By Barbara Connors
Earlier this week, I left behind a cold and rainy Cincinnati, Ohio to attend the annual SXSW Interactive Festival in sunny Austin, Texas. After 5 days of sessions, workshops and panels presented by a mix of start-ups and Fortune 500 companies, I am left amazed by the ingenuity and creativity present in our industry and inspired by what we will deliver in the coming years.
I attended sessions with topics ranging the spectrum of technology, big data, analytics, advertising, content marketing, personalization, retail, corporate culture, innovation, ethics, privacy, and even saw a princess talk about entrance of women into the Saudi workforce. On my way back home, I walk away with some common themes that emerged among the diversity of sessions and opinions. Below are my observations and learnings. Hopefully you will find them inspiring and also take away a few ideas to embed into your work-week.
Four familiar tensions within the media ecosystem are alive and well.
It seems as though we always believe our industry is at a “crossroads.” 2015 is no different. As we harness new technologies, platforms and data to make better business decisions, the following competing interests permeate our landscape:
Agency vs. Advertiser:
As brands build in-house agencies, specialty boutiques focus of different parts of the marketing mix, and consumer-generated content is leveraged as advertising, the role of the traditional agency is changing.GE has worked with BBDO for 90 years and is proud of this lasting partnership.However, while a small consortium of people made strategy decisions in the past, ten agencies now have a seat at the table.This can naturally make everyone a little uncomfortable.However, aren’t ten heads better than one?
Data vs. Gut:
Big Data brings with it the promise of relevance and efficiency, but threatens to devalue human instinct.The truth is they can co-exist, and Mashable and Stitch Fix can prove it.Mashable’s Velocity algorithm predicts the viral impact potential of stories within minutes, and is responsible for 50% of the content published on their homepage.This frees up time for their reporters to create great content.Stitch Fix employs a Netflix-like algorithm to generate outfit recommendations, but empowers stylists deviate from predictions if their gut says a client will like sweater anyway.
Google vs. Facebook vs. the Open Web:
It was only a few years ago that Facebook was the new kid in town.Along with search (still dominated by Google), Facebook now offers one of the most effective digital media spends.It seems both of these players garner a bit of a love/hate relationship from the marketing community.Both companies have come under strong scrutiny that they know too much about us, and the growth of “walled gardens” is challenging data flows across the digital ecosystem.
Personalization vs. Privacy:
As consumers, we expect every interaction a brand has with us to be relevant and provide value.However, the methods through which we achieve this can cause some discomfort.While the industry is engaged in a serious dialogue over terms for appropriate collection, usage, and dissemination of the individual data, the internet of things has adds a new layer to this conversation.As and more “simple” objects become “smart,” it doesn’t take a huge leap for a thermostat to go from helpful tool that keeps heating bills down to a trigger that alerts burglars when we are not home.
Two major convergences will revolutionize how we interact with brands and each other.
Tension creates opportunity for innovation, and I believe much of the innovation we will see in the coming years will come from collision of the following:
The convergence of the physical world with the digital:
To say that the “internet of things” and “beacons” are buzz-words would be an understatement. SXSW hosted 28 sessions on the topic of IoT and 8 on beacon technology. There is no doubt that new technology will change how and where we consume media, how we buy products, what we buy, and how we interact with each other. However, this convergence penetrates deeply into media and retail, and will enable us to truly deliver relevant and impactful cross-platform media and shopping experiences.
The marriage of media and commerce:
A company’s core asset is, and always has been, their relationship with their consumers. This direct relationship creates access to opportunity. However, what retailers, brands, and agencies are realizing is that we have the ability to speak to our target consumers both at the point of inspiration and the point of purchase. Amazon was a pioneer in this space. However, we will see a growth in brands and retailers owning and selling media content as well as media companies acquiring sales channels. The companies that succeed in doing this will be those who create a seamless transition from inspiration to purchase, while maintaining trust and relevance.
Two universal constants remain.
2015 is shaping up to be a pivotal year. However, throughout all of the changes we experiencing, two universal truths remain at the core of every successful company.
- Creativity is a renewable resource. We never run out of it. Tensions always create new possibilities if you are willing to adapt and be creative. This creativity is particularly present in Austin in the middle of March. I mean, did you know that Twitter was incorporated after a trip to SXSW?
- Humanity wins every time. Underpinning the best sessions was an acknowledgement of our humanity, and our responsibility to market respectfully, innovate responsibly and help people to lead better lives more engaged with the world and each other. Simply put, keep the consumer at the center.
Brands who get it will transform the industry.
Science-fiction author William Gibson told NPR in 1993, “the future is already here - it’s just not evenly distributed.” This statement still rings true today. Below are just a few examples of transitions we already see taking place as companies break down barriers of the physical and digital experience and connect media with commerce:
The face, bones and brains of retail are changing, quite literally:
E-commerce still only represents 8% of total retail sales, but its growth trajectory is undeniable. To capitalize on the power of omni-channel shopping experience, e-commerce can no longer operate as a separate division that competes with physical divisions, and the two should not serve the same objectives. For some brands, physical stores of the future may not be expected to drive sales at all, but rather serve as showrooms for online sales and become a marketing line item. For others, stores may become drop-off and pick-up centers, drastically decreasing square footage and inventory management.
David Roth of WPP predicts that the future of retail will be driven by smart products, on smart shelves in smart stores. However, while retail will adapt to include sentient stores and partner with wearable payables, he is confident that physical stores will still exist. Check out Rebecca Minkoff’s retail store in Manhattan, or click on this link, to see how one retailer is bringing the power of the digital experience into the store.
New players are democratizing distribution:
Cutting-edge brands are taking advantage of consumer behavior, and entering the market with a bang. Companies like Airbnb, Uber and Etsy are breaking down the traditional distribution chain to sell goods and services, each doing so without opening a single physical store.
Simultaneously, marketers are seeing a democratization of content distribution. With the proliferation of brand-generated, agency-generated, and user-generated content, advertisers find themselves swimming in options. This creates possibilities for personalized communication, especially through the use of data-driven algorithms. What will separate the people who sink or swim will be the ability to balance the use of programmatic selection with human-led curation.
Brands are closing the gap between “want” and “get”:
Across industries, consumers are choosing ethereal experiences over ownership, and new companies are taking notice. This evidenced through companies selling consumption of services over products (ex. honeymoon registries), companies renting products that were predominately owned just a few years ago (ex. Spotify and Rent the Runway), and even platforms facilitating short-lived social sharing (ex. Snapchat).
Technology is enabling us remove friction across steps in the path to purchase in ways never before possible. Beacons enable marketers to push relevant content to consumers truly at the moment of truth, wherever they decide that to be. Soon RFID tags will turn products into moving advertisements, enabling us to discover, explore, and purchase a purse we spot across the street without ever needing to ask the woman carrying it where it “where do you get that?!”
The advent of 3D printing brings the promise of immediate gratification to the physical world. Companies like Bite Lip Lab allow consumers to customize the perfect lipstick at a kiosk and have it custom-printed for them in a matter of minutes.
Companies who creatively embrace both the conflicting and converging realities while keeping consumers at the center of their business will succeed. They always do.