I was reading a report that predicted that online advertising will hit $44.6 billion in 2008, approximately 10% of total advertising spending. At these numbers, online ad spend will overtake radio this year and magazines in 2010.

All in all, online advertising increased 25% this year and has nearly doubled in two years—all without the Olympics or election year traffic that we’ll experience in 2008. 25% growth may be a conservative estimate. My first prediction is an easy one: it’s going to be a huge year for online advertising.

Increased online advertising spend clearly trickles down to the search engine marketing firms and consultants. Someone has to help companies effectively spend their money.

2. Search engine marketers get more credibility

Look for search marketing to grow as a field in 2008. SEM and paid search firms have traditionally been looked down upon by the more established online marketing disciplines. However, as organic positions become even harder to obtain, companies are going to be looking to paid search to maintain competitiveness and ensure their brand is positioned. The process of planning, creating, and managing paid search campaigns will likely become even more complex and competitive, putting search marketers into high demand.

Search marketing should grow in prominence in 2008 and firms that offer those services should have a great year. Traditional advertising agencies and digital firms who haven’t branched out may get a rude awakening in the coming months.

3. Better tools and applications

In 2008 we will see better tools, applications, and platforms that will improve the ad management experience for both large-scale SEMs and small, individual advertisers. Look for more desktop tools like Adwords Editor or helpful Excel add-ons that make it easier to plan and manage campaigns. Users will continue to find the online applications slow and limiting. There will be some major advances in tools that will be readily embraced by online advertisers and may—over time—help to demystify the process.

4. We begin to see the benefits of the Google/DoubleClick and Microsoft/Aquantive acquisitions

These acquisitions were big news this year. It will be interesting and exciting to see how Google and Microsoft integrate them into their offering. For Google, DoubleClick gives them a huge boost in their traditionally weakest area: display ads. The marriage of DoubleClick’s ad-serving platform and Google’s targeting engine could help Google dominate in an area they’ve struggled with in the past.

The tangible benefits of Microsoft’s purchase of aQuantive are a bit harder to pin down. aQuantive arms Microsoft with a number of new tools, clients, and expertise that may help the company continue to grow its online advertising division. Traffic and search volume may the most immediate benefit of the buy; now Microsoft has a global offering and ad platform. aQuantive may give Microsoft enough leverage to overtake Yahoo as the number two online ad platform.

5. Google loses some marketshare

Google is clearly the dominant player in the paid search market, locking up nearly 90% of the market. 2007 saw a few chinks in the market, however, and it’s feasible that Google could lose some marketshare in 2008. For one, Google has become increasingly more expensive. Cost of keywords has amplified along with competition. Small advertisers can no longer hope to compete with large companies for top placements. Faced with growing costs and competition, more advertisers will begin to look to other platforms and providers. It is still relatively inexpensive to advertise at Yahoo.com or Microsoft’s sites. Microsoft should get a nice traffic boost based on its recent Facebook deal.

It should be an interesting, banner year for online marketing…

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This entry was posted on Wednesday, December 26th, 2007 at 5:32 pm and is filed under Business, Google, Search Marketing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.