Whatever happens in 2008, it is almost sure to bring a great amount of upheaval in technology, media, and marketing. In many ways it is likely to be a continuation of the trends that exist now. This is because technology continues to permeate our lives, how we connect, travel, and think. That likely won’t change, but the ways we interact with it might. Here are some predictions from RS for this coming year:

Peter Bordes:

“There will be a shift in the market with the next generation of dynamic media & advertising platforms as web 2.0 tries to find a meaningful business model other than AdSense, and the thinking web (web 3.0) begins to become a reality. New leaders will emerge who are able to integrate all forms of media (traditional, interactive & social) so that they are no longer silos and can all speak to each other. This marks the start of the era of open modular platforms. All must begin to adapt or adopt.”

“2008 is the beginning of the “age of relevance” and recommendations. As users, media and advertising move from searching to finding a more meaningful and intelligent way to dynamically & seamlessly connect. Relevance is the key as media becomes even more highly fragmented, and  users empowered to be in control of what & how they are consuming…”

David Taber:

“The writer’s strike and the ramp-up to full digital TV cause a permanent shift of viewership and ad dollars away from network TV and toward cable and web channels.  Audiences that are worth anything (e.g. urban, coastal) fragment dramatically, causing much more cohesive, easily targetable audiences.”

“FCC media ownership rules are enacted, causing a rapacious M&A cycle.  Every large media company has a complete portfolio of outdoor, print, radio, TV, and web properties.  They offer advertisers multi-property placement and comprehensive targeting and measurement services.”

“At least one major Social Media site falls victim to severe spamming and other attacks.  Users move rapidly from one Social Media site to another in fads that last only a few months, causing churn and user exhaustion.”

Lawrence Coburn:

“2008 will see the rise of powerful, cross-domain features. Just as widgets have infiltrated blogs and social networking sites in 2006-07, the trend towards open platforms will allow third party developers to build features that enable a single user experience that spans each of the major
social networks - for example, a movie reviewer might earn reputation points on Facebook that translate to their MySpace account. In some cases, these feature developers will become as powerful as the hosting social network. Cross domain feature providers will own a more robust view of the end user, as they will capture their activity in various social contexts (think LinkedIn vs. MySpace). They will also be hedged against the inevitable rise and fall of individual social networks.  Early favorites to seize important features that span domains include Flixster (movies), Bunchball (games), RockYou (communication), Slide (photo sharing), and iLike (music).”

“The social network battlefield will evolve from a competition to see who can own the biggest social network, to one to see who controls and influences the platform that connects each social network to the third party developer community.  Currently, there are two players: OpenSocial, spearheaded by Google, and the Facebook Platform.  I expect to see more.”

Edward Leaman:

“In 2008 we will see the idea of branding move from ‘relationship’ to ‘skinship.’ In skinship the requirement on brands is actually to touch the customer at the belief level, by creating the symbiosis of value alignment. You buy because you believe, rather than you need or want. This requires brands to become transparent to their customers and so customers will begin to really be able to talk to, and influence, brands, and brands will really be able to touch the hearts of customers, if they have the courage to be that authentic. The customer will name what and who is authentic and who is not.”

“The idea of a brand as a transparent container will appear on the horizon. In this construct, similar to an empty mandala, a brand becomes a vessel which the customer brings themselves to and fills with their own needs and wants requiring the brand to serve that purpose in order to win trust and loyalty. In this moment brands become sustainable and relevant to the market in truth for the first real time.”

Scott Parent:

“In 2008 MySpace will fall victim to it’s own poorly targeted ad-greed and could be face-down by the end of the year.  Spammers will turn their gaze to Facebook. The powers that be at Facebook however, will learn from MySpace’s demise and do a much better job policing their user base.”

“Because of the writer’s strike, fresh television programming will continue to be unavailable for the better part of 2008. As a result advertisers will take their dollars and turn to YouTube, via Google, to spend their cash. Smaller companies with great content and sizable audiences like PodShow, Revision3, Revver, and Rocketboom will get themselves a nice slice of the pie if they can continue to grow their audiences.”

“Finally, 2008 will be the year that television production companies start producing web-based episodic programming. Quarterlife was the first step, but was poorly executed. You’ll see networks trying out a few episodes online, then putting them on-air if they generate significant buzz.”

Chris Smith:

“Cute Cat videos will continue to dominate the UGC space.” (Don’t know about lolcatz? Read this.
watch this.)

“Online consumers of UGC (user generated content) will finally get tired of digging through horse dung looking for a pony. They will begin to consolidate their online short viewing content into channels run by individuals, continuing the “trusted advisor” or omakase meme that is prevalent in this “age of recommendation.”  The channels will be programmed by individuals to aggregate UGC and “traditional” broadcast content developed by non-traditional studios. (Example.)”

“At least one major social network will try for an IPO play this year. The twist will be that it will provide long tail incentives (pre-IPO positions) for “members” to maintain their active involvement with the social platform over time. The positions will have a vesting schedule to insure members stick.”

“2008 will the the year of the “connector”. The most impact-full software will be “plumbing applications” that work to tie together micro (cell and iPhone), mobile (laptop and PDA and vehicular) and teethered (set top, TiVo, AppeTV, VuDu, Bose, GenAir…) appliances to seamlessly move data in microformats that are relevant to each. Digital entertainment will drive this initiative. Enterprise data distribution will lag behind.”

“Social Networking fatigue will result in people actually getting out of their homes and going to clubs, bars, restaurants, libraries and museums. There will be a re-discovery of physical social intercourse, followed by a realization and backlash that these modern facilities do not have enough wall sockets to charge my iPhone so I can check to see if anyone looked at my facebook account and actually gave me a writing on the wall like they should do because I wrote on their Superwall and sent them a e-message video hello that cost me 21 tokens of “faceBucks” that i bought on eBay at a discount. Losers.”

“Interruption marketing will decline in 2008. A re-emergence of contextual marketing will gain traction this year. Advertisers will understand that consumers do not want to be bothered by pop ups and lay overs and other code driven gimmicks to force readers to acknowledge their advertising opportunities. Just like Ford’s new SuperDuty F-250 pickup truck with Rigid-Flex technology, advertisers will begin to create custom messaging that is interwoven into the content itself, so that the the consumer has a passive and more enjoyable interaction with the advertising of tomorrow and a smoother ride down the information Super Highway than other vehicles of its class.”

“2008 will see a rise in “Enterprise re_Evolution”. 2006 and 2007 enjoyed dynamic changes in the click and mortar experiences of consumers and how they interacted with their brands of choice. Stuff (it’s a technical term) like AJAX, CSS, Ruby; micro and mini web-centric applications like basecamp, twitter, mint; and web platforms with solid API’s and Open Social integration will begin to make their way into the Corporate IT infrastructures. There has been relatively no progress in Enterprise Applications in the past couple of years. IT organizations will begin to be required to provide suppport for these apps as employees will continue to create “micranets” (micro-intranets) using things like BaseCamp for project management, Twitter for “paging and OPS (office positioning system)” and Wiki’s for KM solutions as well as blogs and RSS for knowledge transfer. The company that can tie this together in a way that will pass the “Big Blue” test of enterprise productivity applications will make a killing.”

“2008 will bring about a catastrophic disaster revolving around personal assets and data. I don’t know what it will be, but i have already had numerous phone calls with people that are looking to “integrate” and upgrade and connect the appliances, gadgets and devices they have, and in every case: directions were not read prior to install, formats or requirements were not reviewed prior to purchase, and NO BACKUPS were ever completed during the life of most products. I think that consumers will nuke their photos, contacts, movies in a way that will create a new short term micro-economy of data rescue services.”

“Apple will introduce something in 2008 that will make some people upset because its better than the something they just got for Christmas at a cheaper price that what they paid for something that doesn’t do as much or is heavier or bigger or shinier than the thing they have. Record, Film and Newspaper companies will blame Jobs for the the destruction of jobs (profit) in their respective industries. Fanboys everywhere will riot against the establishment, using MacBook Pros and media projection equipment to play first run movies (via PirateBay) on the side of multiplexes. Chuck Norris is called in to provide Law and Order. In other news - Chuck Norris is currently suing NBC, claiming Law and Order are trademarked names for his left and right legs.”

Gary Kreissman:

“The economy will flatten in ’08 and likely dip into recession.  Advertisers will be forced to accelerate the trend toward accountability, i.e. performance advertising. Many major brands will permanently make the shift from traditional media to Cost per Lead, Click and Action.”
 
“There will be a “flight to quality” in performance advertising as advertisers recognize that simply building a list of email names is insufficient to boost ROI.  Incentive-based lead generation will be further stigmatized, while programs that build relationships through relevant information and dialog will thrive.”

Jay Moore:

“Monetization – Users will find methods other than AdSense to fund their web and mobile presences. Small, widget like storefronts associated with the content of their interests will become commonplace, and allow users to not only talk about what they like (aka blogging), but also to get a little something for their effort (but not on a PayPerPost basis).”

“Mobile content/media will be fully integrated into the mass of users internet experience. Differentiation between short content forms (e.g., ringtones) and long content forms (full track music, videos, tv) will be significantly diminished. Users brand affinity for content will become their calling cards, and that which they communicate about the most.”

Trip Foster:

1. Design and user experience will continue their progression to the front of the classroom when the lecture turns to technology adoption and digital lifestyles. Apple will reap the rewards from this trend due to its product-centric design principles.
2. “Meta” Social networks such as Facebook and MySpace will lose popularity as other more focused niche social networks come to market that specifically address the needs of their users.
3. As the recession hits, more marketers will push more of their budget into measureable online media at the expense of radio, print and TV. The trend will be toward more rev-share and CPA marketing and less brand advertising.
4. Marketers will adjust their budgets to more accurately capture the 20% of user time spent on Online media (today ~7.5% of their budgets are allocated to online media). The gap will close even more rapidly in ‘09.
5. The volume of content uploaded to the web will create a Faustian Bargain…users will have a more difficult time finding relevant content and seek solutions to help them filter through the crap.
6. More of the mainstream web user-base will earn revenue from their activities on the web and realize the financial benefit of contributing to the conversation. 
7. Google will make more money. Steve Balmer will get angry again.
8. HBO’s Flight of the Conchords will redeem their poor season finale episode with an all star performance of the Rolling Stone’s smash hit Monkey Man.

 It’s likely that most of you have seen this already. However, it sheds a humorous light on the bubble-like behavior surrounding our industry. Its worth the look.

By David Taber.

Since the dawn of the information age, TV and films have portrayed computers as being capable of evil, mayhem, murder, and even world domination. War Games, 2001, Demon Seed, The Matrix, I Robot, Star Trek, and dozens of other science fiction books and movies painted really scary portraits of what our digital creations would do to us if given the chance. Terminator’s story line had it that the Final Conflict began just 15 minutes after Skynet’s link-up allowed it to gain consciousness.

The realities of the information age have been a lot less dramatic, and probably will be for a long time to come. In this issue, we’ll explore the real-world impact of the technologies that we’ve been building and marketing. Why? Because the best marketing is based on truth, not fabulous stories. The magic of marketing happens with believable hype.

Future Schlock

Computers and high technology have had a huge impact on our lives. But the impact is rarely as envisioned — or marketed — by the technology’s purveyors. For example, Alexander Graham Bell did not expect that the telephone would be used for point-to-point conversations. He thought that people would come to auditoriums to listen to the news, lectures, and music brought by telephone wires. This is what radio eventually did, only decades later and in the home. One hundred years later, developers of the Short Message Service in cell phones expected their system to be used for occasional paging among professionals. What happened instead: millions of teenagers tapping out SMS messages as a replacement for passing notes around the classroom.

Looking at the core of the IT industry:

• There are more microprocessors in the world than there are people. Most computers are used in remote controls, door locks, and other low-level automation. There is no danger of their conspiring against us.
• A $1000 laptop may have as many as 16 billion transistors in it and a clock speed 30 times faster than a Cray-1. But most of the processing power is used to run GUI widgets and eye-candy. On a laptop fully loaded with software toys, going from power-on to usable desktop applications consumes enough time for a trillion computational operations. Long before the system could take over the world, it would BSOD.
• The largest computing resources are grids that tackle really tough problems like modeling weather systems, simulating nuclear explosion, and exploring genomes. Google uses a grid of ~500,000 Linux boxes. But the biggest grids on the planet — harnessing millions of nodes — are used to compute fractals for Electric Sheep screen savers or sift through random noise for the SETI project. Doesn’t make for a good movie script.
• There are hundreds of useful software applications for sale. But most users typically run less than 7 applications on their computers, most of which are used as a very smart replacement for paper.
• Artificial Intelligence — once an overhyped defense-department technology and still an overhyped plot device for science fiction — is used most commonly to correct spelling, detect (and generate!) spam messages, and move videogame characters. HAL ain’t here.
• The real impact of IT on users has been surprising. Everyone forecasted that office automation software would reduce the amount of paper, but ink and toner are the only consistently profitable parts of the whole industry. Vendors paid big money to prove that computer literacy would lead to higher incomes, but a recent study (funded, ironically, by HP) showed that the info-glut in modern PCs actually decreased officeworker IQ by more than 10 points.

Looking further afield, at electronic media and entertainment:

• For 3 years now, every computer made can be a TV, radio, DVD player, recording studio, and videoconferencing system. This goes double for a Mac. Yet even today, nobody but the uber-geek puts a PC in their living room.
• Despite the potential for the democratization of entertainment content — something that many artists viewed as nirvana — the quality content is not coming from “anywhere in cyberspace.” Sure, there’s an overabundance of stuff on YouTube, MySpace, and GarageBand.com, but the stuff you actually want to watch and listen to is produced and controlled by increasingly concentrated media conglomerates.

How has this changed the economy?

Clearly, IT has had a dramatic impact on business and consumer purchasing patterns. Slide rules, drafting tables, typewriters, and pocket protectors disappeared within 10 years or their digital replacements.

But the dramatic changes from the PC are complete, and future innovation at the base level will have only incremental effects. (In fact, we’re probably near the end of the PC era as we know it. The only things preventing the PDA/phone from supplanting most PCs: the size of the keyboard, and the limited battery life. Find a way to eliminate a laptop’s screen through an audio or eye-movement interface, and the PC is toast.)

After all the hype about the Next Big Thing, what really changed the economy was not routine automation or individual productivity software, but digitized content and the internet. Ironically, the really important impacts — the effect on documents, research, and media — were not hyped that much. The gravitational pull of the Network Effect was, truth be told, missed even by Bill Gates and Scott McNealy for quite a while.

Universal email (and its cousins, IM, newsgroups, and blogs) has all but wiped out postal mail, faxes, and office memos. VOIP and audio chats will wipe out conventional telephony.

Book and record stores die on a weekly basis because of the triple onslaught of Amazon, recordable CD / DVD media, and MP3 compression. Tower Records — once the world’s largest record store chain — was sold out of bankruptcy. iTunes and their cousins essentially remove the need for media stores and CD production altogether, and in 2007 iTunes alone represented 10% of the retail US music market. The fabled internet disintermediation has actually happened here.

Newspapers and news magazines are commercial zombies, ravaged by declining readership thanks to the internet. They are in a death spiral as they cut their reporting and editorial staff to meet budgetary realities. Although there is a great example of open source information content in the WikiPedia, blogs and talk radio are not likely to serve as credible substitutes for professional reporters. As modern societies need a flow of quality news in order to function properly, something big is going to change here: watch for a tipping point.

Radio has been able to adapt much more readily to the internet than print media, and overall listenership is still healthy. But podcasting is making a serious dent by changing consumer listening patterns. In my family, listenership to real-time radio has fallen to zero in just 2 years. Podcasting might have seemed like just hype, but its user impact is probably even more significant than Tivo. And users of these new media always skip over any ads.

However, TV is still much more economically potent than radio, because people spend more hours watching TV than listening to radio. There are more channels to watch every year… and Tivo, satellites, broadband internet, IpTV, YouTube, and Video iPods ensure that this trajectory will continue for a long time to come. However, because viewership is constrained by the number of free hours in a day, audiences will be increasingly fragmented.

Advertising has been turned upside down by all these trends. Print advertising in newsmagazines, professional journals, and newspapers is in deep trouble, although print ads in gaming, fashion, and lifestyle magazines are still OK. Advertising’s impact in broadcast media has been dramatically reduced by Tivo and podcasting, and rates there will decline as audiences splinter.

On the other hand, there’s a ton of positive innovation in online advertising, both in Google and the major media properties. Watch for a tipping point here as well, as innovators create closed-loop advertising and marketing systems that really engage their audiences as a community of interest.

What does this mean for marketing?

You don’t have to have read The Innovator’s Dilemma to know that high tech products evolve a whole lot faster than the user’s ability to take advantage of them. Countless product innovations just won’t matter, and a lot of hype won’t either.

Wonder why you can’t get any attention from reporters and editors about your new product? They’re completely jaded, after having been bludgeoned by countless over-zealous product managers. If you want them to give you some ink, give them an interesting customer story.

Don’t get me wrong: hype is a necessary and even desirable thing. You won’t get headlines without it. To get funding and press attention, company founders must make grandiose claims about the impact their technology is going to have.

This awareness-building hype is necessary, but it must not permeate the value propositions or sales materials for products. Overblown claims cannot be effective because they aren’t really relevant or credible to the customer.

Applying the right amount of hype — and for the right reasons — is the trick.

• If you make components or subsystems: some new products deserve hype because they change the economics for users. It is significant that now you can now hold a terabyte of disk storage in your hand for $500. When there’s cheap 64 GB flash RAM, it will make a difference to a lot of products. If you could increase the power density of batteries by 2x, you’d enable big changes in the way users work. If you’re lucky enough to have a product like this, your hype will be most credible if you had your customers (OEMs) do the talking for you.
• If you make entire systems (end-user products): incremental improvements shouldn’t be hyped. What’s the level of change that should be hyped? If the end result of your new system can be a big shift in consumer behavior, and if it passes the in-law litmus test (i.e., at least two of your in-laws says that they would actually do something different thanks to your new product), then hype away. But it will be more credible if you use an industry expert or pundit to say it.
• For software (and particularly for platforms): ubiquity is more important than technological finesse, so don’t hype features. Oracle isn’t the 800-LB gorilla because of 7000 APIs or world-beating quality: it’s because Oracle is the de facto standard. This is where Open Source can be truly important: when properly targeted, it can achieve ubiquity faster than any previous business model. So, JBoss and MySQL can hype achieving real market power despite big vendors like BEA and Oracle.
• For luxury items: don’t use hype at all, use celebrity endorsement. What is said is nowhere near as important as who said it and how cool the situation surrounding the endorsement was. The best endorsements are natural and subtle, often involving few words about your brand.

Looking at the impact of the IT and internet revolutions, big changes have happened to the craft of marketing: advertising, merchandising, selling, and continuous customer interaction. The internet enables companies to rapidly and economically create communities of interest that form the basis for very low cost commercial interaction and loyalty. Take a look at what Woot has done with almost zero capital. Clever marketers figure out how to engage their communities throughout the product life-cycle, and create closed-loop systems for measuring and optimizing every phase of doing business. Unfortunately, most companies have not invested properly in their marketing departments. They need to evolve their skills to effectively leverage new tools and available information.

Contents copyright 2006 by DOTnet Consulting, Inc., all rights reserved. Feel free to forward this report, but you must include this copyright notice. All trademarks and graphics are the property of their respective owners.

What is the one thing the Internet has done that has permanently changed industries and will continue to do so? Is it e-commerce? Is it online advertising? Is it social networking?

The one thread that runs through all of these seismic changes is the shift of power from the producers/sellers/manufacturers to the consumers/buyers. While manufacturers used to tell consumers how great their products were, buyers are now researching other consumers’ reviews of products when they need such information to inform their own purchase. They are therefore ignoring any and all advertising that is thrown at them whether old media (tv, print, radio) or new (banner ads, adwords).

In real estate, buyers now have sales prices of comparable properties at their fingertips and no longer needs to rely on what a broker tells them. The cost of switching between one stock photography website and another is virtually zero and the consumer will go where they find the photos they are looking for at the price they are willing to pay.

In the advertising industry, the implications are also profound. While the industry has already seen massive shift of dollars towards “digital” and away from traditional media, the advertisers are still using “digital” in much the same way as before — pushing ads at consumers in a one-way communication. For example, banner ads, adwords, sponsorships, etc. like their “old media” brethren still rely on the chance that the consumer will see the ad when they are doing something else like reading their personal email or surfing for news.

Given the overload of advertising being “shouted” at consumers, they are well-trained to ignore everything until such time they need the info — and even then, they are unlikely to trust what an advertiser tells them, but rather, will turn to trusted sources or other objective third parties for the information they need to make the purchase decision.

For the near future, I believe that advertisers should do the following three things:

1. evolve one-way advertising (pushing info at consumers) to two-way interaction which enables a more continuous gathering of insights about consumers and their needs

2. given the insights from #1 above, focus on the “use-cases” of your target customers and when and where they are likely to seek more information to inform their purchase; the key is making the right information easy to find by the user where, when, and how they need it.

and finally,

3. focus more on product or service and less on “marcom” that tells potential buyers about it; if the product is great, or better yet exceeds consumers expectations, the consumers will tell others about it — and this gets you around the problem of consumers not trusting your marcom message anyway.