Predictions: 2008 - what's next?

Digital has finally taken its place at the top table. And woe betide those who fail to appreciate its power.

Traditional agencies and media fat cats will be picking up the pieces of their fallen empires, if they continue to resist the democratic, two-way force of the web - the greatest change socially, commercially and culturally of the past 50 years.

And 2008, as some of the sector's brightest stars reveal, has yet more changes in store.

AGENCIES

SIR MARTIN SORRELL CHIEF EXECUTIVE, WPP

2007 was a very interesting digital year. I think it marked the realisation by the 'big groups' that digital was becoming an even more powerful phenonomen and the realisation from the 'small groups' that they could not do it on their own.

A similar pattern seems to be emerging in the digital area, as emerged in media planning and buying. Independents see their future inexorably linked to larger groups that paradoxically (given the advance of technology) can provide geographical scale and client databases.

This has been reinforced by the rapid growth of digital and the realisation that if consumers spend on average 20 per cent of their time online and clients spend only eight per cent of their budgets online across the globe, that something has to give. And that something would be an increase in global digital budgets to at least the 20 per cent level or more - just as we see in the UK, driven by the influence of the online BBC brand.

In addition, clients are starting to understand that there is in fact no distinction between offline and online - just as we discovered 50 years or so ago with TV. We have seen in a couple of situations recently, offline pitches being consolidated with online pitches, and I believe that the demarcation between offline and online pitches will become increasingly blurred.

ARJO GHOSH, CHIEF EXECUTIVE, SPANNERWORKS

2008 will be a watershed for search marketing. Although it is already established as the first priority on any digital media plan, search still has a long way to go, particularly in user experience, integration across media, and web navigation.

Changes to user experience will have big implications for how brands compete for attention online. Currently, search results are generally useful and relevant to user requests, but can be one dimensional. The introduction of 'universal' and '3D' search, where images, video and news are blended together, marks the most radical change in search for a decade. Brands that integrate their response will win big.

Establishing and maintaining a competitive edge in search will become more dependent on the mix between paid and natural search. A natural strategy will be essential to the mix and many marketers will be stimulated into new ways of thinking about their brand assets.

Finally, we are navigating the web in increasingly adventurous ways. Social and user-generated media are offering additional ways to navigate through to brands, and many popular search results expose people to a wider experience outside of the brand marketer's control.

'Channel media' is so 2007. It's time to embrace 'integration' in its true sense.

MARGARET MANNING, CHIEF EXECUTIVE, THE READING ROOM

In 2008, it will dawn that focusing on usability in isolation is meaningless. Attention will turn to 'user experience' - encompassing usability, accessibility and interactivity.

There is confusion surrounding 'usability' - it's perceived as an intellectual exercise, somehow removed from the creative process. However, real usability is at the core of any web design - it's part of the creative, design and technical process. It's called 'user-centred' design: you start with an understanding of your users and their needs, and what message you're trying to convey. After all, if the user isn't satisfied by his experience he will go elsewhere.

Achieving optimum user-experience involves making a site engaging, fun, informative, easy and logical, based around user involvement at all stages. Of course, the bonus is that this will also deliver the required business results - you can't ignore that ROI is what it's all about. Very 2008.

ZIV NAVOTH, MARKETING AND BUSINESS DEVELOPMENT MANAGER, BEBO

Social networks will reach saturation point in 2008 - especially within the younger demographic. Increasingly, you'll see media and music companies offering their wares on social networks for free, to get young consumers used to their brands and also to get them accustomed to downloading legal music. But next year won't see a big rise in selling on social networks via e-commerce - social networks will still focus on being communities above anything else.

Traditional media will partner with social networks more and more, particularly in terms of video aggregation - taking down a lot more barriers between 'traditional media' and UGC. This is because the traditional media owners can still make money from ads on our site. The boon for us is that the network gets quality content. It's a two-way thing - a world where brands have a conversation with their users, and everyone benefits from the 'back-and-forth' activity.

CARL WHITE, CHIEF EXECUTIVE, VALUECLICK EUROPE

Publishing houses will be the first brands to truly integrate their businesses online and offline. Arguably, it's already happening. Traditional offline publishers are seriously scrutinising their business models and content as they grapple with varied consumption of written media. Some national newspapers are merging their editorial teams, the most high-profile being the Telegraph business desk. The Guardian has appointed two technology directors and the Financial Times has also bolstered its team with a new head of video.

Meanwhile on the commercial side, Rupert Murdoch has announced that The Wall Street Journal will remove its content walls in favour of generating revenue from advertising. This is good news for users because search engines will now be able to see and spider that content. The FT is also reviewing its options - it has opened up some of its paid-for content in favour of letting users read the first 30 stories per month before asking them to fully sign up. The Sun has recently launched a mobile domain, while magazine publishing houses are experimenting with repurposing historic content from the offline versions into new features, exclusive written content online, sponsored podcasts, as well as exclusive video and audio content. It will certainly be interesting to see how media publishers develop their offerings further in 2008.

JULIET BLACKBURN, HEAD OF DIGITAL, AAR

The area I am really keen to see unfold is who will take the digital place at the client's top table? Will it be the advertising agencies who already sit there, the DMers already delivering a large percentage of online work, or will the digital purists stake their claim?

Some of the digital shops, such as Dare, Agency Republic, AKQA, have already won the hearts and minds of their senior clients and regularly share coffee and biscuits with their advertising and media agency colleagues while deciding on communications strategies.

For many clients, however, digital has been the domain of the IT department or junior marketing colleagues. But all is changing. As more budgets incorporate digital, so its importance is rising up the boardroom agenda. Consequently, more senior clients are becoming interested in the activity, and they want the best talent to do the work.

As clients are having digital conversations with their incumbent agencies, no-one can afford not to be able to walk the talk. Non-purists are desperately pinching creatives, project managers and technical know-how to build their internal digital capabilities, while the digital agencies try to lure planners and creatives from the offline community to raise their game in the minds of clients.

The winner at the top table, though, will be the one who can create the most powerful and compelling propositions using this wonderful world of digital media. Watch this space.

TRAVIS KATZ, HEAD OF INTERNATIONAL OPERATIONS, MYSPACE

The coming year will see the true emergence of the social internet. More than ever, social networking sites are blurring the line between the on-and offline worlds and laying the groundwork for this new social web, which will be infinitely more personal, portable, and collaborative.

Key to this is to make everyone's web experience personal, and to think in terms of the individual. Just as your home or office is your physical address, we expect your personal, online social profile to become your internet address.

Portability will continue to be a key trend; in the future half of our traffic will come from non-PC users. Consumers want content where they want it, when they want it, and however they want it, so applications and features have to be just as fluid and portable.

DOUGLAS MCDONALD, CLIENT SERVICES DIRECTOR, SPONGE

2008 will be the year in which mobile takes centre stage in more and more major above-the-line campaigns. It's also the year for mobile advertising to live up to the hype.

So far, SMS has been a significant part of below-the-line advertising campaigns, such as sales promotions and ad response from print and broadcast activity. The primary goal has been to encourage consumers to buy products or hand over personal data.

However, in 2008, both from client pressure and a genuine desire to innovate, creative types will realise that mass-market advertising coupled with the increased capabilities of handsets can turn a traditional ad spot into an interactive brand experience.

But the overwhelming desire of marketers to re-create online advertising on the mobile will expose the chronic lack of decent sites that consumers bother to visit. The question is, will people who think of the mobile internet as an annoying addition to their online strategy change their views and actually build a decent site that makes the most of the medium? If this happens and consumers can be tempted away from the 20 or so sites that get the vast majority of visitors, then perhaps a mobile advertising business will thrive. If not, expect to see loads more PowerPoint slides that start with "Mobile advertising is predicted to be... ".

CHRIS CLARKE, EXECUTIVE CREATIVE DIRECTOR AND PRESIDENT, DIGITAS

This year will see personalised communications really beginning to be delivered online. Data innovation and exponential improvements in computing power will help drive this. We'll see the ability to dynamically change creative, and deliver shopping experiences to consumers based on previous purchase history or, in the case of Google, search history.

Video advertising online will continue to grow in popularity, but it will lag behind less rich formats when it comes to personalisation and targeting. Perhaps the biggest issue around video ads online will be pre-roll. With IPTV players such as Joost experimenting in this area, it remains unclear if pre-roll is to be the saviour of the 30-second spot. Personally, I feel the online user will avoid pre-roll where possible, leading to more innovative work-arounds.

With a global slow-down looming, ROI will be the key issue in 2008. Online advertising needs to deliver on its promise of measurability. With the launch of Global Navigator, Digitas is engaging this battle in a big way, offering a tool mapping the effectiveness of all forms of advertising on and offline.

JIM STERNE, PRESIDENT OF THE WEB ANALYTICS ASSOCIATION AND CHIEF EXECUTIVE OF TARGET MARKETING

There will be two major stories that turn out to be non-events in 2008. One will be the Next Big Thing that will turn out to be of little interest to the masses. The other will be the Rise of the Google Killer.

The Next Big Thing story is a certainty because we're all addicted to the story. We're hooked on the idea that some invention from two guys in a garage - now one guy in a dorm room - will change the world as we know it. I will still insist on getting credit for this prediction even if that creation is deemed a Google Killer.

Just as Google's offer of online documents and spreadsheets is frequently referred to as the Microsoft Office Killer, a Google Killer will be unleashed upon the unsuspecting public. This synergistic, web 2.5, socially mediated, magic web application, will combine personalised search, video Twitter and burning ads on to toast. Blogs will report that only nine-year-olds comprehend it, but will remain cognitively dependent on it for the rest of their lives.

Within a month, it will be determined that this astonishing new app is boring, trivial and only of interest to trend watchers - who will trip over each other to declare it dead.

JAMES BOOTH, FOUNDER, TANGOZEBRA

I'm still waiting on a number of things. The digital marketing revolution was supposed to be super rapid, developing at unthinkable rates. Many will argue that it is; this time last year however, we were looking at 2007 and being promised the advent of reliable advertising solutions for IPTV, podcasting, VOD, mobile and many other exciting emerging channels.

I'm sure I'm wrong, but I get the feeling that things haven't really moved on quite as expected, which is such a shame when the opportunities are so visible and the demand so strong.

For me, the balance of power is increasingly shifting towards the online publishers. Conventional approaches to online planning and buying are tired. Granted, online advertising continues to remain an important part of the marketing mix, but the machine, as is, rarely sticks its neck out to do something different for fear of getting things wrong and risking a client. This lack of innovation is as frustrating for online publishers as it is for brands.

Today's consumer is sophisticated and picky. Advertisers need to understand how to engage with consumers in more relevant ways. In-gaming advertising promises to deliver against this, as does mobile, once technologists realise that there is much more to making mobile marketing work than banner ads.

The area that really interests me though is content, and how it can be used to bring publishers and advertisers together to create lasting value.

CLIENTS

PAUL SQUIRES, NEW MEDIA MANAGER, E.ON

It feels like digital marketing developed even faster during 2007 than it did in previous years. The increasing importance of trends such as social networking and the improving mobile experience, which have begun to take off in recent years, have helped to galvanise the sector, reinforce its importance, and prevent the kind of cyclical market bubbles that have plagued it in the past.

I anticipate an equally rapid evolutionary pace in 2008. One trend will be an even greater concentration on mobile activity, as devices fulfil their oft-made promise of delivering a cohesive and meaningful web experience, and better and more usable technology makes socially necessary activities (such as micropayments) easier, smoother and more secure.

Also, I hope to see RSS and advertising finally getting together in a mutually acceptable way.

CELIA TAYLOR, DIRECTOR OF PROGRAMMING, VIRGIN 1, BRAVO, CHALLENGE AND TROUBLE

2008 will be the year lawyers and rights holders finally loosen up and allow the on-demand and broadband content markets to take flight.

Last year started with everyone scratching their heads, wondering what on-demand deals we should be striking, and how. It seemed that everyone wanted to embrace the new world, but were too afraid to dip their toes in the water for fear of doing the "wrong" deal. I found that we, as a company, were often educating suppliers about our broadband content aspirations, and this approach allowed us to conclude some of the first deals with major studios, such as our Star Trek deal with CBS Paramount.

Things moved on really quickly during 2007, with November's announcement of "project kangaroo" from the BBC, ITV and Channel 4 being just the latest major development. As major commissioners and producers of their own content, this collaboration will be instrumental in bringing on-demand to new audiences, which will help boost the market further. VMtv is also going to keep the pace up, building on our advantages of having our own online portal and on-demand platform.

2008 will see Virgin 1 collaborating with more and more partners, and concluding more and more deals for cross-platform content.

JACQUES REYNAUD, VICE-CHAIRMAN, EUROSPORT

The mega-trends that we see impacting in 2008 are, first, that internet advertising will continue to innovate in totally new and unexpected ways. We know that the internet is here to stay, to grow, and I think no-one, no matter how expert, can imagine just how much or how far.

Second, while the internet is all that and more, it doesn't do everything. It certainly doesn't signal the end of TV advertising in any sense, and we are extremely confident about the future. The possibilities are endless for broadcasters who are forging ahead in the internet world.

Cross-media partnerships empower both broadcasters and internet; just look at our Yahoo! Eurosport offer. We are seeing daily proof of its success. Before, we had the choice: cheese or dessert. Today, it's cheese and dessert!

ARIEL ECKSTEIN, VICE-PRESIDENT, BUSINESS EXPANSION AOL, EUROPE

2008 will see the rise of the mobile internet. But does the right consumer proposition exist?

AOL believes three simple ingredients lead to a mobile internet audience as engaged and profitable as desktop.

First: content. The mobile user demands similar depth and breadth of content as on desktop, otherwise it's inadequate.

Second is engagement. Mobile content is likened to 'digital snacks' for 'on-the-run' consumers, but this can be more engaging. Products that take advantage of mobile's unique assets, such as location-enabled IM, will win out.

Third is advertising. Engaged users are easier to monetise and, with platforms such as Third Screen Media Mobile Advertising, AOL can embed advertising throughout the mobile experience. Whether display, pre-roll video or in-application, advertising and mobile are a match made in advertiser heaven.

There is huge potential in mobile content and advertising - but monetising success comes from extending the desktop experience, not just cutting to a smaller screen.

CHRIS WARD, COMMERCIAL DIRECTOR, MICROSOFT DIGITAL ADVERTISING SOLUTIONS

2008 will be the year of integration. Advertisers will start to understand that online and offline should not happen in silos, and gain a better understanding of the nature of social media, seeing it less of a threat and much more of an opportunity.

The web will be used more and more as a branding medium, and new formats such as video will bring advertisers once nervous of the channel back into the conversation.

We'll see entertainment brands increasingly viewing digital as an integral part of their marketing campaigns and developing ever more creative campaigns that create dialogues with consumers. We also expect to see the slower adopters of digital, such as FMCG brands, begin to invest in digital, using it as a mechanism to converse with consumers and to test new products.

While it feels like mobile has been the 'next big thing' for a few years now, the growth in social networking could mean that 2008 is the tipping point for mobile advertising. With the rapid growth in social media and the opportunities readily available with mobile, you've got two applications that are instrumental in enabling communications between people. As the mobile web grows, mobile advertising will grow with it.

Measurement will be seriously re-appraised as planning models start to take account of different online behaviours and consumers' receptivity to advertising differs according the activity they are involved in.

PETER DUFFY, HEAD OF MARKETING, AUDI

Humans are naturally social beings. We enjoy connecting with people and brands with similar aims and interests. 2008 will be the year when brands make the breakthrough in facilitating these contacts with ever more participatory content aimed at creating value for both individuals and tribes.

Brands will become increasingly fluid, allowing customers to personalise and engage on different levels. In my world of Audi, assets need to be designed to work across a range of customers - from the design freak to the petrol head.

Brands will continue to think in terms of digital assets rather than websites. Digital channels transcend the web and 2008 will be a year for those who differentiate between platforms and content. Assets will increasingly work across multiple platforms, be it website, mobile, outdoor or even dealership. Platforms can only proliferate.

The challenge will be connecting the dots. The winners will be those agencies and clients who can re-invent themselves to prioritise and exploit the digital experiences that are commercially critical and increasingly entering a physical realm.

DENNIS WOODSIDE, VICE-PRESIDENT, UK, IRELAND AND BENELUX, GOOGLE

Google is a technology company. We develop applications for the internet that scale. Consequently, we approach things a bit differently. We like maths. We like proving that things work, or don't work, with cold numbers.

In 2007, the UK's total advertising spend will be £26bn. But, getting back to the maths - how do we know this works? How do we know that £2m is the right amount to spend on a TV campaign? How do we know that we are paying the right price for that full-page spread in a magazine? How do we know - I mean, really know - whether that 30-second spot increased sales?

Smart business bosses are beginning to ask these legitimate and responsible questions. They can answer them with search marketing, direct mail and point of sale - and accountability can now extend to television, print and radio.

2008 will be the year when accountability moves from being an option to a necessity. Addressable set-top boxes, internet radio, the mobile web and web-based news portals make these questions answerable - today. Innovative media owners will address the market's demand for accountability. All it will take is commitment by the media community, and the acceptance that a little maths is not a bad thing.

SCOTT GALLACHER, HEAD OF ONLINE AND PARTNERSHIPS, BSKYB

I can see three key themes emerging or continuing within the UK market in 2008. With online now a significant revenue driver for many organisations and its activities falling across a range of organisational silos (marketing, IT, PR and so on), we will see a restructuring.

A rationalisation will align the activities more successfully and refocus skill sets. This will see the dearth of talent on agency side, which was such as issue in 2007, being mirrored within client organisations.

With the growth of the three pillars of MySpace, Facebook and Bebo in terms of unique users, site traffic and time spent, the discussion is less about which is the best social media site, but how they are drawing traffic away from others.

Mergers and acquisitions will become the new research and development. Companies are now shopping for innovation: Google with YouTube; NewsCorp with MySpace; eBay with Skype, etc. This will fuel another start-up bubble driven by acquisition as opposed to IPO.

TRADE BODIES

GUY PHILLIPSON, CHIEF EXECUTIVE, INTERNET ADVERTISING BUREAU

Because the role of the IAB is so diverse, we're able to identify a number of upcoming trends across a range of online disciplines. Facebook was the biggest story of 2007, and the new Facebook referral ad system was launched in the UK this November.

Just as social networking has dominated the headlines in the past couple of years, I believe we'll see a further trend of social shopping emerge - not just through Facebook - but more directly on sites such as Stylehive.com and Crowdstorm.com, where you literally share the wisdom of the crowd.

All online video formats will continue to grow brands, including streaming ads, web TV, in-text video and, of course, there's no stopping YouTube. Standby for the son of Cadbury's Gorilla....

Paid-for search could hit £2bn by December 2008 and other notable success stories in direct response will be ad networks and also classifieds - which on its own could command £900m in online media revenue.

The buzz will continue around mobile as every internet technology company and sales house bundles in. But if the mobile ad market doubles, it will still be less than 1 per cent of 'traditional' internet advertising in the UK - which by the end of 2008 will represent 20 per cent of the total media market.

WAYNE ARNOLD, CHIEF EXECUTIVE OF PROFERO AND PRESIDENT OF DIGITAL, IPA

For all of us who have known its peaks and troughs - this is the year the economists will look back and say it spelled Armageddon for agencies and media owners who some how continually failed to prepare and invest.

Conversely, it was the year for those who are prepared will make unassailable advances forward and so become the new marketing elite.

This is because the sector has reached a tipping point: the amount of money and client brainpower being invested means the sector is now too substantial to ignore.

It will not be Armageddon for all the traditional agencies or media owners; some will make the painful transition. However, you will see the emergence of brave agencies and media owners who have always believed.

Rome was not built in a day and neither is a great business with digital at the heart. Money can only get you so far - soul, risk and ambition are proving more important. As a result, the next generation is emerging; obviously, I believe Profero to be one of those.

On a more day-to-day level, 2008 will also be the year social networks will have to prove their revenue models. Digital creative will start to gain the wider recognition it deserves.

RICHARD FOAN, MANAGING DIRECTOR, ABCe

The year ahead for online media is one sure to be full of further rapid change and growth with greater focus on online measurement than ever before.

Greater focus particularly as 2008 will see increased flexibility being offered by publishers and channels continuing to fragment with the uptake of the likes of widgets building on the rise of user-generated content.

Furthermore, with ever greater sums of money committed to online media, there will be a greater demand for accountability.

The cumulative effect of all this will be that, this time next year, the industry will be further down the road to demonstrating best practice at all key points in the chain.

One development is likely to be a combination of audience data and transaction data - audience data, based on sampling a representative group to build a picture of demographics and usage patterns (supported by the JICIMS initiative), and transaction data based on the analysis of interaction through the use of next-generation web analytics tools that cater for Ajax-type content as well as time-shifted video and audio consumption (supported by JICWEBS standards).

SIMON WALDMAN, AOP CHAIRMAN AND GROUP DIRECTOR OF DIGITAL STRATEGY AND DEVELOPMENT, GUARDIAN MEDIA GROUP

2008 will see an amplification of many of the key themes that emerged in 2007. In particular, video and community will continue to bring us both opportunities and challenges; and there will be no let up in the ongoing process of organisational change that we are all experiencing, as digital activity moves from the edges of the business to the core.

For advertisers, our efforts will focus on providing clear value to advertisers in a world of pay-per-click deals and blind-buy networks. That will mean providing ever more creative commercial solutions and smarter opportunities to engage with our audience.

On an industry level, the move to a single planning currency is both welcome and necessary and will be worth the many hours it takes to bring to fruition.