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By Patty Deutsche
Vice President, e-agency
OAKLAND, Calif. –
China, once considered a third-world country, will take over the Internet in 2005 and never look back.
E-agency, an interactive marketing communications firm based in Oakland, Calif., predicts this
will be the year that the number of Internet users worldwide tops 1 billion – led by China. The number of Web searches
will pass 5 billion per week. We’ll use the Internet more than ever, at the office, at home, on our phones, at the coffee
shop or the mall, even as we look for a parking place. This will be the year that the couch potatoes beat the geeks,
as the control centers of our home networks move to the comfortable confines of our home entertainment centers –
which most likely will be made in China.
Each year as the New Year approaches, the e-agency staff takes a break from its normal tasks of
developing world-class Web sites, creating opinion-leading public relations campaigns and branding and marketing its clients’
award-winning products and services, to make some well-educated guesses about what the New Year holds for our increasingly
on-line world.
Our predictions
The big impacts in 2004 will come from five big ideas.
1) China. (It will be obvious.)
2) “Branding” will be the corporate buzz word of 2005, and for good reason.
3) Mainstream business will finally “get” blogs.
4) The home network will be controlled from the home entertainment center.
5) We will (almost) all download a movie this year – most for the first time.
6) Even more of the routine functions we do every day, like finding a parking space, will
be done online.
7) Wireless networks will be everywhere, at work, in public and in many homes.
8) Good photography will lead the way in making Web sites more attractive.
9) We’ll be watching “TV” commercials on major Web sites by next Christmas.
10) More Web sites will add search tools, as they become more complex.
The new year will bring changes in how we communicate, where we get our information,
and how companies reach their targeted audiences. Much of this is due to smarter technology, but some is
due to a new generation of smarter users.
Here are some details:
1) The number of people in China who are online will match and then exceed the entire
U.S. population next year, according to Internet research firm e-Marketer. By 2007, the U.S.
and China will each represent an identical 23 percent share of the broadband online world.
China’s role in the world economy – and the economy’s shift to a post-PC era –
could not have been punctuated more profoundly than when IBM opted to sell off its PC business to Lenovo –
of China.
John Chambers, CEO of router-maker Cisco, said “China will become the IT
center of the world” within the foreseeable future. Already much of the merchandise we buy in America
and elsewhere is made in China. Some are alarmed by it. U.S. Rep. Bernie Sanders of Vermont wants trade
barriers to keep China from “stealing” U.S. jobs. Some, however, are excited by the prospect of a more-free
trade relationship with the world’s largest nation, and are watching expectantly for China to drop its historic
ban on direct sales to individual consumers. The change has already been negotiated and could happen at any time.
One company that can’t wait is cosmetics distributor Avon, which had $157 million in sales in
China in 2003, and has budgeted $600 million in direct sales by 2007.
The prospect for online marketing to China by American companies has become very real.
Travel services and destinations are one obvious potential benefactor. U.S. entertainment is also a hot export,
as more e-commerce sites start to think globally instead of locally.
2) Branding is the corporate “buzz.” Everyone is talking about it and next year everyone who
considers remodeling a Web site will be doing it. In the ‘90s, all companies were doing diversity training and implementing
total quality management. In 2005, any company that does not invest in using its Web site to brand its company or products
risks losing its competitive edge. Take one look at the business section of any book store and you’ll see there are
as many ways to brand as there are authors. (For a concise and practical book to get you started, visit
www.e-agency.com to download “Branding:
6 Easy Steps” by Dave Dunn.)
3) Blogs are no fad and should be of interest to more corporations.
Blogs started out as a counter-culture means to publish thought and opinion pieces and unite the
global village. In 2005 they are mainstream, real-time and powerful. Businesses of any size should
carefully monitor them for what’s being said about them – employee sentiment, product feedback, customer
satisfaction, even competitor comparisons – and use them to endear customers to their brands. This will
be yet one more way to measure brand reputation and, using information from the blogs, create a better product.
(Think public relations without “the media.” But be careful what you wish for. Companies must stay on their toes
to catch negatives like employees trashing the company, consumers bad-mouthing the product, or competitors
undermining the brand – and wherever possible, “make lemonade.”)
We will also start seeing blogs become a potentially productive medium for banner advertising.
Microsoft MSN recently launched SPACES, its official blogging service. It does not currently sell advertising, but
it will.
4. The home entertainment center – not the PC - will become the new network hub of most homes,
connecting online devices of all sorts, including some we haven’t imagined yet. LCD screens, long popular on desktops, are
fast finding their ways into many living rooms and bedrooms providing the nexus as the convergence with the Web takes off.
Futurists have long talked about running our households from our computer. But we predict it will be music and movies – with
their great sound and video and the marketing power attached to them – not to mention that couch – that will finally pull
everything online together in one place. Half of American homes now have broadband, and that figure could hit 70 percent
by the end of the year. Commercials are already on the air promoting the use of our TV set as our connection to the world.
As long as we have broadband – we don’t even need computer skills, they boast – we can access e-mail, shop online, check
the weather, all without leaving our “comfort zone.”
5. By the end of this year all of us (almost) will have downloaded a movie – many for the first time.
No more will we stand in lines, or juggle our Netflix queue, waiting for new movies to arrive in the mail and trying to remember
to send back the ones we’ve watched. Netflix and Tivo are partnering to allow mutual customers to download movies. Cable TV
providers are getting in the act with video-on-demand. We’ll just download a movie or a TV show, pay online, and screen them
either on our computer screen or our home entertainment center – see #3 above. No lines, no returns, no out-of-stock notices.
6. Services like reserving a parking space at BART or at the airport are done increasingly online.
This is an instance of a smarter use of existing technology. We started making airline and hotel reservations online; then,
restaurant reservations (e.g., Open Table). The functionality continues to expand to the most mundane tasks – like finding
parking. Some parking lots and garages already can tell drivers how many spots are available on each floor. “Smart Parking”
will now notify drivers along the highway (before they even pull off into the parking lot) how many spots are vacant. And drivers
will also be able to reserve parking online. (Last summer, e-agency helped PCA-Airports publicize a new off-airport lot in
Oakland. More than 200,000 people made reservations online.)
7. Wireless local area networks – WiFi – has been blooming everywhere (as we predicted in 2004.)
By the end of 2005 wireless will be standard in most public places, workplaces and even homes. Where it is already in shopping
malls, coffee shops, on trains and even in McDonalds, this year service will be upgraded, adding capacity (distance) and
penetration (accessibility in hallways, tunnels, etc). More companies will install WiFi to enable employees and clients to
work cable-free. Yahoo Maps already allows us to display WiFi hot spots on any map. With popularity always comes a price.
Where WiFi access may have started out as free, provider networks now impose charges that can range from $5 a day to $30 or
more a month.
8. New Web site designs are focusing on richer graphics – but not the gee whiz stuff of the early
Flash days. Site designs that had swung to the simple and austere in recent years will move back to a much greater use of
original photos (not stock photography) as companies portray the personal and personable sides of their businesses. Photos
will show attractive, happy, successful people, working in teams, using and delivering products and services. Beware, though.
The difference between the impacts of amateur and professional photography can be huge. Many smart companies will spend as
much as half of their Web budget on photos (and models) alone. But don’t despair – they can be used throughout the marketing
mix. It’s best to budget for photography separately, and find a pro.
9. Online TV-commercial-style video ads will be featured on many major Web sites by next Christmas.
For the cost of production, companies can link an e-mail to their own 60-90 second mini-videos, hosted on their Web sites for
all to see. Cheaper than buying television air time, the audio and visual message is just as compelling – more so than any
print or radio ad – and will likely spawn a new cottage industry of online video ad producers. By the end of 2005, the monthly
expenditure for online advertising is expected to surpass that of slick magazine advertising ($11.3 billion, according to
Internet research firm, eMarketer.)
10. More Web sites than ever will be searchable – not searchable by Google or Yahoo, but searchable
within their own site. Because sites are getting larger and more dynamic, this need has become more acute. Currently about
70% of sites have some sort of enterprise search function. In 2005, that number will rise to 90%.
Last year, e-agency made predictions as well. We said the Internet would “disappear.”
And it has. Not literally, but certainly from our vernacular. Scan any news story these days and search for the
word “Internet.” You generally won’t find it. It’s been replaced by “online” or simply assumed – as predicted.
It’s become as common in our minds as electric power or running water.
We predicted that politics on the Web would go mainstream. We still have to take some big strides to make secure
voting online a reality, but the use of the Web in last year’s Presidential election was unprecedented.
From Howard Dean’s online contributions to MoveOn.org’s grassroots campaign and the Republican Party’s Get Out
The Vote (GOTV), viral online marketing worked. A political campaign without a Web presence was dead in the water.
Those campaigns that used them well did well.
Spam is still all too prevalent and all the big new laws have had no effect. But, as we predicted,
ISPs have vastly improved spam filtering. The offensive, unwanted, even fraudulent e-mail is still there,
in droves. But if you can master your “tools wizard,” you don’t have to look at it. Push a button and it’s gone.
We predicted the ubiquity of wireless and have seen the explosion of this technology nearly
everywhere we go – coffee shops, airports, malls – and on nearly all the gadgets, from cameras to laptops to telephones.
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Based in Oakland for 15 years,
e-agency specializes in public relations, branding, strategic marketing consulting, response marketing,
advertising, graphic design, and, at the heart of the agency, a complete range of Internet services, including Web site
design, e-mail marketing, Web advertising, site marketing, e-commerce development, e-book publishing, secure on-site Web
and e-mail hosting, and database programming and management.
Key e-agency clients include Oakland International Airport, Safeway, the Shorenstein Company,
North American Airlines, the Oakland Metropolitan Chamber of Commerce, North American Lubricants, KaiserAir,
the California Water Environment Association, Matthews International Fund, Claremont Rug Company, and the
Alameda County Transportation Improvement Authority. E-agency hosts more than 250 Web sites and has clients
in 23 U.S. states and eight countries.
More information can be found at www.e-agency.com. Logos and portraits of the principals at e-agency, designed specifically for print publication, can be easily downloaded from www.GiveMeMore.com/e-agency.
Media contact:
Patty Deutsche
(510) 414-6198
pdeutsche@e-agency.com
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