dotShift

Here come the consumers!

According to a new Forrester report released at the Forrester Consumer Forum 2007 in Chicago, interactive marketing spending in the US will more than triple over the next five years, reaching $61 billion by 2012. In other words, the enterprise and the media industry are finally waking up to what the rest of the world has known for a while; there are a whole bunch of people online

Based in part on a survey of 344 interactive marketing professionals and their budget decisions affecting display ads, search, email marketing, online video, and emerging media (social, mobile, and advergaming). Forrester's breakdown of spending includes the following:

• Search marketing will triple in five years. Mainstream marketers' aggressive use of search marketing will grow the category at a CAGR of 26 percent to $25 billion by 2012 due to the increasing costs of paid search, additional spending on optimization tools and services, and international expansion
• Display advertising will reach $14 billion by 2012. Display ads will be a key factor in the interactive marketing budget by having an essential supporting role for all interactive campaigns
• Services and integration will drive email marketing growth. Spending will focus on improving email relevancy with analytics and data management, and will grow to more than $4 billion by 2012
• Online video ads will significantly increase. Growing consumer adoption of online video will result in a dramatic 72 percent increase in online video ad spending to $7.1 billion by 2012. More customer-centric online video applications will increase the medium's appeal for consumers and marketers
• Social media will drive emerging channels to $10 billion by 2012. Mainstream adoption will boost spending in emerging channels such as social media, mobile, game marketing, widgets, podcasts, and RSS. Spending on social media alone will grow to $6.9 billion.
• Mobile marketing will grow to $2.8 billion. As consumers become increasingly tied to personal computing handsets, they'll want to extend their mobile utility to accommodate transactions. This transition will drive mobile marketing to grow to $2.8 billion by 2012.

All of this is great news for me and the people like me who work with technology centered on social and consumer-generated media. For the complete release, visit here, or the US Interactive Marketing Forecast, 2007 To 2012 is available from Forrester here.

Travel and Social Media

There was an interesting story on Travel Mole recently that cited a Forrester report about online travel. In the report, Forrester discusses several topics, including the rather alarming (to the industry) fact that there's been a noticeable decline in the number of people who do both research and bookings online.

This would seem to fly in the face of the general trend we have witnessed, of greater general usage of online mechanisms to book travel, when measured in terms of dollars. As such, it would definitely come as a surprise to some. But not, I would think, to those that have been paying close attention to the "web 2.0" phenomenon.

With the advent of consumer-generated media (CGM) and the associated social aspects of this media, it was only a matter of time before consumers started to listen to each other more than they listened to anyone trying to sell them anything. The smart players have realized this for a long-time,and have created features - or entire sites - to take advantage of the fact. Not just enabling the discourse between consumers, but actively mining the conversations for insight. Amazon is a case in point.

Unfortunately, the travel industry has been been late to the game in providing features to consumers (or even suppliers) that allow for consumer review, opinions, and networking. It would seem to me that this has lead to consumers going elsewhere to satisfy their need, talking amongst themselves on blogs, social network, and media-sharing sites. Once they have started to look elsewhere for their point of reference, there is little to bring them back in order to conclude a transaction. It's time for the travel industry to realize that they need to ask consumers what they want, and that the easiest way to do this is via CGM and social networks - travel being, of course, a primarily social activity.

This can be done with the application of a few small but judicious changes in their own online feature-sets, some creative mash-ups, or perhaps the creation of plug-ins for popular CGM sites such as Facebook, Myspace, Typepad, and Blogger. Some of the major players would also be well-served by engaging the services of a company like Visible Technologies to give them insight into what is being said online - regarding their products, competitors, destinations, etc - and what to do about it.

Of course, as the CTO of Visisble Technologies, I am not entirely unbiased ...

:-)