7 Branding Trends for 2008 You Won't See Anywhere Else

What are the seven branding trends that will affect you most in 2008?

ProfitBrand Trend #1. Next era of online advertising rises

"Have you ever clicked your mouse right here? … You will."

That was the world's first banner ad  (as well as one of the most prophetic), which kicked off the first era of online advertising. The AT&T ad ran on October 25, 1994, on the HotWired site.

This long-lasting era of online advertising has been substantially enhanced through the years to counter the slow glazing of consumer eyes, and now offers a variety of sizes, animation and tracking. Such banner or display ads account for about one-third of online advertising revenues, despite the fact that the click-through rates have declined dramatically from the early years. However, video advertising (which includes video search and mobile TV) is breathing new life into this genre, and will certainly capture many more dollars next year.

While the first era will be with us for a long time, the second era – symbolized by pop-ups and pop-unders -- is hopefully on its last legs. Surely, camera company X10  and the travel site Orbitz  deserve places in Advertising's Hall of Shame for their Internet carpet-bombing. (However, beware of "pop-up audio," an emerging format that forces visitors to hear an entire ad without being able to turn it off).  Revenue figures are hard to come by, but one estimate claims 20% of the $9.5 billion spent on casino and porn advertising goes to pop-ups and pop-unders.

The third era is sucking the lifeblood from newspapers. Online classified advertising, best symbolized by Craigslist  and also-rans like eBay's kijiji , captures at least $50 million annually of high-profit advertising that used to go newspapers. It is also a dagger poised at the heart of MLS, the real estate monopoly for brokers and agents. Classified ads account for about 17% of total online advertising, which various research firms estimate dto total $17-$20 billion in 2007.

The next era is, of course, search advertising, with more than 40% of the Internet advertising pie. The value of search advertising comes both from the ability to target someone interested in an offering and pay for performance. As a result, the average cost of a sale for paid search is $26.75 per order, compared to $71.89 for a banner ad. No wonder US advertisers spent $8.3 billion on online advertising in 2007, up from $7 billion in 2006.

This era will explode if Google, which controls an estimated 70-85% of the paid-search advertising market, completes its acquisition of DoubleClick. Imagine what marketers will do with the offspring of the marriage of the largest search query database with the world's largest online behavioural database.

The latest era, now just out of the blocks, is social advertising, where advertisers will be able to piggyback on the social interactions of online users.  Already, movies, books and companies have been putting up profile pages on MySpace, and then accepting "friend requests" for advance or "insider" information. Facebook users can treat brands as their "friends," and each online interaction with the brand can be communicated to their own circle of friends. USAToday achieved an amazing 380% increase in new reader registrations when it added social media services such as discussion forums, story recommendations, reviews and more. A companion trend is social shopping, which involves sharing shopping wish lists, experiences and purchase tracking.

ProfitBrand Trend #2: Google's OpenSocial

The Internet is becoming too much like the real world. Everybody is part of a different community, with very little interaction among the Facebook, MySpace, LinkedIn, Orkut, Ryze and almost every other online community of interest. For corporations, manufacturer employees find it hard to link with suppliers, and everyone feels six degrees away from customers. This both makes it harder for communities to attract new members, complicates our desire to enjoy the best of each community and puts barriers between customer and supply chain relationships.

Google has launched a potential solution to this Babel called OpenSocial. This Rosetta Stone for all online communities will expand business and personal networks, enhance peer-to-peer branding and give companies greater insights into customers. In technical terms, OpenSocial is a set of web APIs for building social applications. (Facebook and LinkedIn have also developed  social networking APIs.) The most immediate effect will be to build bridges across the various social Internet communities so that, for example, popular Facebook applications can run on other sites. 

But, much more important, OpenSocial will help brands build and expand bridges to customers. That is one reason Salesforce and Oracle have submitted citizenship papers. One branding application will be expanding the capability for customers to help customers. This is often the best form of customer support, as Cisco has long demonstrated. Think about getting an answer from someone who has faced the same problem as you rather than a script poorly read by a drone in a distant land. Customer co-creation, especially in the area of design, is improved because customers can build on the comments or even work of others.  Unplanned product usage – like the way electricians used tape to cover scrapes before band-aids were invented -- that opens up new markets can be identified earlier. With appropriate permissions (and this is an uncharted brand frontier), companies could share customers with complementary needs, such as a universities and textbook companies.

Today, brands strive to break into markets.  If OpenSocial gets widely adopted, brands will instead seek to break into communities.

ProfitBrand Trend #3: The handphone opens up

The handphone is the Swiss army knife of your life. It can connect your life via voice, text messaging (SMS), and email. It can track your life by storing contacts, calendars and calls. It can even track you, thanks to GPS.

But in the US, the handphone is more like those tiny Swiss army knives that attaches to your key ring. Handphones in the US are a generation behind those In Europe and in Asia, with useful features like call timing crippled by carriers. Switching carriers can be more painful than divorce even when your carrier is the partner from hell. Roaming fees can bankrupt Bill Gates.

Compare this to the rest of the world. In many countries in Europe and Asia, a wave of the handset can pay for subways, coffee and newspapers. (Technically, that's because of a very interesting development called NFC, or "near-field communications.)  Carriers can be switched by just inserting a SIM card. In Europe, roaming fees are capped at 0.49 euros (about $0.73).

But just as the closed worlds of CompuServe and AOL gave way to the Internet, MCIMail got buried by email, MCI broke the AT&T monopoly, and the open sourceFirefox is eating proprietary Internet Explorer's lunch, Americans are finally starting to strip off  telecommunications straightjackets. Hackers quickly learned how to break the iPhone. Google has announced plans for a phone platform called "Android" that will facilitate social networking, video and faster, cheaper applications. And before long, the US government will hopefully be auctioning off spectrum that will enable entrepreneurs to build specialty, open networks without current carrier constraints and failings.

Android and the new spectrum have the serious potential to transform handphones into advanced work and personal tools in the same way that broadband and the browser transformed the World Wide Web. The opportunities for branding are immense. High-speed video on larger screens. Easier content sharing among networks (think YouTube meets chat). Barcodes on ads to enable immediate information access. User reviews on restaurants you are walking past.  Multiplayer games. And that's without even thinking hard….

And what about privacy? The howls of outrage will disappear the same way that one-time concerns about advertising on the Internet faded away. Fears about keeping personal matters personal fade with every FaceBook entry and cookie dropped on a hard drive. In the digital age, when privacy rights and property (data and intellectual) rights conflict, privacy will lose every time.

ProfitBrand Trend #4: Crowd sourcing and open source branding

One of the first examples of crowd sourcing – using the public to solve a problem – was in 1714 when the British Government offered a huge bounty of up to £20,000 to anyone that could accurately determine longitude. Today, crowd sourcing is becoming an integral part of open source branding, which provides the strategic framework for viral marketing, word-of-mouth and reputation management. Consisting of asking customers or other broad audience to solve a problem carry out a task, crowd sourcing represents the ultimate form of brand engagement.

Examples of crowd sourcing and brand building abound. Threadless is an Internet-based clothing retailer that sells T-shirts designed and rated by consumers.  Google depends on user-generated links to determine site popularity. The popularity of the Firefox brand owes much of its success to its continual improvements by users, and its ability to incorporate freelance extensions that extend functionality. L'Oreal, Sony and Toyota have used crowdsourcing to create their best ads. Soft drink company Mountain Dew has "Dewmocracy," which invites soft drink lovers to "shape the flavor, color, name, logo, and design of the next Mountain Dew." American Express is asking card members to identify and rank projects that will receive corporate funding.

Advantages of crowd sourcing are numerous. It lowers the risk of product introductions, since potential buyers have a stake in the outcome. Messaging stands a greater chance of being relevant, dynamic and authentic. And what better way to engage customers in a brand than to give them a hand in its creation?

ProfitBrand Trend #5: Widgetization of the Web

Need a knife? Or do you need chef's knife, carving knife, paring knife, serrated knife, utility knife, boning knife, filet knife, cleaver knife, santo ku knife, steak knife, mincing knife, oyster knife, de vein knife, clam knife, grapefruit knife, cheese knife, chestnut knife, tourne knife, peeling knife or one of dozens of other knives?

In many ways, widgets are like specialty knives. They do but one thing, but do it really, really well. Widgets generally provide specialized information, like package tracking or a traffic updates. Widgets can do everything from hormonal tracking to providing assistance with saying the rosary. (Widget catalogues are available at Widgetgallery, Snipperoo, Widgetbox and other sites.) Widgets are bolstering social media applications like MySpace and TypePad, and YouTube, Slide and other sites receive much of their traffic from widgets. For example, a YouTube video becomes a widget when it is added to a non-YouTube page. In many cases, widgets drive more traffic to sites than search engines do. Ultimately, widgets may write the obituary for portals.

Widgets come in three categories:

• Content: Provide information, such as news, weather or stock tracking
• Utility: Provide functionality, such as search, maps and chat
• Personalization:  Enable customization, such as countdown clocks, music, photos, etc.

Widgets can exist on a desktop, Web site, aggregation site like Pageflakes or Netvibes, or even be incorporated into an ad. Widgets enable both engagement and affiliation. For example, Purina has a widget that shows the latest pet-related news. With a widget from Adidas, consumers can share inspirational stories based on its "What Impossible Is" campaign, as well as shop for sneakers. Google has widget-based advertising called Gadget Ads, plus a home page that can be customized with widgets called iGoogle. Widgets can link customers to companies more closely. Widgets can communicate price changes, deliveries, new products and other information that must be frequently updated.

Like other aspects of digital branding, measurement is possible with download tracking, RSS feed volume and widget-tracking services from comScore. Site views are an additional metric; HotOrNot's Facebook widget doubled traffic at the people-rating site. In fact, look for "widget branding" to become the marketing buzzword of 2008, and "blidgets" – widget versions of blogs that can help broadly disseminate blog content– to become Blogs 2.0.

ProfitBrand Trend #6: Out-of-home advertising

The oldest form of advertising is getting a facelift.

The first ad was a primitive billboard scratched on a rock – "home-cooked brontosaurus" or its equivalent. For decades, outdoor, or "out-of-home" advertising didn't offer much more than that first billboard. But new visual, technological and measurement technologies, combined with advances in creative engagement, will make out-of-home advertising the rising star of 2008.

The outdoor advertising industry boasts about its reach and low-cost. "More people can view one particular billboard than the Super Bowl!" says the Outdoor Advertising Association of America. Media Dynamics says the cost of a TV impression is $15.20, while a billboard impression is $2.15.  But the claim of superb reach and low cost has been undercut by outdoor advertising's lack of measurement. Traditional traffic counts or diaries suffer numerous weaknesses. As a result, in most countries, outdoor advertising accounts for less than 5% of total ad spend.

But that is changing. The out-of-home advertising marketing expanded at a 10.6% clip in 2006, compared to overall advertising industry expansion of 6.4%, according to PQ Media. Global Industry Analysts projects that the world market for out-of-home advertising will reach $30.4 billon by 2010. Such growth will be fueled by four changes:

• New places: White spaces will be increasingly replaced by ad spaces. Already,  ads are appearing on airline tray tables and overhead bins. Arenas and malls  sport ads on escalator handrails and steps.  But the biggest new place may be inside your head. Soft drink machines, billboards and entertainment complexes are already using "hypersonic advertising." Walk by the billboard, and hear an ad no one else can hear, such as the gentle fizz of a soft drink being poured over ice. Essentially, hypersonic ads used a concentrated beam of sound that essentially "vibrates" your skull, giving you the illusion that you are hearing the message in your mind. Unlike other advertising, it is not something you can turn off or tune out. Inevitably, this will be combined with "passive analysis," which analyzes video feeds in real-time to determine the age and gender of passers-by, to deliver tailored audio advertising. The famous scene in "Minority Report" definitely wasn't science fiction.
  

• Instant ads: Also expect to see the spread of digital billboards, or LCD screens that can change ads instantly. That's a big advance over classic billboards, which take weeks or even months to change. Digital billboards are naturally captivating, plus consumers can't change the channel or hit the off switch. Digital billboards are part of the ads-everywhere explosion aimed at captive markets, such as retail TV, digital in-store merchandising, and "employee TV" (the latest tool of internal branding).

• Custom ads: Auto manufacturer Mini Cooper is experimenting with giving Mini drivers an RFID keyfob, which can then be programmed with a custom message. When the driver approaches an RFID-activated billboard, the custom message lights up. Who isn't going to look at a billboard with their name up in lights?

• Better measurement: Another advance is GPS technology, the guide-in-the-sky that is making maps obsolete. With traditional out-of-home advertising, calculating the value of those seeing the ads was dependent on methodologies with as much validity as "positioning." But travel and viewing patterns can now be tracked with GPS technology. For example, Nielsen Media Research claims its pager-sized GPS devices  in South Africa, Chicago, Los Angeles and Singapore can deliver "a reliable, people-based measurement system that delivers true reach, frequency and ratings data, complete with audience numbers and demographic breaks." GPS also helps track the progress of truck- or bus-side advertising through various neighborhoods. The digital advertising can automatically change messages depending on location. The GPS tracking information is later correlated with sales to help determine effectiveness.

ProfitBrand Trend #7: Rise of Islamic brands

Two recent headlines: The investment arm of the UAE government has taken an 8% stake in chip manufacturer AMD. Dubai Aerospace purchased 200 planes worth US$27.2 billion. And this is on top of other business news from the Middle East. At 555 meters, the Burj Dubai is the world's tallest skyscraper (and it's not even finished yet!). Dubai Internet City is one of the world's largest technological centers. About 25% of the world's construction cranes are in Dubai, completing $200 billion in projects. And on it goes…

Although Muslims make up approximately 20% of the world's population, and are as well known as the Japanese for their affinity for luxury brands, there are no Islamic brands on Interbrand's list of international brands. But backed by the increasing economic clout of the Middle East and Muslims worldwide, plus increasing marketing sophistication, Islamic brands will inevitably emerge, especially in the areas of food, finance, transportation and telecommunications. Potential candidates include Emaar, Genting, Mobile Telecommunications Company, Vestel, Saad Group and, of course, the rising star of the airline world, Emirates. Additionally, look for Western brands to start incorporating Sharia compliance into their branding, and looking at their advertising and messaging with a more culturally sensitive eye. This is especially true for banks, since Islamic finance is the fastest-growing area of banking.

Agree? Disagree? Are there other branding trends? Comments, please!

Comments

good points, all!

i would also add the following 3 key trends for brands in 2008:

1. Social search and Search 2.0

SOCIAL SEARCH

social search will emerge as an exciting and useful trend in 2008. the idea behind social search is that an information seeker can be presented with information that is made even more relevant by a combination of the terms the seeker is searching for and recommended and/or similar search results of friends and/or people who have similar interests and/or profiles to the searcher.

one notable early stumble in social search was the recent launch of wikia (http://alpha.search.wikia.com/), which got poor reviews in techcrunch (http://www.techcrunch.com/2008/01/06/wikia-search-is-a-complete-letdown/). granted, this is just the alpha launch of wikia, so surely improvements are on the way. however, i'm not sure i'm comfortable with wikia's mechanics.

the social search startup i'm excited about is Snagsta (http://www.snagsta.com) with the provocative tagline "helping you find the things google can't". snagsta's approach is totally different from wikia's and revolves around the idea of people in the snagsta community sharing lists of their most favorite/least favorite things in any conceivable category.

snagsta.com hasn't launched yet but the cheeky pre-alpha website is available at http://www.snagsta.com. the word on the street is that snagsta will be going live very soon. i can't wait to try out it.

SEARCH 2.0

Google's recent decision to list non-text media such as videos, maps, etc. in search engine results pages (SERPs) provides brands with new opportunities to dominate search engine results by leveraging brand-related content in a variety of social networking properties such as youtube (and many others). no longer is trying to get a single web page of a website listed at the top of the SERPs going to be adequate. the opportunity now exists to dominate multiple listings on multiple top SERP results. this is a significant, exciting first mover opportunity in 2008 that brands must grab NOW. if not, they may end up being buried beneath numerous search engine results of competing brands.

2. Social graph filtering

one of the troubling things about sites like facebook (which i like very much, by the way) is that all our activities, messages, etc. are viewable and "commentable" by our entire group of friends. in reality, we move in separate circles--business, family, high school friends, college friends, religious/spiritual groups, etc. Surely there are some overlaps but we don't always want every member of every circle to see everything we've been getting up to!

new social media sites like http://www.gotacess.com allow members to define social circles and provide limits to which type of information can be accessed by different people in different social circles. maybe facebook and other social networking sites will follow suit.

the benefit for brands? i think this social graph filtering capabilities will result in more people using social networking sites more often and posting even more relevant content on them. this is sure to result in more targeted and trusted community building opportunities as well as additional targeted advertising opportunities for brands.

3. Eco-friendliness

al gore's nobel prize for his work in the area of highlighting global warming has further elevated eco-awareness. Brands that exploit this trend are sure to benefit:

+ corporate social responsibility (CSR) programs that highlight a company's "green-ness" in areas such as energy consumption/manufacturing processes/construction materials/waste recycling at the company's offices/factories/etc., green-ness of a company's partners such as component suppliers/distributors/alliance partners/etc., support of green charities and promotion of environment-related programs, etc.

in malaysia, for example, the kuala lumpur stock exchange now requires every listed company to report on their CSR status (in all areas--not just environment-related matters). top and bottom performers are highlighted publicly.

+ use of green products and services as a status symbol: consumers are now proud to be seen driving in a car that is clearly recognised as a hybrid, for example.

jeff zweig
chief guru

web guru asia - digital marketing specialists
http://www.webguruasia.com
kuala lumpur - hong kong - bangkok - singapore

[Stephen P, Harris]

Nick,
One wonders when there will be an advertising backlash. Tivo is helping many skip past tv ads - and there is something called Banner Blindness. This affliction is basically a trend where people do not see the banner ads on a web site - looking past it. Maybe this becomes a form of subliminal ads - we don't see it but it is still seen.

I speak with many entrepenuers that are looking to build social websites where advertising will be their revenue model. How much advertising can we take? When will we say no to all this bombardment - to the denigration of the advertisers brand? If I see one more NetFlix pop over and under, I will... scream.

Or are we programmed to accept advertising...

Search will still be important and vital. I haven't opened a paper based Yellow Pages book in years. Yet I Google every day.

I agree that mobile will be a vital segment in 2008 and beyond - but please no ads on my phone! It will or can be a great faciliator. I already have GPS on my Blackberry - and look forward to other conveniences.

As someone close to the online market - there are so many vehicles and platforms... there are widgets and very niche start-up companies... it keeps things very interesting... but its also quite overwhelming at times. I thought the internet age was suppose to give us more freedom, improve our work/play life... I am still working 80 hours a week!!!!

Stephen P. Harris
www.stephen-harris.com
www.think-ebiz.com