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
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