David Hallerman, Senior Analyst
Video
More marketers will increasingly embrace online video advertising, supported by the twin boom of video streams and video ad networks.
Further support for video ad growth will come from sites that offer a deeper catalog of professional video content—such as whole seasons of TV shows (both present and past), exclusives of entire sports events and other premium content. Such offerings will attract larger audiences. But in order to maintain the costs of deep-catalog video, the sites and their studio and TV network partners will need to introduce hybrid plans that combine subscription fees with advertising.
Ad Targeting and Privacy
Effective ad targeting depends on fresh and abundant data about Website visitors—what they’re doing, where they’ve been, where they go. However, both consumers and politicians are increasingly concerned about privacy issues.
From consumers, that will mean greater use of ad-blocking software or browser add-ons and more deletion of cookies. Consumers will be most sensitive to data gathered on social network sites, because of their personal nature.
From the government, that potentially means federal legislation limiting Website tracking.
For publishers and search engines to get in front of these changes will require greater transparency than ever before, such as Google’s new Privacy Dashboard. In 2010, we will see more Websites let users know what data is being kept about them and give them options to remove data or prevent it from being accumulated. However, such transparency alone will undermine online advertising efforts. That means publishers will also increasingly need to make clear what the trade-offs are for accepting online advertising—the free content, the quality of the content, the basic value exchange.
Search
The development of search engines, and related advertising, will increasingly include data gathered through the social Internet, including the real-time data from communication sites—mainly Twitter. By using social data to filter search queries, search engines will hope to deliver even more relevant results and more effective advertising.
These social search trends will bump up against the privacy concerns mentioned above. Again, those search and social sites that get ahead of the transparency curve will tend to gain more consumer mindshare than those who operate under a heavier cloak.
Another key change to speed up in 2010 will be more video results as part of general search queries. That will help drive the greater traffic marketers will increasingly expect as a trade-off for the continued high CPM costs of video ad placements.
Lisa E. Phillips, Senior Analyst
Internet Users and Usage
Internet usage will continue to rise, as consumers find more ways to access the Internet. The continuing proliferation of laptops, smartphones and Internet-enabled TVs, MP3 players and gaming consoles will be the main force behind this trend. Teens and young adults are already active Internet users with many devices. The change will be seen among adults ages 55 and older, many of whom have always had an interest in consumer electronics and now are discovering social networks and other media.
However, the number of Internet users will begin to stabilize, as penetration reaches 66% of the US population, or 205.3 million people. Year-over-year growth will slow from 3.3% in 2009 to 2.36% in 2013, reaching 70% penetration in four years.
Broadband standards in the US will be redefined by the Federal Communications Commission (FCC) in February 2010. The FCC’s current benchmark—which eMarketer uses—is an Internet connection of 200 Kbps in at least one direction. That falls an order of magnitude below global averages. The US does not even make the top 10 list of global “broadband leaders,” which measures household penetration and quality of connection. eMarketer will update its definition of broadband following the FCC’s decision in February 2010. The change may substantially affect estimates of US household broadband penetration, if cable and satellite connections—the dominant forms of digital broadband—prove slower than advertised.
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Tomorrow, check out analyst predictions on e-commerce and mobile.
This slide, presented last week by Vivek Couto of Media Partners Asia at their Asia Media Summit, shows the key markets for Asian advertising growth.
As this chart shows, the sale of digital items rapidly overtook advertising as the major source of revenue for the Japanese social network GREE (same is true of other social networks in Japan and China).
