2009 Predictions

Happy New Year! As you stumble around the house on this cold January 1st, grab some coffee and wish me better results on my predictions for 2009 than last year. Here’s my top 10:

1. The Year Video Gets Organized

Back in the dark years of 2003 and 2004 the media attention around the Internet advertising business was mostly focused on how bad everything was. Declining revenue, Punch the Monkey ads and worse, Bankruptcies, stock prices, etc. But underneath the meteor-charred skies the mammals were emerging. Those were the years when much of the current online ecosystem matured, including Ad Exchanges, Rich Media, the first video ads, etc.

In 2009 the news about In-Stream video will likely be similarly glum. We’re going to hear a lot about the difficulties of monetizing video, about high profile flame-outs in the space, consumer resistance to pre-roll, etc. But in the background some important fundamentals will be established: a) The VAST ad serving standard (which I was involved in drafting) will be adopted by leading publishers and technology vendors; b) The video ad formats will stabilize to a simple choice between pre-rolls and overlays; c) Advertisers will be able to buy video advertising at scale through more efficient processes and standards.

2. Mobile (Applications) is Where the Action Is

Another year of disappointment for mobile ads. Perhaps, perhaps not. For the first time mobile application development and distribution has moved beyond the realm of alchemy and into the mainstream developer community. Between the Apple and Android platforms hundreds of new software companies are being nurtured and millions of installations are taking place. It is only natural that the business model for these applications will span both paid and free models, and that advertising will have a place. While a lot of attention will be paid to local advertising using the built-in geo features of the phones, my guess is that there will be a bigger opportunity for video and immersive brand advertising, taking advantage of the rich displays. Compared to the tiny text and graphical banners of WAP advertising, application ads will be something to get marketers excited about.

3. Video On Demand to the Set-Top Gets Big

Content aggregators like Amazon, Netflix, YouTube, and Hulu are furiously closing deals with set-top boxes including TiVo, Roxi, etc. 2009 will be the year this becomes a real trend with significantly more consumer interest than the traditional “VOD” services from cable providers. Expect to see at least one set-top on-demand ad network (“STODAN”?) as well.

4. Apple TV Gets Serious

Second year in a row this is on the list. Apple likes to be a late-comer to the market to fix everyone else’s mistakes. 2009 seems late enough for the living room.

5. Ask.com Makes Moves

Last year I predicted that Ask would move up in share to 5%. It didn’t. In fact, it seems to have become a mere arbitrage engine. But all arbitrage opportunities eventually close and the people running Ask are smart enough to know that. I’d guess it looks at acquisitions in 2009 to bulk up share and relevancy.

6. Twitter’s Revenue Model isn’t Advertising

Twitter launches its first serious attempt at revenue and it is definitively not banner ads and sponsored search on your Twitter.com page. My guess is a branded destination pages for companies looking to improve their social presence.

7. Twitter Portalizes in Advance of Advertising

Contradicting myself — Twitter publishes “portal” pages on specific meta-topics to drive additional web and mobile traffic. These pages will eventually find themselves supported by advertising.

8. Internet Advertising is the Only Growth Story in 2009

Everyone’s anticipating a major slowdown in advertising in 2009. The open question is whether online will buck the trend based on taking share from other media. I’ll be quantitative and say that online grows (>0%) while every other major media shrinks (<0%) in 2009.

9. “MSN” Retired

With the powerful brains behind Windows Live Hotmail.Net start moving Microsoft search over to the new Kumo brand someone is bound to notice that most of the traffic goes to lonely old MSN.com*. Sometime in 2009 the sunsetting of this say little portal will begin.

* – Of course the only reason the site gets any traffic at all is because of default browser settings.

10. Widgets Still Don’t Make Ad Money

Not sure how we’re going to verify this prediction at the end of the year, but trust me — selling ad space within a little square of someone else’s website is not a good business model.