AAAA SmartBrief Special Year-End Report
Looking ahead to 2009
What's coming up next for the advertising and marketing industry? Part II of this AAAA SmartBrief special year-end report, below, highlights our predictions and yours for what's in store for 2009. Part I, published Tuesday, looked back at the most important trends and stories of 2008.
With the economy skidding and media and advertising employment down, 2009 looks to be a challenging year for ad agencies. The incoming Obama administration has a lot to cope with in terms of handling the economy, but Democrats also have an ambitious agenda when it comes to regulations affecting advertising. The powerful House Commerce Committee has a new chairman -- Henry Waxman, D-Calif., who has his own well-known views on regulating DTC drug advertising and online privacy.
Agencies face the challenge of educating clients on the importance of advertising in a down economy, to preserve brand loyalty and integrity. Digital agencies and online media must continue to prove their worth to marketers -- who may be tempted to confine their expenditures to familiar outlets in hard times.
Of course, there will be opportunities galore despite the down economy, and you can read about next year's success stories every day in 4A's SmartBrief. For now, read on to learn how 4A's SmartBrief subscribers answered poll questions about the coming year, and what the thought leaders at the 4A's are predicting for 2009.
Your Predictions
| Reader Poll: What new media format will see the biggest growth in 2009? | ||
|---|---|---|
| Mobile phone/device |  |
37.83% |
| Social networks |  |
31.74% |
| Online video |  |
26.09% |
| None of the above |  |
4.35% |
| Reader poll: Do you think Millennials are really a breed apart? | ||
|---|---|---|
| Yes: The under-30 generation is like a different species | |
50.57% |
| No: Don't believe the hype | |
48.28% |
| No opinion | |
1.15% |
| Reader poll: Will Michelle Obama's personal style have a major impact on fashion marketing? | ||
|---|---|---|
| Some impact -- she's not a trendsetter, but her visibility guarantees that people will notice what she's wearing | |
59.40% |
| Huge impact -- she's the next Jackie Kennedy | |
26.50% |
| Little impact -- First Ladies don't count for much with young consumers | |
13.68% |
| No opinion | |
0.43% |
| Reader poll: Do you think social networks will emerge as a leading online marketing venue? | ||
|---|---|---|
| Yes | |
43.80% |
| No | |
37.96% |
| Too early to tell | |
18.25% |
4A's leaders look to 2009
SmartBrief: What can agencies do to make sure that clients don't look to them as an expendable cost center during the downturn, and what can the 4A's do to help?
Nancy Hill, President & CEO, 4A's: Agencies have a great opportunity to play a larger role in addressing (and delivering) better metrics. During an economic downturn -- especially during a downturn -- agencies should take the opportunity to have an open dialogue with their clients and make sure that everyone's business interests are aligned. The 4A's can help by providing our members with best practice guidance on agency compensation -- among other things -- and a solid framework to advance the conversation.
SmartBrief: The 4A's has been in the forefront of encouraging diversity in the upper and lower ranks at ad agencies. How do you keep that drive going during tough times?
David Prince, SVP, Training, Education & Development, 4A's: We all know that during economic downturns, it's sometimes necessary to 'right-size' agency staff and maximize resources. However, it's critical for agencies always to understand (and embrace) the business value of diversity, and continue to maintain a database of diverse talent. This economy will turn around … eventually. The last thing we need is for agencies to need to start from square one in building their pool of diverse talent because they suspended the search during a slowdown in hiring.
SmartBrief: Is this a good time to experiment with new media strategies?
Chick Foxgrover, SVP and Chief Information Officer, 4A's: Digital, new media and social strategies had solid momentum before the current downturn. Now, more than ever, clients will be looking for the more measurable results that digital strategies can add to their marketing mix. But careful attention to what's appropriate and applicable will also be mandatory in a challenging economic environment.
SmartBrief: In the year to come, what can agencies expect from a Barack Obama administration?
Dick O'Brien, EVP, Director of Government Relations, 4A's: As the new government overhauls the regulation of the financial industry, their belief in 'regulation as a cure' will almost certainly spread to other areas as well. In our case, we should expect a serious push for new regulation of prescription drug advertising, advertising to children, green marketing, the behavioral tracking of consumers online -- and a number of other issues that are only now starting to bubble to the surface.
IAB SmartBrief Year-End Report
Looking ahead to 2009
What's coming up next for the advertising and marketing industry? Part II of this IAB SmartBrief special year-end report, below, highlights our predictions and yours for what's in store for 2009. Part I, published Tuesday, looked back at the most important trends and stories of 2008.
Interactive advertising looks to be a rare growth spot in a slowing economy. The targeting potential and measureability of online advertising continue to draw advertising dollars away from traditional media. Even if, as many predict, overall U.S. ad expenditures shrink in 2009 on a year-over-year basis, most expect online advertising to grow both in terms of market share and real dollars.
The question isn't will interactive marketing grow, but where will that growth be more pronounced. Social networks, video and mobile devices continue to attract more and more dedicated users, and marketers are following their customers into these new media channels.
Read on to learn how IAB SmartBrief subscribers answered poll questions about industry trends and check out an insightful Q-and-A session with IAB President & CEO Randall Rothenberg.
Your Predictions
| Reader poll: Do you think Millennials are really a breed apart? | ||
|---|---|---|
| No: Don't believe the hype | |
50.23% |
| Yes: The under-30 generation is like a different species | |
49.77% |
| Do you think social networks will emerge as a leading online marketing venue? | ||
|---|---|---|
| No | |
47.62% |
| Yes | |
38.10% |
| Too early to tell | |
14.29% |
| To what extent do you think the Obama campaign won because of its creative use of new media? | ||
|---|---|---|
| It helped, but it was not decisive | |
52.05% |
| They wouldn't have won without it | |
39.73% |
| It had a marginal effect | |
6.85% |
| Don't know/no opinion | |
1.37% |
| Which of the following widely used media is poised to break out in 2009 in terms of monetization? | ||
|---|---|---|
| Social networks | |
42.31% |
| Video sharing sites | |
23.08% |
| VoIP networks | |
7.69% |
| Online payment systems | |
3.85% |
Q-and-A: Randall Rothenberg, IAB President & CEO
SmartBrief: Is the Interactive industry mature enough to survive a temporary retrenchment of venture capital funding?
Rothenberg: Measured interactive advertising revenues are now at about $22 billion annually in the U.S. alone, and unmeasured spending -- for example, the amount companies spend on creating, running, and improving their own sites -- is probably even more. The bottom line, literally, is that this is a very large, very dynamic industry that influences every area of our economy. Although venture funding is as important here as in any other innovation-based sector, the interactive media industry is no longer the infant child of Sand Hill Road.
SmartBrief: Recent IAB stats suggest that search is thriving. How can online display adapt and compete with search in this changing environment?
Rothenberg: Display advertising is also growing, and until the recession was on an even steeper growth curve than search. While that curve has certainly flattened, the fact is that the major consumer-brand marketers that had been treating online media cautiously are shifting ever-larger shares of their budgets into interactive. That will continue, especially as online video continues to mature and prove its reach to and effectiveness with consumers. The overall display market also will grow, especially as media companies start building more marketing services, such as consumer insights analysis, around their advertising and media channels. But the biggest growth will come when the marketers, agencies and publishers can reach agreement on brand metrics that simplify the planning and buying of online advertising without sacrificing accuracy, acuity and actionability of the data itself.
SmartBrief: Will marketers still continue to invest in mobile and other emerging media amid the economic downturn?
Rothenberg: There are two widespread, clashing perceptions in the marketing and media marketplace right now. The first is that the recession will curtail R&D spending in the newer of new media, and that mobile will take a hit. The second is that 3G smartphones like the iPhone are game-changers, and are driving unheard-of amounts of traffic to mobile sites, their content and their ads. It's a fair guess that, even if overall investment flattens out, some very adept marketers, agencies, and publishers will use the recession to leapfrog their more risk-averse competitors and achieve leadership status in mobile.
SmartBrief: Will ad rates and the user base be able to underwrite high-quality video content online as has traditionally been the case on TV?
Rothenberg: Yes. A recent Bain & Co. study for the IAB indicated that premium online video ad inventory is selling out, and at very high rates. As consumers increasingly look at their laptops and desktop PCs as an advanced form of television -- you might think of it as "TV with benefits" -- the attractiveness of online video to advertisers will increase. Remember, until recently, major consumer segments such as packaged goods and automotive have lagged behind the cross-industry average in terms of marketing budgets allocated online. Now that they have discovered the branding benefits of online, video will be a growth segment.