2011 Tech Industry Predictions Revisited

Below is a review of tech industry predictions I made on New Year’s 2011. With the advantage of 5 years hindsight it’s easy to build a narrative to make prognostication look positive. To mitigate that tried to be fair and specific with each predictions. It was fun to look back and keep yourself honest.

Real-Time Advertising — Prediction: Correct; RTB would go mainstream in ’11. Summary: If anything I missed the intensity and swiftness that this would take over digital advertising. Now universally called “Programmatic”, this is helping drive automation, performance and ultimately industry growth for display ads at a time that PC consumption is flattening (due to migration to mobile).

Local — Prediction: Correct; local content & services would be the next frontier and overall opportunity for disruption. Summary: I saw the beginning of Uber and food delivery apps but I didn’t fully grasp the extent of how mainstream some of these things would become. Furthermore I’d still say local content/discovery has a LONG way to go but directionally this was and remains a correct prediction.

IP TV — Prediction: Correct; that TV would increasingly be delivered over the internet. Summary: This took longer and in many important ways still hasn’t been realized but the past few years we’ve seen explosive growth in Netflix, Amazon Prime Video, Hulu, Youtube and several mainstream content providers delivering IPTV (HBO Now; every major network delivering content direct to consumers). Cord cutting has become real, WSJ reported that by ’18 21% of Americans won’t pay for traditional cable or satelite package.

Mobile Web — Prediction: Neutral; Mobile web would continue to grow, steal momentum from mobile app and be 10% of pages consumed for mainstream publishers. Summary: I’d say this is a tale of two stories. Reportedly 75% of all mobile consumption is via mobile app in ‘15, however 90% of that usage is sucked up by a handful of apps, most notably Facebook, Instagram, Snapchat and whatever will be the next hip social experience. The vast majority of the rest of mobile usage, which in terms of time spent is greater than PC digital consumption in total was a decade ago, is mobile web. The mobile web is still open and democratic, it’s NOT controlled by a few giants. The prediction of usage (10% in ’11) was directionally correct based on data I saw across major US publishers. For certain categories (games, utilities, social) mobile app is required, for other key categories (news, commerce) it’s the open web.

After analyzing and judging these predictions from ’11 it’s motivating me to update them for the next five years. I guess that’s another story idea :)

The original post in its entirety below from 12/30/10

The theme/tone of this blog obviously is wine and food but one of my other passions (and career) is technology. I’ve loved gadgets since I was little and as time went on I’ve been fascinated with how technology impacts our lives, altering how simple communication is transformed. Anyhow since I’m seeing all these 2011 predictions, I thought I’d throw some out there myself.

I won’t go into specific products but rather trends in technology that will impact businesses. The first and most important in my book is mobile.

• Mobile Web — 2008 and 2009 were about mobile applications but a not so well known fact is that mobile web consumption is far greater than application consumption (in terms of time spent / pages consumed), and in 2011, we’ll see mobile web growth start to take a sizable bite out of overall web consumption. I’ve seen projections of 5% of web ads / page views, I think by the end of ’11 more than 10% of web pages consumed will be in a mobile environment. What this means is if you’re a web publisher, you need a strong HTML5 presence (not a mobile application), if you’re an ad technology provider you need solutions for the mobile web space or you’ll see your market share stagnant. Android, iOS and to a lesser extent Windows Mobile will all grow considerably in 2011 as the idea of a “smartphone” becomes the norm for all US consumers.
• Real-Time Advertising — For folks in the online display advertising market, they know that 2010 was the year of Real Time Bidding (RTB) became a reality but 2011 will be the year it goes mainstream and starts to have a major impact on legacy systems and models. This is important because its bringing the efficiency of search engine marketing to display advertising, it also allows the big brands to better target and reach consumers (and in turn spend more $$$ online). For end users it will mean better online ads, I know most users would prefer no ads, but then again its an acceptable trade off for the vast majority of users who ultimately prefer free content. Google has predicted that 50% of all online dollars will be spent through real time bidding by 2015, I predict the biggest leap (percentage wise) will occur in 2011 as the advertisers/agencies mobilized around this in ’10 for a major jump forward in ‘11.
• Local — The promise of local content, services, reviews, etc. have been around for more than a decade and major online businesses have invested in this for years (anybody remember MSFT’s Sidewalk product in the late 90's?) yet there has been a severe deficit of truly compelling user experiences outside of restaurant/vendor reviews. However the concurrent trends of mobile and local deal / advertising innovations will meet in earnest in ’11 to make this the fastest growing area for dollars and user interest. Forget about Groupon for a second (though how can you with their amazing user, revenue and funding growth), with some truly interesting mobile user tools (think Foursquare, HotelTonight, UberCab, Foodspotting, Instram, among many others) coupled with real monetization engines (local deals, location based targeted advertising) we’ll see a lot more investment in ’11 here and most importantly the intersection of user interest and revenue. It’ll be great for users and a new growth area for venture dollars and entrepreneurs. Of course this started in ‘08/’09 but we’ll see exits / business maturity and continued innovation in ’11 here.
• TV via the Internet — Some people call this cord cutting, I define it as users dropping their monthly cable bills for online only video consumption. With major investments from Apple, Google, NetFlix, Hulu among others, consumers, and specifically the non early adopters, will finally have the tools and knowledge to drop their monthly cable/satelite deals in 2011. If you’re not a sports fan, you can do this today without much pain (thanks to Netflix & Hulu Plus), but with all the major sports networks (MLB, NBA, NHL & NFL) offering web specific packages to receive all their games online, and ESPN3.com maturing, everybody will have the ability to cut the cord so speak in 2011. Obviously not everybody will but my prediction is a significant enough number will (say 5% decline in active subscribers) that we’ll see more public battles between the cable companies, content providers and online vendors that demonstrate the fear the legacy providers have in this new world. The ongoing war here is the net neutrality conversation but the first major battle in this conversation is the Comcast — NBC Universal merger, which will give the largest cable company direct control of a healthy portion of original content. If you’re a consumer who wants more choice, you should actively be pushing your local congress person to enforce net neutrality principles for the merger and access to the NBC Universal content, otherwise you can expect to pay MORE for that content in the future.

There are lots of other trends, both good and bad, that will play out in 2011. But from my vantage point the above four are the most interesting and will play the biggest role in shaping our future as it relates to content consumption and monetization.

I’d love to hear your opinion, please feel free to comment here or tweet me @jwetzel

In the meantime have a great New Year!