2010 What's in store in the online advertising market?

2009 was one of the most unusual years in online advertising and marketing that I can remember in my 15+ years of being involved in this great industry.



At the beginning of the year, it was all GFC, doom and gloom, and everybody was holding on to their money. There was then some cautious optimism in the 2nd quarter of the '09 calendar year, but still a lot of short-termism. Above the line media took a big hit at the end of 2008 and early in 2009, and my feeling is that online really only got truly hit by the GFC in that 2nd quarter, and our little corner of it in the peformance/affiliate space got absolutely belted in June-September.

Then suddenly, there was a rush of spending in the last quarter of the year, and a huge upsurge in optimism. The job market, often the weather-vane for our industry, is suddenly getting busy again, and talking to recruiters (one of life's great joys), they are seeing a lot of job briefs right now.

All I can say is, it was a hard year to try and manage a business, and forecast sales and budgets...



Some key trends I noticed from 2009:

• Search - Paid and SEO continued (and continues) to get a disproportionate amount of people's marketing budget - it's a bit like eating fast food - short-term satisfaction, and it fills an immediate need, but within 2 hours you feel like more.
• Agencies are being squeezed by clients to do more for less (boo-hoo I hear you say, but let's be fair here...) and that means that they are starting to look for creative ways to expand on their margins. We noticed some quite large agencies looking to cut out middlemen wherever possible - I'm not going to make a value judgement on this (yet) but it does place some Ad sales networks in an interesting predicament, where agencies are increasingly trying to go around them
• Finance spending in online dipped for six months, as the banks didn't need to advertise - the federal government did it for them with the Bank Guarantee. This hit a lot of businesses hard and challenged some business models.
• E-Commerce had a big year in 2009, and will have an even bigger one in 2010 as consumers are increasingly looking for value and anyway to save (or at least feel like they're saving) money.
• The big networks, especially ninemsn and Yahoo7, are in trouble and need to change their business models or signficantly tighten their belts (which I think they have already done a lot of) to grow.
• News Limited was the big winner last year in the ongoing newspaper wars IMHO, especially in Digital - what are Fairfax going to do this year to strike back (and I really hope it isn't more whining about how banners are really great, and CPMs are under-weight for what they should be getting paid)? Also interesting move form News. Making two online guys the CEO and deputy CEO of the Oz was really interesting, and shows that News are actually serious about integrating paper and online products - watch this space. I don't know Freudenstein, but Nick Leeder is a very bright guy with a lot of integrity, so think that could be one of the sleeper success stories of 2010.

So, looking into the crystal ball:

• 2010 is going to be a big year for E-Commerce - it may not be 'the' year, but if some of the big launches mooted for this year (Myer, Harvey Norman, DJs) happen with some measure of success the market in E-Commerce will change signifantly
• It won't be the year for mobile advertising, but there will be some continued growth in this market - hopefully some new ideas beyond 'SMS to win!' will be developed
• Broadband network - the final recommendations for that go to government this quarter, let's hope they act quickly and decisively
• 2010 is going to be an interesting year in Ad networks - Permission Corp just bought one (DNS) and that has locked some other big networks out of selling their email products - Rewards Central, Emailcash and Smilecity (NZ) which will hurt some of the bigger ad networks quite badly rumour has it.
• People have to start thinking about how much they are spending on search, and optimise. I also think that Google will see slower growth this year, but I have been wrong so many times on that front, it's hardly worth saying.
• The performance market will continue to grow, but this will be the year for consolidation in this space, and potentially a couple of casualties.

Anyhoo, some initial and rather late thoughts on 2010 in the online ad industry. Any comments appreciated

cheers

matt

AFR Site Rebuilt...AGAIN

I noticed this article in the Oz Media section today:
http://www.theaustralian.com.au/business/media/fairfax-tries-yet-again-with-afr-site-revamp/story-e6frg996-1225801820958

This in my mind is very simple - the AFR has over the last 5 years made a complete mess of its Web strategy. They have ideal content for the Web, a great brand name, and are in a data-hungry market.
In that time, their 'subscription' strategy has been an epic failure on two important counts:
1) Their numbers have been very low (under 5,000 apparently)
2) Even those that subscribe to the paper version of the AFR don't access the Web content simply because it wasn't easy to access or search, and in fact, for a while there, it was almost unusable.
There are two groups that any advertiser (and media agency, publisher, TV Network, Radio Network etc.) would like to get their hands on:
1) Men 18-35 (and in my business, getting them to respond to anything)
2) The mythical 'business decision-makers', CEOs, ABs etc.
The AFR has the second group in spades, but I would suggest, just based on anecdotal evidence, that they are pretty pissed off with the AFR, and its constantly changing online model...I know that agencies are - it's very hard to buy effectively on the AFR site.

The one constant in all of this? The head of AFR, Michael Gill, who is now blaming technology on the need to revamp yet again - whatever else Michael is, he is a great survivor.
I know some guys who were made redundant at Fairfax recently - one in particular was a senior media sales guy who did a great job, kept clients happy, and was a thorough professional (and a nice guy), and yet he got punted from his (I am guessing here) 150k a year job, yet Mr Gill, who I'm sure is getting paid a little more than that, somehow survives...all I can say is, good luck to him.

m

Crazy Bulgarians or What is the world coming to?

So I read this article in the SMH (via the Telegraph) yesterday:

http://www.smh.com.au/world/russian-road-roulette-is-all-the-rage-in-sofia-20091026-hgva.html

If you're incredibly lazy, the synopsis is that a gang of 20-somethings in Sofia (the capital of Bulgaria) meet up late at night, and play russian roulette in the streets by running their 4 wheel drives through red lights at up to 200kmh, and that 5 people have died in the last couple of months, and several people have been injured.

And I thought to myself, what the hell is going on, and what is wrong with these people? Is this the ultimate expression of a society that's bored? They no longer have the yoke of oppression, there hasn't been a war or a revolution for a while in Bulgaria, so is it they don't have enough danger in their lives, so they try and kill themselves and other people?

This seems to me the extreme extension of the Happy Slapping phenomenon that happened in the UK a while back, or the Japanese habit of doing a Hopoate on friends and perfect strangers...and I just don't get it.

I haven't been in a proper fight (I don't think basketball or rugby count) since I was 11 years old, and I think just navigating life, kids, mortgages, marriage and friends has more than enough excitement for me thank you very much. I do like to drive fast, and have in the past been known to drive really quickly, but I just don't get this need to push life right to the edge like this...maybe I'm missing something.

Sofia is supposed to be one of the most beautiful cities in Europe, as well as being one of the oldest. And yet, here they are doing this to each other.

Is there a moral to this story? If there is one, it is this: if you're driving in Sofia late at night, stop at all traffic lights, even green ones, and look both ways, or better yet, stay out until dawn.

meh

m

Am I a whiny bitch?

I run an affiliate marketing network (one of the two big ones in Australia), and have done for nearly 4 years, after working in most facets of online for 12+ years.
One of the trade magazines in Oz recently wrote a 5 page article about affiliate, and quoted our Marketing Director extensively, and was, overall, a balanced and positive article, which we normally would have been very positive about.
The only problem? The headline: 'It All started with porn' I think it was mean to be a funny intro about the misconceptions about affiliate marketing, but I was, and still am pretty pissy about it.
We don't, and never have had anything to do with the adult industry, so I was a little hot under the collar, and fired off an email to the editor of the publication suggesting that, despite the fact they had a much closer link to the adult industry, I thought it was unlikely that they would intro an article about Google or YouTube in quite the same way.

To be fair to her, she got back to me quickly, and did try to answer most of my queries, and simply said that the intro was 'irreverent', but still just an intro.

The rest of the email was ok, but I was a little taken aback by this sentence:
'...we need you to be a little bit more appreciative of our positive coverage and a little more understanding of our misguided coverage if we are to ever cover affiliate again.'

So here's my question: am I being a little sensitive, or is that just outrageous? It's not a big trade mag, so I'm not too stressed whether they do or don't cover affiliate again, but I'm trying to figure out whether I should really get annoyed about it, and escalate the issue given that I was fundamentally threatened by the editor, or whether I'm being a whiny bitch? I did a bit of research on the editor, and was amused to find a huge piece in The Age from 2 years ago about living in Barcelona - this obviously qualifies her to comment on the cutting edge of online marketing in Australia - it was a nicely written piece...
Genuinely interested in people's opinion here

cheers
m

Virgin Blue's Epic Marketing Mistake

I travel Syd-Melb and back at least once a month, and have done for at least ten years for work. I am a Virgin Blue regular, and have been ever since they launched in 2000. Why? They are overall cheaper, they are more often than not on time, their crew are smiley and nice, if occasionally a little officious, but they do 'live the brand'. The other thing about Virgin Blue is that, when they started out, they were determinedly egalitarian. The prices were relatively easy to predict, and I would regularly get Seat 1a, right next to the door.

But all this has changed in the last year, ever since Virgin brought in the empty red chairs up the front - I have been on flights where from row 7 back it was completely chockers, and there was one wanker in a suit sitting up the front (and no, it wasn't me, I average $200 return on Virgin).

I can't comment on the business model - maybe selling 50% of those seats on the busy 6/6:45/7am flights @$500 each makes sense, but from a marketing poiint of view it's a complete catastrophe -it takes Virgin's egalitarian, happy smiley brand ethos and craps all over it. I was on a 60% full 8:15 pm flight last night (had an 8am conference date - www.marketingnow.biz, so wanted to get there the night before), and there were ZERO peeps in the red seats.

Wake up Virgin Blue and smell the coffee - democratise the Red seats, or (GASP) reward your frequent flyers by letting them use them if they're not full.

cheers
m

affiliatsyd Wrap Up

Viva9 organised the first Australian affiliate/performance marketing conference http://www.affiliatsyd.com, which was held last Wednesday, May 13th in Sydney.
Our aim was to create a wide-ranging list of topics and speakers, and really focus on interesting and challenging content, rather than the dreaded 'Advertorials' that we have all seen in our professional lives.
We were also keen to present different perspectives - publishers, clients, agencies, emailers, social media experts, and Super-affiliates, and I think we succeeded really well.
Firstly, I have been bowled over by the response - 200 delegates registered, and for our morning keynote it was standing-room only, with over 170 people in the room.
The keynote was Mr Jay Berkowitz, CEO of Ten Golden Rules, and he was fantastic - he built his presentation from the building blocks of how to create a powerful online presence from the very basics, all the way up to really cutting-edge stuff, which had me scribbling furiously. He is a great speaker, and a lovely guy to boot, and we really enjoyed having Jay at the conference - it was a fantastic start to the day.
Other highlights:
Our Social Media panel, with Lee Hopkins, Laurel Papworth, and Jay doubling up, was awesome, Lee is full of passion and ideas, and was inspiring. Laurel, one of Australia's most prominent bloggers, and Twitterers, talked about the 'Ripple Effect' of social media, which was great, and Jay focused on his pet topics of audio podcasts and the power of online video, as well as the need to create and maintain your own personal brand.
Our power affiliate panel exceeded all of our expectations - Roland Bleyer (never a man to be short of an opinion) and Greg Simon from Fat Cat Rewards gave us an insight into the world of the Super-affiliate - men who live and breathe performance marketing. Craig Seitam from Shopper's Bonus came at it from a different perspective - the '10 hours a week' man, who derives about A$1,000 a week from his affiliate activities - not bad....

Other highlights were Dave Fowler from Lyris HQ, a hard-core email deliverability man if ever I met one, as well our Sports Betting panel - still trying to remember the tips they gave at the end.

Anyhoo, more to come on this topic - watch this space.
cheers
matt