10 Predictions for 2012

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1. One of the world’s 3 major economic systems (Europe, USA, Asia) will experience a MAJOR correction. Huge snapping sound propagates ’round the globe.

Where will the tsunami strike first? I don’t know, but some clues:

  • Surely nobody needs to remind you about the Unstoppable Force (US government spending), vs. the Immovable Object (reality). The Unstoppable Force is not unstoppable and will hit a wall. The next wave of billionaires will be options traders who bet their money that sooner or later, reality will prevail.
  • China is in a massive real estate bubble. A condo in Guangzhou costs every bit as much as a condo in downtown Chicago; in Shanghai it costs more. I have no way of predicting when this is going to end but it will.
  • Britain’s debt is even worse than the US.
  • Porter Stansberry’s famous “End of America” video (a contrivance of some truly brilliant copywriters) predicts the next apocalypse will come when the world suddenly decides to abandon the dollar.

The reason Porter is wrong is that the other choices are even worse.  Sort of like an election, where you vote for the person you suspect to be the least-evil puppet ruler. Karl Deninger said, “The US dollar is a hooker with crabs… all the other currencies have AIDS.”

2. Cost Per Impression for online marketing exceeds that of offline. Online offers no particular price advantage in thick niches; the advantage is in the bells and whistles and targeting. Well worth the money, by the way.

This trend is already firmly established with “Jugular Offers” (troublesome B2C categories like business opportunities, weight loss, alternative medicine) where Google bans are the norm.

This means ninja marketers now use Pay Per Click to test and perfect, then cut deals elsewhere for the big profits. (Funny…. hey, wasn’t I saying that 8 years ago?) Customers acquired offline are more loyal.

Online-offline integration is the name of the game. I know a surprising number of guys who are making big bucks with radio advertising. Almost all the best info marketers I know are using direct mail profitably.

3. Social Media as a hotbed of demographic and psychographic insight – not sales channel.

Yesterday I was eating corn chips and on the bag was the obligatory blue Facebook “F” logo. “Woo hoo!” I thought. “I sure do love Facebook, it’s where I interact with my favorite brands and learn about coupons and special promotions. Happy Happy Joy Joy!”

Before another minute was allowed to pass, I rushed to my computer and became a fan of Frito-Lay.

Seriously, Frito-Lay isn’t going to budge their sales numbers an inch with a Facebook Fan page. However they will get some fans anyway, and the psychographic information they can get from Facebook will tell them stuff about compulsive TV-watching snackers they’d never figure out from a focus group.

This is the whole idea behind our own Fanalytix™. Years ago you couldn’t have bought this information for any price; now it’s buried under your own mattress. Those who use it possess a decisive edge.

Oh, and even though Twitter has no business plan, they can topple Arab regimes. I believe the CIA secretly sends a white van to the alley behind Twitter’s offices and tosses bags of $1000 bills to a guy in an orange suit.

4. Massive Asia Middle Class. Between China and India, their middle class now rivals the entire population of Europe. Asia isn’t nearly the haven of cheap outsourcing that it used to be; people who used to work for 60 cents an hour now cost four bucks.

It also means Asia’s creme de la creme is 3 million strong and they have TONS of cash. I saw more Bentleys in China in 3 weeks than in Chicago all year. If what you sell is expensive and confers status, you need catch the next flight to Shanghai or Bangalore.

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5. Facebook hits the wall w/ investors. I doubt this will happen in 2012. Maybe in 2013. But at some point, the money people will wake up and realize Facebook has been playing patty-cake with their kindergarten advertising system. Facebook’s gonna go public and public companies have to make money.

Facebook ads are still the wild west, where people rub sticks together to make fire. The good news is, there’s a lot of dry firewood.

Just as a major correction is inevitable, Facebook turns a corner and finally decides to get serious about advertising. Not a moment too soon.

6. Affluent Europeans and Americans are adding a 2nd residence in developing countries. I have a friend who’s doing a seminar on how to set up a second residence in Guatemala. It’s already sold out.

There are some real advantages: Nobody in Costa Rica worries about riots in London, and the cooks and maids there are really cheap.

7. Futurist Ray Kurzweil has long predicted the coming “Singularity.” This is when, through the power of Moore’s Law, a desktop PC finally exceeds the power of the human brain. He says it’s going to happen in less than 20 years.

At that time all the computers in the world will be networked together to form a global brain of unimaginable power, ushering us into utopia. We’ll all upload ourselves into the cloud and achieve immortality. Some folks are cryogenically freezing their heads so they can be resurrected decades from now.

Kurzweil has somehow not noticed that Microsoft Word took two minutes to open 20 years ago and still takes two minutes now. He’s managed to not notice that your computer today is no more self-aware or capable of will or desire than the PC you had in 1993.

Does anyone *really* believe there’s no problem that can’t be solved with more CPU cycles? (“Dear business owner: Your REAL problem isn’t lack of credit or sagging sales. It’s the fact that your computer is just too slow….”)

Oh yeah, and the Singularity crowd assumes you can trust the IT department to house your brain and not sell the memory of losing your virginity to the porn guys.

Meanwhile, people who swore they’d live to be 150 still have strokes at age 57. The “Singuarity” is a rapture story for secular sophisticates.

8. Google plus will never unseat Facebook, but…. Larry Page has tied 25% of employee bonuses to Google+. What this really means is that Google is amassing even more demographic and psychographic data than Facebook ever dreamed of.

This is handy for Google: Facebook takes all the heat from privacy groups for their massive public gaffes, while Google AdWords gets better and better. This is GREAT for advertisers.

9. Retargeting means that the days of 3 cent clicks on Google’s Display Network are over, unless you’re targeting Trailer Trash prospects.

10. Four horsemen: Netflix, Pandora, Spotify and Amazon. The price of books, movies and music is headed towards zero. You’re already seeing 1-day Kindle specials: $20 books are $2.99, 99 cents or even free.

Amazon will start renting books to you on your Kindle the same way Netflix rents movies.

At Amazon, books are just a loss leader for selling flat-screen TV’s and Christmas presents. For you, books are a loss leader for selling ______?

You better decide right now. And if you don’t come up with a loss-leader strategy for your biz… someone else will.

Sleep with one eye open.

Perry Marshall

P.S.: Groupon’s gonna fizzle.

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About the Author

Perry Marshall has launched two revolutions in sales and marketing. In Pay-Per-Click advertising, he pioneered best practices and wrote the world's best selling book on Google advertising. And he's driven the 80/20 Principle deeper than any other author, creating a new movement in business.

He is referenced across the Internet and by Harvard Business Review, The New York Times, INC and Forbes Magazine.

77 Comments on “10 Predictions for 2012”

  1. Hey Perry,

    Not sure on the exact date this was written, but man you hit a lot of great points. Facebook does not seem to be doing well and I actually like using Google+ WAY more than I thought I would.

    Can’t wait to see if Amazon really starts renting books out – that would be really interesting :^)

  2. …and the year Google peaked in market value after trashing their own primary business value? Or maybe that will rather be in 2015..? :-)

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