Read what the year ahead will have in store - including a boom in Web design, viral marketing, interactive and online publishing.

After years of hibernation, interactive design is set to boom in 2006. Digit talked to experts in Web design, viral marketing, interactive TV, and online publishing to find out what’s in store for the year ahead.

Liz Citron
Chairperson, BIMA

The challenges ahead in 2006?

As online consumers become more sophisticated, the expectation for digital experiences to mirror real life is getting more noticeable.

Retailers seem to be blind-sided by price comparison sites that in partnership with their customers offer an old-fashioned experience, on a modern platform by providing customer reviews and shoppers forums to help buyers make the right decision. Just like your local shop used to.

My favourite piece of recent research revealed that people don’t want to watch TV on their phones.

How obvious was that? As an industry, we have to get back in touch with our human side otherwise our collective output will be something like those innovations catalogues with strange gadgets people only need once a year.

The market potential?

The market, especially on the Web side, is strong. There is a definite shift of funding to online. Mobile is certainly flourishing, possibly not from such a secure basis as the Internet work, more as a bit of R&D/let’s-keep-up type of perspective. Gambling is booming, as is gaming generally, both facilitated by increased broadband penetration.

Where will there be growth opportunities?

There are glaring production skills deficits in iTV and there are certainly opportunities for creative agencies to apply their talents to a lateral platform. Online gambling is not only looking to explode but I think there will be lessons the rest of us will cherry pick from that industry. As always, vice tends to lead the way in technology.

Where are people missing a trick?

People are still not challenging themselves enough. You see a lot of stuff out there that is just OK. The ideas are usually good but the follow through is complacent.

What’s around the corner?

I think that the trend for self publishing can only increase – we only have to look at the way the Internet is used by Korean teens to see the way forward there. Every one of them is a master publisher and the online communities are as tightly woven as Victorian English villages. We will get there.

Alexandra White, Director, UK
Association of Online Publishers (AOP)

The challenges ahead in 2006?

In an age of media saturation and fragmentation, online publishers will need to work hard to maintain cut-through to their audiences, and in turn, consumers and business users will place more importance than ever on the value of trusted information sources, albeit available in an on- demand, technology-neutral, and personalized form.

Where will there be growth opportunities?

The growth of broadband and mobile has created new opportunities for richer content and enhanced relationships between Web sites, their content, and their audiences, which quality content providers such as AOP members will be best placed to capitalize on.

New products and services such as iMode will take relationships between publishers and operators to a new level where publishers can demand greater recognition for the content they provide.

Views on innovation?

The innovations in the broadcast industry surrounding TV over the Internet will be complemented by partnerships with traditionally text-based publishers as the latter seek to provide more audio and video content for their online audiences.

Agencies and advertisers will also start to make more of the opportunities afforded to them by broadband advertising online.

What will the market look like this time next year?

The current ‘land grab’ frenzy should calm down and consolidate in 2006, as media owners invest in growing the new online businesses they have acquired. Targeting techniques and technologies will come into play as media owners seek to provide their advertisers with even greater value, with niche players seeing an increased interest from those aiming to target particular markets.

There will be a move away from mass-market advertising online towards more efficient targeting based on quality and loyalty of audience. Finally, more online publishers will seek to draw in opinion and expertise from their own readers, creating communities around their content. Many will start to offer users their own blogs within a branded content environment.

Similarly, consumer uptake of RSS will be reflected in branded RSS readers and the introduction of new advertising formats.

Ashley Friedlein,
Ceo, E-Consultancy

The challenges ahead in 2006?

The level of investment in digital channels has increased significantly in 2005 but still does not accurately reflect the impact of the Internet and broadband on media consumption and shopping habits.

The Internet is catching up, but online advertising accounts for only 5.8 per cent of overall ad spend, according to the Internet Advertising Bureau (IAB). There is still a long way to go given that the Internet represents a quarter of the average broadband user’s media time.

UK digital agencies need to work hard next year to consolidate on what has been a positive 2005. Our recently published Agency Rate Card and Business Confidence Survey found that agency revenues, on average, are up a massive 31 per cent this year compared to 2004.

There has been an 11 per cent increase in daily rate card fees since the 2003 rate card survey. However, revenue and rate card increases are not translating into bigger profit margins for many agencies largely because of significant wage inflation across the industry.

The market potential?

The use of display advertising for brand-building will also grow significantly next year as the largest advertisers set aside more money for online as part of integrated cross-media campaigns.

The possibilities of rich media and increased broadband penetration mean that marketers are coming up with more innovative and engaging campaigns that will continue to spur other brands into action.

What will the market look like this time next year?

Agencies will continue to prosper in 2006. According to our Business Confidence survey, the overwhelming majority of agency respondents are optimistic for their businesses over the next 12 months.

Of those surveyed, 94 per cent said they were either ‘very optimistic’ or ‘quite optimistic’ about their prospects. There will be more industry consolidation of the type which has already seen the acquisitions of Glue by Aegis, Modem Media by Digitas and Wheel by LB Icon.

Nik Margolis,
Managing Director, Squeeze Digital

The challenges ahead in 2006?

My overriding concern for 2006 is that more brands will evaluate email badly and defer its adoption as a marketing channel indefinitely. The proliferation of cheap and cheerful ASP solutions, whereby anyone can key in some copy and upload a few images and data sets to deploy an email campaign prove this beyond doubt.

Most people will recognize these weekly or monthly emails as those they might instantly delete when they arrive in their inbox. But the very fact that so many people opt-in to such programs prove why they should be recognized as so valuable.

While the rewards are there to be reaped, the industry needs to invest in strategy, planning, and creative. Trying to manage email driven marketing programs in-house, outsourcing such programs to agencies who do not inherently understand both digital and direct marketing, is a myopic move which will only serve to produce an unrealistic evaluation of email’s true marketing potential.

The market potential?

In 2006 there will be many revenue opportunities afforded to brands from the Internet. Whether it be demand creation, lead generation, retention, acquisition, up-selling, cross-selling, or branding, digital has a significant role to play. Personally, I believe that email marketing is the one marketing strategy that offers the greatest revenue opportunity.

Views on innovation - What’s around the corner?

In 2006, early adopters of email as a strategic direct marketing tool will be reaping the rewards. FilmFour is one such brand to have recognized email’s ability in retention and anti-attrition terms, and their weekly email newsletters look and feel like a sophisticated piece of direct marketing, not ‘email’, and that, really, is the trick.

What will the market look like this time next year?

I hope 2006 sees more strategic use of sign-up devices on Web sites, pages that don’t just capture email addresses, but go further to ask more of those opting in. More importantly, I hope to see this data actually driving the content of communications, and email marketing stepping up to the plate as the true heir of direct marketing.

Rick Palmer,
Managing Director, Bloc Media

Where will there be growth opportunities?

The emergence of richer online experiences, broadband proliferation and the advancement in video streaming and Flash integration will allow for more immersive, video-rich environments in 2006.

Revenue and growth opportunities exist in exploiting the enhanced rich media channels available through the Web and developing stronger and more impactful digital marketing activities with closer tie-ins to ATL and overall integrated marketing strategies.

The advancement in mobile Internet and developments with handheld devices like the Sony PSP will see some interesting revenue opportunities arise this coming year.

Where are people missing a trick?

Sony’s PSP is going to be a big winner this year, with millions of consumers hungry for richer content experiences and video media to download to their handhelds.

Internet TV will also become more prominent this year as broadband and Flash video integration see some high impact opportunities for early adopters.

What’s around the corner?

Flash 8. Video. Broadband. Super rich media. Interactive video. Intelligent loading and polite banner technologies. Digital advertising is going to get pretty intelligent in 2006 and consumers will enjoy far less intrusive forms of advertising with higher production values, better integration into their Web browsing experience and more relevant offerings due to intelligent search technologies and increased production budgets.

What will the market look like this time next year?

I think there will be further moves into consolidation as big full service agencies look to strengthen their client offerings – so expect to see more takeovers in 2006. Expect strong growth in a few of the small to medium-sized digital agencies as they strengthen their position due to market buoyancy, increased client spend and confidence in the future of online.

There will also be an overall increase in staff in 2006 with specialists in marketing, search, digital advertising, and video production becoming more sought after. I also expect to see more film and video production specialists moving into the marketplace and existing digital agencies strengthening their offering in this area as video plays its part in online.

Matthew Tod,
CEO, Logan Tod

The market potential?

Most companies will wake up to the fact that 50 per cent of their online marketing expenditure is wasted due to poor site design.

Where are people missing a trick?

In 2005 we have been assessing the effectiveness of Web sites at converting clicks into sales or applications across a broad range of companies. What emerges is a pattern of wastage due to the failure of Web sites to engage visitors the moment that they arrive on a site.

This visitor behaviour can be measured with most sophisticated Web analytics packages and what you see is a rising number of visits that last for just one page.

These visits, referred to as Single Access visits, can often be traced back to visitors responding to Google Adwords or banner campaigns. It is not uncommon to see 80 per cent of visitors who respond to a campaign looking at one page only and leaving the site, and consequently a huge
waste of money.

Sean Singleton,
Managing Director, Skive Creative

The challenges ahead in 2006?

The key challenge for viral marketing and interactive games is to provide better research on their effectiveness. Skive regularly produces games for brands that deliver millions of plays with tens of thousands of data-captured email addresses, however, we are now working with other partners as we need to measure their effectiveness.

Millions of plays is undoubtedly an incredibly cost efficient way of raising brand awareness and profile, but how many of those people are within your target demographic?

Another challenge is to always be delivering better campaigns. This is not a static market: more people now have broadband, there are newer and more powerful computers on the market and software companies like Macromedia release better versions of their products.

This means the consumer can receive data faster, and demand bigger, better and more inventive interactive content.

What’s around the corner?

I believe the next big area will be peer-to-peer gaming. Runescape and Robot Rage on Miniclip get millions of plays though neither is branded, and executions like Globulus.com or ContiBackFour on Contifanworld.com have created successful communities of regular users.

These require bigger budgets up front, which means faith in the creative concept, but the reward for brands and exposure could be huge. Mobile branded gaming is another area that is undoubtedly growing.

What will the market look like this time next year?

A few years ago Shockwave was a dirty word. Now, thanks in part to faster connection speeds, no one bats an eyelid at a small plug-in download. Flash 8 and 3D Shockwave allow a much richer user experience.

This last year we’ve seen far more integration of Flash video in content such as eBooker’s The Greatest Show is Earth and the Lost microsite on Channel 4, and this will continue to flourish.

Andrew Howells,
Partner, Zip TV

The challenges ahead in 2006?

Despite the fact that iTV advertising is now well established, especially in certain categories such as automotive, there is still a massive educational role to be done in others, especially packaged goods.

Typical with any emerging media, advertisers and their agencies always cite budget as a major barrier. Such value decisions have little or no connection with real campaign evidence.

That said, prices have been under pressure in every part of the iTV foodchain – creative, response, bandwidth, apart from the media premiums charged by broadcasters. There is still a creative challenge.

Advertisers need to be brave enough to develop campaigns that encourage viewers to interact. Results do support this approach. Will there be other advertisers brave enough to explore different TV marketing models beyond the 30-second spot?

Will there be any broadcasters brave enough to explore different TV marketing models?

The market potential?

If the question is will iTV advertising grow in 2006, the answer is a resounding Yes. It’s a World Cup year after all. Will it be exponential? No. There is potential within the current iTV offer.

Much is down to brave clients and their agencies developing more integrated and engaging storylines. The biggest potential, however, lies elsewhere, away from the clutches of the Sky platform.

Where are people missing a trick?

Believing that the 30 second spot is the only way to advertise on TV.

What’s around the corner?

I’d expect to see Sky continue with their aggressive marketing policy, probably extending this to offer existing customers a free upgrade.

IPTV is much discussed and will be becoming a hotter topic in 2006. We should see the HomeChoice network expand beyond the M25 and the launch of two other players in this space – BT and Wanadoo.

What will the market look like this time next year?

Sky will continue to dominate the iTV advertising space. Cable still won’t have got its act together and Freeview will overtake Sky in terms of total number of boxes. Freeview will also become more attractive to new consumers when BT launches its IPTV service.

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My favourite piece of recent research revealed that people don’t want to watch TV on their phones. How obvious was that? As an industry, we have to get in touch with our human side. <BR>
Liz Citron, Chairperson, BIMA
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