2010 Predictions MidYear Report

OVERALL SCORE: B-
1. The success of Apple and Google phones will force Microsoft to buy a mobile ad network. I know, not shocking. GRADE = C, not correct, but no quite wrong yet.
2. CPM prices will rise again. The recession pushed premium inventory prices down, but it pushed traditional ad dollars down more. Online surpassed TV for the first time in Europe in 2009 and this year, we’ll see digital make a comeback in volume and pricing GRADE = B, This was as obvious
3. Social media hype will cool down. Yes, I know it’s popular and the amount of hours spent on Facebook are absurd, but no one has been able to truly measure how impactful advertising on social sites really are. All media buyers should turn social media spending over to the PR team. They are more closely aligned with how to measure the success of social. GRADE = INCOMPLETE, Not enough information. Facebook continues to make their own rules and we all have to play.
4. The end of the search battle. In case it wasn’t clear by now, Google has won the search battle. With roughly 80% of the global search queries and growing and a decreasing battled Yahoo and Microsoft, it’s safe to end the standing 8 count. Baidu however, will be the world’s number 2 search engine by 2012. GRADE = B+, Baidu is not a secret, but the move of Google out of China changed the game. It is important to note that Baidu has tried to launch in other Asian countries with little success.
5. Twitter reaches the crossroads. They will either get acquired, see a new competitor or just go away. The jury is still out on how valuable twitter really is, click here, but the honeymoon phase is over. GRADE = D, It’s clear twitter isn’t going away, but still not clear if they will or should get acquired. The success of their new advertising model will be the beginning or end for them.
6. The tradeoff on free content will hit a pivot point this year. Advertising supported website will be impacted by online privacy changes. And challenge all publisher’s ability to monetize content without charging. GRADE = INCOMPLETE. Viacom’s losing in court to Google only leaves us where we started this year.
7. Large advertising agencies will acquire technology companies versus other agencies. The increase in online advertising will force ad agencies to think about growing more efficient versus just topline growth. GRADE = C, Not correct, but not wrong. This process may take more time that I anticipated.
8. 3D advertising will become a norm on the Internet. After all the hype of TV moving to 3D channel following the success of the Avatar movie, digital ads will be the first to the new format a standard. GRADE = D, It appears TV will be taking a huge leap into this space. I still have my bets on online, its just faster and easier to adopt.
9. Online video will make its way to television. It’s the next step of reality tv, user generated TV.  I know Apple TV does this now with YouTube, but I think Time Warner, Comcast and DirectTV are all looking for one leg up in innovation. GRADE = B, Does YouTube being available by cable neworks count? I hope so, these grades are only getting worst.
10. 2010 will go down as the year of data. Who has it, who owns it, what they can do with it. GRADE = A, The government will be a big player in this space this year. From the EU’s revised data collection policies to Germany’s probe of Google’s data collection, it’s going to get interesting this year.

The difference between an Ad Network and an Ad Exchange and why you shouldn’t care just yet.

Over the years, display advertising has taken a hit and made plenty come back attempts. The latest is realtime bidding, which I won’t cover today, but will be an important player in how we buy media in 2010. In the early days, media buyers would call up portals and website owners and negotiate a price for placement and volume of impression on their site. The main winners at that time were large portals (Yahoo and MSN), national new publishers (NY Times and CNN) and local news providers. With just that mix of publishers, buying display media can be a laborious process. As the number of internet surfers grew, so did the places the consumed content. Creating a challenge for advertisers to get in front of potential customers and for publishers maintain previous traffic levels to their site.

Then came the concept of Ad Networks. An ad network is simply a buyer and seller of display media. They buy advertising space and sell them to various advertisers for a profit, so basically arbitrage. This obviously comes at a cost to publishers, because now they are paying a fee to sell their traffic. As more ad networks where created competition for inventory got more competitive and inventory from ad networks decreased in quality.

Ad Exchanges brought technology to the industry to bring more transparency and simplify the process of buying premium advertising space.Though this became an easier way to “pimp” page views, it too continues to fall the way of ad networks. Publishers, concerned about devaluing their inventory started pulling space out of networks and selling direct. So the struggle between marketers reaching the right audience and publishers selling at the best price contuniues to be a struggle. Enters Realtime Bidding (i.e. RTB). RTB allows advertisers to bid on the impression versus just a page view that provides little information excep that a user visited that page. I’ll discuss RTB in a later post. With Google buying InviteMedia I am sure the airways are buzzing for the rest of the technology companies.