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Big Trends (Hint: Mobile) Emerging In Online Advertising's Next Frontiers

One of the most competitive and interesting sports in reporting on what’s happening in the online world is the ongoing game of predicting the future. Just as we’re seeing regime change in North Africa and the Middle East, it looks as if we’re experiencing another tectonic shift in the universe of online ads.

I spent the past couple of days at Borrell Associates Local Online Advertising Conference in New York City. This event was primarily focused on strategies and tactics that executives from traditional media companies should be looking at to survive and thrive in the increasingly competitive “local” space—but offered some interesting insights for all online marketers, old and new, small and large alike.

So, what’s happening?

First, mobile advertising has not just finally “arrived”—it is growing at comparable rates to the adoption of smart phones and pads. We’re talking at least doubling every year for the next five years, with mobile actually becoming the dominant mode of online advertising by 2015. Put another way, that means mobile ads will grow from about a 15% share today to more than 60% in 2015, according to Gordon Borrell, CEO of Borrell Associates.

Hype? I don’t think so. Borrell has a consistent track record of being right on trends—and being conservative, relative to other market researchers.

Second, the concept of “local” as a meaningful way to segment audiences is gradually becoming obsolete, as mobile devices, which make location implicit in all online activities, have nudged personal computers onto the same track to oblivion as microcomputers and mainframes, back when the PC “revolution” swept the older technology away.

And finally, the catastrophic losses experienced by traditional media may have—at last!—plateaued, as the so-called “dinosaurs” (newspapers, radio and television and other offline media) have finally stopped panicking and are experimenting with innovative models that have not only stanched the revenue bleeding but are also back to doing what they always did—finding a sustainable revenue stream to support quality journalism and content creation.

The bad news: According to keynote speaker, “disruption” expert and Harvard Business School professor Clay Christensen, only about 10% or so of the incumbents will actually survive to thrive in the new era. According to his research, all survivors share two traits, without exception:

First, they create a separate operating division that’s charged with creating a new business model that’s totally free of interference from the legacy business. This is true across the board—while it’s fine for the new unit to cherry-pick some of the best ideas of the legacy businesses, there must be no interference or blending of staffs (e.g. – no creating “synergies”). No influence (or even communication) from the established business over the strategy and tactics of the new business unit.

Second, and most important, the new business unit must be charged with the mission of killing the old. This is a ruthless and (from a Harvard Business School standpoint, anyway), counterintuitive strategy, but Christensen says his research over decades is unambiguous. Again, without exception, this is the only way established businesses have been able to innovate, survive and thrive.

Christensen was a truly motivational speaker. He himself is a survivor, having just returned to public speaking after battling cancer, recovering from a heart attack and re-learning to speak after suffering a stroke that savaged the language areas of his brain. He encouraged the audience to “fill in the blanks” whenever he grasped for a word his brain “knew,” but he couldn’t access to pronounce. In a sense, he was a living embodiment of how a famously successful force of nature must struggle to face new realities and new challenges when the “operating environment” suddenly, and disruptively, changes. For more on Christensen and how he’s confronting his challenges, see the current cover story of Forbes.

All of the speakers from traditional media at the conference claimed that they were endorsing and embracing the principles Christiansen was espousing. However, a number of knowledgeable attendees, including Search Engine Land’s local guru Greg Sterling expressed skepticism. Having worked for years as a management consultant, I share Greg’s skepticism. Change is difficult, and singing the praises of the “new way” is far easier than making the difficult decisions to change and innovate to take advantage of new realities.

But for the first time in my experience, I saw people from “dying” industries genuinely excited about the future, and for the roles they could play in participating in the future, rather than whining about how “amateurs” like Huffington Post and AOL’s Patch were “compromising” their ideals and dragging the notion of quality content creation into the gutter. So color me skeptical, but optimistic.

And to me, despite years of asking “are we here yet,” I believe the stats on the mobile ad marketplace. We are “here,” and we’re continuing to move forward, at a pace that’s likely to be as rapid as the adoption of the iPhone and iPad.

Bottom line: Regardless of where traditional media goes, search marketers should be looking very carefully at the mobile space and making moves to create a strong presence on mobile devices, before competition gets intense. It’s still a relatively small market, but is poised to be the next big wave in online marketing.

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.

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