows the demographic they are wanting to target and only Facebook can marry it perfectly with their vast list of users. This is not to say that advertising on Google will become worthless. Users still go to Google with high commercial intent to make searches that lead to purchases and Facebook users don’t normally log in expecting to buy something. But I think you will see more companies begin to use the new Facebook ads platform since it allows them to have a very specific conversation with the exact demographic they are targeting. I am doing a test run of Facebook advertising right now and will be posting the results in a separate blog. I see Facebook beginning to erode Google’s market share in 2009. It’s all about targeting and Facebook has a much better shooting range right now.
Absolutely agreed on “the death of traditional ad agencies”. Like you, we are growing our business on the carnage of the big players, especially in the local space. We are a Boulder-based shop and I see that you’re Indianapolis– we should share tips.
I’m Dennis and my blog is at dennis-yu.com. I’m an analyst at blitzlocal.com
By the way, could you number your top 10 tips?
Thanks Dennis, if you view the blog on our website http://www.smallboxweb.com you will see it with numbers. For some reason Blogger strips out the numbers.
Way to go, Jeb. Great insight. I agree w/ most of this, especially with regard to mobile & local search growing in importance, the further decline (and eventual death) of traditional advertising agencies, and your feeling that the economy will continue to get worse for awhile, but should make a comeback within 6-12 months.
Meanwhile, your wife and I are just breathing sighs of relief that we got out of traditional media sales years ago.
~Julie
Good list.
about the last one though; i know I use google much more then facebook. maybe log onto facebook once every few days, but not do much. I know other do allot, but somehow i think this number is droping, and people are going to less and less pages.
Facebook is getting old. People will still probably use it for finding friends, and talking to eachother… but i think in the long run most people will stop playing all the silly games, and joining the silly groups, and only have a few page views every few days.
Google will always be used, allot, by everyone
And as more people get connected to the internet, this number will grow.
So, while facebook’s advertising may be smarter, google will do better in my opinion.
I highly agree with all of this especially the death of large ad agencies and a lot of ads you see out these days that really have no ROI on them or a way to track it, it will be interesting to see what happens with magazines.
Anon- I think Google will continue to grow on some level with their foray into Microsoft’s software terrain (Gmail, Docs, etc). But I think Facebook will do some surprising damage in terms of overall market share for online ad spends since their system is really nice, way more specific in terms of targeting, easy to use and cheaper (so far). I think if you look at Facebook’s numbers they are going nowhere but up. I know I use it daily and so do most of my peers.
Matt- I think magazines will have to downsize staff, outsource writing/contributions, get serious about the web and be crazy smart to survive the next few years. Only the best will survive and some cool new ones will come along and grab market share with a completely different take on publication in general (integrating a cocktail of media and technology in a way no-one has done before).
Jeb, this is a great list – it would be great if you could post your list from last year and see how right you were (I think you nailed quite a few last year).
I think the audience is changing on Facebook. More and more families and friends of older generations are finding out how easy facebook is to use but the problem is in the division between family, friends and work. Getting people to click through on your advertising is the tough thing since people are engaged in talking to one another not searching for something like when in Googleland.
And I love the comment about DIY marketing. Social Media may be free but it’s really very far from it. This form of advertising and marketing is constant and always on.
Good job on the predictions. I think the economy is not going to recover as fast you think but it will eventually.
Here’s last year’s list Don, thanks for reminding me. I think I got some stuff right, some stuff repeats this year and some stuff hasn’t really happened yet.
2008 Predictions
I think my point about Facebook is in part that advertising, on some level, is experiencing a sea change. It’s no longer just about “selling” it’s about the relationship. Facebook is about relationships and Google is about finding what you want as fast as possible. I think people will start the relationship on Facebook and finish it via Google. So when they go to Google they might be typing in Prius and not Hybrids since the Prius relationship was started on Facebook. I think once Facebook finds a way to demonstrate this connection, which might be tricky unless they partner with Google, you will see a good deal of revenue shift to their ad system.
One really cool thing I forgot to mention about Facebook ads is that you can have an image, usually a logo, above the ad. So you are getting fantastic branding even without the click which is all you are being charged for. I have people tell me all the time they see my Facebook ads. I bet only a couple ever click on them but the branding element is strong.
I hope you’re right about the economy. If Glass-Steagall is brought back and CDO’s outlawed we might have a chance.
My wild prediction for this year is the guy who started ning will buy Facebook!
Interesting take on several fronts, Jeb. While I might quibble with a point here and there, I think much of this might come to pass. If nothing else, it’s good grist for the thought mill.
Enjoyed it! /Jim
Thanks Jim, I appreciate your feedback. Really enjoyed meeting you the other day as well, your company, Rare Bird, does great work. Hope we find a way to work together in the future.