As the weather turns cold and our minds begin to focus on fighting traffic to get to the local WorldMart for another round of Christmas shopping, it’s time to look ahead at what 2006 might bring. 2006 is shaping up to be a very interesting year in the marketing world. The convergence of home entertainment, the growth of RFID, the increasing momentum of blogs, podcasts and mobile advertising, the continuing shift from traditional to new media and Google’s emerging dominance over everything information-related has marketers extremely excited and a just a little uneasy about what the future might bring.
Convergence of Home Entertainment
From my perspective as a consumer of all things electronic, the convergence of home entertainment is an exciting trend. It will not be long until our PC becomes the hub of home entertainment. 2006 should see the introduction of the first digital-cable-ready PC, which will turn your computer into an HD-capable cable box and becomes the nerve center of your home entertainment system. Want more proof that data, video, mobility and voice are converging? How about Cisco’s purchase of Scientific-Atlanta? As the proud renter of a Scientific-Atlanta set-top cable box and the proud owner of a Linksys (owned by Cisco) wireless router, this is huge news. It won’t be long before Cisco produces one device that includes digital cable TV capabilities, a cable modem, wireless LAN, VoIP and even high-definition TV. With a single device, users can download movies from the Internet and watch them on their televisions. With picture-in-picture, you could even surf the web while watching the Bengals game. It would mean true convergence, and it is not far away. Another example is Yahoo’s plan to stream old TV shows via the Web, and the company’s recent launch of a service that lets subscribers use the Web to schedule recordings of television shows through their TiVo digital video recorders. Forgot to record your favorite mid-morning game show? Just logon to Yahoo and set your recording. TV and the Web are slowly merging, and 2006 will see the first true steps toward visible convergence. The coming introduction of the Xbox 360 (basically a computer wrapped in a video game console box) won’t hurt either.
RFID
Around this time last year (and in this column), the easy prediction was that RFID was poised to explode onto the scene with the promise of great commercial opportunity. Radio Frequency Identification did indeed make great strides in 2005 mostly as an inventory management and control device, ensuring that products were available when and where customers required them. This technology has allowed businesses to begin to follow the product as it passes through logistical channels, from manufacturing through shipping and warehousing and onto store shelves. RFID also allows businesses to track shelf life and even identify where and when a product is purchased.
Whether you are a proponent of RFID or opposed to some aspects of it because of privacy concerns (as many consumer groups are), 2006 should see even more adoption as smaller, cheaper and more reliable devices are released. One example is NASCAR’s new tire leasing program from Goodyear. Goodyear will install RFID devices in all the tires it supplies to NASCAR under its tire leasing deal. This will allow the company to track thousands of tires throughout the season. Not only will RFID allow Goodyear to locate each and every tire, but also it will allow the company to study important data on the performance of each tire, which will potentially lead to better tire technology. As RFID technology continues to evolve, 2006 will see increased use of the devices and the data they supply. It won’t be long before marketers use RFID to very accurately and narrowly segment and target markets, identifying who purchased the product and then linking it to demographic data of the buyer to establish a profile that could then be applied to other potential buyers or market segments. RFID could be extended even further to identify where and when a product is consumed. This information could be utilized by companies to trigger end user contact to offer promotional incentives to re-purchase. Companies would be able to target customers on a truly individual basis and make product and distribution adjustments on the fly as they learn how and where their products are being purchased and consumed.
Blogs, Podcasts and Mobile Marketing
I have discussed web logs (blogs) and mobile marketing in previous columns, but they (like RFID) are worth repeating when discussing the trends of 2006. Blogs have for the most part already come of age (although we have only scratched the surface of using blogs for revenue generation), but 2006 will see mainstream adoption of podcasts and mobile marketing as well. Podcasts allow you to subscribe to a service that periodically sends an audio or video feed, which you can download and view or listen to on your computer or portable media player. Contrary to popular belief, you don’t need an iPod to use a podcasting service. Many syndicated radio shows have already begun podcasting feeds, and the technology is on the verge of exploding in popularity with the likes of the iPod itself. 2006 should see widespread use of the technology, and as it spreads, you can bet marketers will use it for precision commercial messages. As previously discussed, mobile marketing is entering into its adolescence stage. While it’s not quite mature enough to warrant large advertising budgets, its time will soon come. 2006 should bring mobile marketing into the mainstream as the public warms up to it and the technology grows up. Expect to see more text message contest entries, more ads in mobile games, use of mobile advergames, more subscription services, etc. Mobile commerce is still a good distance into the future, but mobile marketing is here.
Continuing Shift from Traditional to New Media
It is no secret that marketing dollars are being shifted from traditional media like newspapers, television, radio and magazines to new media including Web ads, pay-per-click ads, targeted emails, online and email newsletters and other forms of eMarketing. 2005 has seen explosive growth in eMarketing while newspaper and magazine ad page counts have dropped. The reason for this is simple, more and more consumers are paying attention to online media and content at the expense of traditional media. This trend, which will continue through 2006 and is here to stay, is most obvious in newspaper statistics. A recent report by the Audit Bureau of Circulations found a six-month decline in the average weekday print circulation among the top 20 U.S. newspapers. At the same time, newspaper website traffic grew by 11 percent year-over-year in October. Nielsen/NetRatings found interest in newspapers was still strong, but 22 percent of readers had shifted from offline to online sources, which was much stronger growth than the increase in Internet users as a whole, which rose 3 percent year-over-year. From these numbers, it is obvious that the trend is away from traditional media. Traditional media will not go away entirely, but as its effectiveness has declined, budgets have shifted to new media as a way to help recapture marketing message effectiveness and efficiency.
Google’s Emerging Dominance
From front-page headlines to record, skyrocketing profits, Google’s emerging dominance over all things related to information is another trend that sees no signs of slowing. Here is a snapshot of what Google has been up to lately:
- Currently the number one search engine
- Google AdWords has become a dominant form of online advertising that is garnering a significant share of advertising budgets
- Providing marketing support for the Firefox browser
- Offering free Wi-Fi
- Offering free web analytics (Google Analytics, aka Urchin)
- Trying its hand at newspaper and other off-line media buying
- Controversial Google Book Search library project promises to allow users to view the entire contents of every book not under copyright protection
- Beta test of Google Base
Firefox Marketing
Google is providing its ad publishers with a set of buttons that website visitors can use to download Firefox with the Google Toolbar. This agreement should accelerate the use of Firefox while continuing to spread the Google brand.
Google Analytics, aka Urchin
Urchin was previously offered by Google as a per-month pay service, but the company recently began offering the service free of charge. With this tool, businesses can gauge the impact of online marketing campaigns such as banner ads, referral links, newsletters and search. Businesses can also pay for more advanced integration and customization. The tool offers reporting dashboards for executives, marketers and Webmasters.
Google Base
Google’s new Google Base service lets anyone upload most anything to a publicly searchable database. This service will make locating anything that has been uploaded nearly instantaneous, provided it finds users willing to provide the content. Google Base could pose a formidable threat to traditional classified businesses such as newspapers, as well as online sites such as eBay. Google has also applied for a patent for a service called Google Automat that helps would-be sellers generate advertising and is working on an online payment system.
Google has significantly elevated its position from a search engine to a leading media and information clearinghouse. No one knows Google’s future intentions, but it is clear that 2006 will see Google continue to expand into other information-related businesses. As the company’s reach extends and as it develops other effective tools like AdWords, Google will continue to see a greater percentage of marketing budgets.
2006 is shaping up to be a very exciting year. Consumers will be able to streamline their home entertainment centers by bringing voice, data, video and mobility together, quickly and easily receive audio and video podcasts and have access more mobile content while marketers will see more effective, more efficient marketing tools hit the mainstream. While traditional media companies will feel the pinch of new media and technology, and marketers will need to continue to educate themselves on the benefits and metrics of new media, the benefits of these trends will outweigh the negatives. While not all of these trends are necessarily good for consumers (as many anti-RFID and Google haters would attest), they are all guaranteed to affect the way companies market themselves in 2006. Let’s start another trend this year: re-gifting old presents and skipping the hassle of another WorldMart trip. Who’s with me?
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