Marketing Forecast from Ad-ology

Search engine providers and marketers have built up an entire industry based on key words which support robust e-commerce activity. Consumers have been trained to use key words in their searches in order to streamline results. Just as marketers have developed expertise in managing this process, a new study indicates that the younger consumers are employing search in a whole different way.

Last month, I blogged about Forrester Research’s prediction that spending on online display advertising will reach $16.9 billion by 2014. The Forrester study emphasized two characteristics of this media form which make it attractive – an easy-to-measure return-on-investment profile and the availability of a number of display formats. A third strength of this ad format, geotargeting, was recently highlighted by BIA/Kelsey.

2009 brought big changes and big growth for the online video market. Consumers viewed 33.2 billion videos in December, generating a 132% increase over the same period in the previous year. Google continued to own the market with its YouTube property but Hulu moved into second place with 3% of the online video market. comScore statistics show that viewing online video is a widespread consumer activity with an online participation rate of 86.5%.

Most analysts and marketers know that younger consumers have typically been bigger Internet users than older consumers. Web use by younger consumers is nearly ubiquitous (93%) while adults over age 65 now have a usage rate of 65%. The bigger news, according to a Pew Internet and American Life Project report, is that the type of Internet use varies drastically by age group.

Members of the Inc. 500 companies surveyed by the Center for Marketing Research at the University of Massachusetts at Dartmouth are no strangers to the use of social media. Typically fast-growing and nimble, these firms have been at the forefront of social media use, compared to Fortune 500 companies, in the 3 years that the Center has published its annual study. Why then, did these firms decrease their usage rates of popular forms of social media in 2009 and what does this trend tell us about the future?

One of the earliest forms of online advertising, display, currently accounts for $7.8 billion in annual spending or about 30.4% of all online ad spending. Display advertising spending is predicted to reach $16.9 billion in 2014. At that point, the segment should still comprise about 30% of online ad spending according to Forrester Research.