Which predictions for 2005 came true?

This time last year we made 5 predictions for 2005 and so we can now look back on them with a mixture of outcomes, as they were a mixed batch! Some did take place, as predicted, and others were some way off the mark – at least last year – so we review what really happened.

These were our predictions (you can read the originals in more detail in our January 2005 Newsletter):

1) Online spending increases: this was admittedly an easy one to predict as the market continues to grow at a rapid pace, but the scale of increase continues to surprise and last year it raced ahead of the forecasts from the Internet Advertising Bureau. We won’t see the full year figures for several months yet, but they are expected to exceed ‘1bn for the first time and therefore to be ahead of spend levels on the traditional categories of outdoor advertising and radio.

In the first half of 2005, the IAB reports that online advertising spend was ‘490.8m, up 62% on 2004 and comprising 5.8% of total advertising spend. Paid search accounted for 40% of this spend, at ‘197m, followed by display advertising at 34% and classified at 26%.

We believe that much of the increase in spend within paid search marketing reflects the increased number of advertisers now entering this field and, as a result, pushing up the average bid levels, despite the changes made by Google Ads (AdWords) in mid-year that has enabled some advertisers to reduce their spend in less competitive markets.

Certainly online advertising is becoming more ‘mainstream’ now and attracting the attention of larger London advertising agencies who are setting up dedicated departments to handle this business. This trend will continue to grow, along with the increasing coverage of broadband connections throughout the UK.

2) MSN’s new search engine: this appeared in the Spring as expected and although it constitutes an impressive search tool, it will still struggle to take share from Google in the short-term, despite an extensive advertising campaign.

The growing animosity between Microsoft and Google became apparent during the year as Microsoft became rattled by the rapid growth and product expansion of the relative newcomer . Google now appears to be taking the lead from Microsoft in the online field – the one area that Microsoft was slow to take advantage of and assert a prominent position.

Google didn’t immediately react with an algorithm shift as we predicted, although MSN Search was very active in the first few months building its new search index. However, Google did implement a major change in November that predominately tried to remove the impact of link spam from its search results. The impact of this change wasn’t so noticeable on legitimately optimised sites, as previously experienced.

3) Specialised search engines: there was a mixed result here, as the introduction of new shopping search Froogle and local search options by the main search engines were made and, although attracting an increasing share, these tools still have to shift usage away from the mainstream search engines.

Google was very active launching new tools, including the highly impressive Google Earth which is so much more than a local search engine, Google Base and Google Book Search, which marks the first stage of its major book digitisation project.

Our other predictions on specialised search did not really appear last year although all the main search tools are experimenting with different filtering techniques as well as personalisation of search results.

4) SEO market stabilises: there are no official figures on this trend over the past year although the impression is that many of the companies that have been around for some years remain and the number of new entrants are less prominent in 2005, plus some companies that did promote themselves heavily in recent years have now disappeared from view.

The most high-profile casualty in 2005 was TopPile, who had been around since the early days offering a dubious optimisation service, including its Salsa product. The company closed in February once Google failed to rank its clients because of the techniques being used. Subsequently its business collapsed, which should be a warning to a few of the other hard sell, poor delivery services, that still pray on unsuspecting website owners.

The other main development in the past year has been the growth in the awareness of search engine marketing within London advertising agencies, who now recognise the importance of search advertising in the marketing mix, although most of their efforts currently revolve around pay-per-click advertising for their clients.

5) Make or break for e-mail spam: unfortunately email spam is still a major menace and although there were fortunately no high-profile virus infections in 2005, there were still plenty of junk e-mails in circulation, plus the rise of ‘phishing’ e-mails to trick unwary recipients into revealing their bank details continues to grow.

There have been a few high-profile prosecutions this year on both sides of the Atlantic, but as long as email spam is can still make some money from this technique, it is likely to continue.

So, 2005 saw a mixed bag of predictions coming true and missing the mark – or as we would prefer to say, they were just ahead of their time!.

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