As the digital marketing landscape continues to evolve, here are five things to keep your eye on. Check them out -- and use them to get ahead this year.
Advances in underlying technology and consumer adoption assure that the pace of change in the marketing industry will continue to accelerate. From our perspective sitting at the crossroads of technology, consumer behavior, and marketing effectiveness, here are five trends worth watching.
The identity of things
Until recently, the internet has been a global network that allows any computer to connect to another. Within this system, a user types in the name of a website and the network translates the words into an "address" of the computer in order to return a page of text, photos, and video.
In the mid 1990s SUN Microsystems forecast a concept it called the "internet of things." While the traditional internet allows computers to find pages, the "internet of things" enables physical objects ranging from soda cans to cereal boxes to have unique identities that make them findable and trackable. In 1999, researchers at MIT's Media Lab blueprinted the architecture for such a system. Twelve years later, sensory computing capabilities, combined with the architecture of the "internet of things" is producing a trend we call the "identity of things." One possible implication of this system for advertisers is that consumers can now be connected with in-store objects to trigger related information, recommendations, and reviews.
The proliferation of smart mobile devices allow consumers to access information and content tied to objects via various means like bar code scanning, 2D tags, near field communication, or visual search. The digital industry has already seen two waves of content development. The first was anchored to URLs. The second was anchored to social profiles. We are about to witness the third wave of digital content development anchored to objects.
Mobile is dead
This trend refers to the fact that mobile has become so critical to consumer behavior that it has progressed beyond being a "feature;" it is now a necessity for all hardware devices and services. This is clearly the case for tablets and smartphones, but it also applies to cars, household appliances, and even CPG retail merchandise.
This trend goes beyond devices and extends to "the cloud," a general term describing content and software that no longer needs to reside locally on a device but can instead be accessed through the internet. Using the cloud, any device can acquire intelligence in order to personalize a user's experience based on context. With GPS, contextual relevance also refers to the exact place on the planet where the consumer is pulling down content. The SoLoMo fusion opens up new sorts of use cases that are native to mobile devices.
It is no longer acceptable for campaigns to have a mobile section on the flowchart that only gets funded after other activities. Understanding consumer mobility and designing communications that reside throughout those movements must be core to campaign development.
Life is a game
This trend is both simple and nuanced. In the simplest sense, it refers to the increasing popularity of gaming as an entertainment genre and the relative aging up of the gaming generation. More importantly, products like Kinect and Zynga's Farmville highlight massive, mainstream appeal for non-traditional, non-console based titles. Additionally, as the iPhone, iPad, and other smartphones and tablets become more pervasive, the content marketplaces associated with them are revealing games as one of the largest categories. The Nintendo 3DS is showing that games will likely be the killer app for 3D content.
The more pervasive element of this trend refers to the idea that game design principles are clearly being woven into all we do. As mobile devices are built with location and context aware technology, the world is being turned into an arena in which consumers enjoy playing. For retailers and brands, this means creating advertising that recognizes users and knows their preferences, delivering messages of value and experiences in the form of rewards, rankings, and other game-derived forms of incentives and virtual currency.
Frequent flier miles are the world's second largest currency, slightly behind the dollar but ahead of the euro. The reason for such scale is simple; loyalty programs work. Enabled by smart networks and devices, users are capable of using services like Foursquare to compete for rankings as they visit various businesses and locations. Similarly, consumers have become accustomed to redeeming virtual currency for discounts, coupons, and entitlements. For brands, this marks the evolution of traditional loyalty programs, such as frequent flier miles. In the "new loyalty" world, consumers are familiar with such entitlements and are willing to make large behavioral changes in order to earn rewards. Brands can now begin creating consumer-facing experiences that span broadcast, interactive, direct, and outdoor media to inspire loyalty while integrating with existing CRM and loyalty systems.
The rise of content marketplaces
If there was a hardware theme for CES 2011, it would have to be tablets. At CES, hardware manufacturers announced a total of 82 separate tablets, the majority of which are running Google's Android operating system. While Microsoft's absence from this market is noticeable, the larger story is the emerging battle between Google and Apple for tablet preeminence.
To date, Apple has sold 8.5 million iPads in the U.S., making up 88 percent of the market. iPad sales in particular, and tablet sales overall, will increase dramatically over the next two years. Nearly 20 million of Apple's touchscreen devices will be sold next year, an increase of 127 percent, and by 2012 sales are being estimated to surpass 30 million. Our prediction is that despite the breadth of Android availability and pricing advantages on devices running it, Apple will control this market in the coming years. Forrester Research concurs, estimating that by the end of 2012, Apple will retain 80 percent market share.
The reasoning behind Apple's projected dominance can be partially attributed to its head start, attractive design, and ease of use. More importantly, however, is the deep integration between the device and the iTunes content marketplace. Because of this, and the billing relationship with the consumer, Apple will be able to maintain and extend its dominance, despite its higher price tag and smaller feature set.
Manufacturers are approaching the tail end of the demand cycle for LED high definition sets and in search of the next big thing. While it remains to be seen if 3D TVs catch on, "connected TV" seems to be the next reason to upgrade the centerpiece of the living room. This will continue to make access to content marketplaces more ubiquitous.
Netflix already has more subscribers than Comcast, yet it sells no advertising. The conflict between a la carte video content and bundled packages seems inevitable. It will shape how content is distributed, the hardware consumers buy, and advertising opportunities therein.
Continuous partial attention
This term, originally coined by Microsoft researcher Linda Stone in 1998, refers to the continued fragmentation of consumer attention. This societal attention deficit disorder is being driven by changes in the device, media, and distribution landscapes. Media hardware reflects these changes; news and email might be read during breakfast on an iPad, and music might be streamed to a Pandora-enabled 4G car on the way to work. During the day, a consumer might toggle back and forth between work email and Facebook, and upon leaving work may check into Foursquare to tell friends about the restaurant that person is heading to. In the evening, he or she might then watch Netflix on an Xbox while surfing the web on his or her laptop to tweet about the movie. The day might end with an hour of play on an exercise game through the Xbox using Microsoft Kinect.
There is a growing body of research indicating that this pervasive stimuli is changing a human's ability to focus and to learn. In order to compete for consumer attention in this complex media environment, brands must develop immersive, empathetic communications to fully engage their audiences.
You can't throw a rock without hitting some industry pundit willing to opine about digital media trends. And while I hope you found value in this one, the most important trend is that the pace of change is accelerating. Whether it is trends or some other construct your organization uses to make sense of the change, the most important thing for marketers is to have some way for getting the organization to engage and unlock the truly transformational opportunities for their business.
Brian Monahan is the EVP, managing partner, at IPG Media Lab.
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