Thinking machines, real-time video, saying goodbye to your local video store, and everything goes bionic, these are just some of the trends for 2016 identified by Oresti Patricios, founder and CEO of brand intelligence company Ornico.
Global economic outlook for 2016
Growth in the global economy is expected to be similar to that of 2015. This is according to the International Monetary Fund’s World Economic Outlook which says that both developed and developing economies will fare pretty much the same as they did the year before.
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But there’s a big warning for commodities which will grow at a rate 30% lower than their 2011 peak, which means a slowdown in the mining, petroleum and agricultural sectors. This isn’t great news for South Africa which is a resource-dependent economy, and where labour action and police heavy-handedness have seen a contraction in mining.
Growth in Europe will be moderately firmer, North American growth will be constant, and Asia is expected to slow down, according to Adair Turner, former chairman of the U.K.’s Financial Services Authority and author of a new book, Between Debt and the Devil. Japan is already in a recession, and China’s official figures — 6.9% GDP Growth Rate — are not to be trusted, says Forbes’ Bill Conerly. Russia is looking at negative growth, while India seems to be set to do well, with growth in excess of 7%, according to Bloomberg’s analysis of the IMF study.
The big question here is if a slowdown in China will impact growth in Africa? BBC World Service’s economic correspondent, Andrew Walker, says the answer is a definite “yes”. “Africa has been adversely affected, although not so much as to snuff out the real improvement over the past two decades,” writes Walker for the BBC. “Economic growth in sub-Saharan Africa is, according to IMF projections, slowing to 3.8% this year, the slowest since 1999. Slower, in other words than during the global financial crisis,” he states.
Congo and the DRC in central Africa, and the eastern African countries of Mozambique, Tanzania, Kenya, and Ethiopia are predicted to have 6%+ growth in the coming year, as are Mauritania and Cote d’Ivoire, according to the IMF.
In a nutshell, when it comes to Africa, the IMF states: “the drivers of growth since the mid-1990s — improved policies, increased aid, debt relief, abundant global liquidity, and high global commodity prices — have started to dissipate. Moving forward, to sustain rapid growth the region will need to diversify away from commodities, increase export sophistication, and integrate into global value chains.”
The IMF pegs South Africa at under 2% growth, which is matched only by Libya. We are now one of the poorest performing economies on the continent. (The IMF has no figures for Uganda and Somalia, but I imagine they’re also in the <2%-to-negative territory. What esteemed company!)
I, Robot — Thinking Machines
There are a few technologies that are going to be ‘big’ this year, but the biggest — the one that already has many people’s tongues wagging at conferences and dinner parties — is Artificial Intelligence (commonly called AI). The central idea here that machines can not only be intelligent, but can be conscious, is something that is both exciting and terrifying.
The idea is that once computers, or networks of computers, have enough processing power to match that of the human brain, a point known as The Singularity will be arrived at. But it’s not just processing power — the ‘machine’ must be self-aware, it must be able to say ‘I’ — as in “I think, therefore I am.” At that point, the machine will be able to learn, design, create and ultimately increase its intelligence to a point that outstrips that of humans.
Already companies like Facebook are using machine learning, from predicting human behaviour to facial recognition. Google has developed a system called ‘TensorFlow’, which is the backbone of many of the company’s core functions, ranging from ‘Smart Reply’ — that suggests up to three responses to emails, to speech recognition functions in the Google app. Wikipedia is rolling out an AI engine that will help identify badly edited content and vandals who maliciously edit articles. This work is normally done by humans, but like many menial tasks, machines are more efficient at doing it.
The question that still remains is: will the machine that can teach itself continue to accept instructions from humans, or will it want to tell us what to do?
I, Cyborg — Bionic Everything
Humans will become more mechanised. Thanks to the twin drivers of industry and war, artificial limbs now being developed at Johns Hopkins that are able to respond to thought control and even provide biofeedback.
If you have a blood sugar problem, there’s a Google-developed contact lens that can measure your blood sugar. 3D printing allows for cost effective manufacturing of joints and bones.
On the brain front, scientists at the Royal Melbourne Institute of Technology have created electronic brain memory cells. Very soon, they say we will be able to get implants to improve brain function or replace damaged parts of the brain. At Stanford, brain implants have been developed to fight depression and other mental illnesses.
Add to this the growth in popularity of wearable devices, and it seems that we are becoming truly integrated with our technology.
Real time video
We love our cameras — the cellphone camera continues to improve year on year — and social media seems determined to find new ways for us to use them. Twitter’s acquisition of Periscope indicates that real time video may be a growth market. Periscope already has 10-million accounts, and users collectively watch 40 years’ worth of content daily. Going forward, marketers are going to have to factor Periscope and its competitor, Meerkat, into the mix.
VOD killed the Video Store
Say goodbye to the neighbourhood video store, as several media giants compete for eyeballs in the video-on-demand (VOD) space, now launching in South Africa. US internet video giant Netflix has pushed its release date forward to earlier in 2016, as both Naspers and Times Media, along with Hong Kong-based PCCW all offer streaming video, with libraries filled with series, movies, local content and specialist content. The massive rollout of fibre throughout the main centres of the country will help to drive demand, as well as the benefit of watching what you want, when you want to, on whatever device you choose.
Collins dictionary named ‘binge-watching’ its word of the year and South Africans will become even more insular as they indulge in catching up on content they missed, or getting the latest from the likes of Netflix and Amazon Prime — two VOD companies that now produce their own content.
What does this mean for advertisers? A study by the Advanced Advertising Media Project in the USA, where test audiences had ads inserted in much the same way as they are in conventional TV, showed that consumers accept it as a logical part of the viewing experience.
A system developed in conjunction with Comcast, called Dynamic Ad Insertion (DAI), allows ads to be triggered in much the same way as web video (e.g. YouTube) ads — meaning that ads can be changed with a greater deal of flexibility and customisability than if they were hard-coded into the video stream. The system allows for better feedback, in terms of whether customers watch the ads or click on links in the ad.
Product placement will most likely also be an avenue to explore. The recent James Bond movie, Spectre, featured no less than six branded cars, three alcoholic beverages, and a long list of electronic devices and luxury items.
Empathise for Breakthrough Customer Experiences
According to McKinsey, knowing your customer may well take more than AI — you may have to get your hands dirty and walk around with them, to find out what makes them tick. “To create distinctive customer journeys, companies must not only understand their customers’ behavior but also develop deep empathy. In particular, companies need to empathize with customers when they experience difficulties and obstacles,” writes Lhuer, Olanrewaju and Yeon of McKinsey.
What this means is spending time with customers and continuously developing techniques ‘to design and deliver truly transformational customer experiences.’ Instead of focussing on user, interface, McKinsey suggests that design should be integral to the entire user experience. Design impacts on every touchpoint of the customer’s journey.
Social media budgets will rise significantly
Advertising on social media platforms has grown up: Facebook has its Canvas Ad format, Twitter has its Buy Button and Pinterest has buyable pins. Online retail grew phenomenally in 2015 and will continue to do so.
Much of what was previously free for marketers is now ‘pay to play’, says Jeff Bulas — and be sure you are able to measure the results.
Apart from Meerkat and Periscope, the channel to watch in SA is Snapchat — it has already grown to between one and two million users in the US, so it’s likely to take off here in the next year or two.
Advertising Technology Will Become Increasingly Important
According to eMarketer, next year in the United States programmatic advertising will account for 65% of all digital display ad spending, or more than $21 billion. That’s up two times from 2014. Increasingly media companies and agencies are exploring ways to sell ‘traditional’ media this way, including TV spots and out-of-home ads.
We’re also talking about disruptive businesses and the emerging tech of Virtual Reality (VR), augmented reality and finding new ways to use tech to reach customers who are increasingly distracted by new tech.
Big Data and the Crowd
It’s not just about watching trends. Smart retailers like Stitch use AI to analyse customers’ data, to serve them better, anticipating their needs and providing them with what they want.
More powerful computers and smarter algorithms are starting to realise the power of Big Data. For marketers, the potential is huge. For example, in the 2015 festive season, IBM asked its Watson supercomputer to analyse daily ‘big data’ sets, from “10,000 sources across social media sites, blogs, forums, comments, ratings and reviews”, to find out what people are talking about, in real time. The results are then available via the Watson Trend app, which gives shoppers a ranking of what’s hot in the marketplace.
So, if computers are providing real-time trends for customers, it looks like I won’t have to write this column next year – I’ll get my friendly AI to do it for me!