2008 Web Marketing Predictions
Part One


  • Two ugly little secrets online businesses won’t tell
  • The three reasons why most online advertising fails
  • Why all of this is the best news for savvy entrepreneurs and copywriters ever
  • And more

Dear Business Builder,

But before we crack out our tarot cards and take a peek into the future of web marketing, let’s take a moment to see where this online thing has been so far …

1969 – Genesis: Al Gore singlehandedly invents the Internet. (Actually, it was called “ARPANET” and – surprise, surprise – Gore had nothing to do with it.)

The year we landed on the moon – and while Gore was busy graduating Harvard and enlisting in the Army – computers at UCLA, UC Santa Barbara, Stanford and the University of Utah were connected over conventional telephone lines. Harvard, MIT, Carnegie-Mellon and Case-Western Reserve joined in 1971.

1974-1983 – Web made Bombproof: U.S. Defense Department uses endlessly redundant networks and the technique of breaking messages into small packets to make the World Wide Web reliable.

1984-1988 – Civilian Experimentation: Dow Jones News Service, a few other civilian companies and a handful of educational institutions experiment; disseminating news and other information on the Web.

1989-93 – AOL years: The development of HTML code makes hyperlinking possible. The magic of linked pages makes the unlimited sharing of data easy. Massive numbers of new consumer-oriented sites begin to open their doors on the ‘net. AmericaOnline appears on the scene in 1989.

1994-2000 – The Yahoo! years: Yahoo appears in ’94 … Amazon and eBay in ’95 … Google in ’96.

Despite the fact that almost nobody’s making money online (Amazon reputed to be losing $5 per order shipped), Web mavens announce that the Internet has ended the business cycle. Recessions are declared “a thing of the past.”

Investors buy it; irrational exuberance, popular mania and the madness of crowds drives the tech-heavy Nasdaq from 500 to over 5000.

2000-2003 – Rude awakening: After seven years and hundreds of billions in private investment and little or no profits, investors begin to ask, “Where’s the beef?” Funding dries up … thousands of huge but stupid sites go broke. Nasdaq plunges nearly 80%.

2004-2006 – A new beginning: Survivors, new Internet companies and entrepreneurs develop new, profit-driven online models … iTunes and other profitable entertainment sites appear … social networking sites and Web 2.0 burst upon the scene.

Which brings us to 2007 …

Today, 70 percent of Americans – a whopping 211 million of us – use the Web on a regular basis. More than 19 percent of our homes, businesses and institutions (about 58 million locations) have broadband access which makes downloading huge files – music and movies, for example – quick and easy. American consumers will spend an estimated $98 billion online this year.

Plus …

Most Common Online
Consumer Activities

  • China has become the world’s second largest online market after the U.S., with more than 162 million Internet users. (Huge growth potential here: When the same percent of China’s 1.3 billion people use the web as Americans do, it will have 910 million users!)
  • Globally, nearly 1.2 billion people are online – about 20 percent of all the living souls on the planet – and another 150 million or so gain Internet access every year.
  • Around the world, web usage is now doubling every four years or so.
  • In 2007, the amount spent on online banner, PPC and Adwords advertising jumped 46% to an estimated $19 billion.
  • Web 2.0 – where every web user now has the power to easily disseminate his or her information, opinions, photos, videos and other information online – is revolutionizing the wired world

    The number of message boards, forums, blogs and video blogs is doubling every five months; more than quadrupling each year.

  • The rise of Voice Over Internet Protocol (VoIP) through Vonage, Skype and others makes audio and video communications cheap and even free (a very, very bad omen for Ma Bell and her babies – more on that in a minute).

Conclusions:

  1. Even now – 18 years since the advent of HTML – Web access and usage are still exploding worldwide.
  2. It’s only beginning. Only about 18% of the world is connected.
  3. The ways in which we use the Internet are changing – fast. The explosion of social networking sites, message boards, blogs & forums is consuming much of the time that was previously being spent in other ways online – including shopping.

OK – so the Internet is huge
and getting huger by the day.

And the ways we use the Web are changing.

But does anyone else notice something curious
about these statistics?

Now, I’d hazard a guess that this isn’t the first time you’ve seen these kinds of numbers. The media is lousy with breathless accounts of how massive the web is … how fast it’s growing … and even with predictions that the Internet will completely revolutionize the way we shop – or even put the brick and mortar world out of business entirely.

But let’s think some of these numbers through for a minute …

According to the U.S. government, about 211 million Americans are now online and spend $98 billion (ninety-eight thousand million dollars) a year to buy things (retail purchases) on the Web.

Sounds impressive when you say it fast – right?

But let’s take a moment to put some of those numbers into perspective …

First, divide the total amount of online retail sales by the number of U.S. web users and you’ll see: The average web denizen spends only $38.71 online per month – less than the cost of a single tank of gas. And that money is being spread out over millions of websites.

And second, for every retail dollar we consumers spend, only about two-and-one-half cents is spent online. The other 97.5 cents is spent in the real world.

We’re still talking chump change, here.

And frankly, as a person who has found and purchased a home … three or four flat-panel TVs … four or five cars … a garage-full of motorcycles … plus thousands of dollars-worth of computers, books, software, personal electronics, iTunes music and videos, clothing – and just about everything else you can name – online, I’m mystified.

After all – the Web is the world’s largest shopping mall. It offers infinite choice. It offers you what you want for far less than stores in the real world charge. You can buy everything you need easily. Instantly. Without leaving the comfort of your own home, fighting traffic snarls or fighting over a parking place.

But when I look at these numbers, I can’t help but think that if the Internet was a real mall in the real world, it would probably be that kind of seedy, depressing one across town that’s always so empty, you could shoot a cannon through it and not worry about hitting a single soul.

… So why aren’t we doing more
of our shopping online?

Hmmm – well, let’s see …

  1. There’s still lots of stuff you can’t get online. Like a tank of gas … or a carwash … or a Christmas tree … or a haircut … or dinner at a nice restaurant … or that gallon of milk, loaf of bread, dozen eggs, carton of smokes or bottle of Belvedere the wife asked you bring home with you today.
  2. There’s more stuff the web can’t deliver fast enough. Most things you buy online take a minimum of 24 hours to get to you. So if you want that wrapping paper and scotch tape so you can wrap your presents today, you’ll still have to hop in the car and zip on over to Wal-Mart.
  3. Some folks are still afraid to order online. They’re so spooked by stories of identity theft, there’s no way they’re going to give anyone their credit card numbers online.
  4. The Joy of Shopping. This is a huge one … in my humble opinion, the major reason why we still spend forty times more at brick-and-mortar establishments than we do online … and why I’m willing to bet dollars to donuts that the Internet will never, ever put stores in the real world out of business.

    The fact is, a lot of people (not me!) enjoy, even savor the experience of walking into a store … browsing through the racks … touching the products … maybe trying on a thing or two … and handing their cash, check or credit card to a real human being.

    And then there’s the whole mall experience – going with friends or family … seeing and being seen … stopping at a kiosk for a Latte’ or in the food court for a quick lunch … maybe taking in a movie … and winding up buying stuff you never intended to – just because it’s there and buying it made you feel good.

    For many consumers, no Internet store or mall will ever be able to rival that experience.

  5. Most online advertising sucks. Here’s another little tidbit to chew on …

    While the dollar value of retail purchases made online is rising by 22.5 percent a year …

    Internet companies are increasing their online advertising budgets more than twice that fast; by a whopping 46.5 percent per year. (And that doesn’t begin to include all the money that’s spent offline to advertise websites on TV, radio and the other media.)

Last year for example, online marketers spent about $13 billion on banner ads, float-ins, pop-ups and -unders, pay-per-click, AdSense and to rent e-mail lists. This year, they spent an estimated $19 billion – a $6 billion increase.

But that extra $6 billion yielded only $22 billion in additional revenues. Deduct product and operating costs and, for many companies, that’s pretty much a wash. In most cases, worse.

Needless to say, this situation cannot continue indefinitely. Either online marketers learn how to advertise in ways that produce a much, much greater return on investment, or the growth in online ad expenditures is going to slow to a halt; or even reverse itself.

That, of course, would be catastrophic for the Internet – not to mention for investors who own stock in online companies that rely on ad revenue to turn a profit.

Now, let me ask you a question: Do you think online marketers know their advertising is failing them? Do you think they’re aware that the dollars they’re spending to advertise their sites are not coming back to them in increased bottom-line profits?

You’re darn-tootin’ they do. Are they telling this ugly little secret publicly? Nope. But you can bet it’s about all they’re talking about at their weekly “Why aren’t we growing our online profits?” meetings.

And don’t you think they’d be willing to pay some smart person (like you) a king’s ransom if you could solve that not-so-little problem for them?

Heck, yeah!

So why does most Internet advertising do so poorly?

Well for one thing, the strategy most online marketers are using is all wrong. So the cost of driving a single prospect to a website is sky-high and rising.

Worse, most websites utterly fail to cause prospects to stick around long enough to come to trust, depend on and buy from them.

And worst of all, the copy on the vast majority of today’s websites is so brain-dead awful, only a tiny fraction of the handful who do stick – who return to the website often – spend anywhere near the amount of money they otherwise would.

This of course, is terrible news for legions of sites. And it’s the best news possible for marketing consultants, copywriters and entrepreneurs who learn how to do it right.

And that’s precisely what next week’s issue is all about.

And over the next few weeks, we’ll take a look at even more phenomenal new opportunities you’ll see online in 2008 – so stay tuned …

Yours for Bigger Winners, More Often,
Clayton Makepeace Signature
Clayton Makepeace
Publisher & Editor
THE TOTAL PACKAGE

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10 Responses to 2008 Web Marketing Predictions
Part One

  1. CATHERINE ANDERSEN says:

    HOW TO I GET TRAFFIC TO MY SITE W/LITTLE MONETARY MEANS :cry

  2. Tammy says:

    Hey Clayton,

    Your article had my eyeballs glued to the screen a usual.
    Looking forward to the next part.
    Merry Christmas,
    Tammy

  3. Robert says:

    Clayton, lot\’s of great, useful information in your article…as always!
    I\’m looking forward to your insight regarding the phenomenal new opportunities coming online for 2008.

  4. Sherry says:

    I STARTED TWO WEB SITE BUINESS\’S THAT AS GONE NOWERE I\’AM SURE I JUST DON\’T KNOW WHAT I\’AM DOING WRONG ONE WEBSITE I PAYED THOUSANDS OF DOLLARS NOW I\’AM BROKE AND DON\’T HOW MAKE THIS WORK FOR ME I\’AM JUST LOST :cry

  5. Shobha Varkey says:

    DEAR ALL

    WELL I THINK CLAYTON MAKES ONE THINK! SO WHAT DO WE DO? HOW DO WE INCREASE THE PERCENTAGE GROWTH OF PEOPLE SHOPPING ON THE INTERNET, GET A PIECE OF THE ACTION AND MAKE OUR CUT OF THE PIE?

    HOW DO WE ADVERTISE TO CATCH EVERYONE\’S EYE?

    LOOKS FORWARD TO SOME STRAIGHT ANSWERS.

    LOVE AND MERRY X\’MAS

    SHOBHA
    AUSTRALIA :? :cry :( :upset :zzz :sigh

  6. DK Fynn says:

    Clayton, Michel Fortin agrees with you. Check out his[URL=http://www.michelfortin.com/three-hot-trends-to-watch-out-for/]Three Hot Trends For 2008[/URL]

    Great! I\’m on the right track with good copywriting.

    Michel\’s post talked about the rising Asian and newbie markets.

    If you want to see an informational video about thrid world trends, [URL=http://www.ted.com/index.php/talks/view/id/92]here\’s one.[/URL]

  7. DK Fynn says:

    Woops. Sorry for the erroneous title of that last post. I thought the form asked for the title of my site.

  8. Franck says:

    Hi Clayton,

    I visited your blog through a link an Michels\\\’ blog, and I\\\’m glad I did!

    This is one of the best articles (or the best) I\\\’ve read on 2008 – We are just getting started -

    Wow! I like this blog, I add you to my list of the 5 best blogs of the net…. now 6.

    Waiting for your next article.

  9. joycelorenza says:

    Eight predictions for marketing in 2008

            There will be an ongoing emphasis on "engagement" measures.
            More "brands" will become "Category Placeholders."
            Companies will have to move from saying they’re"Green" to actually being"Emerald City Green."
            Media planning will become more touch point focused and personalized.
            Behavior will (finally) trump attitude.
            Consumer expectations will once more grow.
            Personal health management will impact brand engagement and loyalty.
            Innovation and loyalty will matter more.
    —————————————
    joycelorenza

    <a href="http://www.drivenwide.com" rel="dofollow">Email Marketing</a>

  10. Pingback: marketing consultants

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