At the end of 1999, less than 1% of U.S. households had broadband internet access, according to the Broadband Forum; in second quarter 2009, more than 75% did. It hasn’t just been good economically — The Economist has estimated a 10% increase in broadband penetration boosts GDP by about 1.2% in developed countries — it’s also good for marketing. Without broadband, there’d be no online branded entertainment, rich-media ads or user-generated video.
Google debuted in 1999 — and its system of matching advertisers with searchers, known as AdWords, came a year later. Today, search marketing is a $25 billion global market, and search generally has forced marketers and media companies to rethink the way they approach their businesses. Google’s auction-based buying system doesn’t look just at keyword prices but also the quality and relevance of the ad — a precursor to a world where marketing is an invitation and not an interruption.
While word-of-mouth always existed, the rise of social networks helped marketers, social scientists and behavioral economists create digital maps of that influence. Facebook popularized the term “social graph,” referring to the network of a Facebook user’s friends and then their friends’ friends, and so on, and these networks became the basis for the idea that something could very quickly “go viral.” Still to be determined? How much revenue these networks can generate.
First, the remote control was going to kill TV, then the VCR. But it was the DVR that truly changed everything, ultimately forcing the networks and Nielsen to concede that just because your audience is watching a show doesn’t mean they’re watching the ads. Under agency pressure, Nielsen made the biggest change in TV ratings history by reporting viewing of the ads themselves, not the shows. Thirty percent of American TV households are now DVR-equipped, according to Nielsen.
Overnight, Apple’s iPhone realized many of the long-promised but undelivered potential of the mobile web. Now, nearly three years later, it’s finally getting some credible competition from a new generation of smartphones. Meanwhile, marketers are just scratching the surface of what these devices can do. Several generations of apps-as-advertisements have debuted to mixed results, but an even bigger opportunity awaits in location-based marketing, mobile coupons, barcodes and augmented reality.
AD NETWORKS & EXCHANGES
Today, advertisers use a myriad of ad networks and exchanges to buy demographics or behaviors across the web. The separation of inventory from media led to two general strata in online advertising: premium ad space, sold largely directly by publishers, and remnant, comprised of inventory publishers cannot sell or effectively monetize on their own. What’s next? Demand-side networks and real-time ad optimizers such as Rubicon Project are shouldering their way in.
The micro-blogging service is the flavor of the moment, destined to become Facebook, Friendster or something in between. But what Twitter represents is the explosion of free, cloud-based publishing and communications tools that flourished during the decade, putting the power of distribution in the hands of, well, anyone. Like many successful social applications, marketers have fully embraced Twitter; the question is if they will pay for any service — advertising or otherwise — that Twitter has to offer.
Location data has been around for decades, but it wasn’t until the latter part of this one that it was regularly opened up to developers who could create a wide range of utilities and tools with it. Seventy percent of the 30 million U.S. iPhone users use GPS, and already nearly every marketer-built mobile app taps into it. GPS phones combine a person’s location, inferred intent and personal affinities to aggregate and deliver relevant information about the real world surrounding them at any given moment.
Like a lot of transformative technologies of the noughties, Flash was developed in the ’90s. Initially it was a tool that allowed easy, web-based animation. But it became the standard that allowed video and interactive ads to flourish on the web. Without Flash, there would be no YouTube, no Hulu, and no Mac vs. PC ads on the masthead of NYTimes.com. Microsoft is challenging Adobe’s dominance in video with Silverlight, and spent heavily to make it the video tech of NBC’s Olympics in 2008.
Without the API — that’s application programming interface — we wouldn’t have one of the biggest stories of the past three years: the proliferation of the app, and then, the app economy. Since Apple’s iPhone platform API became available to developers, they’ve created 100,000 apps. While a fair share are mindless, others provide entertainment, utility and stickiness for Facebook and Apple, and a healthy return considering neither company had to tie up precious developer hours to create the apps.