2011 Promises Increased Optimism for the Technology Sector
There is little doubt that 2009 and 2010 were extremely tough years for organizations of all shapes and sizes to navigate. Many economic pundits likened the recent global recession to the great depression of the 1930’s.
The tough economic business climate turned the car manufacturing, financial and housing sectors into economic wastelands inside 12 months, with the unemployment rate in the US reaching levels not seen for over 75 years.
The global financial implosion that started in the US in 2009, quickly spread across much of the western hemisphere and resulted in international financial bailout packages in many countries with the UK, Greece, Ireland, Spain and Portugal the worst affected in Europe.
The crushing fiscal pressure that reverberated around the planet sunk banks and toppled brand names.
In the online marketing world this manifested itself into advertising budgets being slashed dramatically – with many agencies drilling down on campaigns to gain more value for money and cutting out under-performing accounts. Those that couldn’t keep up, folded.
Since late 2008 many big technology sector brand names such as Nokia, Google, IBM, Yahoo & HP announced swaths of huge layoffs that continued into late 2010 in order to hold onto slim profit margins. The technology and online industries were on the ropes.
So, what has changed in 2011 that gives us cause for hope? Well, watch out for transformational companies as the recession appears in the rearview.
Not surprising then that those cash-conscious consumers are excited by the phenomenon of the online ‘daily deal’ companies that have sprung up, with a whole slew of online daily deals crashing into our email inbox’s and our browsers. The most prominent of these start-ups is Groupon, launched in November 2008, they quickly did deals with other media companies such as Twitter to grow its user base of local consumers across hundreds of cities worldwide.
Groupon’s growth has seen many unprecedented success stories for local businesses. When Groupon offered half-price $20 gift cards to users of its coupon site, a San Francisco-based chain of coffee shops figured it would get a few hundred takers. It got more than 2,000. That’s one hell of an online fueled caffeine rush!
Other, more established local online directory websites such as Yelp, Urbanspoon and CitySearch were quick to follow the daily deal coupon business model with varying degrees of success. It is no surprise that Google was reportedly keen on acquiring the rapidly rising Groupon.com to further augment its Google Places product. At the time of writing, Groupon had raised $950M to fund their global expansion and had turned down a cool $6Bn from Google to acquire them.
The push to cut operational costs in order to survive has also seen a rapid growth within other technology sectors. According to Gartner – one to watch in 2010 and into 2011 is ‘cloud computing’. Many small and medium sized tech shops are cutting out staffing costs (and hardware) to take advantage of cheaper and more reliable virtual server solutions ‘in the cloud’. So what does this mean? Well, start-ups no longer need to go to the expense of co-location centres, staffing and server costs to support their infrastructure.
There is no denying the continued explosion, and ensuing online media marketing interest, in the social media marketplace. As Facebook and Twitter continue with their relentless pursuit of eyeballs with new product offerings and homepage redesigns, the social media space has seen a significant hiring increase in its business and marketing departments in an attempt to turn those page views into online advertising dollars.
It’s clear that both Facebook and Twitter see the local business market as an important vehicle to access new revenues as they put more emphasis on location based services. Smart local business owners are tapping in and taking control of their social media presence to get consumers through the door and increase their sales.
Online marketing and advertising agencies are back in the game in a big way for 2011 and according to eMarketer there are now significant moves away from offline marketing spending and into online channels for 2011. To put it simply, agencies need to position their clients products and services in front of a targeted audience and that audience has gone digital in a big way. Mobile online usage is set to increase as sophistication levels increase in smartphone technology and marketers see opportunities centred around location based services.
We are not out of the woods as yet, but there are signs that online marketing spending and technology advancements are leading to an optimistic outlook for 2011.
Mark Harper is VP Marketing & Content at GenieKnows Inc., a private online marketing company based in Halifax Nova Scotia, Canada offering Pay-Per-Click, Display and Local Search marketing services.