Media Week Essay - Digital

LONDON - "Co-opetition" will be a major theme for digital publishers in 2009 as competitors learn to collaborate for mutual benefit. And the downturn could well create a more efficient advertising market.

Michael Steckler: managing director of Platform-A UK
Michael Steckler: managing director of Platform-A UK

When Media Week approached me to write this article, the brief was disarmingly simple: "What are your predictions for digital media for 2009?"

I'm wary of predictions because there are largely only two possible outcomes. If your predictions are right, people will say they were obvious. Get them wrong and you end up with egg on your face.

Just ask the Goldman Sachs analysts who staked the firm's smartest-guys-in-the-room reputation that the price of oil would top $200 a barrel by the end of the year. Today's price: about $50.

So I'm going to hedge my bets and make three prudent predictions for 2009, showing how each will have far-reaching consequences for the year ahead. The predictions share a common bond - all highlight our industry's response to fast-paced advances in consumer technology and behaviour.

PREDICTION ONE: heightened competition will breed a spirit of openness

In the past year alone, millions more consumers became online publishers via their Bebo, Facebook and MySpace pages. Bloggers now beat newsrooms to exclusives and the launch of a new generation of smartphones heralds a revolution in the mobile internet. It's no surprise to see recent surveys showing mobile internet use growing eight times faster than PC-based internet use.

For brand owners and advertisers, keeping up with the pace of change is a challenge in itself. Online advertising was always supposed to be simple, but as the number of publishers, outlets, formats and channels continues to grow at a breathtaking rate, online advertising is perceived as being increasingly complex.

Adding to this complexity is a trend that started in 2008 and is set to take off in 2009: openness. Just as publishers once learned that adding links to competitors' sites was a benefit rather than a threat, they are now learning that adding competitors' content to their sites can have the same positive effect.

Bebo, for example, recently joined the new OpenSocial platform, which allows any developer, including competitors or advertisers, to develop content for Bebo. It's a win-win situation: Bebo dramatically enhances its user experience and developers get access to a high-profile platform to promote their application.

This "co-opetition" - collaborating with competitors for mutual benefit - will be increasingly commonplace next year and is a direct response to consumers' desire to have as much of their content in one place, unfettered by any limits imposed by the platform or the content provider.

This has already been seen in the advertising world, where publishers partner with networks to increase the value of inventory by bringing niche audiences to advertisers on a far greater scale.

PREDICTION TWO: the winners in 2009 will be those who can exploit technology

Consumers have been spared the headache of the web's new complexity by RSS feeds from the multitude of news sources, recommendation sites, cost-comparison portals and the latest semantic services such as Twine.

However, until very recently, confused advertisers haven't been served so well. But this is quickly changing because the latest full-service global ad networks are leveraging hugely powerful technology to reach an ever more significant and fragmented online audience.

A great model of this is the activation of new technology targeting consumers. At Platform-A, we drive our network advertising engine using AdLearn, a solution that applies optimisation technology to serve ads to consumers intelligently, enabling us to reach 32 million consumers every month (source: comScore, October 2008).

AdLearn's algorithm calculates the optimum ad to serve at the optimum time to get a response for its advertiser. As the data set of what works and what doesn't grows, such systems will be able to place ads more effectively.

Combined with other solutions such as targeting by keyword or online behaviour, online advertising has the potential to deliver ads that users want to see at a time when they will be most responsive to them.

PREDICTION THREE: results will be the start of the conversation, not the end

This downturn could well have the positive result of shaking out the advertising market. As advertisers tighten their purse strings, media owners and ad networks will have to prove not only that what they are doing works, but also that it works much better than any other option.

There will be no place for inefficiency. Media owners and agencies will start sharing more of their knowledge of audiences, data and key metrics to ensure they offer advertisers a media plan that delivers measurable ROI.

Although shares and oil prices might be in turmoil, I remain distinctly upbeat about 2009. It will be a good year for those in our industry who can continue to demonstrate they can reach consumers in ever more powerful ways.

The "A" in Platform-A will become synonymous with "acquisition" - the acquisition of new customers for our clients.

Those who want to prosper next year will have to harness rapidly emerging consumer trends and be unafraid to bite the bullet of co-opetition.

Closer and warmer partnerships with consumers, clients and even competitors will help shelter us all from the cold winds blowing through the market.

Michael Steckler, managing director, Platform-A UK.

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