While the buzz in 2009 was all about social networks as a function of the Web, in 2010, marketers’ attention will focus increasingly on the ways social networks are becoming the medium for communicating on mobile devices. Video is likely to play a key role as well, as mobile users are “socializing” video from their devices to a far greater extent than they are watching it.

I wrote about this phenomenon and other key trends in mobile marketing in my latest iMedia Connection column, which went live today. Following is a clip from the full article:

Consolidation among mobile ad networks is clearly lining up to be a major theme in the year ahead. Even so, achieving scale in display advertising on mobile devices is just one piece in a much larger puzzle — that of using mobile to showcase full-blown marketing and commerce experiences.

Marketers often talk glowingly about mobile’s flexibility and how effective it is at activating other media. However, mobile has traditionally been a less effective vehicle than other media for end-to-end consumer experiences. In order for mobile to reach mass adoption among marketers, the medium has to develop beyond its core strengths in communication and messaging.

Fortunately, startup activity is rife across many keys areas of the mobile sector, and the next 12 to 18 months should see many of the missing pieces fall into place. The continued fusion of mobile and social and the appetite for apps (among both consumers and brands) will facilitate more involved marketing experiences. In fact, location- and social-aware apps and utilities will be a key avenue for brands looking to engage consumers on the go.

Mobile advertising will likewise grow more sophisticated, with improved targeting capabilities and richer, more engaging options across multiple channels, from apps to browsers to SMS. Augmented reality (AR) seems destined to generate more ink than activity or revenue in 2010, given the limited number of mobile handsets that support it, but AR is worth keeping an eye on nonetheless because of what it portends for the future of mobile marketing. It represents an innovative way of creating a virtual overlay to the physical world by combining and maximizing on-board device features (e.g., camera, GPS, accelerometer, broadband connectivity).

With the rise in mobile broadband access and the proliferation of multimedia smartphones, video viewing (and consequently, video advertising) is set to become a more integral part of the mobile experience. Paid content models such as iTunes will continue to expand to mobile devices, but the growth in mobile web and application usage will also create opportunities for marketers to engage with viewers in both professional and user-generated video content.

The article takes a detailed look at different segments in the mobile marketing space and profiles a number of companies to watch, so be sure to read through to the end to get the complete picture.

Score another one for paid content. Just after The New York Times confirmed what we’d all suspected (is “feared” too strong a word?) — that it’s going to charge for online access again — YouTube became the second media giant in a week to announce a shift from free access to paid content. The user-generated video specialist is launching an experimental digital movie-rental service, and its first venture into transactionable content. But will it work?

(Read more…)

Peter Kafka of All Things Digital has a post well worth your time about whether YouTube will finally bring in a profit for Google in 2010. He points to recent predictions by Barclays analyst Douglas Anmuth that YouTube will see revenue jump 55 percent, to $700 million, in 2010, and that it will “start contributing positively” to the Google’s earnings. Anmuth writes:

Perhaps the main take-away for Google’s display business is that in 2010 we believe YouTube will start contributing positively to EPS. An improving advertising environment certainly helps, but with YouTube monetizing more than 1 billion video views every week, and with strong sell-out rates on its home-page from larger advertisers–we note 90% of the top 50 Ad Age have advertised on YouTube–we believe the site can profitably take share of the branded display & video market. We project YouTube to generate $700 million in revenue in 2010, up 55% Y/Y. Usage continues to grow. In November the total number of YouTube’s videos viewed grew 139% to 12.2 billion in November and unique visitors grew 32% Y/Y to 129 million. As a comparison, Hulu, the second most popular video site by videos viewed according to comScore, recording 923 million videos viewed.

I agree that YouTube seems poised to grow its ad revenue in 2010, and I also agree with the market dynamics that Anmuth points out. However, 55% strikes me as an aggressive target. Some of the forces working in YouTube’s favor will be mitigated by headwinds from negative factors. Here’s a list of pros and cons the company will face in 2010:

PROS

• The site is adding more and more premium content, which of course is more monetizable than the user generated content (UGC) that made the site into the giant that it is.
• Usage rates keep growing, which I continue to be amazed by. Its dominance in the video space remains essentially unchallenged, despite Hulu’s strenghts as an episodic TV specialist.
• YouTube is getting smarter about the way it monetizes videos — more ad formats, a better overall presentation.

CONS:

• As hard as it tries to become a premium content portal, YouTube can’t shake the perception that it’s a UGC site. Even in the best of cases, it will only be able to monetize a small portion of its video inventory this year.
• The space will get more crowded as Hulu continues to spread its wings and other sites (i.e., Netflix) also gain traction.
• The spread of Internet-connected TVs could be a double-edged sword for YouTube. On one hand, the site could gain by making licensing deals w/consumer electonics firms. On the other hand, other companies (Amazon, Blockbuster, Netflix, Hulu) are also going to be scrambling to make deals, so consumers will have a wider array of options than in the mid-2000s, when YouTube took advtange of an open field.
• Because of the enormous price that Google paid for YouTube, the site has to do a lot more than reach profitability in order to pay off for the parent company. While I don’t think Google is unhappy with YouTube, there is more pressure to perform on YouTube than there would have been if the purchase price had been closer to the ground.

In summary, I think Douglas Anmuth’s projection is a bit aggressive. Taking into account the above, I agree that YouTube’s revenues should grow this year, but somewhere on the order of 10%-20%.

During the course of last week we weighed in on several trends to watch in 2010. Here’s a quick and tidy round-up of those predictions.

• Seven Predictions for 2010 from eMarketer’s CEO, Geoff Ramsey: During 2010, as US ad budgets crack open just a little, look for an accelerated migration of ad dollars from traditional to digital media. Advertising on social networks will never attract a large share of marketers’ ad dollars, while the classic interruption/disruption model of advertising, whereby marketers insert unwanted, usually irrelevant ads as a price the consumer must pay to view desired content, will erode, if not fade away.



• Social Media: Marketers will demand better ways to manage and measure the impact of earned media—the additional unpaid exposure a brand gets when consumers share about the brand online. Search will get more social in several ways: by including real-time content in results (e.g., Twitter posts), adding information from social network friends to results, and using collective information from other Web users to hone search relevance. These trends will yield new ad formats that may incorporate friends’ viewpoints or interactions directly into the ad—and will raise new red flags among privacy advocates. (Read more…)