U.S. groups and meetings market sees online revenue growth slow
January 30, 2007
Revenues generated for the hospitality industry by meetings and conventions are expected to grow to $175 billion by 2008, compared with $164.1 billion in 2006, according to “Groups and Meetings: Market Opportunity Redefined,” a study by HSMAI and PhoCusWright.
Travel revenues (including air, hotel, car rental, ground transportation, cruise and tour expenses) represent 54 percent of the total revenue. Non-travel expenses (including meeting rooms, catering and audio/visual equipment) represent 46 percent of the total.
Corporate meeting revenues are expected to grow to $75.8 billion by 2008, up from $73.4 billion in 2005. PhoCusWright predicts the online corporate travel market to hit $24 billion by 2008, or 60 percent penetration, up from $19.8 billion in 2005.
Association meeting revenues represented only 5 percent of the market, or $8.5 billion, in 2005. While the number corporate meetings per organization increased 11.2 percent from 2005 to 2006, association meetings declined 2.1 percent. However, this sector is forecasted to reach $10.4 billion in 2008, or 5.9 percent of the market.
Online revenues in the U.S. groups and meetings market are expected to grow to $39.1 billion, or 41 percent of the total market. The online sector accounted for only 33.7 percent of the market in 2005 and 37 percent in 2006. Online travel revenues are expected to grow from $33 billion in 2006 to $39 billion in 2008, with $18 billion of the total coming from air travel and $15.4 billion from hotel bookings.
The No. 1 factor inhibiting online booking is the lack of personal contact. Forty-four percent of survey respondents prefer to talk to someone in person while booking.
Other findings include:
- Hoteliers are working to centralize their groups and meetings inventories and rates to enhance offerings and optimize resources.
- Large meeting components continue to move online to achieve efficiency and offload tasks to planners and attendees.
- The rise in new market entrants and efforts by established players to automate aspects of groups and meetings will draw attention to technology tools, educate the marketplace and encourage people to book online.
The study was conducted between August and October 2006. PhoCusWright contacted more than 35 executives from 24 supply companies, 2,000 meeting professionals and corporate meeting decision-makers, executives from 17 technology providers and more than 1,100 consumers. Responses were collected via e-mail and telephone.
Tuesday, January 30, 2007
Wednesday, January 17, 2007
Microsoft takes email design back five years
Microsoft Outlook 2007, released next month, will stop using Internet Explorer to render HTML emails and instead use the crippled Microsoft Word rendering engine. Outlook enjoys a 75-80% share of the corporate email market, which is similar to Internet Explorer’s share of the browser market - they make the rules.
E-Mail Marketing company Campaign Monitor has been doing some early testing, as have a few other brave souls, and come February, here’s just a taste of what won’t be supported:
- No background images - Background images in divs and table cells are gone, meaning Mark’s image replacement technique is out the window.
- Poor background color support - Give a div or table cell a background color, add some text to it and the background color displays fine. Nest another table or div inside though and the background color vanishes.
- No support for float or position - Completely breaking any CSS based layouts right from the word go. Tables only.
- Shocking box model support - Very poor support for padding and margin, and you thought IE5 was bad!
Microsoft have released a full run down of what is and isn’t supported, including a downloadable validator that helps you validate your HTML for their engine. Word of warning though, it only works with Microsoft software and Dreamweaver.
Microsoft Outlook 2007, released next month, will stop using Internet Explorer to render HTML emails and instead use the crippled Microsoft Word rendering engine. Outlook enjoys a 75-80% share of the corporate email market, which is similar to Internet Explorer’s share of the browser market - they make the rules.
E-Mail Marketing company Campaign Monitor has been doing some early testing, as have a few other brave souls, and come February, here’s just a taste of what won’t be supported:
- No background images - Background images in divs and table cells are gone, meaning Mark’s image replacement technique is out the window.
- Poor background color support - Give a div or table cell a background color, add some text to it and the background color displays fine. Nest another table or div inside though and the background color vanishes.
- No support for float or position - Completely breaking any CSS based layouts right from the word go. Tables only.
- Shocking box model support - Very poor support for padding and margin, and you thought IE5 was bad!
Microsoft have released a full run down of what is and isn’t supported, including a downloadable validator that helps you validate your HTML for their engine. Word of warning though, it only works with Microsoft software and Dreamweaver.
Monday, January 15, 2007
E-mail should be smaller: EmailLabs
E-mail marketing firm EmailLabs, a subsidiary of J.L. Halsey Corporation, is advising business-to-consumer marketers to reduce template size to account for the trend in smaller viewing areas in Web-based e-mail clients.
The recently released Yahoo Mail Beta and Microsoft's Window Live Mail Beta, now enable preview panes by default. These smaller reading spaces enable consumers to quickly scan their messages before opening them, forcing marketers to get to the point.
“Marketers need to rethink how their e-mail templates are designed so that the top left corner of the message includes the core call to action,” said Lena Waters, director of marketing at EmailLabs, Menlo Park, CA. “It is important to have a full understanding of what the clients are going to see.”
Due to widespread adoption of Microsoft Outlook’s preview-pane function in corporate settings, business-to-business marketers have been dealing with this design challenge for some time. But this is not true for business-to-consumer marketers, who for the most part always have designed e-mails under the assumption that consumers would see the entire e-mails as designed.
Ms. Waters said that even when messages are viewed in a full window, shrinking real estate can still be a factor. Many e-mail clients now serve display ads on the right-hand side of the screen, taking that space away from the message window. Also, many e-mail programs automatically disable all images in the preview pane, leaving a big red X or an empty space where the main idea should be.
So she recommended adding text-based e-mail navigation in case images are automatically blocked, as well as color backgrounds as opposed to images.
“Designing with these new viewing habits in mind is important to communicating with your customer,” Ms. Waters said.
E-mail marketing firm EmailLabs, a subsidiary of J.L. Halsey Corporation, is advising business-to-consumer marketers to reduce template size to account for the trend in smaller viewing areas in Web-based e-mail clients.
The recently released Yahoo Mail Beta and Microsoft's Window Live Mail Beta, now enable preview panes by default. These smaller reading spaces enable consumers to quickly scan their messages before opening them, forcing marketers to get to the point.
“Marketers need to rethink how their e-mail templates are designed so that the top left corner of the message includes the core call to action,” said Lena Waters, director of marketing at EmailLabs, Menlo Park, CA. “It is important to have a full understanding of what the clients are going to see.”
Due to widespread adoption of Microsoft Outlook’s preview-pane function in corporate settings, business-to-business marketers have been dealing with this design challenge for some time. But this is not true for business-to-consumer marketers, who for the most part always have designed e-mails under the assumption that consumers would see the entire e-mails as designed.
Ms. Waters said that even when messages are viewed in a full window, shrinking real estate can still be a factor. Many e-mail clients now serve display ads on the right-hand side of the screen, taking that space away from the message window. Also, many e-mail programs automatically disable all images in the preview pane, leaving a big red X or an empty space where the main idea should be.
So she recommended adding text-based e-mail navigation in case images are automatically blocked, as well as color backgrounds as opposed to images.
“Designing with these new viewing habits in mind is important to communicating with your customer,” Ms. Waters said.
Saturday, January 13, 2007
Travel providers go beyond the browser
January 12, 2007
by John Bray, PhoCusWright
While realizing that search has been a great vehicle for increasing travel planning (seven in ten trips begin with search), most travel providers would agree that search has done little to instill consumer loyalty. Sensing that consumers are perhaps a bit too easily distracted in all their shopping and browsing, travel providers have invented numerous ways to get between the consumer and their browser in hopes of opening a more direct channel of communication, stimulating more demand and hopefully encouraging more loyalty.
Online travel started by leveraging the power of the Web browser to enable travel booking. However, if you look closely at today’s leading travel sites (e.g., Expedia, Southwest, Hilton) you see that most of the emphasis is on the so-called “booking button” – the little window that allows consumers to price a travel product – and further, you see that there’s not a really a fundamental difference, in the user experience for the booking portion of these sites.
Essentially, consumers have launched their browsers expecting inspiring travel planning, only to be disappointed by seeing largely the same thing that they’ve had online for four or five years now. Given this remarkable sameness (i.e., the lack of originality in this travel planning process), a convenient circumstance for the emergence of search and metasearch occurred.
Certainly, search is a great thing, simplifying the travel planning experience in many respects. However, the side effect of all this searching is a lot of churn. Of course, consumers shop intermediaries like agencies and then ultimately buy from suppliers. But what is not as often known is that they also shop suppliers in great numbers and then end up going to intermediaries.
In fact, there’s little loyalty in online travel buying, even though the online travel industry is now over seven years young. Three in ten online travelers don’t even have a single site that they prefer for travel purchase, and a vast majority, 68%, have numerous preferred sites.
Sensing this and eager to create loyalty, suppliers and travel distributors have gotten smart. Realizing that the browser may not be the ideal medium to derive consumer loyalty, they’ve built tools to go beyond it.
Several examples of this movement have occurred across the industry. The first one, probably the ‘poster child’ for this movement is a product called “Ding” from Southwest Airlines. In the first three years since launch, Southwest now has over one million users that actively have the product open and are using it on their desktop everyday. They have over five million downloads. And what the Ding product provides is a pervasive way for Southwest to advertise to their loyal customers, those who would download a piece of software and put it on their desktop, when their best fares are available. Through Ding, they open up this channel and offer fares that are not available anywhere else to this selected group in the local market where they reside or where they choose their preferences.
In my case I live in Denver, Colorado. With Ding, I can only see the special fares that they want to promote to me in this market on an irregular basis. How do I know those fares are there? I don’t even have to go and look for them. I don’t have to open up a browser and search for them. I am literally dinged – ding, doorbell sound – whenever these fares are promoted or available in the market. And they’re only available for a very limited amount of time. So like Pavlov’s dog, if you will, the consumer is being trained – ding, ding, ding – come to this special fare.
Ding belongs to a category known as branded desktop applications (BDAs), and there are others from folks like Travel Alberta, Vail Resorts, and most recently Expedia. But there are other examples of going beyond the browser. One is AOL Instant Messenger (AIM). With AIM, by selecting “kayakbuddy” (provided by Kayak) as a chat buddy, you can search for flight and hotel prices, right from your IM window without even opening the browser.
The Google Earth product is truly a great mapping application, but one of the ways to enhance it is for distributors and suppliers to provide “skins” for Google Earth that consumers can overlay on top of the mapping for preferred hotels, properties and travel destinations. With a skin provide by Earth Booker, I can fly in, choose the hotel that I want, and very quickly buy that hotel directly.
The next example will be very familiar to those who used so-called push-technology tools like Point Cast when the Internet was just becoming popular. With the forthcoming launch of Microsoft’s new operating system (Vista), the desktop will be transformed from a static canvas, where the most you can do is place a picture, to a dynamic workspace where rich fidelity applications that act like purpose-built travel planning tools will reside. One can gain a glimpse of this by visiting start.com (requires Windows Internet Explorer 7.0). What start.com allows you to do is select numerous snippets of travel shopping applications (in Microsoft parlance they’re called “Gadgets"), there is one from Kayak as well as one from Orbitz already. I can keep any number of these Gadgets local, essentially taking all the extraneous stuff out of the travel site and say “just give me that booking window”, if that’s all I want to have. Similar to Gadgets, is a product from Yahoo! called Widgets, including travel-specific tools from Octopus Travel, and Flight Compare as well as several other metasearch engines.
In addition to these tools, very soon you’ll see where you can buy travel from your car. In the United States, General Motors now has the OnStar dashboard in over 1.5 million cars with a portal for GPS two-way communication installed in it. Very soon we’ll see travel applications brought locally, the ability to buy hotel rooms on the road, make hotel and dinner reservations, and make this travel buying, if you will, from a map and a browser. In fact, not even a browser, but rather from a dashboard – the dashboard of your car.
Through these new applications, travel providers have seen that they can get between the browser and the consumer; because in the browser, consumers can get lost or misled or just lose attention. By trying to get between the browser and consumers, suppliers and distributors seek to get closer, get more personal, and become more intimate.
January 12, 2007
by John Bray, PhoCusWright
While realizing that search has been a great vehicle for increasing travel planning (seven in ten trips begin with search), most travel providers would agree that search has done little to instill consumer loyalty. Sensing that consumers are perhaps a bit too easily distracted in all their shopping and browsing, travel providers have invented numerous ways to get between the consumer and their browser in hopes of opening a more direct channel of communication, stimulating more demand and hopefully encouraging more loyalty.
Online travel started by leveraging the power of the Web browser to enable travel booking. However, if you look closely at today’s leading travel sites (e.g., Expedia, Southwest, Hilton) you see that most of the emphasis is on the so-called “booking button” – the little window that allows consumers to price a travel product – and further, you see that there’s not a really a fundamental difference, in the user experience for the booking portion of these sites.
Essentially, consumers have launched their browsers expecting inspiring travel planning, only to be disappointed by seeing largely the same thing that they’ve had online for four or five years now. Given this remarkable sameness (i.e., the lack of originality in this travel planning process), a convenient circumstance for the emergence of search and metasearch occurred.
Certainly, search is a great thing, simplifying the travel planning experience in many respects. However, the side effect of all this searching is a lot of churn. Of course, consumers shop intermediaries like agencies and then ultimately buy from suppliers. But what is not as often known is that they also shop suppliers in great numbers and then end up going to intermediaries.
In fact, there’s little loyalty in online travel buying, even though the online travel industry is now over seven years young. Three in ten online travelers don’t even have a single site that they prefer for travel purchase, and a vast majority, 68%, have numerous preferred sites.
Sensing this and eager to create loyalty, suppliers and travel distributors have gotten smart. Realizing that the browser may not be the ideal medium to derive consumer loyalty, they’ve built tools to go beyond it.
Several examples of this movement have occurred across the industry. The first one, probably the ‘poster child’ for this movement is a product called “Ding” from Southwest Airlines. In the first three years since launch, Southwest now has over one million users that actively have the product open and are using it on their desktop everyday. They have over five million downloads. And what the Ding product provides is a pervasive way for Southwest to advertise to their loyal customers, those who would download a piece of software and put it on their desktop, when their best fares are available. Through Ding, they open up this channel and offer fares that are not available anywhere else to this selected group in the local market where they reside or where they choose their preferences.
In my case I live in Denver, Colorado. With Ding, I can only see the special fares that they want to promote to me in this market on an irregular basis. How do I know those fares are there? I don’t even have to go and look for them. I don’t have to open up a browser and search for them. I am literally dinged – ding, doorbell sound – whenever these fares are promoted or available in the market. And they’re only available for a very limited amount of time. So like Pavlov’s dog, if you will, the consumer is being trained – ding, ding, ding – come to this special fare.
Ding belongs to a category known as branded desktop applications (BDAs), and there are others from folks like Travel Alberta, Vail Resorts, and most recently Expedia. But there are other examples of going beyond the browser. One is AOL Instant Messenger (AIM). With AIM, by selecting “kayakbuddy” (provided by Kayak) as a chat buddy, you can search for flight and hotel prices, right from your IM window without even opening the browser.
The Google Earth product is truly a great mapping application, but one of the ways to enhance it is for distributors and suppliers to provide “skins” for Google Earth that consumers can overlay on top of the mapping for preferred hotels, properties and travel destinations. With a skin provide by Earth Booker, I can fly in, choose the hotel that I want, and very quickly buy that hotel directly.
The next example will be very familiar to those who used so-called push-technology tools like Point Cast when the Internet was just becoming popular. With the forthcoming launch of Microsoft’s new operating system (Vista), the desktop will be transformed from a static canvas, where the most you can do is place a picture, to a dynamic workspace where rich fidelity applications that act like purpose-built travel planning tools will reside. One can gain a glimpse of this by visiting start.com (requires Windows Internet Explorer 7.0). What start.com allows you to do is select numerous snippets of travel shopping applications (in Microsoft parlance they’re called “Gadgets"), there is one from Kayak as well as one from Orbitz already. I can keep any number of these Gadgets local, essentially taking all the extraneous stuff out of the travel site and say “just give me that booking window”, if that’s all I want to have. Similar to Gadgets, is a product from Yahoo! called Widgets, including travel-specific tools from Octopus Travel, and Flight Compare as well as several other metasearch engines.
In addition to these tools, very soon you’ll see where you can buy travel from your car. In the United States, General Motors now has the OnStar dashboard in over 1.5 million cars with a portal for GPS two-way communication installed in it. Very soon we’ll see travel applications brought locally, the ability to buy hotel rooms on the road, make hotel and dinner reservations, and make this travel buying, if you will, from a map and a browser. In fact, not even a browser, but rather from a dashboard – the dashboard of your car.
Through these new applications, travel providers have seen that they can get between the browser and the consumer; because in the browser, consumers can get lost or misled or just lose attention. By trying to get between the browser and consumers, suppliers and distributors seek to get closer, get more personal, and become more intimate.
Thursday, January 11, 2007
3,637 Marketers Reveal Which Email Tests Worked Best
By Anne Holland, President, Marketing Sherpa
If your email marketing budget -- or allocated staff time -- is tighter than you'd like, how can you figure out which tests are worth conducting … and which won't move the needle?
Last month MarketingSherpa's research team conducted the largest-ever survey of email marketers in the world -- with 3,637 respondents. One of our critical questions was: Which creative email tests give the best ROI (return on investment)?
Here's one of the many results charts for you to review (see link at the end of this article for more):
Chart: Email Tests – B-to-C Marketers Evaluate ROI
Source: MarketingSherpa, Email Marketing Benchmark Survey, November 2006
Methodology: This fifth annual survey was opened to selected MarketingSherpa reader lists on Oct. 26 and closed on Nov. 1, 2006. 3,637 total responses were collected from email marketers (2,492) and employees at agencies/ESPs working with email (1,145).
We chose the six most-common creative tests to ask about. The biggest result -- testing in and of itself increases ROI. In every case more than 50% of marketers improved ROI (even if only moderately) by testing.
My favorite result -- copy writing really, really matters. The top three best ROI tests were more to do with words (copy, offer, subject line) than they were with design or graphics.
Your Web design team (or IT department) and Web analytics departments also have to be put on notice. As this chart proves, the landing page (where clicks land) is critical. Which means your email department may in the end *drive* Web site development, instead of just linking to already-created Web pages. The email department has to have a heavy hand in the Web design team's ongoing tests and decisions. Email can't be an isolated department down the hall anymore.
This also means your email analytics are not complete at just open and click, you have to include Web data after the click. Luckily many email vendors have anticipated this and are either merging with or allying with Web analytics firms. The "single dashboard" movement -- wherein marketing results from multiple online channels are all shown in a single report -- is off to a flying start, even for smaller marketing organizations.
The only problem moving forward that I can see is how to integrate offline campaigns -- which ultimately must be included. But that's a battle that we’ll be in for the next five years or more.
As for 2007, if you're having a hard time getting a budget for the personnel or technology you need to conduct email tests, I hope the above chart is helpful. Too often senior management are prone to considering email something that's nearly "free and easy" instead of a marketing tactic you should invest in for significant improvements.
Perhaps that's the biggest goal of all for 2007 and email. Just test something, anything. Even a dinky test is worthwhile if you can use results to create a powerful chart for the next senior management meeting. Your goal: to prove email tests are worth investing more in.
We've known for a decade that email is a profitable marketing medium. Now it's time to start taking email seriously by dedicating more copywriting, staffing and technology to the medium.
Email Sign Up (free)
If your email marketing budget -- or allocated staff time -- is tighter than you'd like, how can you figure out which tests are worth conducting … and which won't move the needle?
Last month MarketingSherpa's research team conducted the largest-ever survey of email marketers in the world -- with 3,637 respondents. One of our critical questions was: Which creative email tests give the best ROI (return on investment)?
Here's one of the many results charts for you to review (see link at the end of this article for more):
Chart: Email Tests – B-to-C Marketers Evaluate ROI
Source: MarketingSherpa, Email Marketing Benchmark Survey, November 2006
Methodology: This fifth annual survey was opened to selected MarketingSherpa reader lists on Oct. 26 and closed on Nov. 1, 2006. 3,637 total responses were collected from email marketers (2,492) and employees at agencies/ESPs working with email (1,145).
We chose the six most-common creative tests to ask about. The biggest result -- testing in and of itself increases ROI. In every case more than 50% of marketers improved ROI (even if only moderately) by testing.
My favorite result -- copy writing really, really matters. The top three best ROI tests were more to do with words (copy, offer, subject line) than they were with design or graphics.
Your Web design team (or IT department) and Web analytics departments also have to be put on notice. As this chart proves, the landing page (where clicks land) is critical. Which means your email department may in the end *drive* Web site development, instead of just linking to already-created Web pages. The email department has to have a heavy hand in the Web design team's ongoing tests and decisions. Email can't be an isolated department down the hall anymore.
This also means your email analytics are not complete at just open and click, you have to include Web data after the click. Luckily many email vendors have anticipated this and are either merging with or allying with Web analytics firms. The "single dashboard" movement -- wherein marketing results from multiple online channels are all shown in a single report -- is off to a flying start, even for smaller marketing organizations.
The only problem moving forward that I can see is how to integrate offline campaigns -- which ultimately must be included. But that's a battle that we’ll be in for the next five years or more.
As for 2007, if you're having a hard time getting a budget for the personnel or technology you need to conduct email tests, I hope the above chart is helpful. Too often senior management are prone to considering email something that's nearly "free and easy" instead of a marketing tactic you should invest in for significant improvements.
Perhaps that's the biggest goal of all for 2007 and email. Just test something, anything. Even a dinky test is worthwhile if you can use results to create a powerful chart for the next senior management meeting. Your goal: to prove email tests are worth investing more in.
We've known for a decade that email is a profitable marketing medium. Now it's time to start taking email seriously by dedicating more copywriting, staffing and technology to the medium.
Email Sign Up (free)
Tuesday, January 9, 2007
The Hottest New Media Platform of 2007 Is Right in Your Hand
JANUARY 9, 2007
Mobile phones started as simply another way for people to say hello to one another, but they may soon have a profound impact on the way all advertising channels interrelate.
JANUARY 9, 2007
Mobile phones started as simply another way for people to say hello to one another, but they may soon have a profound impact on the way all advertising channels interrelate.
Massive pure-play mobile marketing campaigns will be thin on the ground during 2007. Far more prevalent will be cross-media plays where the direct response capabilities of handsets provide the punch line to a rich media setup in other media such as television, radio or print.
"This year, one of the main challenges for marketers and carriers will be how to evolve a mobile consumer culture that accepts and responds to advertising," says John du Pre Guantt, eMarketer senior analyst and the author of the new Mobile Marketing and Advertising report. "This will entail knowing what to attempt — as well as what they should definitely not attempt."
eMarketer predicts that the global market for mobile marketing and advertising will grow from about $1.5 billion in 2006 to $13.9 billion in 2011.
"After a lot of hand-wringing and some spectacular successes — as well as flameouts — mobile operators, brands and consumers will learn from each other about what works and what does not work," says Mr. du Pre Gauntt, "just like they did for online."
Already in pioneering mobile markets such as Japan, quick response codes embedded in magazines offer readers the chance to maintain a connection to the editorial content while clueing publishers and advertisers to consumers' changing interests through mobile connections.
Combine innovations like that with the continuing march of advanced networks and handsets in Western Europe, North America and the Asia-Pacific region, and the stage is set for an explosion for mobile marketing and advertising.
A survey of 50 leading brands in Europe by Vanson Bourne found that the top three categories for tactical responses that brands look to drive through mobile marketing included requests for more information, making a purchase or booking, and discovering new attributes about a brand.
"Brands, agencies and carriers will need to cooperate in deeper, richer and more complicated and interrelated ways or risk losing out on the world's most prevalent interactive platform," says Mr. du Pre Gauntt.
All players in the mobile space must be prepared for change — and they must get over the perception that mobile is a "premium" communications or media channel.
"However, even after that hurdle is cleared, some major obstacles stand in the way, not the least of which is general consumer reluctance to accept marketing or advertising messages to subsidize their mobile content or service experiences," says Mr. du Pre Gantt. "Given the past history of 'customer service' on the part of mobile carriers, this is not a trivial issue."
Revenue sharing, consumer privacy and the need for carriers to provide marketing-relevant measurements are only some of the shoals through which marketers need to navigate.
"The fact is that mobile is now a lifestyle technology, which is good news for marketers but nothing they should take for granted," says Mr. du Pre Gauntt.
Tuesday, January 2, 2007
eMarketer's 10 Key Predictions for 2007
What to watch for in 2007....
What to watch for in 2007....
- Online Ad Spending Will Hit $20 Billion
- Some Money and Lots of Hype for Online Video Advertising
- Social Networks Are Set for a $1 Billion Windfall
- Downloadable Games Will Get Hotter
- Thirty-Seven Million Strong: A 'Minority' Bigger than Canada
- Mobile TV Arrives
- US B2C E-Commerce Will Cruise Past $200 Billion
- The Retail Power of Word-of-Mouth
- Broadband Services Will Matter as Much as Speed
- DVRs Pump Up TV Viewing
Online Ad Spending
Total US spending on Internet advertising will reach at least $19.5 billion in 2007. This is 19% more than total spending in 2006. This rate of growth is sharply down from the 30% or more that has been the norm for several years. However, even this reduced level of year-on-year growth would be considered spectacular for most industries. With total US advertising spending projected to grow by a mere 1.4% in 2007, the shift to the Internet is clearly set to maintain its heady momentum in 2007.
Online Video Advertising
Internet video advertising will get more media play than dollars in 2007. eMarketer projects that spending on this format will total $775 million in 2007. To put this figure in perspective, remember that it represents only 4.0% of projected US online ad spending. Although marketers are increasingly keen on including video in their online ad campaigns, they will continue to face a shortage of appropriate premium placements.
Social Networks
Worldwide ad spending on online social networks should top $1 billion in 2007, up from an estimated $445 million this year. Fueling this growth will be factors such as international expansion, "niche" networks and Google's deal to supply search technology to MySpace.
Video Game Downloads
Digital downloading of video games will take off in 2007, and by 2010 this distribution method will account for 22% of all worldwide game software revenues. Besides online stores pushing the new generation of games consoles, look for Time Warner's GameTap service to position itself as the HBO of PC gaming, focusing on original content to drive its subscription service. Video-on-demand (VOD) marketers may find their skills in demand for promoting these platforms, which play on subscriber taste for instant gratification via download.
Hispanic and African-American Internet Users
The number of African-American and Hispanic Internet users in the US will rise to 37 million, from 35 million in 2006. This market will continue to grow faster than the total US online population for several more years, giving advertisers with the imagination to reach out to them fresh opportunities. (The population of Canada is 33 million.)
Mobile TV
Mobile TV took its first baby steps in 2006 with professional content. The World Cup offered a first glimpse of what the broadcasting future for mobile might look like, and in 2007 another crucial element will be added to the mobile-TV mix — user-generated content (CGC). Given the impact the Web equivalent of this development has had in 2006, advertisers and marketers are likely to face a dizzying array of new choices.
US B2C E-Commerce
US B2C online sales will comfortably pass the $200 billion mark in 2007, reaching a new record total, which eMarketer projects will be $223 billion. Online retail sales will account for $132 billion of this, with online travel accounting for $91 billion. Some of the impetus for this growth will come from existing online buyers increasing their spending. A significant force driving online travel sales is the demand from travel-loving and relatively affluent baby boomers.
Word-of-Mouth
The influence of consumer generated content (CGC) on US consumers' purchase decisions will continue to grow in 2007. A recent study from market research firm Compete found that consumers were more likely to be swayed by CGC than by information coming directly from brand advertisers and marketers.
Broadband Services
When broadband emerged, it was distinguished from dial-up by its always-on nature and the greater bandwidth available to users. These characteristics were seen as reason enough to trade up from dial-up. Now, however, broadband is about value-added services and is driven by providers bundling voice, video and data together. Services such as voice over Internet protocol (VoIP) are approaching the 30% penetration range. eMarketer predicts that one in four broadband households in 2007 will subscribe to a VoIP service, rising to nearly 40% of broadband households by 2010.
DVRs and TV Viewing
The alarmist claims that digital video recorders (DVRs) and video-on-demand (VOD) would cause the death of TV and the loss of billions of dollars worth of advertising dollars are increasingly looking just plain wrong. TV distribution and access are changing and audiences are increasingly fragmented. However, every challenge presents an opportunity. More people will watch more TV and video content in the future, not less. They will just be doing so in different ways — via the TV, the Internet, the PC and their portable devices. eMarketer predicts that VOD will be in 30% of US TV households by the end of 2007 and that DVRs will be in 30% of TV households by 2009.
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