Tuesday, January 22, 2008

Recession is here! By Even Aas-Eng

Everyone who has money in stocks or funds has had a terrible 2008. And it continues today, as I write this Asian markets are down between 5 and 10% and the stock exchange in my home town Oslo is down about 5% today.

I guess this is interesting enough itself but since this is a blog about online media I will try and look at this from a different perspective. The media industry always gets hit hard by recession. Advertiser slash their budgets to save money and agencies struggle because the last thing on a CFOs mind is to put money aside for the next big brand campaign. I am sure that we will see this happening during the next years but with a twist! In all markets online media is experiencing a massive growth. In mature markets between 10-20% and in more undeveloped markets between 20-50% (undeveloped markets here doesn’t necessarily mean undeveloped economies)

The last couple of years I have said many times that I welcome the next recession so that online media finally will have its final and mayor break trough. This was obviously said with a smile as I also save in the stock market and I have very little to smile about at the moment… But I really think that my joke brings some matter of truth to the table. The staggering growth of online media spend will continue and in some cases I sincerely believe that the growth could be further increased by the wobbling state of the world economy. Why? Well as advertising budgets gets slashed and CMOs are pressured on their ROI it’s not totally off to think that they will allocate more money to the most predictable, accountable and cost efficient media channel. It might be a bit naïve way to look at things but it could happen. During the last years of growth, online media has taken big market shares but companies haven’t spent less money on other media channels. On the contrary, they have spent more. It’s my guess that most companies are in a position to save money on their marketing budgets without risking growth in sales or their brand. And it’s also my guess that they won’t save on their online campaigns.

So if it’s true that we will see further growth or even an increase in growth for online media spend it might be possible to make a buck or two in the stock market as well! For those who read the following you should keep in mind that I am NOT a financial analyst!
Google is down about 20% this year and I guess they will be down even more after today’s trading. Google is definitely a company that has many years of fantastic growth ahead of them. In many markets Google is still enjoying growth rates above 100% and Asia and Eastern Europe hasn’t really started yet. They don’t in the US but the US market is less and less important for Google. So Google might be a good buy if the market continues to slide.

The Swedish company Tradedoubler is also an interesting case. Last year AOL tried to buy the company for 215 SEK a share. Shareholders turned the offer down and the stock reached an all time high of 235 SEK. At the moment they are trading at 123 SEK! Tradedoubler is in the affiliate marketing business and they are doing well, so is affiliate marketing and everything seems to indicate massive growth in the years ahead.

There are many, many other interesting cases around. Companies that operate in the ad technology sector, tracking and web analytics companies, search engine marketing technology and e-mail marketing are all interesting.

So I guess my final conclusions are that there are many opportunities out there and that online media will not be hit by the sliding global economy.

God, I hope I am right!

Wednesday, January 9, 2008

Microsoft buys Fast search and transfer, by Even Aas-Eng

It’s not very often that Norway is the centre of events in the digital world but yesterday there was an exception.
Trading in Fast was stopped on Tuesday and something big was obviously about to happen. On Wednesday morning the news broke.

For those who doesn’t know Fast I will give a quick intro. Fast is (or was) a Norwegian software company who has specialized in search technology. Enterprise search has been their core business but they have also created other interesting solutions. I will get back to that later. The company sprung out around a tech school in the city of Trondheim. Norway actually has a search technology hub in that city, besides Fast both Google and Yahoo has engineering offices there.

In statements made by Microsoft regarding the acquisition they say that they bought Fast because of their technology and their standing in the enterprise search market. I am sure that is true but I also think that there is a reason beside this that have more to do with media then with technology.

Early in 2007 Fast launched a product called Fast Ad momentum. This product resembles Googles adsense technology, it’s a long tail tool that makes it possible to commercialize your total inventory. It’s perfect for companies like Schibsted that has many websites and search engines but no technology for automated ad sales. Since there are a number of big media companies around the world that are desperate to copy Googles success but they are dead scared of cooperation with Google the ad momentum product could be an interesting one indeed. It was at least the reason that I bought Fast shares!

Microsoft is also a company that is increasingly becoming a media player and they have not been very successful in trying to match Google. I would not be surprised if Microsoft will use the Fast ad momentum to get some momentum of their own!

For other media companies Fast is now history as an independent software maker, so I guess its time to by stock in other companies with the same competence. Did anyone say autonomy?

Thursday, January 3, 2008

2007 top digital events by Even Aas-Eng

Here is my very subjective take on 2007.

1) Google buys doubleclick
The number one in search and the company with the largest ad network on the planet decided that it’s was time to put some (ad)sense into it! Buying doubleclick Google looks set to become the worlds leading display advertiser. I am already looking forward to what the Mountain View people will buy this year.

2) Facebook launches social media ads
Zero to one million members in Norway in one year is not too bad. But for me it was the launch of their advertising concept that was the big story. Global reach, local presence with endless targeting possibilities. Still in its infancy it can only get better and I project a 2008 packed with news from facebook.

3) Microsoft enters the online advertising race buying Aquantive and a small stake in facebook
2007 was the year that Steve Balmer decided that he would not only talk about Google but actually try and do something. The Aquantive deal will bring opportunities across Microsoft channels that hopefully can give many of them a boost. What Microsoft and facebook are up to, I don’t really know.

4) Marketer’s world wide realizes that Second life is just that and that they won’t have to close shop in real life just yet!
Thank God this hype worn off during the first part of the year. I am not saying it’s not interesting, I am just saying that there is so much else more interesting.

5) Iphone
It came, it looked good and it conquered! People bought it and they started to surf the web. Numbers from UK shows that 60 % of Iphone users move about 25 MB of data back and forward per month. Only 2% of other mobile phone owners move the same amount of data. The floodgates are open, the ad dollars will start to move towards the cell phone in 2008. And did I mention that it looked good?

6) Search conquers Europe outside UK
Staggering growth numbers all over the continent and finally the media agencies and big advertiser are starting to see the light. The only problem is that many of the newly convinced see SEM as the only online solution, need to stop that! Mantra for 2008: SEM targets existing demand it doesn’t necessarily create more demand.

7) How difficult it was to find enough people!
Young people all over the world unite! Come and work with online media, we need you!