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Predictions for 2005 and Beyond

Predictions for 2005 and Beyond Gunjan Bagla

It’s December already and while you start thinking of resolutions for the new year, here are my top 10 prophecies for what 2005 will bring. I had a little help from my friends but you can blame me for any predictions that don’t pan out.

#10: You won’t see another scandal at AOL next year.

AOL shocked the world by merging with Time Warner on January 10, 2000. Believers in the new age of online partied continuously until April 3, 2000 when the Microsoft anti-trust ruling interrupted the jubilations. The barrage of .

# 6: The battle between consumers and marketers will start to resolve itself

Nick Nyhan, president of Dynamic Logic, predicts: “Consumers continue to feel under siege by marketing and it creates backlash, building on spyware, database marketing, Do-Not-Call, DVRs, etc. The marketing community is slow to respond and ends up polluting new avenues as soon as they are found. The cat and mouse game continues until consumers or nimble entrepreneurs create mechanisms with which they can barter their attention for content, or payment.”

#5: National opt-in programs will appear on major sites

Spyware has become a mainstream concern as unethical marketers have found ever more creative ways to invade desktops everywhere. We will begin resolving the process in 2005. Nyhan predicts a national opt-in program conducted on major sites to comply with emerging anti-spyware laws by 2006.

#4: Online will earn a seat at the grown-up table in all markets

In some markets like the travel and financial services industries this has already happened. Paran Johar of Tribal DDB, whose clients include mortgager Ameriquest, has been sitting at the grown-up table since 2002. I predict that by December 2005, online marketing will get the same level of respect in pharmaceutical, automotive, CPG and other more conservative industries that it gets in travel today.

As Rose of Deutsch puts it, “the future of marketing is campaign-driven, not broadcast-driven, marketing solutions." Most agencies develop television commercials as their core competency and then offer some sort of integrated "checklist." The question marketers have been asking is, "Have we included the Internet?" when we should be asking "Have we created a campaign that can't live without it?"

A necessary corollary is that as more brand marketers start spending big bucks on the Internet, publishers will raise prices and establish a higher premium on interruptive advertising. As a result, you will see direct marketers like NetFlix and LowerMyBills get squeezed.

#3: Big Venture Capital will not return to online marketing in 2005

When Fastclick received $75 million in its first round of venture funding many veteran dot-commers began salivating and dusting off old business plans. Go back to work and stop fantasizing, kids. VC investments in online marketing will continue and might even accelerate but most rounds will be well under $10 million. FastClick is an anomaly and most smart VCs are making small, careful bets. That’s not saying anything against FastClick, which is a great company and will likely make very good use of the investment. But 1999 ain’t coming back anytime soon.

#2: Global sourcing will affect the advertising business

There is a tidal wave building across corporate America where knowledge work is being performed on a global scale. We have all had the experience of calling up Linksys or GE and speaking to a support technician in Gurgaon, India. Yet while online publishers are already starting to use such resources, advertising has largely been unaffected by globalization.

However, as agencies and marketers seek to deploy their capital most effectively and as the need for round-the-clock decision-making increases in 2005, you will see this develop into a mainstream trend. Search marketing will be the first area to be affected, and search agencies have already approached me for help in finding offshore resources.

#1: Creative departments will start to leverage broadband to the fullest.

Paramount Pictures’ Siskind says, “The more full-motion-like television commercials our Internet becomes, the greater the medium impact will be for the studio category.”

Now that most of the U.S. population finally has a decent Internet connection, we can all get to serious work. “In 2005 new technologies will allow for broadband to be utilized more efficiently thus increasing the creative possibilities,” predicts Johar of Tribal DDB.

“Fast downloads equals fearless browsing,“ says Lynda Keeler, founder of Delight.com and former GM of Sony Internet. “Broadband pushes users to new levels of media grazing. But it's the ability to share, add to and interact with the message that gets people passionate about the experience.”

Rose of Deutsch agrees: “When interstitials pack the same emotional punch as a :30 spot and we're using commercial producers and directors to create our ads, then we're on to something. That could happen by 2006.”

I’ll go one step further: By Super Bowl 2006, Rose’s prediction will have come true.

Gunjan Bagla is a mechanical engineer and entrepreneur who has been active in marketing and media for over 15 years. He is presently responsible for Dynamic Logic's business with movie studios, automotive companies and others in the Southwest. His writing has appeared in Direct Marketing, iMarketing News, Silicon India, Channel Seven and ClickZ.

Gunjan Bagla is a principal of Amritt Ventures, an advisory service facilitating trade between the United States and India. Mr. Bagla provides guidance in entering new markets, global strategy execution, finding and managing vendor partners, and...

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