Some Thoughts and Predictions for 2008

Here are some quick, stream of consciousness predictions for the coming year, not in any order of significance or priority:

More online video (content and ads):

The “video is everywhere” trend will continue and local sites will increasingly feature video. The yellow pages publishers will have great success selling video to SMBs and it will become a kind of “must-have” promotional vehicle that also plays to the vanity of local business owners.

Internet on TV (and vice versa):

The Hollywood writers’ strike and the continuing exodus of TV audiences to the Internet will mean: 1) more pressure on television and TV advertising 2) accelerating two-way TV-Internet content distribution. Apple’s forthcoming iTunes movie rental announcement is a part of that larger trend.


I predicted last year that newspapers would finally “figure it out” in 2007. What happened was more incremental, even as newspaper print revenues continued to suffer. But most major newspaper publishers are now moving much more decisively. Most have embraced community and are working with syndication and technology partners. There’s more pain to come but newspapers still have a window of opportunity in local to be trusted “go to” sites because of their brands and content advantage in many markets. (There’s a more nuanced discussion required here, but for “predictions” I’ll leave it there.)


This year will see the continuing impact of the iPhone, as its market share grows and surfing the mobile Internet becomes more mainstream. Touchscreens continue to proliferate (partly in response to the iPhone). The Palm Centro isn’t the hit that Palm is hoping for but smartphone prices come down, causing more people to adopt them – and more mobile Internet adoption in turn.

As an ad medium mobile is no longer a novelty and some interesting and creative mobile campaigns and promotions emerge this year. In addition, mobile starts to become an important bridge between the Internet and the physical store (a la NearbyNow). Mobile as an in-store price-comparison and research tool becomes more important for consumers. And camera-phones as shopping tools (point and shop/search) finally gain some US adoption in 2008.

We’ll also see the first Android phones (from either HTC or LG) and they will either capture the press and pundits’ imaginations or be unimpressive. If they deliver, however, the whole Android platform and movement will get a big boost.

We should also see the introduction of more interesting wireless and mobile Internet access devices that fall into neither the cellphone nor laptop categories (e.g., Dash, iPod Touch, Kindle, Nokia 810, ModBook).

M&A, Yahoo!, AOL and AT&T:

This is a somewhat murky area. It’s very safe to say there will be more M&A activity this year as traditional media companies continue to build out their online portfolios. And the competitive dynamics of the big online portals and engines will continue to fuel acquisitions.

As I said previously, Yahoo! will be forced to “do something” if it can’t appease investors in the next couple quarters with a sufficient growth/turnaround story and results to match. We’ll have more clarity on Yahoo!’s fate as an independent company by Q2.

AOL could be retained or spun off by TWX. The company’s share price has generally been flat (or down) during Richard Parsons’ tenure. So there’s pressure to “do something” to increase shareholder value. Microsoft was interested in AOL previously and got outflanked by Google, when it made its billion-dollar investment in the company two years ago. It’s entirely possible that Microsoft would invest significantly or buy the portal outright (which might be problematic for several reasons for the two companies) if it were to be put on the block.

While there would be integration and redundancy challenges inherent in a Microsoft acquisition of AOL, that would not be as true for AT&T. AT&T has lots of money and is moving fairly aggressively on several fronts. Beyond, the company doesn’t have a strong consumer Internet (or particularly strong mobile) portfolio; so I would expect some acquisitions in 2008. Investments in Yahoo! or AOL would complement the company’s current businesses — though I think of the two scenarios Yahoo! would be more likely.

Comcast, once a sleeping giant in local, seems to have receded as potential player. Hesitation and competitive pressures on its core business have held back the cable provider from doing much that is decisive or provocative online. However, a growing feeling of a need to act and diversify online could make Comcast a serious potential investor or acquirer in 2008. We might even see a splashy local consumer acquisition, because Comcast has a sales force to monetize local traffic.

The “R” word:

There’s disagreement about the outlook for a US recession in 2008. Some economists think we’re in a recession now. From an advertising standpoint 2008 will see slower spending in traditional media (notwithstanding the Olympics and US election) and an acceleration of brand ad budgets shifting dollars online. Effectively then the traditional ad industry generally will experience a recession-like slump, while online will remain fairly healthy. The problem is: marketers are confused and most are not rising to the challenge of reaching fickle, distracted audiences.

For this reason, paid search advertising continues to shine even as marketers struggle to figure out where to put their brand dollars (portals, social nets, verticals, etc.)?

Local inventory online (and on mobile):

The past two years have seen great strides in the development of what might be called the “product inventory infrastructure.” This year will see local inventory information become even more common and widely proliferated. Some of this will come from new, independent efforts such as TheFind’s. But much of this will come from content and data syndication from the likes of NearbyNow, ShopLocal, Where2GetIt and Channel Intelligence to a range of third-party sites. ShopLocal has been doing this for some time with newspaper partners.

This data/content will also come from retailers’ own buy online, pick up in store capabilities, which are becoming more common and more important to consumers.

User-generated content and trust:

Now that community and the “culture of participation” are firmly established online, the next hurdle is separating the wheat from the dreck. When you’ve got 200 reviews how do you make sense of them? Review aggregation/summaries and site features like Yelp’s “ratings details” chart become increasingly important. Trust circles make a comeback as well for the same reason: “What’s my network saying about this place?”

In addition, Facebook will undergo a significant makeover this year and seek to become more of a “daily utility” (and less of a novelty) to users, adding Web search (from MSFT) and MyYahoo!/iGoogle-like capabilities and features. In other words, it will seek to become a kind of Internet “dashboard” and nouveau portal with trusted community.

Virtual worlds and more 3-D:

Many of you may have seen the recent NY Times article on Webkinz and Club Penguin. A kind of parallel trend to online video, “virtual worlds” and increasing 3-D visualization (maps, etc.) will gain steam in 2008.

I’m fascinated by what I think will be the ultimate collision of gaming, social networking, local content and virtual worlds. It will probably require a bigger pipe (see Internet on TV) for this to be fully realized. But eventually there will be a range virtual worlds for adults (not referring to porn here) online and especially on TV that offer Internet content, community and rich, immersive experiences (something along the lines of Google Earth or Virtual Earth 3-D meets Everyscape meets

The local SEM rollup:

I keep expecting somebody to come along and bring together two or more of these local SEM firms and then put some meaningful marketing behind the effort to build a trusted brand. This area is still a kind of “Wild West” and most SMBs are still ignorant of the existence of these firms. This year we may see some consolidation in this segment – because that’s the only way to compete effectively with the yellow pages sales forces.

Impatient investors and more startup failures:

We’ll see more startup failures and sites being shut down by VCs this year, as larger investors (like Hollywood) look for increasingly elusive “big scores” to the exclusion of a succession of small hits. This failure trend will be true in local too, as sites just can’t effectively monetize their traffic to support their cost structures. Unfortunately, most VCs will move farther away from the mentality that one needs to succeed in local: a long-term vision and patience.

Newspaper and yellow pages diversification:

I wrote briefly not long ago that newspapers and yellow pages may “diversify” by starting and/or acquiring sites that are once or twice-removed from their core businesses: verticals, community sites, independent local sites and so on. We’ll see how far this goes in 2008.

Will we see the emergence of a coupon destination?

I continue to be amazed that there’s no online coupon destination. Judy’s Book was trying to build one but that was aborted. Many sites offer deals or coupons as an aspect of what they do (e.g., Dealio, ShopLocal), but there’s no “top of mind” branded coupon destination for consumers. Will 2008 be the year that happens? This is, in my view, a gaping hole online.

Mobile coupons (or mobile coupon redemption) is an important future trend as well.


Andrew Shotland discusses local trends and local SEO trends for 2008.


14 Responses to “Some Thoughts and Predictions for 2008”

  1. Harald R. Fortmann - Online Marketing is my Passion » Blog Archiv » Trends 2008 - die 2. Says:

    […] Greg Sterling meldet sich zu Wort und hat ein paar Trends ausgerufen… […]

  2. Local Business Will Prevail Says:

    Some insightful outlook…have you heard of the recently launched coupon site from Valassis? What is your opinion about, they’ve been around since Web 1.0. I believe the coupon space will really rock when married with a downloadable smartcard. That’s an idea that someone should have implemented by now on a large scale…one card every coupon…wow!

  3. More 2008 Predictions… | Local Search Solutions Blog Says:

    […] Some Thoughts & Predictions for 2008 […]

  4. Burn Alex Says:

    Tv-internet is good!! But if internet is slow it couses headache!! To treat this pain use fast internet conection!

  5. Greg Sterling Says:

    I hadn’t heard of Redplum and looked at it quickly. It’s not the killer coupon destination by any stretch at this point. One of the problems is coverage. The model is something like Oodle for coupons.

    Re smartcards, check out AOL shortcuts:

  6. Kelvin Chan Says:

    Wow … quite a bit of food for thought. Thanks for that! 😉

  7. patricia Says:

    Great predictions, but it is NOT the issues in entertainment industry that is driving or going to drive internet television!! God, people – PLEASE take a quick look at what is going on with development of the internet itself as a technology – THAT is what is creating internet tv, nothing else. The telecom industry – nobody else – owns the web and ultimately dictates where it’ll go, and that’s where it’s dictating it to go.

  8. Startup Aims to Revive SF Free WiFi Initiative « Screenwerk Says:

    […] of the predictions that I previously made but neglected to include in the list I published the other day is that geotargeting and local ad networks will get much better and more precise this […]

  9. Local Business Will Prevail Says:

    Thank you Greg! For years I thought a better solution was needed in the coupon space. About shortcuts from aol…marrying store loyalty cards with coupons is moving in the right direction but often people have multiple store cards. One Card…All Coupons is a better solution for the shopper, don’t you think?
    local online advertising

  10. cohn Says:

    Nice overview…

  11. Local SEO 2008 Predictions Says:

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  13. The Predictions Season Is Here « Screenwerk Says:

    […] ‘09 (could change my mind with enough coffee). Here are mine from 2006 (for ‘07) and 2007 (for ‘08). Some are right and some are […]

  14. Top Posts of 2008 « Screenwerk Says:

    […] Some Thoughts and Predictions for 2008                […]

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