SOPA and PIPA are twin congressional proposals that are currently making their way through the US legislative process. SOPA stands for Stop Online Piracy Online and PIPA stands for Protect IP Act. They’re both directed at making life more difficult for non-US websites that are in violation of American copyright laws and host, distribute or stream copyrighted content. Well, if their intentions are so noble, why are so many high-profile individuals and organizations coming together to rally against it? Is Wikipedia not against online piracy?

Of course, it is against pirating content or software and so are most people, including the majority of anti-SOPA protesters. The problem is that the Congress is pushing for a major shake-up of legal regulation affecting not just a few offshore offenders but the entire cyberspace, especially its incredibly vibrant US core. And it’s the kind of influence with a high potential for unintended consequences.

If SOPA and PIPA pass, intellectual property rights holders (music companies, film studios, etc.) will get the instrument they could use to indirectly hit a website in violation of their rights. Because many such services are located outside the US, hence outside US jurisdiction, it will be American companies that provide essential online services, from search to payment processing, who will bear the responsibility to punish the offender. This means Google will have to block it from its search results, PayPal will have to freeze its accounts and so on.

According to many industry experts and lawyers, taking this course of action is sure to open up a tremendous potential for abuse and creative exploitation of the new laws. It’s especially upsetting considering that SOPA and PIPA offer a fast track procedure to those placing a copyright claim. More importantly, though, the bills will place the burden of delivering the technological and organizational solution for the whole clean-up process on Internet companies. Even if it’s possible to sustain this kind of self-policing, smaller players, such as start-ups, would face a steep incline to secure resources needed to finance and maintain such systems.

Another criticism of SOPA and PIPA has to do with the fact that there are regulations in existence in the American law that set the framework for handling such cases. Digital Millennium Copyright Act (DCMC) is the most important piece in this field. Also importantly, the twin anti-piracy proposals have been ridiculed by the owners of such sites as Pirate Bay as inadequate and insufficient. Weeding out international piracy is like trying to hit a fast-moving target, but it looks like the US authorities started to take it seriously. Shutting down MegaUpload on Thursday (one day after anti-SOPA protests) may be a harbinger of a tougher stance.

However, there has been quite a lot of talk about growing excess in this area. Too many young companies offer little except small technology twists and a lot of hype. Market valuations are very high considering that some business models are still not profitable and there are too many question marks hovering around. It is becoming more and more difficult to sift through masses of wannabe Internet industry stars and identify real potential and value.

No one will be surprised if the real game-changers (like Twitter or Groupon) emerge unexpectedly, slipping off the investor radar in the early stages, as many did in the past. Below are our bets on which trends will define 2012 in the startup ecosystem.

1. Data-driven startups

Surrounded by sensors and completing hundreds of digital operations, we leave traces of our online activity. One the one hand, companies will work hard to come up with the most effective ways of tracking and processing this information. The most powerful systems will stand a chance of providing outstanding value to clients who are data-hungry and transforming their businesses. On the other hand, many young companies will learn to dig into these vast reserves of web analytics and weave it into useful services and products. Customers will be able to take better informed decisions in a wide variety of areas, from shopping to education.

2. Education barriers come down

We like talking about how the Internet is changing education, but most schools remain oddly inadequate in today’s reality. Many web entrepreneurs are starting to live up to the role of game-changers in this area and we are seeing a spate of ambitious educational projects that leverage technology, from Khan Academy to ShowMe. M.I.T. is getting ready to launch a free online platform with a global reach. There is so much to do in the field of education that startups are sure to emerge here for years to come.

3. The power of mobile devices

The convergence of GPS, web-enabled mobile devices and cloud computing means that an entire new field opens up for exploration. Young businesses that offer reliable ways to reach consumers and make their everyday experiences, from shopping to networking, easier and more fun are sure to make it big. Get ready to see a lot of innovation in mobile payments, shopping and other areas. Add to it Apple’s Siri voice assistant that is only beginning to embrace outside developers are the future is wide open.

The advertising industry is under pressure from its newest digital forms. Online advertising is now second only to television in total revenue, even though as early as in 1995 businesses were struggling to find a reliable way to monetize the web. Search and display marketing have surpassed the printed press in 2010, leaving traditional newspapers or magazines behind and giving them no real chance to catch up in the future. Both search and display show growth dynamics far exceeding any other advertising forms on the market. 15% of the advertising budget of all ad-supported media might not sound dominant just yet, but we’re on the way to much higher values.

Cadogan goes on to talk about his company OpenX, which is a leading provider of adserving and ad exchange solutions for publishers and buyers. It creates an automated and highly effective marketplace of display ad inventory that aggregates both supply and demand. This means that it is easier for publishers to offer their space in an increasingly fragmented and complex landscape at reasonable prices while advertisers have better control over their spending as they can define clear parameters and control purchases down to the single impression. It’s a revolutionary model for every industry player.

Many see digital agencies as the biggest victim of this development direction. If publishers and buyers have a platform to interact directly, why not cut out the middleman? What is the use of agencies buying ad space if the process is automated and easily controlled. The truth is more complicated. Cadogan says that there is still need for expertise at the demand side and knowledge of people at trading desks is not easy to recreate. As new forms of advertising come into the picture, including mobile and smart television, new breed of experts at agencies will be even more needed. Technology will continue to provide a tool for better organization and execution of creative, well-planned campaigns.

Cadogan is optimistic about the future of display. Two important areas of growth that are already showing incredible potential and pace are mobile and video. Online advertising and ad serving solutions will have to find ways to structure and deliver these products for clients as users fall in love with mobile web-enabled devices and different forms of online video. What is interesting is that, as Cadogan says, “no company has established a dominant position in display”, unlike in search, which means more competition and innovation in the coming years

The first reason is that software is becoming more and more complex. Take web application development that is moving forward at a pace that requires great production processes from their providers as well as constant and rapid adaptability. Without tracing the latest changes in key technology areas as well as productivity solutions and tools, most web application development companies become relegated to the status of niche subcontractors. They lack brainpower and agility to tackle complex problems that currently dominate the market and this is bound to complicate further as clients demand more sophisticated solutions that have to be created in more sophisticated environments.

The second source of professional advantage are the tested processes and methodologies that quality players stick to and develop as their operations grow. They shorten the time it takes to market a product or solution and make it easier to integrate new team members or technologies. Without control over these procedures, many software development projects mire in ongoing problems and consume endless resources in order to get ahead. While this could go unnoticed in smaller tasks, the consequences of chaotic development in more complex implementations tend to be vast, including a buggy product and loads of frustration along the way.

One more element that contributes to this growing gap between professional teams and amateurs is the availability and use of tools. There is no question that relying on open-source products and small scale solutions can be successful in one way or another. The problem with with efficiency of the development process as well as the quality of the final outcome. Professional teams working on industrial strength tools and the latest cloud-based enterprise class platforms have a far greater capability to deliver on time and with the sort of quality that business benefits from.

Of course, this difference between the potential and capability of professional and amateur software development teams is not set in stone. Players can freely move from one group to another as they take strategic decisions about their processes, technologies or tools. But with the current complexity of the market and high expectations from clients, it will be taking longer and longer to build an organization strong and flexible enough to service complex software development projects.

Engage 2011 London witnessed the release of a preview of the study findings, but its major impact was clear and strong enough.

As the authors of the study put it, “digital is the new normal now”. While the adoption of the web and web-enabled devices into marketing strategies differs from company to company, it does not go below a certain level and the overall trend is up. Engaging the audience on the Internet is now seen as a standard practice and not a novel solution or an experiment. Digital marketing has been established as a reliable channel and businesses see solid returns as well as the potential for future rewards. Now, it’s not having a digital presence that is considered unusual.

The Digital Life researchers also draw attention to the fact that organizations work more closely than before on digital marketing efforts. Corporate communication is being restructured as a result of feedback from online channels, with collaboration between the chief marketing officer and other functions in the organization getting more intense.

Another conclusion is that digital data is a real gold mine of today for companies. Customers leave more valuable footprints on the Internet than elsewhere and thanks to advanced web analytics it is no longer a problem to collect useful information. It gives companies a major tool for improvement. The real problem is not amassing data, but being able to identify the best ways to use it to the company’s advantage. This is the challenge many companies will be facing in the years to come. Simon Falconer of TNS, a consultancy that organizes the Dailly Life study, said that “for the CMOs we engaged for this wave of Digital Life, the new challenge is very much about uncovering the truly actionable insights from this new data. We see this as a big focus area for 2012 and beyond”.

The final insight reveals at Engage 2011 London had to do with the desire of organizations to achieve stronger integration between distinctive sources of data, including web analytics. The thinking behind it is that when you can bring together several streams into one, you might be able to get more than the sum of its parts. Companies are likely to invest time and effort into pursuing this direction in the coming years, sensing worthwhile rewards.

Should they find or develop a platform that will integrate distinct sources of information in one interface or should they keep using multiple targeted analytical products?

It is a choice between a comprehensive solution that makes it easy to see the full picture and many specialized tools that might provide richer feedback but require more time and effort to process and act on. Every business with an online presence needs to answer this question as part of their Internet strategy.

Clearly, what attracts companies to complete web analytics packages, like Google Analytics or Piwik, is that they are convenient. They provide a wide range of metrics in a single interface, so there is not need for time-consuming hand-stitching between different sources of data. This immediately lowers the learning curve for employees whose job is to use this information to the company’s fullest advantage. Most comprehensive tools are relatively good at adapting to a changing environment of web analytics so they keep updating old features and rolling out the new ones. One downside is that they may not be targeted enough to provide sufficient insight into specific areas of interest for users.

Choosing an integrated product as a bedrock of the web analytics strategy is a good idea for organizations with a less mature online measurement environment and more general needs. They provide a solid level of control over the flow of information and directly actionable feedback. You do not need refined skills to start improving your business operations, especially at a broad level.

The main advantage of targeted web analytics products is that they can provide a vastly improved measurement for a specific purpose. This is getting increasingly important at a time when the online ecosystem grows so quickly, including in brand new directions. Before big players bring themselves around to integrating a functionality to collect data about such new aspects of web activity, we are bound to see startups offering standalone solutions. Developed for a single task, they are often extremely powerful. At the moment, one area of growth for targeted web analytics is online advertising or social media, with smaller players working hard to penetrate metrics such as engagement or loyalty.

Using many targeted products is a good idea for companies with mature analytical environments and with niche-oriented needs. They have the expertise needed to manage multiple sources of online data, possibly even integrate it into major platforms, like Piwik or Google Analytics, and they have clear objectives that can only be met with targeted analytical input.

With business and web analytics in high demand, it seems wise to ask what are its primary drivers.

Mobile. Online players are beginning to feel the push towards mobile experience from their customers and visitors. Desktop will remain a large entrance point for Internet access, but as the number of web-enabled mobile devices continues to rise, so will mobile Internet usage. This creates demand for smart, actionable mobile web analytics that will help companies learn and iterate in search of better solutions. There are many questions up in the air about how to best explore mobile web and how to integrate it with desktop experience. Good analytics is a way to answer them successfully.

Social. Social networking sites are emerging as a mature marketing channel. They do not only help build brands and engage customers in a more personal conversation, but also – as a growing body of evidence shows – stimulate sales. As people become more and more willing to spend time consuming and interacting with social media, it is only natural that analytical tools helping to make the most of this trend are springing up. Companies will have learn to deal with tonnes of data that get generated during their social media campaigns.

Collaboration. Online users have fallen in love with productivity tools, from Dropbox to Evernote to Google Dos, and they continue to seek solutions that will help they go about their everyday tasks in a more efficient and effective way. Project management or CRM systems are in widespread use. Analyzing interactions within these tools will help understand how people collaborate and how to help them collaborate better. As so much casual business cooperation moves online, it is a natural step for companies to want to analyze it and optimize it.

Cloud. Companies have embraced cloud computing as a way to outsource processing power infrastructure and some software functionality. Because of its impact on cost control, the trend is likely to continue, but businesses will seek ways to establish the optimal balance between in-house and cloud-based resources. There will be growing demand for business and web analytics solutions that help figure out how to best combine these two assets in a coherent strategy.

2012 will be a busy year for the web analytics industry. It will continue to try to catch up with an expanding online ecosystem that sustains a growing variety of businesses. Here are key trends to watch.

1. Towards performance-based metrics

Web businesses will continue to put pressure on web analytics providers to deliver not only more actionable metrics, but also metrics that gives a better picture of performance. This means, for example, information about specific actions, leads or sales generated in an online advertising campaign rather than a response (in impressions or clicks) to it. Response-based metrics are convenient and easy to gather, but they rarely provide actionable insight, to say nothing of helping assess effectiveness or ROI. Web analytics providers will continue to develop models to deliver more than just response or engagement data.

2. Real time – now is the time

Online companies will want to react more quickly to what is going on with their web strategy. It will be more important than ever to keep adjusting to customer needs and improving to elude competition. More employees will be dedicated to monitoring effects of online activities and implementing changes before it’s too late. That’s why real time web analytics will play an increasingly important role and service providers will have to develop solutions to make it more useful for users.

3. Channel integration

Online and offline are becoming more and more entangled in business. The best business and marketing strategies will be those that can take advantage of this interplay between different channels as customers switch between online and offline environments. Companies will look for solutions and technologies that help integrate various channels and a great starting point is having solid data collection and mining capability in this area. Web analytics might find itself on the path to convergence with some traditional tools to provide a more complete intelligence service.

4. Custom and specific

As companies in different industries discover the benefits of digital measurement and align it with their strategies, they will demand more custom web analytics solutions to investigate their highly specific audiences with highly specific interests looking for highly specific products in highly specific ways.

Photo by Sean MacEntee

1. Speed and simplicity

Most users expect mobile sites to load as fast as their desktop cousins. Developers will have to put a lot of emphasis on speeding things up for customers as their patience is limited. With competition in practically every corner of the Internet, if you have to wait too long for service, the temptation to switch to a different provider is simply to strong to resist. This pressure will be even greater on mobile than desktop, with most users expecting quick, on-the-spot support. Simple will be the way to go, not only to achieve higher speed of loading. Mobile sites and apps will have to deal with smaller display space and lower transfer for some time to come. Consumers of mobile internet will look for a perfect fit for their mobile needs (which are distinct from desktop experience)

2. Thumb friendliness and visibility

Mobile interface designers and developers will need to find optimal solutions for the physical parameters of mobile devices. They will needs buttons that are large enough to operate without messing things up. With limited display space, visibility will be a high priority. This means putting the most useful features first and making it easy to move around in search of other types of functionality.

3. Accessible, conversion orientated, local

Mobiles make life easier by definition. They simplify communication and doing business. Mobile sites and apps will have to build on this strength. For developers and designers, it means making sure your property works across devices and platforms and is not slowed by inefficient technologies. Keep in mind what your objective with the site is and remove all possible barriers to conversion. It will help you make profit and your visitors use your services.

4. Local first

The biggest potential in mobile sites is that they can help make instant decisions in a specific time and place. This is why it should foreground local functionality, here and now.

5. Across devices

2012 and the following years will be a time of multiple screens. People will continue using desktop a lot at home or in the office while experimenting more and more with mobile applications on smartphones or tablets. It will be important for developers and designers to remain consistent, offering similar or even the same functionality for desktop and mobile. Users love predictability.

Photo by Yutaka Tsutano

1. Mobile application development

The hottest place to be in the IT industry in the coming year will be mobile applications. As tablets and smartphones continue to take the world by storm and consumers demand more functionality and fun, software development outsourcing companies that specialize in this field will make a killing. If they prove their value, they might be eligible for a premium in comparison to other software dev providers for supplying an extremely timely service. Other areas of high demand will be social media, search, web analytics and online advertising

2. The rise of productivity and collaboration tools

Project management and collaboration tools are becoming more and more refined, which makes hiring and supervising remote software developers easier than ever. From Dropbox to Ubuntu One, from collaborative software to platforms such as AWS Elastic Beanstalk, developers around the world can comfortably contribute to projects from remote destinations. This means new implementations relying on software development outsourcing or offshoring will be more efficient and secure.

3. Outsourcing marketplaces

Software development outsourcing and offshoring will make heavier use of increasingly popular online marketplaces for freelancers. This refers especially to smaller and early-stage companies that need contracts to build the portfolio and the reputation. oDesk, Elance, Guru, vWorker, Elance or Amazon Mechanical Turk will become household names for both clients and providers of small-scale and early-stage software development outsourcing and offshoring services. This is an excellent opportunity to test skills and network in search of long-term, big-scale assignments.

4. Reputation segmentation

Reputation of different regions and cultures will continue to play a part in decisions of clients to contract jobs out to particular companies and pay accordingly. Established software development outsourcing destinations, like Poland or the Balkans, will move up the reputation ladder, which means more jobs and a better negotiating position for rates. The Middle East, including Egypt or Tunisia, will be relative newcomers. Reliable providers with a track record of excellence will be able to command higher premiums regardless of their location in the world.

Photo by lrargerich