Ramsey Predictions Pitted Against Tchong Trends

Session: Is Your Guess as…? Interactive Outlook

This session pitted Trendsetter Trend Analyst Michael Tchong against eMarketer CEO Geoffrey Ramsey in a battle to predict the future of online marketing. Tchong and Ramsey donned their boxing gloves in a nine round pro/con style debate, with each full round ending with the audience participating in an SMS based, real-time vote in the relevant issue.

In the first round, Ramsey gave eMarketers prediction of $7.6 billion in online spend by the end of 2004 as a strong indicator of the online ad industry’s health. Tchong countered by saying that, because of time compression - no time to read, no time to eat, no time to date, no time to be sold - alternative forms of marketing such as “leaning marketing” and stealth, paid word-of-mouth endorsements will become far more prevalant than traditional online marketing. Forty two percent of the audience said online budgets will increase 10 to 25 percent.

In round II, Ramsey said broadband will proliferate to 32 percent by the end of 2005, facilitating the growth of online advertising. Tchong said it’s a bad assumption to think “broadband will make users watch more commercials” and that future advertising “will all be through the cell phone.” In terms of the percent penetration broadband will need to reach before it will dramatically shift the advertising landscape, 29 percent of the audience voted it to be 50 percent.

Skipping to round IV, Ramsey provided a multitude of facts regarding the adoption rate of wireless technology. The U.S. is far behind the rest of the world in terms of usage, at 48 percent penetration, as compared to 93 percent for Italy. He predicted that there will be 173 million wireless users in the U.S. by 2005 and that data usage over wireless will reach 75 million by 2005. Having provided those figures, Ramsey’s opinion is that consumers do not want to be interrupted with wireless advertising. Tchong jumped in and cited 25 million camera phones sold in the U.S. in just the first six months of 2003, indicating that the cell phone is becoming a central communication device for consumers. While Tchong acknowledged consumers really do not want to hear from marketers, he pointed out that if an agreement can be struck between advertiser and consumer, such as Vindigo providing its service for free in exchange for delivering ads, then consumers will be far more receptive to wirelessly delivered advertising. Fifty nine percent of the audience said wireless is the next “killer app.”

In round V, Ramsey, while agreeing search is becoming a force to be reckoned with, said it will still be just a part of the pie and that other, broader branding efforts will need to remain. Tchong said “if you can’t be found, it’s pointless” and with the consumer moving to the driver’s seat in terms of control of marketing, advertisers must be where consumers look. In a related question, 57 percent of the audience said search deals will be priced on performance in the next year.

In round VII, Ramsey again brought out the data, claiming 85 percent of TiVo users skip some ads and 53 percent skip all ads. Citing a Starcom study, he said 60 percent use TiVo for recording and 77 percent skip commercials. In 2006 Ramsey says 15.3 million, or 13 percent of Americans, will have PVR technology in the home which will effect a $5.5 billion loss in ad revenue and a 19 percent drop in television advertising. Tchong predicted PVRs won’t do too much damage to advertising because, after the early adopters, most users won’t use the skip feature. He claims more damage will be done by the new category of “home media centers” popping up that combine computer with DVD, cable box, PVR and networking, all in one box, providing even more control to the consumer. In the audience survey, 40 percent voted PVRs will raise television ad costs due to drop in viewership.

Other rounds featured debates on whether the rich media platform or creativity will grow the ad business, the future of online shopping, media integration and what the best Internet business model is currently (resolved: eBay).

The two finished admirably, without too much blood on the floor, and the audience left with a headfull of facts and figures intermingled with opinion and prediction. This session was moderated by Archer Advisors President Rich LeFurgy.