• by Mark Simon , November 26, 2007

In the next month or so, you're going to be reading a lot of ink written by online pundits predicting what the big trend of 2008 will be. To provide some pre-forecast inoculation against this annual tea-reading ritual, let's look at what they said a year ago about 2007.

Was 2007 The Year of Online Video? A year ago, in the wake of Google's acquisition of YouTube, it was as obvious as rain that 2007 would be the year that online video reached parity with bad old broadcast television. In fact, one pundit predicted that User-Generated video ads would pose the kind of David vs. Goliath challenge to the advertising establishment that everybody loves to see. Of course that didn't happen: sure, millions of people are watching online video (and the longer the TV writers stay on strike the more this trend will strengthen). The problem is that there's still no actual business model to support the online video business, nor are there any standards that can make buying video ads anything but a head-scratching puzzle for marketers. This problem may take years to solve (if it's ever solved at all).

Was 2007 The Year of Mobile Marketing? Sure, the iPhone was a hit in 2007, and mobile devices are getting smarter all the time. But questions about how advertising is going to play on mobile phones keep getting more nettlesome. The conventional wisdom seems to be that users will accept mobile, geo-targeted ads with the same docility they greet advertising on Search Engine SERPs. But the mobile environment is a qualitatively different communications channel that's inherently advertiser-unfriendly. Frankly, there are likely more people who'd pay extra to keep data-mining marketing away from their phones than there are who'd accept it.

Was 2007 The Year of Behavioral Targeting? During 2007, BT Boosters made much of the fact that Yahoo and Google both announced plans to incorporate behaviorally targeted ads into their advertising systems. But the degree to which BT-style targeting will ever be anything more than a way to slightly enhance the value of almost valueless remnant inventory remains an unknown. BT can work in certain instances, and there's so much junk inventory on the Web that adding even an insect's worth of intelligence to this pile has got to be a good thing. But I'm completely unimpressed by the way that the search engines are implementing BT logic. For example, if I perform two searches on Google, the first for "Mortgage Refinance" and the second for "Travel to Holland," I'm greeted by ads offering to "Mortgage Holland." Some might call these "smart ads"; I call them idiotic.

So what trend really dominated 2007? 2007 was, of course, the Year of Massive and Truly Scary Consolidation in the online ad business, with Google, Microsoft, AOL, and other deep-pocketed entities snapping up BT firms, ad networks, mobile technology startups, and SEM agencies, and I'm happy to say that a couple of online pundits actually called this game correctly last year. But from a marketer's perspective, I'd say that 2007 will go down in history as the Year Of The Ever-Increasing Pain Point. Competition and technology complexity ramped up, exogenous business factors drove advertiser margins to razor thinness, and the last of the search engines to provide any meaningful level of transparency (Yahoo) became just another hybrid-auction "black box."  

Unfortunately, all of the trends I see in search point to this Pain Point increasing in magnitude for marketers and publishers alike, even as lots of big players in Silicon Alley continue to laugh their way to the bank .