2009 the critical year for digital marketing
Search agency bigmouthmedia believes that the next 12 months will have a pivotal role in shaping the digital marketing sector.
The firm forecasts that with a number of factors ranging from challenging trading conditions to advancing technology will combine to make 2009 a landmark year in the industry's development.
While the economic downturn will continue to have an impact on every sector, digital marketing businesses will focus on digital's cost benefits and demonstrable ROI in an effort to buck the trend.
Trading conditions will seriously impact upon vulnerable agencies however, and a period of industry consolidation seems inevitable.
"Digital marketing has several key advantages when it comes to trading through a recession, but the downturn will wipe some of the smaller players off the map. Agencies reliant on one or two key clients will be particularly vulnerable, and I expect to see a rash of acquisitions and company failures radically reshape the industry over the course of 2009," said Steve Leach, bigmouthmedia CEO.
"In the UK Google's decision to end BPF (Best practise funding) will also have a big impact. The loss of the commissions paid to agencies who recommend their clients spend with the search giant will badly hurt companies that have built their business model around this income stream.
"There are still plenty of opportunities out there, but this isn't a back-bedroom sector anymore. Major clients increasingly require partners with international scale, and as the downwards pressure on costs continues small-scale agencies are going to struggle to cope."
However, set against a backdrop of steadily increasing corporate use of social media, video and online PR, the company predicts that the year will also see increased investment in digital marketing as cost-conscious companies seek to improve the quality of commercial content and access new channels such as mobile marketing.
In search, 2009 is also expected to prove a defining year. With the free PPC management tools provided by the major engines expected to continue improving, commercial third-party technologies could be under threat.
"This will be a Beta Max year for the technology underpinning search marketing," said Leach.
"Until now, while search engines have provided technology to run the PPC marketplace it has often made a lot of sense to go to a third party for a technical solution to enable automated PPC bidding and management. Will that continue to be the case in 2009? It'll be a hard year to sign long term search contracts on this issue as it increasingly looks like the search engines are giving better automated solutions away for free."
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