January's Column By New Media Age Editor Mike Nutley
The turn of the year is traditionally the time when industry watchers turn forecasters and issue their predictions for the coming twelve months, so it seems appropriate to take advantage of my unique perspective as editor of NMA and suggest a few trends to watch out for.
Regular readers of this column won't be surprised to learn that I expect the amount of advertising money spent online to continue growing this year. Indeed in our last issue of 2003 we reported that the latest figures from the Interactive Advertising Bureau suggest that online is already taking 2% of the UK's total advertising spend, the IAB's target for autumn 2004. Partly this is because major advertisers have woken up to the reach of the Internet; MSN's Online Pulse survey last autumn questioned 500 UK media planner/buyers and marketing managers and found that 85% of them were either advertising online, or had done so in the past nine months.
What's more exciting is that this boom should start to benefit more than just the top few sites. Ad space on these sites is already selling out and rates are starting to rise. Inventive planner/buyers should be looking for slots for their clients that are cheaper and offer better targeting. It's also becoming apparent that there is a growing role for increased personalisation of online advertising, in a return to the early claims made for the medium. Efforts to deliver on this unique property of the online medium are coming from small software companies like Connextra, which is taking its context-sensitive, dynamically updateable advertising technology into financial services, but also from the search engines, which are looking to deliver a better user experience. It used to be that several thousand results were acceptable from a search, but expectations have moved on. Expect to see localisation of results from all the major search companies this year.
In addition, you can expect to see the beginnings of a new browser war as MSN launches its own search product tied into its browser and office software; Google's response will almost certainly be to launch its own browser. Linked to this will be an increasing emphasis on security. Microsoft's attempt to reinvent itself as a producer of high-quality, reliable, secure software last year was a clear indication that customers' demands have changed. If the PC is a mass-market product, it's going to have to look like one. In addition, if Microsoft, and other big software companies, want to move to renting their products rather than selling them, they're going to have to offer customers something in return, and that looks like being security and reliability.
Meanwhile the problem of spam is going to get worse. The legal and technological solutions being offered are only partially effective, so until these start to join up, we'll be forced to rely on administrative responses such as auto-response whitelists.
Finally I'm predicting a slow-down in the enthusiasm for public WiFi hotspots this year as would-be operators work out the value chain and how to make money. Conversely, the drive for WiFi uptake will come from the technology's ability to remove the need for infrastructure, and therefore make it possible for many other buildings to be used by companies that need broadband connections.
In making these predictions, I'm mindful of a lesson a previous NMA editor reiterated in a recent column for the magazine; that we always over-estimate the short-term impact of technology and under-estimate the long-term effects. Eleven years on from the launch of the first browser (Mosaic on 23 January 1993), we're seeing through those over-estimates, but we're still a long way from knowing the full picture.
Michael Nutley, Editor, New Media Age, http://www.nma.co.uk/