Online Trends for 2009

Here are some online trends to look out for in 2009.

Advertising Takes a Beating

With the sluggishness of the US economy, advertising will decline significantly and online advertising in particular will be hit hard. Online advertising will still continue to grow but at a much slower pace.

This slowdown in growth will put pressure on web 2.0 applications with lots of content but lower conversion rates. Applications such as Facebook, Flickr, YouTube, etc. will need to focus more heavily on monetizing all those collaboration interactions that millions of people now do for free every day.

There will also be a continued emphasis on Cost Per Action instead of Cost Per Click to link advertised costs to conversion. As the cost of online advertising increases (for example the cost of buying keywords) there will be increased pressure on Google and other advertising platforms to show direct linkage between advertising and conversion to revenue. This is where online advertising as a channel has had an advantage over traditional media channels.

Internet TV is Finally a Reality

The "watch video on your computer" revolution started about 10 years ago, but until this year watching the equivalent of television via the Internet really wasn't possible. Instead, users have sacrificed the video quality that even low definition television provides for increased collaboration, crowd created content, etc. In addition, the selection for mainstream content has been limited online until the last year or so.

In 2009, the compromise on quality and selection will fade away. Video sites such as YouTube, Facebook, etc. are all upgrading their video streaming so that the videos uploaded by users are streamed at much higher resolution. In addition, sites such as Hulu now stream hundreds of mainstream television programs in almost broadcast quality. While not able to yet compete with HDTV, video on the Internet will now be viable as a full-screen, sit in the living room type experience.

Part of the challenge has been the source video - consumer digital cameras tended to be lower resolution video than television. However, the latest digital cameras produce very good video quality including my Panasonic camera that can shoot HD video in wide screen format.

Web 2.0 will Become Mainstream

Don Tapscott's new book on the Net Generation points out that when technology becomes boring and we stop talking about it then the next level of innovation is possible. Web 2.0 will simply become The Internet as usual and we'll stop talking about it as this new found technology revolution (until we think of the next one of course).

Applications like YouTube, Facebook, etc. are now so mainstream that your mother uses them. Applications such as Facebook, MySpace, YouTube, etc. have all already demographically shifted to the mainstream from being in the hands of the power users, the young and the affluent.

Mobile Applications Will See Massive Growth

With the launch of the IPhone and its inevitable competitors, the phone now becomes a viable application platform. IPhone is as significant for mobile applications as IPod was for downloadable music.

Another mobile device seeing large sales is the Amazon Kindle. It allows users to purchase books and view them in a mobile device. The idea of e-books has been around for over 10 years but it takes a device like the Kindle with its complete vertical integration to drive the adoption.

Geotagging and Live/Google Earth

As the amount of content increases, one of the simplest ways to filter content is through geography. In addition, with the maturity and increased use of mapping interfaces such as Live Earth, Google Earth, Google Maps, etc. both as destination sites and as mash-ups, geotagging of content, pictures, videos, and people will be a vital way of filtering content in 2009.

One of the simplest examples is the integration of Panaramio with Google Maps. In Google Maps if you look up any address it will show you related photos from Panaramio, all geotagged on upload by location.

Change of Strategy From The RIAA/MPAA

For the past several years, the global culture industry has been taking people to court over copyright infringement. Approximately 30,000 people have been sued in the US for copyright infringement over the past 5 years. The impact on file sharing has been no real impact on file sharing but has made the RIAA one of the most hated organizations worldwide.

It appears that after 5 years of harassment law suits, the RIAA has decided to change its strategy and use a softer approach. In addition, new technology and business partnerships will allow the media conglomerates to start making money off their content no matter who uploads it. For example, Universal now stands to make over $100 million in ad revenue through a deal inked with YouTube that uses search terms to identify user contributed music videos that map to Universal's artists.

Casual Entertainment Over Hard Core Gaming

The success of the Nintendo Wii (sold out again this Christmas!) as well as other casual games such as the Sims and Spore will continue to provide online entertainment for the masses. Collaboration, casual games and customization will continue to push the mainstream entertainment market. Games like RockStar, Wii Fit, etc. will continue to provide mainstream entertainment while leaving more hard core games to cater to the hard core 18-30 male demographic.

See the above note as well on platforms like IPhone and Facebook - these are perfect jumping points for casual gaming as they cater to an audience that might play a game of solitaire but isn't going to be spending hours with Call of Duty.

The casual gaming market is still in massive growth mode and this will continue in 2009.

Difference, Story Telling and Community

This isn't a trend, but it will continue to be true in 2009 as it always has been: story telling, difference and community building continue to drive the content creation process.

The revolutionary part of the Internet is the ease at which these tools can be employed for someone to tell a story, create some innovative content and enable a community. The growth of blogs shows that everyone has something to say and the size of the audience it generates is how well it connects to its community of interest. Determining "success" depends on the objective - it may simply be distributing family pictures or it may be making your opinion heard by millions as Barak Obama did in 2008.

The Key Challenge in 2009: Conversion

I have a friend who is very passionate about informing parents about Toy Recalls. She has an active blog, she uses Twitter and Facebook and she is able to get her message out to several hundred viewers a day. When we discussed her "success criteria", she seemed pleased that she had grown this community from zero but her next question was, "ok so now what?". This is I think the key question for all this collaboration activity going on - how do we convert the energy of all this discussion, file sharing, photo sharing, tagging, blogging, etc. into some sort of concrete action so that its simply not just hanging out (although that is not a bad goal in itself).

It's as if we have got people off the couch and started them talking again. So now the community is sharing, talking, collaborating. So now what happens? How do the tools available provide methods to convert this community to action?

This is the future growth opportunity for application platforms like Facebook and you can see the evolution of these tools going in this direction already - applications like the Causes application for example are a first attempt to translate a community of action into a concrete action (in this case donating money to charity).