Digital Hot List 2008

Bringing the Heat

As we all know, it ain’t just about Web sites anymore. These rankings, when we started them four years ago, were known as the AdweekMedia Web Site Hot List. Besides the clunky moniker, it increasingly didn’t reflect the fact that ad-supported digital media had mushroomed far beyond Web pages to encompass search, networks, applications, games, virtual worlds, mobile and other forms. Thus, the Digital Hot List was born.

This year’s top 10 (compiled by Adweek’s Brian Morrissey, Mediaweek’s Mike Shields and myself) certainly reflects the diverse universe of platforms embraced by consumers as well as marketers.

Making its Hot List debut at the very top is, of course, Google. Accounting for more than one-quarter of the total online ad market in the U.S.—and with such important developments as the acquisition of DoubleClick and the launch of Web browser Chrome—it’s a sure bet Google will continue to shape the future of digital media, for all players. Others making their first appearance here include such powerhouses as Apple’s iPhone, Hulu and Xbox Live; returning from last year are Facebook, YouTube and Imeem.

When the list was comprised only of Web sites, we singled out those with the most impressive growth year over year in closely watched metrics like unique audience, time spent and pages viewed per user. For the sites making this year’s rankings, we used the same methodology, relying on data from a range of sources, including Nielsen Online (which, like AdweekMedia, is part of The Nielsen Co.), comScore and others. For sites and nonsites alike, we considered additional factors, including influence on the world of digital media, as well as the culture at large; ad innovation and results; and the informed judgment of our best contacts in the ad business.

—Tony Case, Editor, Special Reports (tony.case@nielsen.com)

THE DIGITAL HOT LIST

Dynamite Destinations and Devices of 2008

1. Google

Just call it “the home page of the Internet.” Where portals once ruled, Google’s search algorithms now hold sway, dictating the experience for the wide majority of Internet users. What’s more, Google has turned advertising on its head with its reliance on math to match up marketers and consumers. (Google now comprises 27 percent of the entire online ad market in the U.S., per eMarketer.) With DoubleClick in hand, Google has a chance to spread further into display and video advertising while it also continues to press into selling print, radio and TV inventory. More than any other player, Google most certainly will continue to define the future of digital media.

Raked in Q2 revenue of $5.37 billion • $3.53 billion in revenue from Google-owned sites •  DoubleClick acquisition boosts ad outlook • Unveiled browser Chrome in challenge to Microsoft’s Internet Explorer

Last Year’s Rank: New to List

2. Facebook

Rupert Murdoch may dismissively liken it to a phone directory. But, in fact, Facebook has established itself as the hub of the next iteration of digital media: the social Web. It blew past News Corp.’s MySpace with a fast-expanding, demographically diverse global user base of more than 100 million. Its revolutionary decision in May 2007 to open up to outside developers was a seminal moment in the Web moving beyond destinations to encompass platforms. A fly in the ointment: Facebook has yet to crack the advertising code. Still, it remains the odds-on favorite for figuring out how to introduce new forms of ads into social environments.

Unique audience soars 76.6 percent to 29.9 million, while rival social net MySpace is flat • Time spent up 19.6 percent • Global active user base more than 100 million • Still struggles to crack the ad code

Last Year’s Rank: 1

3. iPhone

Yes, it’s a piece of hardware. But the iPhone makes the Hot List for single-handedly elevating an entire medium and potentially—finally—delivering a robust platform for mobile ads. To date, mobile advertising has been all potential and little payoff, with the average consumer still using his or her cell for calls and texting. Then, this past July, the 3G smartphone model sold 1 million units in its first weekend. With 82 percent of iPhone users accessing the Web, per Nielsen, and 37 percent watching video—10 times the average for mobile users—more brands are paying attention to the medium, all because of this single, remarkable little machine.

Estimated 8 million units sold, approaching Apple’s goal of 10 million by end of year • Even before launch, single-handedly elevated the mobile medium, as well as prospects for mobile advertising

Last Year’s Rank: New to List

4. Hulu

Labeled “Clown Co.” by bloodthirsty bloggers anticipating its failure, this high-profile joint digital venture of media giants NBC Universal and News Corp. wowed the ad world with its user-friendly design and growing library of programming. In July, five months after launch, the site hit 3.3 million users and delivered more than 100 million streams. While not a YouTube killer, insiders say Hulu regularly sells out ad inventory as it experiments with ad approaches like the “choose your own sponsor” option. Beyond its early success as a destination for fans of shows like The Office and The Daily Show, Hulu represents the embrace of mega Web syndication by once-twitchy TV nets.

Achieves 3.3 million users just five months into launch • Besides NBCU and Fox, features content from movie studios (20th Century Fox, MGM), sports leagues (NBA, NHL) • Clients include GM, Toyota and Intel

Last Year’s Rank: New to List

5. Glam

Some Web publishers dismiss Glam, sniffing that it’s nothing more than a glorified ad network. But one need look no further than the range of players mirroring the Glam model to witness its influence. The likes of MSLO’s Martha’s Circles and Nickelodeon’s ParentsConnect are, essentially, amalgamations of cherry-picked blogs and long-tail sites featuring like-minded editorial elements—much like Glam. Other players, meanwhile, would run a mile in their Jimmy Choos for Glam’s growth. In June, its audience swelled 216.7 percent to 30 million year over year. Sporting more than 600 publishers focused on themes ranging from health and family to fashion, Glam is a stunner.

Unique audience surges 216.7 percent to 30 million • Time spent up 10.6 percent • Clients include Neiman Marcus, Levi’s • Boasts more than 600 publisher partners, from Manolo Blahnik to Rachael Ray

Last Year’s Rank: New to List

6. YouTube

It’s hard to believe it’s been less than three years since Steve Chen and Chad Hurley first uploaded videos on YouTube. Now it’s part of our everyday lives, bringing more than 70 million monthly unique users in the U.S. alone everything from campaign speeches to the latest viral sensation. (Barack Obama referenced YouTube as an example of today’s warp-speed spread of information and images.) Of course, Google still hasn’t figured out how to make money from YouTube. Its overlay ad program sputtered a year after launch, while marketers get only ho-hum options for tapping into YouTube’s rapt, global audience. But for bringing in the masses, it remains unrivaled.

Unique audience jumps 39 percent to 71.4 million • Pages viewed per user up 34.5 percent • Time spent up 27.7 percent • Most- trafficked video site by far • Remains dominant cultural force • Ad success still elusive

Last Year’s Rank: 3

7. Xbox Live

A subscription-based Web platform that lets Xbox 360 players talk trash with friends across the globe during sessions of Halo 3 also lets marketers pin down 18-to-34-year-old males in a gaming environment, but without interrupting the game. Swelling from 6 million users to 12 million since the beginning of this year, it has landed sponsors including McDonald’s and Doritos, the latter encouraging users to create a game around the brand. Nintendo Wii has grabbed headlines, but in marketers’ battle for the living room, Xbox Live is the real game-changer, selling downloads of premium programming while delivering a expanding roster of original, ad-supported content.

Doubles user base to 12 million since beginning of this year • Content partners include Paramount Pictures, NBC and TBS • Recent partnerships with Netflix and Warner Music Group to stream movies, music videos

Last Year’s Rank: New to List

8. The Huffington Post

In this historic election cycle, one of the biggest scoops didn’t come from The New York Times or The Washington Post. Rather, the news that Barack Obama called rural voters “bitter” at a San Francisco fundraiser first appeared on The Huffington Post, the three-year-old site founded by Arianna Huffington that’s creating nothing less than a revolutionary and dynamic model for digital purveyors of news. The so-called battle between blogs and “mainstream media” largely misses the point. Going forward, the most relevant players will, like “HuffPo,” likely combine the best of both, delivering smart journalism and incisive commentary as well as user participation.

Unique audience grows 218.9 percent to 4 million (beating rival Politico’s 2.4 million) • Time spent up 53.3 percent • Regularly scoops ‘mainstream’ press (must-read, wall-to-wall coverage of GOP veep pick Palin)

Last Year’s Rank: New to List

9. Imeem

Where so many others failed, Imeem has a hit on its hands. Online music is a tough business, requiring navigation through a minefield of rights issues and other challenges. Witness Pandora: The popular online radio site is under threat of shutting down after royalty fees were jacked up. And SpiralFrog, a well-funded startup, has struggled despite the support of influential recording and ad industry figures. But Imeem has pulled away from the pack, successfully combining music sampling (establishing pacts with the major labels) and social networking. Innovative ad programs for marketers including Toyota and Nokia are a sure bet that Imeem will play on.

Unique audience balloons 121.9 percent to 3.6 million • In less than four years, the innovative music/social-net site lands pacts with major labels, builds promising ad base (Toyota, Nokia) as other players flame out

Last Year’s Rank: 10

10. Stardoll

Virtual worlds tailored to kids and tweens are popping up all the time—and one of the coolest, most innovative players has to be Stardoll. Users can play dress-up with avatars of their own creation, or those modeled after celebrities like Miley Cyrus and Avril Lavigne, using the products of real-world retailers including DKNY and Sephora. The site, which boasts 20.6 million global members just two years after launch, has landed business from marketers including Procter & Gamble, Kohl’s and The CW network. Critics argue that it’s less a “world” than a 2-D site. But Stardoll, promising more community features, is most definitely one to watch in the on-fire kids market.

Just two years on, this ‘virtual paperdoll’ site draws more than 20 million members • Innovative intersection of kid-targeted social media and retail/fashion marketing • Counts P&G, Kohl’s and T Mobile as clients

Last Year’s Rank: New to List

All About Apps: from Twitter to Loopt, these players grab the spotlight

By Brian Morrissey and Mike Shields  bmorrissey@adweek.com, mshields@mediaweek.com

The Internet is morphing from a collection of Web pages into a growing assortment of applications that users can move across an expanding variety of platforms—from computer desktops to social-networking sites to cell phones. It is happening against the backdrop of the exploding phenomenon known as the social Web, where users don’t so much passively receive information as they actively create experiences and share them. In recognition of this transformation, we surveyed the digital landscape for the very hottest apps. Here, we highlight some of those enjoying the most impressive growth while delivering the greatest potential for brands.

Loopt

Via Facebook, users can announce to the world what they are “doing right now.” Using Loopt, users not only can see what their friends are up to but also where they’re located, tapping into GPS technology increasingly common with cell phones. Friends not only can find each other as they go about their daily business but also can share photos as well as recommendations on restaurants, stores and the like on various partner blogs and social networks, including Facebook. Scarily intrusive to some but extremely cool among a certain breed of out-and-about young urbanites, Loopt is being watched carefully by the privacy-concern crowd. But marketers, long hoping to tap into the place-based ad potential of mobile devices, are homing in on the opportunities Loopt has located. —M.S.

Social Gaming Network

If there’s a category of killer app on Facebook, it’s gaming. (Just consider the passion—and, ultimately, the disappointment—stirred by Scrabulous.) One of the more innovative creators of popular games is Social Gaming Network, a Palo Alto, Calif.-based startup backed by a reported $15 million in venture capital, including an investment from Amazon CEO Jeff Bezos. SGN claims 1 million players per day, an install base of 50 million users gravitating to titles including the increasingly popular multiplayer fantasy game Warbook. Marketers like Gillette have advertised alongside a number of SGN games, and the company promises in-game ad opportunities soon. —M.S.

Twitter

Every year or so brings an Internet phenomenon that grabs the spotlight. Two years ago, it was YouTube. Last year, it was Facebook. And 2008 is the year of Twitter. The micro-blogging platform that famously enables users to tell their friends what they’re up to in “140 characters or less” isn’t for everyone. (Its user base is estimated at just a few million.) But Twitter is the medium’s hot thing of the moment, attracting not only the most famous bloggers but also news outlets and even presidential candidates. (Barack Obama is the most popular Twitterer, with more than 70,000 following his daily updates.) Twitter’s open architecture has spawned dozens of apps via outside developers. Because Twitter is free to users and does not carry ads, its business prospects remain uncertain. Still, brands like Comcast and Dell continue to warm to Twitter, setting up accounts to field consumer comments aimed at improving their customer service. —B.M.

Nike+

Few brands have successfully created their own online communities. The gold standard is Nike+, an application that lets runners track their workouts through chips in their shoes, then upload them to a social-networking site. Since its debut in May 2006, users have logged more than 80 million miles on Nike+. The beauty of the system is that it combines product, utility and marketing all in one. Rather than rely solely on an ad message about reaching one’s goals, Nike is helping runners attain them. And Nike+ has spawned some interesting extensions. Two weekends ago, more than 1 million runners participated in the Nike Human Race 10K in 25 cities, along with those worldwide who ran on their own and uploaded their performances on Nike+. —B.M.

Slide

This apps pioneer first gained traction via its ubiquitous photo-sharing tool. More recently, it has built a user base of more than 150 million by nailing the silly social side of social networking with mega-popular apps FunSpace, Top Friends and SuperPoke!—the latter enabling Facebook users to “hug,” “kiss” and “slap” their friends. This summer, users could even “whip” their buddies courtesy of a tie-in with Paramount Pictures’ Indiana Jones and the Kingdom of the Crystal Skull. Coca-Cola used Slide’s “Top Friends” app to share virtual bottles of Vitaminwater. Also this summer, SuperPoke! got its TV closeup, via a partnership with cable channel VH1. —M.S.