Digital Hot List 2009

Outlandish boasts aside, Mark Zuckerberg is a pretty smart guy. Though the founder and CEO of Facebook lost a bit of credibility in 2008 when he foolishly declared his Beacon ad model would change advertising for the next 100 years, he’s easily regained it all back on the strength of the seemingly effortless growth of his social media platform. Facebook is simply the hottest site in the digital world right now, thanks to Zuckerberg’s wise move three years ago to broaden beyond the college crowd (a move that earned Facebook the No. 1 position on our Digital Hot List in 2007). With exponential member growth across all demographic categories, a credible ad play that has marketers buying in and signing up (as they are on Twitter, No. 3 on this year’s list) and an inclusive model, Facebook stands as the sine qua non of social media.

But Facebook is not the only digital success story, as AdweekMedia digital editors Mike Shields and Brian Morrissey spell out in this year’s Digital Hot List. No. 2 Hulu (up from No. 4 on last year’s list) made good use of “old media” by buying time on this year’s Super Bowl, then watched its uniques surge to 40 million a month—as it secured one of five online video ad dollars. No. 3 Twitter, meanwhile, is so red-hot, TV producers are starting to build “no Tweeting” clauses into actors’ contracts.

Not on the Hot List but certainly meriting attention is the burgeoning business of e-readers. This fledgling industry has rapidly moved past Amazon’s Kindle, embracing all printed media, not just books anymore. Only last week, Barnes & Noble rolled out its category entrant, the nook. Digital editor Shields separates the hype from the realities for ad-supported publishers who are eager to embrace this new way to reach (especially younger) consumers but fully understand this is no panacea.

As the digital industry gets back on its feet after a bruising 2009, expect these 10 leaders on our Digital Hot List, as well as the e-reader purveyors, to lead the way to recovery. 

—The Editors

1. FACEBOOK
Facebook has more members than the population of all countries in the world save China, India and the United States—and it should overtake the U.S. next year. Not bad for a company that five years ago began in a college dorm room. Social media is joining search as a main conduit to information on the Web, and Facebook is the undisputed leader. How big is social? This year it passed porn as the Web’s No. 1 activity. It has become a trusted referral engine for users to share links and opinions, acting as a human-powered counterpoint to Google’s computer- driven discovery engine. Facebook has managed to balance its tremendous growth with the seeds of an ad model that will live up to founder Mark Zuckerberg’s boast that it would change media forever. By eschewing a focus on banner ads, Facebook has pioneered the use of engagement ads to get its users to fan brands, vote in their polls or watch their videos. The strategy is working: Facebook has done work with 80 of the top 100 brands and is now cash-flow positive and expecting more than $550 million in 2009 revenue. Not so shabby.

Profile: Unique U.S. audience doubled to 94 million > Time spent per user a month crossed 3 hours, up 13 percent > Passed 300 million members > Expecting $500 million in revenue and now cash flow positive. LAST YEAR’S RANK: 2

2. HULU
The joint video venture announced in 2007 between NBC Universal and News Corp. was written off as a disaster in the making. Either the partnership’s competitive interests would crush it, or YouTube would. Two years later, even Disney is in as an equal partner (CBS remains glaringly absent). Some analysts estimate Hulu accounts for some 20 percent of all online video ad spend. Almost every major TV and movie company distributes content on the site. Hulu enjoyed a major traffic spike after kicking off a TV campaign during this past Super Bowl, but that could tail off if it starts to charge viewers. Though it still doesn’t sell all of its long-tail inventory, Hulu has set the pace in the market. The site has forced much larger YouTube to adjust its content approach by adding more ad-friendly long-form content.




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