The creative force is strong with us today in Austin. Also Mark Hamill is here. The crowd at SXSW continues to grow as the music festival draws near. Pop-up events all over downtown have been taken down and replaced with brand new pop-up events at a pace that makes you optimistic about the prospect of humans colonizing Mars. There’s a renewed energy today, and the festival met it with a packed schedule that included some of the most detailed and informative panels so far. Yesterday was all about vision. Today was about experience, and we got all kinds of it during our third day at SXSW. Here’s the best of Day Three.
Facebook IQ: The 5 Consumer Shifts Shaping 2020
In the next two years, mobile devices will be in more homes than running water or electricity. Mobile will generate half of US commerce, and 85% of customer interactions will be handled without a human. But if you know where to look, you can find the future all around you, right now—from how people use messaging apps in Southeast Asia to mobile payments in Sub-Saharan Africa. Tomá Beczak, Global Content Strategist at Facebook IQ, and Ann Mack, Director of Insights Marketing at Facebook IQ, presented five key consumer shifts that will shape the digital world in just 22 months, aka 2020.
The pair broke down the who, what, where, and why behind the shifts and then offered up suggestions for how to prepare for this future. They identified five areas—culture, communication, commerce, connectivity and community—we’ll all want to pay attention to moving forward. And by amazing coincidence, they all start with the same letter! Clearly, the future is looking better already.
First, culture. Traditional boundaries are breaking down right before our eyes, with 56% of people in the U.S. claiming that traditional gender roles are becoming irrelevant. This trend is mostly being driven by Millennials, who by 2020 will make up over half of the global workforce. Among Millennials across four markets, Facebook saw a 15% year-over-year increase in conversions related to gender role blurring. The study also revealed that three-out-of-four women surveyed said the most important thing brands can do to promote gender equality is to stop portraying women as sex symbols. Gender isn’t the only boundary being turned upside down. Across the US, UK, Nigeria and South Korea, 70% say the age you become “old” is increasing.
Communication. Over half the people surveyed for this study cited that they prefer to view video content on mobile devices because it is faster and easier to consume. We know people are consuming content faster than ever, but surprisingly, they are also retaining it more quickly. People can recall content on the Facebook News Feed after seeing it for just 0.25 seconds. And they are looking at video content five times longer than static content on Facebook and Instagram.
For Mack, the most interesting shift in communications is the idea of fluid realities. She quoted Chief Scientist at Oculus VR, “The distinction between VR and AR will vanish… The real and virtual worlds will just mix and match throughout the day, according to our needs.” What does this mean? In the not-so-distant future, these technologies will be so integrated in our lives that, as marketers, these technologies will be used simultaneously and regularly to reach consumers.
In support of this claim, 68% of people surveyed in the US, UK, Nigeria and South Korea say that “Virtual reality will become a part of everyday life,” and 54% said that “VR will mean people never have to miss an important event.” We need to be thinking about how using these technologies can enhance our lives specifically in the industries of travel, retail/CPG, automotive and entertainment.
Next, commerce. With this huge mobile shift, we are looking for commerce experiences that are seamless, speedy, and personalized. Unfortunately, says Mack, the current user experience for mobile commerce is not quite there yet. Companies need to prioritize navigation and user experience when creating their digital shopping experience in order to adapt to this mobile-centric commerce shift.
With this shift, we’re seeing a huge move to messaging apps as a main source of customer service. People expect to ask questions and get immediate and informed responses in one step. The biggest takeaway from this transition is the collapse of the traditional purchase funnel. Think about one-click buying. We’re cutting out so many steps of the funnel that we’re going to see the moment of discovery and the moment of conversion become one seamless step.
Connectivity. It seems like we’re always talking about connection and connecting when it comes to digital media and content. In this case, however, we’re going to bring in technology connectivity. For example, we live in a world where home automation is becoming the norm, and if you’re us, you have multiple smart devices in your home. The issue here is that very rarely do all of your home automation systems communicate or connect with each other.
As a result, people access their smart devices from different sources with different tools, and this is a headache. At this point, the technology is not enhancing lives. It’s too fraught with frustration and effort. The same concept can be applied to mobile apps. Beczak cited that of the people surveyed, their top-three apps account for 80% of their usage. Of those, almost all of would prefer all their apps be collapsed into one single app. Cue the Mark Zuckerbergs of tomorrow and get ready to simplify your ad budgets? Well, maybe.
In 2020, 60% of the world’s GDP will be owned by emerging markets. In those markets, one in four internet users are already mobile only today. According to the study, by 2020, three billion people will gain access to smartphones. One of the most significant ways people in emerging markets like Kenya, Nigeria, and South Africa are using smartphones is to generate additional income, whether it be offering mobile payments for taxi drivers or selling a craft. Think about how life-changing a smartphone can be to someone in these markets. Better yet, imagine life without one.
Community. Living in a connected global community is our reality today, and by 2020 daily life will be even more globalized. Individuals are creating communities in new ways everyday. Beczak highlighted a series of communities that are available through Facebook and how impactful they can be. Globally, there are 750 million new Facebook friendships each day. There are 2.5 million group chats created every day on Messenger. More than 200 million Facebook users are part of meaningful communities or groups.
More than 1.2 billion people on Facebook are connected to a business in another country, including 60% of the U.S. population. More than 360 million people already take part in cross-border e-commerce every year. Communities are no longer bound by borders and oceans and haven’t been for quite some time.
Mack listed three key takeaways to prepare for the consumer world in 2020. First, reimagine familiar frameworks. Meet your customers where they are when they need you. Second, create for context—it’s not just about the content anymore but the situation. And last, make mobile the center of your digital efforts. Think about the role your mobile device plays in your personal life. When will it play that role in your business life? If you’re reading this, it probably already does.
Absurdity Sells: The Value of Playful Events
“The cumulative effects of many tiny absurd acts can be huge,” said Richard Dedomenici, a British performance artist with a spiky mohawk and equally prickly demeanor. Best known for a series of absurd remakes called Redux (see this one first), Dedomenici is the only panelist so far featured without a job title. Just a name, and he delivered the kind of insights you don’t get from other marketers. In fact, he delivered the majority of them while insulting the other panelists, but there were no pushovers in this mostly UK-based panel consisting of Eleanor Barrett and Rosie Freeman, Co-Directors of The Brick Box, Henri Mazza, Vice President of Austin’s Alamo Drafthouse, and of course, just Richard Dedomenici.
Across many sessions so far, “experiential marketing” has been lauded as the next big thing. This session was about pushing those experiences to the absurd and surreal, creating real-life spaces and situations that lie at the junction of performance art, public installation and brand interaction. Henri Mazza provided a great example. He created a man-made beach, added water and inner tubes, and held the most amazing screening of Jaws in history while viewers floated like chum in the water. Did this boost ticket sales? Not at all. Was the price per customer justifiable in any way? Not even close. Did it make his company internationally famous? Absolutely. Starting to see the point? Let’s elaborate.
Absurdity is the last bastion of surprise, and surprise is a commodity that is more and more difficult to recreate over time. Human minds are tuned to novelty. It is in our nature to recognize when things are not quite the same. Absurdity is a device for taking advantage of this tendency, but absurdity for its own sake is a nonstarter. There should be always be purpose behind your apparent meaninglessness. Absurdity in physical installations, particularly open, public spaces, is a way to create experiences that could never exist naturally. The Brick Box recently played on the concept of juxtaposition by creating a combined pop-up Mosque, LGBTQ store and BBQ restaurant shaped like a pig, all next to each other.
Is this absurdity for its own sake? You be the judge. Can you imagine another venue that could attract practicing Muslims, LGBTQ identifiers, and BBQ lovers for those reasons to the same location? Absurdity is a laboratory for unparalleled audience experimentation. It can also be the spearhead of a brand message if handled with care. Dedomenici echoed the idea with a comment sounded by satirists through the ages, “If you can make someone laugh, they are much more willing to engage in the underlying message behind the work.” Put another way, absurd content, even if it seems bizarre in relation to your brand (or just utterly bizarre) is a real way to make a meaningful connection with any audience. But only if it has a purpose.
Don't Duopolize Me!
Facebook and Google have created an advertising duopoly predicted to wipe out smaller ad tech companies and continue the decline of VC funding in ad tech. Brands spend millions every year collecting consumer data they should rightfully own and be able to use while Google and Facebook are profiting. This session explored why competition reform is needed for the overall ecosystem, what makes data consolidation bad for ad tech, and how brands can own their own data to elevate the consumer experience.
Data has been one of the central threads in almost every session and during every conversation over specialty-crafted cocktails at SXSW 2018. The key point to understand is that Facebook and Google own the vast majority of user data and receive 63% of the ad spend of the entire digital universe. They are also dominating internet growth and receive 77 cents on every dollar of new ad spend. What is driving this growth? Mobile. Mobile is dominating digital, and Facebook and Google are dominating mobile. Although these digital behemoths did not start out as mobile companies, they pivoted when others wouldn’t or couldn’t. Today, eight of the top 10 mobile apps are Google or Facebook properties.
When looking at data ownership, it’s a bit of a best-and-worst scenario. (Sidenote: the “Best Wurst” food truck in Austin serves a delicious brat at 2 a.m. and is our favorite food-related pun of 2018!) If you’re a brand or marketer, you have to admit that Google and Facebook allow us to do things we never would have dreamed of 10 years ago. The two giants deliver massive scale and super-targeted signal feeds, creating a new era of marketing. But as a result, they’re expensive to work with, and the incentive that has been built in the industry to get things in front of your face to serve the impressions is, well, annoying. Facebook is attempting to address this by changing their algorithm to prioritize personal interaction. The jury is still out for most on seeing that change, though.
Regardless, selling against them is tough and they’re killing startups. But with these challenges come opportunities. Michael Nicholas of Assembly and MDC Media and Brian Wong of Kiip took a deeper look into what some of those are. First, there’s action-based targeting, something Facebook can do within its closed environment, but Google isn’t that great at so far. Startups who can help target audiences in Google inventory more like Facebook will add huge value to the current duopoly situation.
Targeting is still very content oriented, reaching people within content relevant to an advertiser or product. The next area is the moment or activity-based targeting, meaning that your impression is served to a user around a time when they are performing a task related to your product. Because we live in such a fragmented media world, it’s all about timing more than ever before. Advertisers now know when people are doing certain things based on their data, so we don’t have to be everywhere.
How do we access data that lives on Facebook to use it on the outside? The other major theme at South-by this year is Artificial Intelligence. Nicholas and Wong suggest that start-ups who deliver the strong AI experience designs audiences actually want to talk to will enable that data portability in the duopoly. Chatbots are able to move that data off the platform using the Facebook Messenger API. Also, startups who lower the barrier of entry to data will add huge value to the current duopoly situation. As of right now, it’s still a high rollers’ game. Nicholas seems to think Amazon may be next to jump in and imagines an inexpensive, on-demand Amazon Web Services data management platform. Time will tell. Soon.
The Takeaway from SXSW Day 3
The user experience is officially bigger than digital. It’s a cross-reality experience that starts on your phone and ends up in your neighborhood, or vice versa. Media lines are blurring and new mediums are emerging at an unprecedented rate. Increased connectivity, both in terms of more people and more types of devices, is giving brands an opportunity to make a global impact that goes way beyond brand mission statements. At the same time, it’s important to keep a sense of humor. Brand relationships, like human relationships, should be funny and sad, serious and ridiculous, adaptable and relevant. Like it or not, brands and artificial intelligence are growing more complex. Why? Because you are.