Geoff Ramsey, co-founder and CEO of eMarketer, offers his singular insight regarding the past, present and future of digital marketing.

By Tom Dellner

One could make the argument that Geoff Ramsey is the world's leading authority on online marketing. And it would be a difficult argument to refute. Ramsey and his colleagues at eMarketer perpetually canvass thousands of sources worldwide for the latest data regarding every aspect of e-commerce and digital marketing, from search to social media to mobile to video game advertising--and everything in between.

We sat down with Ramsey to discuss the hottest--and the not-so-hot--online marketing trends, and to ask him to make some difficult prognostications about the future of e-commerce.

Electronic Retailer: What was the impetus for the launch of eMarketer?

Geoff Ramsey: The three partners at eMarketer were all in the advertising business. Prior to launching eMarketer, we had a small shop together. Back in the mid 90s, we were creating websites for our clients. One of my partners suggested that we create our own website--a business portal for Internet marketing.

I started creating content for the site and wrote a number of articles about the conflicting statistics regarding online marketing trends. And these were pretty basic, fundamental studies: the sheer number of Internet users in the U.S., the amount of time spent online, etc. And even on these basic metrics, the numbers from the different research companies were so wildly divergent that it was all somewhat laughable. It was pretty clear that there was a need for a company to step in, gather, synthesize and make some sense of the data.

ER: What was the competitive landscape like at the time of eMarketers launch? Were there particular areas of research for which the market was especially hungry?

Ramsey: There were less market research firms back then. Over time, weve seen many niche players pop up, covering, for example, the Web 2.0 space, which we think is terrific. eMarketer is a research firm that doesnt do market research--were aggregating data from hundreds of different sources, so were always looking for bio-diversity, if you will. The more different kinds of research companies out there, be they online pollers or other kinds of survey firms that are canvassing the Internet, the richer the content we have to report on and thats good for everyone.

Back then the market was a lot of dot.coms--and the VCs that were supporting them--looking for any and all available data about the Internet. Mostly, they needed very basic information like the size of e-commerce, the size of the online ad market, etc. Of course, the projections back then were all way off. We miscalculated both the scope and the direction of e-commerce. As luck would have it, most researchers ended up overestimating in the short term and underestimating in the long term.

ER: What do you do when you encounter conflicting or divergent research?

Ramsey: We thrive on information like that. Because we have a massive database of all the trend data, estimates and projections from the various firms, were able to compare this new data with the existing body of evidence. When the numbers are way off, a couple of things might be going on. For example, the information might be crap--the report is an outlier with bad methodology and no bearing whatsoever on todays marketplace. Or, maybe its a signal that the market has changed and we need to re-calibrate.

To assess the new data, well look hard at the methodology used to see how robust it is: Was it a survey of 12 executives? Or were 50,000 people polled as a result of a random digit dialing sample survey. Well also look at the definitions used; differences in definitions--the definition of Internet user, for example--could account for the divergent numbers. And we also look for bias. For example, the data might come from a legitimate research firm, but the research is sponsored by a vendor that has a vested interest in the outcome. Looking at these three factors, in addition to comparing the data to the existing body of evidence, we begin to get a clear picture of whats going on.

ER: With the emergence of more research firms, are you seeing more red herrings in terms of data, or are the numbers more consistent?

Ramsey: Over time--and this is a 10-year perspective--I would say that generally were seeing more convergence. New numbers seem to confirm prior projections and existing information. This is probably less because the research firms are getting better at it, and more because the industry as a whole has matured and the technologies for measuring data have improved. But sometimes we still get numbers that are all over the map--especially when the research is future-looking.

ER: Can you think of a marketing trend that you thought showed true promise, but which never really took off?

Ramsey: Its far easier to look at the ones where you went, ah ha, I knew that was going to happen. We tend to weed out of our minds those things that dont sync up--post rationalization. But one of the things thats kind of dogged me--I always saw it as just on the horizon, but it never really came into favor the way I thought it would--is rich media. What we didnt foresee was that rich media would essentially be eclipsed or leapfrogged by online video--everyones been caught a bit off guard by this: content publishers, advertisers, marketers, ad agencies and certainly the television networks.

ER: What current marketing trends or technologies might be susceptible to the same fate?

Ramsey: Another good question. Its not that these things are fads and are going to go away altogether. Its more that they will remain relatively small as marketing phenomena or consumer trend phenomena. Or that they dont necessarily translate to significant e-commerce or online marketing opportunities. Widgets, podcasts and some of the real-time communications technologies like Twitter fall into this category. Again, I dont think these things are going away, but the absolute number of people listening to podcasts, for example, is infinitesimal compared to the number of Internet users doing social networking or using online video.

ER: Conversely, which have caught fire to your surprise?

Ramsey: Online video. Specifically, the speed at which it has taken off. Certainly, we saw online video coming and were the first to issue a report on it. But the speed with which its been adopted has surprised us all.

Another that surprised me personally was widgets. I heard about them a few years ago and pooh-poohed them, but now theyve become important enough that eMarketer has written a report on them. Now its only 30- or 40-million-dollar business in terms of marketing, so its small table stakes as compared to the $21.4 billion thats spent on online marketing in general. But it did catch me a bit off guard because I thought it was something that would come and go rather quickly, but its still here and its use will continue to grow. However, will it become a truly viable marketing opportunity for most e-tailers? As I mentioned above, I think not. And heres another factor to consider: As these little marketing trends become bigger, the more theyre used by other marketers, the more diluted their efficacy becomes.

ER: Are there any other emerging trends or technologies that you think have great potential?

Ramsey: Ive been a little taken aback at how quickly customer reviews have been embraced by consumers. Three-quarters of consumers look for customer reviews on e-tailers websites. But only about a quarter of retailers offer them. Theres a huge gap there, so I expect this trend to take off.

Online video, as I mentioned, remains a huge opportunity for e-tailers. Its a terrific method to do an online demo of your products or brand in action, and video is a more effective way to advertise on other relevant sites. And relevancy is the key. As you get more intrusive with your online advertising platforms or tools (such as going from static ads to online video), youd better be more relevant and targeted.

ER: When new marketing technologies emerge and begin to show promise, you frequently hear the argument that companies should jump in and take their lumps so that they will be ready when the technology hits its stride. And yet, theres potential for a company to invest money in a new trend, only to see it fall by the wayside. In your opinion, how should a marketer approach the decision of whether to embrace a new marketing trend?

Ramsey: I would advise three things: First, know your business and your customer really well. Second, focus on a single platform--you cant be figuring out, at the same time, some sort of blog strategy while creating a social network and implementing an online video program. Third, do some focused testing. On the Internet, it doesnt cost you an arm and a leg to conduct tight little experiments that, if measured correctly, can yield some very useful results. So theres no excuse for not trying things. Just dont try them all at once because then youre measuring nothing--theres no control.

Even if you end up deciding against implementing a new program, you may have learned something that will help you in other areas. For example, an experiment in social networking may reveal that your target customer talks about your products in language you were unaware of, language that could make for effective keyword buys in paid search.

ER: Ten years ago, if you would have been able to look into a crystal ball and see e-commerce as it exists today, what wouldve been the biggest surprises?

Ramsey: There are many things, because the industry doesnt evolve in a linear fashion. You cant just apply a linear extrapolation based on the data points that currently exist. You have to think outside the box to project what the new data points will be, which is nearly impossible to do. For example, 10 years ago, we never couldve predicted that paid search would be such an essential facet of online marketing, because there was no Google that had come along yet to show how search could be monetized. Likewise, who could have guessed that social networking sites would emerge that would grow to a size where they could give the portals a run for their money?

ER: Now that youve said that its virtually impossible to predict marketing trends five or 10 years out, I am going ask you to do exactly that.

Ramsey: Im confident in predicting a couple of paradigm shifts. I hate to use that expression, but were running out of words to describe these amazing things. The idea of content as king will reign supreme in that advertisers and marketers wont just be in the communication business, theyll be in the content business. They will need to produce relevant content that does more than sell, it must be valuable in and of itself. Its the only way theyll be able to cut through the clutter--especially now that we have so much machinery that enables us to filter out unwanted messages. The content must be so compelling that consumers will seek it out and want to share it with others.

Along with that, I think well see the next evolution of distributed content. Users are no longer going to be bound to websites or particular portals. They will be able to go to the I pnternet where theyll have their own space--for lack of a better term--and stuff will come to them, via things like widgets or RSS feeds or other technologies we havent even thought of. It will be the ultimate in fragmentation; everyone will be seeing different content for which theyve opted in. The ultimate challenge to the marketer or advertiser will be to deal with this fragmentation.

ER: A recent report youve issued illustrates that online retailing drives far more store sales than Internet sales. How should a multichannel marketer leverage this information?

Ramsey: People want to buy online and then pick up the item in the store. Or they research online and then buy in the store. Or maybe they want to research in the store, then do price comparison via a mobile device and either buy it online at a better price or ask the store to match the price. This is consumer power.

As consumers, we want to seamlessly shift from one platform to another. Successful retailers remove the barriers that prevent us from doing so.

ER: Mobile marketing has yet to reach its stride in the U.S. When do you think it will begin to fulfill its potential?

Ramsey: I think its still a few years out. We have a number of impediments that are going to continue to hold mobile back. Its a great opportunity, but with different carrier platforms and different handsets, etc., its an extremely arduous task that marketers face in pulling together enough audience and measuring campaigns effectively across platforms. It takes the brave and the deep-pocketed to make this work right now.