Speaking at the keynote of Forrester’s European forum in Paris, Colony had this to say about the biggest social network in the world:

“I think Facebook is toast. The company is in major trouble around mobile engagement and the app Internet.”

Of course, Colony’s concern with Facebook is not uncommon. The “someone else” part of the title refers to highly publicized comments from one analyst back when Facebook’s stock price was really (really, really, really) hurting. Ironfire Capital’s Eric Jackson said that Facebook would “disappear in the way that Yahoo has disappeared” within the next 5 to 8 years.

His concern? Facebook’s ability to monetize mobile, which he predicted as the force that would dominate the future.

Forrester’s Colony echoed those sentiments today. According to PCWorld, he said that “mobile engagement, built on architectural change brought about by the app internet will replace the broader Web as the focus of innovation and change.”

And apparently, Facebook won’t be a part of that.

Facebook’s IPO blunder was no doubt a wake up call for many investors and prospective investors. And the company struggle to monetize mobile was always at the center of that doubt, especially after Facebook amended their IPO filing to state that they “do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and [their] ability to do so successfully is unproven.”

It’s still unclear whether Facebook will be able to truly monetize mobile and if it will bring in an untold stream of revenue, but some recent reports suggest that the company may have reason to hope. In a period following the point where Facebook began offering mobile-only ad options to advertisers, mobile ads performed very well. Much better, in fact, than desktop ads (whether they be News Feed or right-side) or all other ad packages combined. One ad partner even found that the mobile-only Sponsored Stories ads had a 25x higher click-through rate than Sponsored Stories on the desktop.

And as you know, Facebook is always looking at new ways to boost ad revenues. Two rumored services in the pipeline include a real-time bidding platform as well as location-based mobile ads.

Colony isn’t the first, and I’m sure he won’t be the last to call time of death on Facebook. Of course, much does depend on mobile – realm that is undeniably expanding at a substantial rate. This also isn’t Colony’s first prediction to make news. Back in late 2011, he predicted the burst of the social startup bubble.

Colony’s analysis didn’t quite cross over into the territory of a personal attack. He was even complimentary at times, writing, “Zuckerberg appears to have the raw material to be a great CEO — vision, technical knowledge, high IQ, creative thinking.”

Still, Colony made more than a few unkind remarks. He claimed, for example, “Mark Zuckerberg’s skills as a CEO are overrated. . . . Zuckerberg’s media profile vastly overshoots his abilities.”

Also, Colony wrote, “What can Mark Zuckerberg, CEO of Facebook, teach other CEOs? Not very much. To date, he is a one-trick pony — a leader who has expertly refined and polished one very, very big idea — remaining unproven beyond the borders of that idea.”

These comments could cause a few Facebook supporters to rethink their position, if only because of the source. Forrester Research has a very good reputation in some quarters.

Or maybe the development will work in Zuckerberg’s favor. A significant number of people have already come forward to defend him in the comments section of Colony’s blog post.

To drive his point(s) home, Forrester analyst James McQuivey put together a 1,050-word post.  "TV matters in a way that nothing else does" was one of his more noteworthy arguments.

"Each year, the TV drives roughly $70 billion in advertising and an equal amount in cable and satellite fees, and another $25 billion in consumer electronics sales," McQuivey pointed out.  "Plus, viewers spend 4.5 hours a day with it . . . .  Google’s goal is to get into that marketplace, eventually appropriating a healthy chunk of the billions in advertising that flow to and through the TV today with such painful inefficiency."

And with regards to the odds of Google succeeding, the analyst later wrote, "[T]he base layer of high-speed connectivity to and in the home can support Google’s ambitions.  Plus, there’s enough content online between YouTube, Hulu, and Netflix, to make it worth the bother of connecting the TV . . ."

Then there are Google’s partnerships to consider, with its alliance with Sony looking especially likely to provide its TV platform a way into people’s homes.

Google TV seems liable to enjoy another wave of positive press (and in effect, free advertising) now that all of these points have been laid out.

Forrester’s been classifying online people as inactives, spectators, joiners, collectors, critics, and creators for quite some time, and its statistics regarding these groups have provided valuable about how the online landscape is changing.

The problem, as Forrester analyst Josh Bernoff noted earlier, is that these categories didn’t leave much room for normal Facebook and Twitter users.

So the conversationalists classification was introduced to represent Twitter users and Facebook users who make at least one status update per week.  Exactly 33 percent of online folks should fall into this grouping, and Bernoff added, "They’re 56% female, more than any other group in the ladder."

Also, "While they’re among the youngest of the groups, 70% are still 30 and up."

The above diagram pretty well shows the breakdown of other groups.  Now we just get to sit back and see how quickly people travel up the ladder as the social Web gains momentum.

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"US consumers are making an inexorable transition to an all-digital, Internet-powered world," said Forrester Research Principal Analyst Charles S. Golvin. "The Internet pervades all aspects of Americans’ lives, from how we shop and buy, how we communicate, how we entertain ourselves, and how we seek out information to how we manage our personal relationships. While today these digital activities are constrained to the home and the office, in the next several years consumers will increasingly rely on a ubiquitous Net that is instantaneously accessible on a wide variety of devices, from mobile phones to laptops to new form factors such as eReaders."

In Forrester’s report, they segmented consumers by "lifestage," looking at singles and couples, young families, older families, and older singles and couples.

"This lens provides some very interesting consumer insights into how technology behavior changes when people transition between different stages of their lives," says Forrester’s Jackie Anderson, who spent months sifting through the data. "Which devices do they own, and how many of them, what are they buying and not buying, how they are using the Internet and even how they’ve structured their digital home."

Findings from the report include:

- Young singles and couples are the most connected (About half has send a picture from a cell phone in the past month, and a quarter has accessed the mobile Internet).

- 33% of US homes with Internet have home networks

Also at play is a shift in marketing budgets’ allocation for interactive channels, for the purpose of matching consumers’ migration online, the firm notes. The market is expected to grow to $953 million by 2014, which would be a 17% compound annual growth rate.

"Market usage of Web analytics is in the awkward adolescence stage," says Forrester Senior Analyst John Lovett. "While the analytics market is beginning to develop, significant change is imminent, and maturity is still off in the distance."

The emergence of "highly capable," free analytics tools is changing the game, as Forrester notes, but there are still challenges:

- the need for human analysis of large amounts of data

- the ability to develop metrics

- the necessity to integrate marketing and IT

"The democratization of data is looming," he adds. "Ultimately, Web analytics will become part of a broader array of integrated services supporting marketing professionals who focus on customer intelligence."

Google is certainly doing all it can to get marketers using its Analytics service. The company is constantly releasing how-tos, rolling out integrations, and adding features. With Google being such a big part of online marketing, I’d say it has a tremendous advantage in the market based on its brand name alone.

Forrester offers a full report for the US Web Analytics Forecast – 2008-2014 (for a price). Forrester clients get it for free.

"It’s true that online media has been nearly overwhelmed by an onslaught of inventory — there’s something like 80% more online ad space, a lot of it from social media, than there was a couple years ago," says Forrester Analyst David Card.

This makes targeting all the more important. Luckily there are still channels that can accomplish some very niche targeting, and other channels that have not had this as a strong point in the past are starting to cater to it on a higher level.

"But for all the macroeconomic forces of ‘infinite inventory,’ some ad space — and some audiences — are worth way more than others," says Card.

Research recently shared by comScore shows that vertical ad networks – those that target ads to specific online audiences based on demographic or category content (not unlike our own iEntry Network) – are increasing their reach.

Of those networks tracked by the research firm, the collective reach has increased from 21.5% of the total US Internet audience to 57.1% in a year’s time from March ’08 to March ’09.

Audiences for these vertical ad networks are becoming increasingly more engaged according to comScore. "As more vertical ad networks prove their ability to effectively reach specific target audiences by aggregating mid-tail publisher sites, the industry will likely give greater consideration to these emerging ad delivery channels," says the firm’s VP Media, Lesle Litton. More on comScore’s findings can be viewed here.

Card offers some advice for publishers who are looking to keep advertisers coming. "Cut clutter, experiment with new formats, and know your audience really, really well, is the easy advice for online publishers," he says. "Build out a marketing platform that’s flexible in terms of targeting and in incorporating data from many sources. Encourage comparison. Add other sites’ inventory to your own. Pit your salesforce against multiple ad networks to see who can best monetize some sections of your site (but hold back the best stuff.)," he says.

It’s worth giving heavy consideration to how valuable your home page is as well. While AOL-like numbers are certainly not going to be incredibly common, Compete looked at just how much traffic a home page banner ad displayed on AOL’s home page gave to the advertiser in comparison with other sources. Long story short, that advertiser was probably quite pleased.

Comments

The survey of 145 interactive marketing professionals snuggles-up nicely with cScape’s research published in December that suggested companies will focus more on customer engagement in 2009.

Highlights from the report authored by Jeremiah Owyang include:

• 53% of interactive marketers expect their budgets for social media marketing to increase as a response to the recession.
• Social media budgets remain miniscule compared to the rest of interactive marketing. Three-quarters of marketers say their social media spend is $100,000 or less over 12 months.
• Social media is not yet a marketing line item. 45-percent of marketers say their social budgets are determined as needed and 23-percent say they scrape together funds from wherever they can find them.

Only 25% of companies are spending more than $100k a year on social media and it’s not yet a line item? Reminds me a lot of search engine marketing circa 1999. If you spend peanuts on social media, you’ll get…peanut butter–not filet mignon–when it comes to seeing results. Something Owyang agrees with:

“If you continue to fund social applications only as experiments, you’re unlikely to be able to do enough to make an impact, or to have a secure source of funding for the future. One way to put these efforts on a firmer footing is to concentrate on objectives and measure progress… rather than just experimenting to see what happens.”

You can purchase “Social Media Playtime Is Over” from Forrester for $749.

Comments

A new study by JupiterResearch, a Forrester Research company, predicts that digital music will grow from the current 18% to 41% of total sales in 5 years. Researchers credited stores like Amazon and the transition to mp3′s which make downloads portable for some of the increase.

The "U.S. Music Forecast 2008 to 2013" predicts that growth in digital music sales will not compensate for declining CD sales, with the U.S. music market shrinking over the next five years from $10.2 billion to $9.8 billion.

64% of subscribers to digital music services and 57% of those who download music also bought a CD in a store within the last year. Regular digital music consumers have shifted 60% of their music spending to digital. The study predicts that music on cell phones will only contribute 3% to overall sales or $300 million by 2013.

ANALYSIS: While the CD will continue to hang on, most..