Key Predictions For 2007
EMarketer has released key predictions for what 2007 has in store for the US media, with online being the main focus of its look at the year ahead.
Although eMarketer points out that this growth rate is down from the 30% or more which has been the norm for several years, this reduced level of growth would still be considered very strong for most industries.
A recent report from GroupM said that, were it not for the internet, the UK would be Europe’s slowest growing major ad market in 2007 (see UK Is Europe’s Slowest Growing Major Ad Market).
US Online video advertising is set to get more media play than dollars in 2007, with eMarketer projecting that spending on this format will total $775 million in 2007, representing 4.0% of projected US online ad spending.
Worldwide ad spending on online social networks should top $1 billion in 2007, up from an estimated $445 million in 2006, with growth fuelled by such factors as international expansion, “niche” networks and Google’s deal to supply search technology to MySpace.
Digital video game downloads are also predicted to take off this year, with eMarketer saying that by 2010 this distribution method will account for 22% of all worldwide game software revenues.
It adds that Video-on-demand marketers may find their skills in demand for promoting these platforms, which play on subscriber taste for instant gratification via download.
With regards to mobile TV, user generated content (UGC) is expected to have a big impact in 2007, in much the same way that it came to the forefront of the online experience in 2006.
The influence of UGC on US consumer’s purchase decisions is expected to grow further in 2007, with a recent study from market research firm Compete finding that consumers were more likely to be swayed by UGC than by information coming directly from brand advertisers and marketers.
Meanwhile, US B2C online sales are predicted to comfortably pass the $200 billion mark in 2007, reaching a new record total which eMarketer projects will be $223 billion.
Online retail sales will account for $132 billion of this, with online travel accounting for $91 billion. EMarketer says that some of the impetus for this growth will come from existing online buyers increasing their spending.
Emarketer also predicts that one in four broadband households in 2007 will subscribe to a voice over internet protocol (VoIP) service, rising to nearly 405 of households by 2010.
Point Topic recently released a report which said that the number of broadband lines in the UK reached 13.1 million by the end of 2006, although this was 20% down on the number added in 2005 (see UK Broadband Lines Reach 13.1 Million).
Delays in meeting the demand for ‘free’ bundled offers and the task of transferring over 1 million lines to local loop unbundling (LLU) have both contributed to the drop in new broadband connections, said Point Topic.
However, Tim Johnson, CEO of Point Topic, said: “We believe that ISPs have the chance to do better in 2007 though.”
Perhaps surprisingly, eMarketer says that more people are expected to watch TV and video content this year, with audiences watching via television, the internet, PCs and portable devices.
Research carried out by Sarah Pearson of Actual Consumer Behaviour (ACB) and Patrick Barwise of the London Business School, published last summer, stated that advertisers have little to fear from PVR use, adding that the figures suggest that in a wider digital context the shift from live to on-demand viewing over the next 9 years will not be as dramatic as many predict (see Research Suggests Advertisements Still Viewed Live By PVR Viewers).
Meanwhile, EMarketer also predicts that VOD will be in 30% of US TV households by the end of the year and that DVRs will be in 30% of TV households by 2009.