DECEMBER 28, 2007 – More of what’s to come online in the new year.
To read Part I of this article.
Jeffrey Grau, Senior Analyst
Alternative online payment methods to credit and debit cards, such as PayPal, Google Checkout and Bill Me Later, will gain traction with Web retailers and consumers. Online retailers like these options because they save on processing fees, and research shows that offering several payment options increases conversion rates. Consumers like having more choices and feel more secure about making online transactions.
Multichannel retailers will begin rolling out “buy online, pick up in store” services in larger numbers. This option pairs the convenience of online shopping with the instant gratification of store shopping. Consumers like it because they can avoid shipping fees. A number of big name retailers, including Circuit City, JC Penney and Sears, offer this service.
Recently Wal-Mart announced a variation on that service just in time for the holiday season with its site-to-store option. Consumers who purchase online forego shipping fees by having their items shipped to a local Wal-Mart store for pickup in a few days.
John du Pre Gauntt, Senior Analyst
Google will bid aggressively for 700 MHz spectrum in the United States to force mobile operators to partially or fully open their networks to outside innovation. Mobile marketing will have its first significant privacy meltdown. Global smartphone sales will become mainstream instead of occupying a niche.
Mobile marketing will execute its first million-dollar-plus campaign and local mobile search will become a huge battleground among Web giants, mobile operators and local directory publishers.
Karin von Abrams, Senior Analyst
The UK will remain at the top of the European social networking league. But the reach of social networking sites will peak at just over 80% of Britain�s online population for two reasons. First, most UK Internet users who want to share their lives online are already doing so; this leaves young people (kids and �tweens�) as the largest source of growth.
Secondly, there will be rising awareness and concern about the perils of sharing personal information online, as breaches of privacy and security�and the dangers of revealing too much�are publicized.
European consumers waiting for a robust variety of user-friendly, ad-supported content and services delivered to their mobile phones or PDAs will be disappointed. Operators and content owners will improve their offerings, and most mobile owners will be happy to see advertising in exchange for free content, but mobile ad formats will remain rather primitive.
The technology to enable the seamless combination of attractive ads and content, and a convenient direct response from consumers, is still some way off.
UK online ad spending will pass �3 billion ($6.2 billion) and show healthy growth despite financial and political uncertainties in Britain and beyond. This will be the first major wobble in confidence to occur since the UK became a mature wired economy. In fact, the Internet will help Britons cope efficiently with a more challenging marketplace. Web users will spend more time online, exploring options and seeking value for their money. Advertisers that target this committed audience effectively will achieve solid returns on their investments.
E-commerce will also thrive, passing �50 billion ($100 billion) as more consumers avoid the stress of crowded transport systems and city centers to shop from home.
Across Europe, the social and cultural gap will widen between seniors (those 55 and older) who join the online population and those who don�t. Currently, older citizens in Spain and Italy are most likely to opt out of the Internet often because their lives revolve around other activities that are more important to them or because they have no affordable, reliable online access. Seniors who do use the Web will benefit much more from government and local information and services.
Online seniors also constitute an expanding and generally affluent market for certain goods and services, such as travel and financial products. The preferences and spending power of European seniors will emerge more clearly in 2008. Advertisers that identify and develop opportunities for this audience could reap big rewards.
Despite the hefty opposition from the European Union to its intended purchase of DoubleClick, Google will be shopping in Europe for complementary companies. So far, Google�s buys in the region have been largely under the radar (most are mapping and charting companies that can strengthen one of its less controversial offerings, Google Earth).
But it�s logical that Google, now entering the mobile arena, will also aim to take advantage of Europe�s enthusiasm for mobile devices and its wealth of expertise in this area. In 2008, look for Google to be eyeing up�and perhaps pouncing on�local talent.
Paul Verna, Senior Analyst
YouTube plays a decisive role in the 2008 US presidential election by, one, airing a user-submitted clip that seals the fate of a leading candidate or, two, setting the tone of the campaign through the site�s series of sponsored debates. Or both.
Music labels and marketers step up their experimentations with new and emerging business models as the CD continues to fade into oblivion. Expect to see more ad-supported sites, monthly subscription services, full-track mobile download offerings and use of social networks as music discovery and sales tools.
Labels have no choice but to continue to relax their policies toward digital-rights management, inching the market closer to an unprotected MP3 standard.
US consumer spending on movie downloads doubles as digital services from iTunes, Netflix, Amazon Unbox, Wal-Mart, Movielink/Blockbuster, CinemaNow, Vongo and others start to migrate to the mainstream.
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