Mark Holden, Strategy & Planning Director, PHD UK
I. Where Are We?
There exists a computer that can perform 4,000 complex computations every single second.
It’s called the IBM 1401 and it currently sits in a museum.
This is partly because the computer that sits in an average smart-phone carries out over 1,000,000,000 computations per second.
And whereas the 1401, which was developed in 1959, weighs ten tons – the same as three elephants – the microchip in your smart-phone is the size of your finger nail.
And this is the shocking thing – one in every four people in the developed world has one of these super computers in their pocket.
This exponential increase in computational power has, as we all know, changed the world and, of course, changed the world of communications.
We are now in what is widely referred to as the Information Age. In the 70s and 80s we built our computers, in the 90s we built our networks and in the first two decades of this century we will build our social networks.
Each technological paradigm is built on top of the previous.
When you reflect on this, it is totally understandable to think that the fundamental driver of change is not demographic or socio-political – it is in fact technological.
We had previously believed this.
But we now think that we were wrong.
The true driver is us, as in humanity.
Technology is simply the enabler.
You can sense this if you layout the technological epochs.
Each technological paradigm is on some level answering a human need.
We believe that we are currently half-way through the social network paradigm.
Right now, over one in every two people within the developed world is connected up into a social network.
Globally, there are now over 1.4 billion social networkers.
Another way to think about this is that there are now 1.4 billion independent media owners.
But, of course, these are very different from the media owners we have known to date.
As they all link to each other.
And they are connecting and updating constantly – for example 91% of 16-24 year olds access Facebook an average of seven times a day.
They still largely comment with impunity.
They are incredibly influential – 78% of consumers say they trust peer recommendations on social media – only 18% trust advertising.
And these social networks are not stopping at their own boundaries – they are infecting the entire web. Social networks are making connections to other websites via Facebook’s OpenGraph – log-in or ‘Like’ a website and automatically inform your friends, leaving a print on your social graph. Hot on Facebook’s heels to socialise the web is Twitter with its new ‘Follow’ button and Google with ‘+1’.
It is important to reflect on this for a moment, as it is so easy to just say ‘yeah sure’. But this is leading to a complete change in how society functions.
And all of this new social activity is, of course, increasingly mobile.
One in four of the developed world owns a smart-phone. But many non smart-phone users access the web – therefore closer to one in every three accesses the internet via their phone.
And it is increasing dramatically – the next billion to come online will be via mobile devices.
In fact, the smart-phone market actually eclipsed the PC market during the first quarter of 2011 for the first time – according to data from IDC. Vendors shipped 100.9 million smart-phones during the fourth quarter, compared to 92.1 million PC shipments.
And nine out of 10 of these smart-phone users are using social media.
Social access via a smart-phone is leading to a quickening in the speed at which information, and therefore influence, is moving.
Changing societies. Changing history
From hugely significant ramifications such as the Arab Spring in the Middle East, through to the death of super-injunction in the UK, we are seeing the effects of the rising speed of influence. These are the early results of having people connected in real-time.
As significant as this was, this connecting people up was only part of the social media journey; now for the second part of this social network epoch. This is where things are going to start to get interesting – for us as people and for us as an industry.
But, I will come back to that.
Before we get to it, I will try to paint a picture of the world eight years from now. Let’s start by exploring what sort of technology is likely to emerge – so that we can make a more evidence-based prediction.
To do that, we need to start by getting greater clarity on what is it exactly that is driving this human evolution. Not a big question then.
What’s driving us?
If you look at the different technological epochs, it suggests that the evolutionary drive is that of liberating ourselves from physical and time-based constraints. If you project forward, this suggests that the ultimate end point will be a state of abundance – where you are able to be everywhere with everyone and everything in the moment.
If we assume that this is the ultimate goal – any technology that ever works will, in some way, enable us to move one step forward to that state. When you look back, this assumption serves as a useful paradigm against which to assess the likely uptake of technology and it seems to work historically for Transport, Computing, Internet, SMS and Social Networking. All of these have unshackled the human spirit from any time, spatial or informational constraints.
We are going to attempt to use this paradigm to think-forward on how the landscape will change in the next eight years – after we have done this we will then paint the picture of the next eight to ten years. To put some flesh on the bones.
So let’s take a look at the technologies that should gain traction based on our paradigm of abundance – they fall into three main groups:
II. What’s Coming?
The average internet speed is approximately 5Mbps (The estimated spread is wide, varying from 1.8Mbps according to Akamai Technologies, Dec 2010 to 8.79Mbps according to Speedtest.net, Nov 28, 2008 – May 30, 2011). China has one of the slowest and most expensive internet services. It is government owned. 3G, GPRS or cable access to information is still government controlled, monitored and filtered for domestic consumption.
However, speeds are set to dramatically increase with the increasing investment being made in FTTH/B. The global consensus is that FTTH/B (Fibre to the Home/Building) is the broadband technology for the future – offering speeds of up to 100Mbps (and even up to 1Gbps).
The FTTH Train Is Coming
South Korea and Japan are leading the ranking with 55% and 35% FTHH penetration respectively.
Outside of Asia the average is 5% FTHH penetration. However, this is expected to ramp-up as we continue to see a growing interest among the major telecommunications companies and other broadband providers in upgrading all-fibre networks in order to meet projected consumer bandwidth demand. Almost every major market is investing – either with government or commercial support. For example, telecommunications company, Orange, is investing two billion Euros in France. By 2020, most markets will have at least 50% penetration.
The demand will come from product innovation as consumers’ desire for super-fast broadband is lower than their appetite for keen pricing. Therefore the adoption of fibre broadband will be driven by on-demand, high-definition TV, Video, VOIP and Gaming innovations.
FTTH will be supplemented with advances in wireless connectivity with 4G (LTE or WiMax), which we are promised will eventually deliver speeds of up to 50 Mbps, assuming sufficient numbers of cell stations are added. 4G will always have the limitations of bandwidth traffic – the more people that share it, the slower the service – but the realistic estimated speeds of 10 Mbps should be just about enough for what we will be using mobile devices for in 2020.
This will further fuel the movement to The Cloud – where individuals and organisations offset storage and computation.
A Cloudy Future
Our devices will focus all of their power on interface experience and let the servers in The Cloud do the hard work. This is being driven by Google and Apple – with Google’s Chromebook, where the standard desktop experience is all carried out in The Cloud and with Apple’s iCloud where none of our music and video storage will be on our devices. By 2020, the cloud will be the unconsidered default for most people’s working and storage. Our various devices will simply be looking glasses onto the same content, up in The Cloud.
So, some fundamental changes to the infrastructure. However, although changes to infrastructure are important, they do not offer us the same observable level of progression that we see in developments to interface.
We will see changes in Cinema, Radio and Out-of-Home. We will also see changes to home-gaming consoles with many of them being replaced by virtual cloud-based services. But the main changes we will see in interface over the next two years will be with our own personal screen technologies – namely TV and mobile devices. For that reason we have focused on these, starting with TV.
The next main-screen purchase is increasingly less likely to be 3D (although it will be included as a default feature). After a disappointing start, a recent Nielsen survey showed that very few people would definitely buy a 3D TV in the next year – the figure was only 3% of people in North America.
Glasses-less 3D TV will offer a fillip, but 3D will only be adopted en-mass when the cost has come down so far that the screen is 3D as standard.
By 2020, we will probably be more excited about large OLEDs (Organic Light Emitting Diode) that enable screens to be on paper-thin material. We will also be moving into Ultra-HD – which will have an 8,000 vertical line resolution (current HD is 1,080). The intriguing thing about Ultra High Definition is that at that level of resolution, depending on the viewer position, it will exceed the resolution of the human eye.
These technologies will only just be launching in 2020 and will still be at a price point above that which main-stream audiences will be able to afford. Sharp and the Japan Broadcasting Corporation launched their 85-inch prototype model. It is 16 times higher resolution than HDTV.
By 2020, main-stream audiences will be increasingly more likely to invest in a connected TV. According to IHS Screen Digest, the next big surge in connectable devices will actually come from connecting up our TV screens to the net – this will over-shadow any of the increases we are to see with smart-phones or tablets.
IHS Screen Digest predicts a dramatic ramping-up of connected TVs starting in 2011.
Again, using North America as an example, it predicts that up to 35% of TVs in the US will be internet-connected by 2014. Extrapolating from this, we can see that 60+ % of all TVs in developed markets having some form of internet connection by 2020. Major broadcasters will follow the likes of US cable operator, Comcast, and start streaming live broadcasts – so that they can be watched on different devices.
Although for most markets, linear TV may still dominate our viewing time, we are likely to see younger demographics spending an increasing amount of time outside of the linear stream. This will be led by companies such as YouTube and Youku in China – as they either produce content or continue to tie up more exclusive deals.
There is a possibility that YouTube or Youku could make up one of the serious bidders for the English Premier League Season 2016-2019, bidding against Sky. But this will only happen at the point where a significant amount of homes have FTTH and a connected TV. But it could happen sooner. There is a possibility that signing exclusive content distribution deals will accelerate this process. We have seen many examples of this, such as when Sirius Satellite Radio (in the US) signed Howard Stern to their network and it increased subscriptions exponentially.
This drive to connected TVs will be driven by the standard replacement cycle. Upon upgrading, the decision to pay a small premium for a connected TV will be to access more information and to be able to socialise.
Accessing embedded content will start to take hold as we near 2020 – mostly driven by sports statistics – but it will carry over to other genres offering viewers the ability to be able to double-click on any content to find out more.
An increasing amount of content is likely to have a clickable overlay – using a dynamic version of the same technology that YouTube currently uses, called ‘Hotspotting’. The click/taps will happen on the second screen (tablet or phone)
By 2020, a small but increasing number of programme producers will begin to embed additional information within content. Linear content will be made clickable by using audio-recognition software that will synch the IP overlay to the content – so it will know which information to serve up based on which area of the screen has been clicked and at which moment.
The initial motivation will come from pioneering content makers, but it will ultimately be driven by advertisers that want to add an extra layer to product-placements. Eventually sold on performance metrics, this may turn out to be an interesting revenue stream for production houses and media-owners.
Indeed, some pioneering production companies are setting up e-commerce businesses – using the embedded linear content as merely the shop-window for products and services that can be bought in an IP overlay. This has been termed ‘T-Commerce’ and, according to US research from Parks Associates, by 2015 T-Commerce will account for $8b worth of transactions in the US alone and we estimate, up to $15b globally.
The Socialisation of TV
Connected TVs will increasingly start featuring social overlays. But ultimately, an audio-synched smart-phone will perform this function. Already available in Europe, one-third of smart-phone owners are using their phones whilst watching TV.
Viewers will adopt new multi-screen behaviours – many people will connect to a social group whilst watching a programme and influence the content – viewers will actually be the participants in live linear broadcast TV shows.
HBO in the US is pioneering social TV with a service last year that created a social experience around shows such as True Blood and Entourage – amongst other things, viewers can interact with the actors and the creative talent behind the show as it runs out live.
Cut To An IP-Ad Break
There is already an increasing appetite within agencies and with advertisers to be able to run bespoke IP-based ads within linear TV. The eventual up-take of such services, as with Sky’s AdSmart technology in the UK, will enable advertisers in many parts of the world to serve behavioural targeted TV ads – with content tailored to the individual.
In some markets we are already seeing ‘TV ads’ ‘versioned’ in real-time based on interaction rates. By 2020, a significant amount of sets will have NUI (Natural User Interface) technology embedded – the technology used within Microsoft’s Kinect. These screens will allow users to interact with the ad-break with voice and gesture – they could choose which ads to watch providing valuable feedback for advertisers. The real benefit of this will be facial recognition – this will enable the ad-break to be tailored to the individual and not just the household. Even by 2020, this will be small – but beyond this, for replacement screens after 2020, we are likely to see a dramatic ramping-up of NUI.
After 2020 and towards 2020, we will also continue to see a blurring between the ad-break and the content, fuelled by the slow but inevitable increase in the percentage of programming content that is IP-served. For IP-served programming, we will see content being tailored based on the understanding of the individual captured through facial recognition and linked to behavioural, social and e-commerce data. Versioning software currently being used in ads may well start to be used in some programming content – so that the same programme will be versioned for different individuals with behavioural-targeted branding and cached products embedded into already filmed content, placed by real-time bidding software.
And you won’t just be experiencing this and other content via the main screen, as we will spend an increasing amount of time with wireless devices – smart-phones and tablets.
The Only Way Is Wireless
PWC forecasts global smart-phone penetration will be 17% by 2014 (and 55% in developed countries). By 2020, penetration should be at 40% of people globally and 80% in developed countries.
As for tablets, the market forecast from Gartner for 2011 now stands at 55 million units worldwide rising to 154 million units in 2013 and 208 million in 2014. By 2020, we are likely to see close to 300 million, which will mean there will be more than one billion tablets in use – 35% of people globally and 70% in developed countries.
Therefore by 2020, close to 90% of people in the developed world are likely to have some form of smart device, compared to 25% today (based on de-duplication analysis by PHD). And these devices will be three to four times more powerful than what we have to date with all of the power focusing on the interface and powering the additional technologies:
A. OLED & Graphene
And our devices will begin to look different. The roll-out of Organic Light Emitting Diode technology (OLED) will change what we can do with our devices. OLED screens offer 60X more colour variation and only 25% power consumption and they can come on flexible and transparent screens. So devices can be rolled-up, offering up opportunities for larger roll-out and transparent screens. And beyond 2020, this is increasingly likely to be used in conjunction with a new substance called Graphene. Touted as the ’miracle material’ of the 21st Century, Graphene will be the strongest material ever measured, an improvement upon and a replacement for silicon and the most conductive material known to man. Its properties have sent the science world into a spin. It will ultimately allow for smart-devices to be rolled up into a tube the size of a pencil.
B. Haptic Feedback
We will also begin to have touch-screen technology with haptic feedback – which sends out small electrical currents to create a vibration when certain areas of the screen are touched. AppleInsider claims that Apple is rumoured to have filed a patent application for a form of haptic feedback.
C. Advanced Voice Recognition
Google’s Voice Search has had mixed reviews but as the computation is carried out in The Cloud, its algorithm is actually learning as it goes. Its improvement will typically be exponential and by 2020 we will have a powerful technology that allows us to interface with The Cloud more efficiently. Apple has also filed a patent for a text-to-voice technology that includes a noise reduction component.
D. HyperSonic Sound (HSS)
HSS is the new name for a technology that has been working in the lab for sometime, which enables audio to be broadcast along a corridor. So you can direct audio at someone and only that person can hear it. As the cost begins to drop, theoretically it could start to be incorporated into smart-phones in order to provide audio for the person that is holding it, that nobody else can hear. It is worth noting that the same technology will also have applications for Out-of-Home.
E. Virtual Personal Assistants (VPAs)
By 2020, any interest in voice search will be superseded by a focus on predictive computation algorithms that enable us to engage with our devices in a way that is natural to us. Our devices will understand what we need and serve up the right information and crucially, connect us to the world. They will function like personal assistants. The technology will incorporate parsing software so that it can decipher what has been asked for and then effectively connect the core data to other websites. For example, you ask to book a pizza restaurant tomorrow for four and the technology will know where you will be. It will have Application Programming Interface (API) links to a socially-created restaurant review engine and will select the restaurant and then make the booking direct with the restaurant, get real-time confirmation and enter it into your calendar. An early example of this can be seen with an app called Siri – that was purchased by Apple in 2010.
F. AR (Augmented Reality)
Already here, AR enables the smart-phone user to fire-up their camera, hold their phone up and see an internet-based information layer over the top. Pioneering companies like Layar have created some interesting apps and companies such as Sekai Camera are innovating ideas such as air-tagging that allows users to leave tags in locations that their social networks can see when they are in that location.
However, the technology is yet to take off and is still in its primitive form. That could change as geo-promotion gradually takes hold – allowing companies to float AR offers tailored to you in real-time.
And it could also change with Markerless AR – this is a combination of AR and pattern recognition – where images are fired up based on a visual cue in the camera as opposed to GPS position. Companies such as Zappar are pioneering this – they are allowing advertisers to augment visual content with additional elements. This typically uses pattern recognition but over time will be enhanced by audio recognition. By 2020, many high value and high consideration product categories are likely to have an increasing amount of their print material embedded with video content – so, for example, see an ad for a Porsche, hold up your camera and see inside the car as if you have x-ray vision. This type of usage will offer the utility required for AR to finally be adopted.
Beyond advertising, markerless AR can add a lot of value to many situations. By 2020, early facial recognition software will be in-place. For opted-in users, we will be able to hold up a phone, pattern-recognise their face and then automatically drag in social-information about that individual. Google has claimed to have shelved plans for facial recognition for now. However, it is actually Facebook that has the strategic lead – as they already have the world’s largest named portrait library and social information resource.
AR advocates are quietly excited about an intriguing technology that is just popping up on the horizon that will enable this – AR-Embedded Glasses. An Israeli company called Lumus have developed eyewear that connects to the internet and then projects the image onto the inner-side of the glasses’ lenses.
Even more outlandish is the idea of internet-enabled contact lenses. In 2009, The University of Washington embedded nanoscale electrical circuits and LED into contact lenses and powered them with a form of e-coupling. The electrical circuits did not obscure the view of the wearer. Images appeared one metre away floating in-front of the wearer. These are likely to be first used by the military. Commercial uses are expected to include: subtitles, directions, information on local environments and advertising. These will come after 2020 but when they do, they will really start to make AR technology change the way we live.
But before then, some companies believe that cameras will be used to take constant film of our activities so that our social networks can see what we are doing 24/7. Developers at ZionEyez in Seattle are working on Eyez, a pair of glasses with a tiny embedded video camera that can continuously record everything you see in 720p, transmitting it wirelessly to social media sites for all to see.
ZionEyez is calling Eyez “a new revolution in social media technology,” allowing exhibitionistic gadget lovers to wear these video-shooting glasses that transmit their images via Bluetooth to an Eyez app on an iPhone or Android device. From there, the video would be streamed through wireless networks to video sites online, where it could all be viewed live.
It is likely that this will be used, albeit by a small majority of over-sharers by 2020.
G. Projection and NUI (Natural User Interface)
Smart-phone designers are now focusing on Pico-Projection as an additional technology. Pico-Projection is simply a small but powerful projector. The interesting element about this is that if it is combined with a NUI (Natural User Interface) – the technology used in Microsoft’s Kinect that recognises movement – it will enable the user to turn a small phone into a work station.
H. NFC (Near Field Communication)
NFC is the game changer and will do more to revolutionise communications over the next eight years than anything else. NFC is a subset of Radio Frequency Identification (RFID), but whereas RFID works over distances of more than a kilometre, NFC only works in distances of up to 10cm. Currently the most widespread use is for travel and contact-less payment – in the form of a card or credit card. However NFC-enabled phones are the big opportunity and the future. Wireless market analysts called iSupply estimate that by 2014 13% of mobile phones shipped will be NFC-enabled.
This will result in some seismic shifts in business – with handset manufacturers, telecommunication companies, banks and web-based businesses fighting it out or partnering-up.
Google announced its NFC payment system called Google Wallet in May 2011 – as a partnership with Sprint, Citi and Mastercard. And of course there is additional value to be had in marrying up purchase data with browsing data.
Yet they face tough competition from Visa Mobile Payment and competing products such as Isis and Square.
However, Google is thinking beyond payments. It is also building an NFC infrastructure called ‘HotPot’. Trialled in Portland in the US, HotPot allows shops and restaurants to have NFC-enabled posters and window stickers that allow Nexus S phone users to check-in and rate their venues (and receive any resultant benefits). This is likely to be the evolved form of check-in by 2020. Many places will have NFC-enabled check-in points that, for people who have opted-in, automatically inform the individual’s social network, adding to their social graph and resulting in benefits such as special offers/micro-payments.
NFC offers Outdoor advertisers the opportunity to turn panels into retail-panels – Clear Channel predicts that Outdoor panels in bus shelters and malls will have retail functionality. After low client engagement levels with digital outdoor – in creating bespoke digital creative – the retail component is expected to spark real interest as it takes hold over the next eight years.
And NFC communication will be two way – as each user will have a NFC fingerprint that has information from their previous activity and social graph. This will begin to enable digital sites to deliver tailored content in real-time. This may be refined offers-based, or even our own content being incorporated into the ad experience – seeing our name or photos integrated into advertising. This will mainly be a small tactical component by 2020, but will begin to ramp-up after this date as digital panels increase in number and sophistication and as ad-optimising and versioning software develops to automate and optimise the process.
This will be helped along by a new generation that has lower-levels of concern with privacy and increasingly sees the value in sharing data in order to get more tailored ad-experiences and publicity to their social networks – and even more explicit value adds such as free WiFi or micro-payments.
By 2020, in most developed markets, NFC will have successfully linked our virtual worlds to our real worlds. And NFC will demand that other physical things around us become connected – heralding an open-sourced hardware revolution.
I. Open-Sourced Hardware
Soon our wireless devices will be many. As we move towards 2020, we will begin to see the emergence of Open-Sourced Hardware. This will be the realisation of the ‘internet-of-things’. A company called Ardunio produces small circuit boards that enable products to be connected up to the internet and therefore the social network.
These will begin to appear in many products – plants that tweet when they need water, devices that tell us whether our doors are locked or opened, lights that can be turned on or off remotely and water usage stats.
Our products will have an activity stream – and we will be able to monitor our surrounds. This will link the real world to the internet and provide a stream of new data that will be interpreted by software and will give us greater control over our environments.
Clearly, the developments in Interface will have an observable effect on our lives and will influence the communications industry. But the next eight years will begin to see advancements happening in the more ethereal area of the internet and how it works.
Over the next year the internet itself will start to change. Or, to put it more accurately, the way that we categorise and work with the data of the internet will change. This will start with a movement to HTML5, which will give websites the functionality of native apps. But it will go well beyond this, even within the next eight years.
Socialisation of the web
The first part of this is the socialisation of the internet. Facebook’s OpenGraph has already started the significant process of connecting the entire web to Facebook – and understanding users and their friends. Facebook doesn’t stop at its own borders – it is infecting the entire web.
As Mark Zuckerberg (founder of Facebook) explained, you can ‘Like’ a band on Pandora and that information can become part of your graph so that later if you visit a concert site, the site can tell you when the band you like is coming to your area. The power of the OpenGraph is that it helps to create a smarter, personalised web that gets better with every action taken. Zuckerberg thinks that the future of the web will be filled with personalised experiences.
For example, now if you’re logged into Facebook and go to Pandora for the first time, it can immediately start playing songs from bands you’ve Liked across the web. And as you’re playing music, it can show you friends who also like the same songs as you, and then you can click to see other music they like.
In 2010, TripAdvisor launched the travel industry’s first major implementation of the Facebook OpenGraph. TripAdvisor’s ‘Trip Friends’ feature allows travellers to tap into their social network to find friends who can offer advice about a destination. TripAdvisor can show travellers which of their friends have reviewed, visited or lived in a destination. Someone who searches for Madrid hotel reviews will find a neighbour who lived there and can message that person for advice. When friends exchange dialogue and reviews, the travel experience becomes more relevant, trusted and targeted.
This is an early glimpse of a web that will be reframed for you – by 2020 the web-browsing experience will be a social experience for most of the developed world. And for the connected generation within the developing world, they won’t be far behind. India already has 24m connected to Facebook and over 20m connected to Orkut. And it is growing at 100% per year.
Although, arguably, Facebook has a head-start on all global social sites, Google and Twitter have similar initiatives – Google launched its ‘+1’ button and Twitter launched its ‘Follow’ button. These buttons can be uploaded by any website and enable browsers to click on them as a form of recommendation. For Google, this results in ‘+1’ icons appearing within Google’s organic search-listings, informing browsers that this is a site that comes highly recommended. Bing launched a similar system in May 2011 but decided to accept that you cannot compete with Facebook and instead has the Facebook Likes data embedded into its search results.
Search Moves from Links to Likes
Heralded by some as the movement from Links to Likes, this new movement provides an added layer of data to help Google improve the quality of their search results. So, just as the web will become a social experience – so will the way we search. Developments in Chrome, Google’s browser, has enabled it to add to this with the opposite of a Like, that being a ‘Block’ – where browsers are able to block websites from appearing in future search listings. This is intended to empower browsers, and at the same time provides a powerful layer of data in order to downgrade lower quality sites – specifically content farms that try to steal clicks for the purposes of selling advertising.
Added to this, we will continue to see a movement to improve search by improving the way information is organised and understood. In 2009, Google purchased a company called Metaweb – which enables site owners, publishers and developers to easily and intelligently add content from across the Web, in return categorising their site more effectively. This has allowed Google to launch ‘rich-snippets’, a feature that pulls user reviews or price rangers into the search results. And in 2011, Google, Bing and Yahoo launched a collaboration called Schema.org – a common way for web-developers to mark-up their websites so that search engines can find and relate information more effectively. This is significant as it will begin to allow us to make the internet more intuitive. And we are likely to see more intuitive representations of search results – early signs of this being seen with Google’s WonderWheel.
Search Moves Vertical
And there will also be an increasing movement vertically. A vertical search engine searches a specific industry, topic, type of content (e.g. travel, movies, images, blogs and live events) or geographical location. Some of this content cannot be found, or is difficult to find, on general search engines. Over the course of the next eight years, the major search engines will start to incorporate vertical search engines into their core search product.
However the true power of this will emerge as we move closer to 2020. And the early signs of this are being seen with small unknown search engines, such as a Finnish start-up called Futureful. Futureful aims to ‘give you what you want before you knew you wanted it’. Its algorithms glean information from the social feeds of Facebook, Linkedin, Twitter, Delicious, Tumblr and Flickr in order to locate trending topics based on what you are interested in and what you are doing now.
This is delivering on what Google’s CEO, Eric Schmidt, believed when he said that “the ability to tell me things I didn’t know but am probably very interested in is the next stage of search”.
The Great Race for Relevancy
Forrester has termed the next few years as ‘The Great Race for Relevancy’.
This new social data combined with clearer content-marking will be interrogated with powerful new algorithms. There will be a movement from link-based to answers that are algorithmically based, where search engines will actually compute the right answer.
By 2020, we will be approaching a point where Google can give direct and accurate answers to questions like:
What time is Guess Guess Guess on?
Who plays in goal for LA Galaxy?
Who is the favourite to win the Superbowl?
What black suits are on sale at Zara?
From here something magical starts to happen…
The Internet Wakes Up
Beyond 2020, Google’s algorithm will improve to the point where it can answer questions that are more nuanced and geo- and time-based:
Is the stimulus package working?
Which is Yui’s best song at the moment?
Did the council approve the town hall closure?
When should I leave to get to Beijing by 8pm?
At this point the internet becomes an intelligence that will make its current guise seem incredibly dumb and disorganised. We won’t know how we lived without it.
Social Enhanced Gaming
This level of intelligence will make home gaming an even more immersive and addictive experience, providing people with a level of flow and satisfaction that cannot be found in the real world – you will play live as with current MMO (Massive Multiplayer Online) games, but the intelligence of the social network will have a great effect on the content. The MMOs will begin to import content from your social graph to tailor the game to you.
Gaming will continue to blur with movies – with many more games following in the footsteps of the latest game-movie hybrid called LA Noire. EA already predicts that there will be three billion gamers globally by 2012, up from 1.5 billion in 2010 and 200 million in 2000. By 2020, gaming will be one of the major global media experiences – as judged by share of media time. And there will be an increasing focus on dynamic in-game branding and the caching of products – where advertisers can replace standard cars or watches with three-dimensional branded products.
Moreover the concept of ‘gaming’ will blur with the real world. Finally, the deeply connected social networks will allow for the emergence of what is being termed ‘gamification’. Global research group, Gartner, predicts that 50% of companies that manage innovation and research will use some form of game-logic to motivate people’s involvement and contribution. Early examples can be seen in companies such as The Extraordinaires – which reward people with points for contributing to causes set by external companies or organisations. One US example was a game to encourage the photographing and geo-tagging of defibrillators so that the emergency services could direct people to their nearest one. In the UK, the Guardian used game mechanics to get people to trawl through hundreds of thousands of MPs expenses and categorise them.
Game mechanics tap into something incredibly powerful and unleash rampant engagement way beyond most affordable financial incentives that could be offered. Game dynamics will be used for major tasks. They have already been used on a mass scale for such things as folding proteins – a task that can only be done by humans.
In fact, the largest game-based system is still Wikipedia, which is built with all of the fundamental game mechanics. The front-end facias will be as much fun as playing Farmville, but the effect of our actions are offering real utility in the world.
The Mark Zuckerberg of this ‘gamification’ revolution is the twenty year-old founder and CEO of a company called SCVNGR (pronounced Scavenger), Seth Priebatsch. SCVNGR wants to build a game layer on top of the world – and it is starting off by bringing ‘gamification’ to the world of marketing. Its website and app enables small businesses to set challenges, such as tweeting or taking pictures whilst within the store in order to unlock complimentary products.
Towards and beyond 2020, it is likely that a large percentage of us will be playing games; the resultant effect of which will be either greater corporate productivity, enhanced promotion for companies and brands (and free product for us), or contributions to significant human projects.
So, let’s try and bring all of these changes together
Try to hold in your mind the force of this collective intellect; real internet-intelligence combined with the technologies that we will have in our devices and the new infrastructure of FTTH, 4G and The Cloud and you can start to sense the world that we are moving into. Each advancement has an effect on the other – the combination of all these changes will be an exponential effect on societal change.
It will result in a way-of-life where technology enables us to deeply access the world, in the moment.
A world that is synchronistic – in that it seems to know what we want before we want it.
A world where we are never alone – we always feel connected to our social networks as events unfold in the moment.
And a world that is increasingly fun and absorbing, where we can achieve great things, and even, from time to time, get a free latte.
The question is how this new landscape will change the way we work and play? What changes can we expect to see with people and society?
Let’s take a look at how this will change citizens and then we will finish off with the direct implications for marketing communications.
Come and step into a typical, developed society in 2020.
III. Society 2020
By 2020, pretty much everyone you know will have a smart-device.
From a distance, they will look relatively similar to today, apart from slide-out and/or translucent screens.
An increasing amount of people will be seen holding these devices to their mouths but not to their ears – as they will simply be using their voices to control the devices. We will begin to treat our devices like personal assistants. We will speak naturally into them to book restaurants, flights or even to find out specific pieces of information. As all of the computation will be done in The Cloud and every single engagement will improve the overall algorithm for all; by 2020, the experience will begin to deliver on expectations.
Commuters will still prefer head-phones but an emerging group will choose to audio-beam the sound using HSS. Many business users will work off one device – projecting screen and keyboard onto a table and a wall and using NUI for typing.
These will all be observable activities but the most striking difference is that 2020 is the world of the tap. People will be seen constantly taping their devices against payment-pads to make micro-payments and against shop windows to check-in or check-out. Pretty much everyone will be doing this and this holding out and tapping will be the second most defining difference you will notice compared to 2012.
The most defining difference to 2012, will be people looking through their devices. Many people will be holding them in-front of their vision to augment their surroundings – this will be a common sight in the street, in shopping malls, infront of outdoor ads, in shops and in cinemas. An increasing amount of purchases will be made after a device has been held over the product to see a summary of user reviews and even brand sentiment. As people enter stores, they will be peering through their translucent devices and seeing hovering ads and user reviews – but all organised and ‘iconised’ so that the information is attractive and easy to digest. In many parts of the world, the device will become essential to navigate the environment – people will become increasingly lost without it.
Youth audiences will amuse the older generations by holding phones in-front of their friends’ faces to gain access to their social graph. A large percentage of youths will abandon any concerns of data-privacy, as the desire to be witnessed will be overwhelming. They will be further incentivised by the additional benefits that they receive such as micro-payments, tailored content, pay-wall access, free wifi and the kudos of belonging to well-branded groups.
These super-socialisers will allow more of their activities to be witnessed by their social networks. Some people will set-up closer knit groups for a sort of VIP access to what they are doing.
The over-sharers of 2020 will broadcast their lives in real-time from small embedded HD video cameras built within their eye-wear with their social networks editing and commenting as the streaming happens live. Some of them will turn into mini-celebrities, which will result in programming content being made around them. The significance of this always-on social streaming will be simply that it will stretch-out the notion of what is extreme, allowing the quick adoption of other activities that, by comparison, will seem acceptable. These will include such things as GPS location, what they are buying, who has called or been called, what they are looking at (via AR), how they are feeling and good old-fashioned status updates.
All of these data-points will automatically feed into dashboards. They will be presented as a map of the user’s city or town, with moving icons of where their friends are. Users can watch the icons that represent their friends moving around with information about what they are doing popping-up around them as they go. These dashboards will also feature relevant information, informing the viewer of things that they were not aware they wanted or needed to know – like a proactive search engine.
These dashboard screens will be in their most resplendent glory at home. Particularly for those that choose to afford what is state-of-the-art. These homes will have Ultra-HD OLED screens the size of an entire wall and users will toggle between a map view and a ‘Skype’ based view, which will almost feel like you are joining your room up with someone else’s. They will consume linear and streamed content on these screens, although most content still won’t be served as Ultra-HD by 2020. They will engage with the content with gesture and voice – using stereoscopic cameras within the screens. The screen will recognise their face and tailor content according to them. Their devices won’t need to synch together with their home screens, for the simple factor that they will all be looking at the same content that is in The Cloud.
But, this will still only be for the minority.
Most people’s homes will not be that different from today – the main difference will be that they will have a large OLED screen that is connected to the internet.
In many markets, a large percentage of TV viewing will still be linear and surprisingly not that different to 2012– as the connectivity of watching content at the same time as others will become more important. However, there will be some countries, particularly Japan and South Korea where streaming content will have almost replaced broadcast content – but even in these markets, viewers will synch in with other people within their network to watch content at the same time. All TV viewing will be done in some connection with people in our social graph – people will just get used to knowing who they are watching TV with. This will become the central fireplace around which social networks will gather.
However, in 2020 almost everyone will consume TV with their smart-device in their hands and have the content working across both screens – this is particularly the case for appointment-to-view content. The device is used to find out more information about what is on screen and make purchases there and then – an increasing amount of the products within content are embedded with more information, socially enabled so they can ‘Like’ them and connected to an e-commerce engine so they can buy there and then. And of course, they can also comment and debate the content in conjunction with their social networks and the actors and producers of that content.
Some of the major TV events will be audience participation shows where real people are made famous and wealthy within a show.
In some markets, where there is enough motivation for the home entertainment providers, the linear ad break will be IP-based and ad-served. The viewer will get used to seeing tailored creative based on their own behavioural data – and see real benefit in this through relevancy, sequential targeting, frequency capping, ad-selection and ad-interaction. They will also benefit from rewards in the form of access to pay-wall content. In some of the more sophisticated markets, ad relevance will increase to a point where it starts to become a utility.
The final point will be the accepted power of the social network to affect businesses, organisations and governments. As smart-phone penetration ramps up, the networks will become more real-time based – with this, the power of their influence will increase along with the ability to ‘take down’ brands.
For a large number of social networkers, a new social class will emerge as a more powerful hierarchical system than traditional social class. For the tweeter generation – a ‘#fail’ or an attack by their followers would activate a deep fear of rejection and represent a loss of influential power. Many people will want to be part of the social-elite – where knowing how to engage in social media will become as important as which school you went to.
This new world is only a few years away and it is heading towards us at an unrelenting speed. So the final part of the journey is to consider what the marketing services industry needs to do to prepare for this – that is the focus for the next and final section of this book.
IV. Communications Agency 2020
By 2020, the advertising industry will largely be considered as much a creative industry as it is considered a technology industry.
The communications agency of 2020 will be increasingly considered to be a digital-based agency first and foremost.
And in many of the developed markets, communications agencies will also consider themselves as data agencies.
By 2020, audience data (behavioural data and intent data purchase through data suppliers such as BlueKai) will be largely accepted as a commodity – and the bid price will find a market price at which point it offers little value, as per brand terms in Search Engine Marketing (SEM).
However, agencies will take client data and combine it with their pools of existing data and social data to create high propensity segments – therefore increasing the bespoke nature of audiences and increasing the potential scale. This will present an increasing challenge for advertisers and for auditors in terms of assessment.
As they do today, teams will bid for data and then bid again for impressions to reach them – they will carry this out within a more evolved form of the Audience Management Platforms (AMPs) that are rolling out now. AMPs are complete ad-management software platforms that merge real-time bidding software with data management dashboards. Incorporated into this will be sophisticated creative versioning technology – so that various combinations of creative can be served and optimised in real-time. These systems will also include more advanced auto optimisation software that effectively distributes equity across the various different digital touch-points.
AMPs for night-vision
SEO and social media investment will gradually make their way into these AMPs. As will IP-served TV ads and the very small, but growing, IP inventory across Outdoor, IP-Radio and Cinema. With all of these channels incorporated into AMPs – it will start to give agencies and their clients an unprecedented level of visibility and control. As an increasing amount of creative optimisation will be carried out within the system, communications agencies will be at the frontline on creative.
Creative agencies will still produce the core advertising ideas – but the execution management will begin to be shaped by the communications agencies. They will control the software that optimises which combinations of assets (headlines, copy-lines, images) run against which audience, at what time of day and where. In some cases, the communications agencies will actually employ copywriters to write copy – in a similar way in which they control the content within SEM.
This new breed of algorithm-based planning will really take hold, globally – as specialists and as specialist companies that will steal social ad targeting in a similar way to SEM agencies that stole SEM work in the last decade. Their core products will be software not people – and they will also offer it direct to advertisers. They will automate the targeting and creative management for social sites – linking directly into their APIs.
These algorithm planning agencies will be an entirely new breed. They will have come from a software background and will therefore have different paradigms – this will make them a big threat.
It will be the integration of social ads with all of the other activity, within an AMP, that will allow the major communication agencies of 2020 to take back responsibility for social ads.
SEM will cease to be seen as a separate department. SEM activity will simply be incorporated into the AMP. SEM will be managed by a real-time bidding team with the ever growing amount of IP-based inventory – including pre-rolls.
This will also include pre-mid-end-rolls within Content – YouTube will have an increasing amount of quality video content as it continues to sign up more partnerships with production studios.
They will also have developed further their partnership with Vevo, the music video distribution channel, and by 2020 YouTube will sell in-video ads across more than 50% of their total video views. This, combined with other video suppliers, will mean that close to 50-70% of all video views worldwide will be ad-inventory – which will mostly be bought via an exchange.
Future of Futures
This dramatic increase in biddable video inventory, combined with enhanced real-time trading systems, will lead to a media futures exchange – where agencies and/or ancillary groups use algorithms to either ‘long’ or ‘short’ on the future cost of audience data and inventory. If this happens, it may begin to change the role of the media agency – to one where it is an active player in the market and not just a middle man.
Forrester Research said that media planners of the future will be like portfolio managers focused on managing risk for their clients.
The beating heart of the communications agency will be algorithm-shaped. There will be a continual movement to get everything into a real-time-exchange.
The focus will be to automate everything that can be automated and then to upscale their offerings – the maxim of the day will be A&U (Automate and Upscale). There will still be many media channels that will require a manual media buy – media such as traditional TV buying and Outdoor will benefit from some improvements in booking systems, but they will be waiting largely for the real-time-bidding wave to engulf them. However, in some markets, we may see the uptake of bid-based software systems that include off-line channels such as print.
Upscale offerings will come in many areas – such as enhanced audience understanding, through to the application of the social sciences to identifying how best to influence. But the greatest ramping-up of the communication agencies offering will come in these four different areas:
Content creation will continue to be a growing up-scaled offering for communications agencies. By 2020, most media agencies will be considered to be ‘full-service-content-agencies’ – carrying out content strategies that, in many instances, carrythrough to advertising.
Also, an increasing amount of innovation is expected in this area – not just with the formats, but also with the business models. Some agencies and/or production companies may produce content with a clickable layer of more information behind all of the products and services featured – with the sole purpose of gleaning intent-data that can then be used for targeting, or even on-sold to data management companies such as BlueKai. They are also likely to develop ecommerce platforms attached to the clickable layer – so, for example, the viewer can click on a handbag that a character is holding to find out more, ‘Like’ it and then buy it there and then. Clickable content is a whole new strand of content development.
Agencies are also likely to be making an increasing amount of content using crowd-sourced specialist companies. These crowd-sourced companies will get better at gleaning work out of people – and also start to build a skill-set that can elicit content on the fly. Catalysing and ‘curating’ real-time content will become a new skill set that will link content to social.
By 2020, campaign thinking will have universally been replaced by always-on thinking. The launch of new campaigns will result in teams working through the night for several days to monitor and moderate the ‘Earned effect’. Social experts will be trained to understand data as well the new emergent forms of group psychology – they will use expressions such as ‘confirmation bias’, ‘herd’, ‘contagion’, ‘gamification’ and ‘catharsis’. They will be equipped and empowered to deal with a negative contagion and to shape a wave of interest into a positive outcome in the moment. These social planners will be an essential part of the strategy team for the conception of ideas – paid investments will be seen as catalysts of earnings. Good social marketing planners will add unprecedented value with their in-the-moment judgements. Some will be the super-stars of the industry.
3. Agent-Based Modelling
Leading up to 2020, we will see an increasing amount of interest in agent-based modelling (ABM). ABM allows advertisers to build a virtual network of their entire market. From this, advertisers can try different strategies to see their effect on business performance. Pioneering clients of 2020 will have ABMs and these will give them an advantage over their competitors. Communications agencies will eventually adopt them and feed all of their data into them. Some agencies will partner with external companies and some will take them in-house.
The greatest influence on advertiser performance will continue to be the idea. This will mean that, almost as an antidote to automation, we will begin to see a resurgence in creativity. After the inventory is optimised, the creative component can start to receive an uninterrupted focus.
But the focus will be wider than it is today – it will include NPD (New Product Development) as by 2020, the canvas upon which creativity can happen will be incredibly rich and diverse. Innovation will be managed by both creative agency and communications agency, with occasions when they will be pitching against each other. The new role of creative technologist will work with creative teams and/or with channel planners. Their role will be to bring creative thinking to life in a new digital eco-system that includes the consumer.
Time to pick a side
Some communications agencies may divide themselves into two halves – with one side focusing on Upscale services and account management and with the Automation half being centrally ‘pooled’ within the holding companies. The Upscale half will be ultimately on a road to compete with the existing creative agencies. The Automation half will be on a road to compete with the major tech companies such as Adobe and IBM.
What we will see is an increase in the value that communications agencies add.
Advertisers will spend more time selecting their communications agencies than they do today and than they do with any other agency – as the complexity in assessing one against the other will increase. But get the decision correct and the effect on the advertisers’ business will be as, if not more, significant than it has hitherto been with the selection of the creative agency.
The unrelenting change that we have seen over the last decade has resulted in transformations to our world and our industry that we would have been hard pressed to have foreseen.
The next eight years will see similar change. It is the nature of an exponential growth curve of technological development that we will see as much change in the eight eight years as we have done in the last 20.
This technological development will enable us as people to move one step further on our journey towards abundance – where we are able to be everywhere with everyone with everything in the moment.
With this paradigm, we can assess the technologies that are likely to gain traction over the next eight years. Technologies that are distributed across infrastructure, interface and the internet.
Successful developments will be those that liberate and empower people.
People will have more access to the world of information. They will also have more information on the world of their social networks. Their social graphs will shape their worlds, in real-time.
We will be individuals but we will also be very powerful networks – which will increase in power. This will present some incredible threats and incredible opportunities for advertisers and their agencies.
Initially it will lead to an increase in the focus on automation and optimisation as a growing amount of advertising inventory is traded via exchanges – which may well in turn fundamentally change the communications agency model.
And mid- to long-term, once this area has been optimised, the focus will really start to move onto the upscale services – areas such as new-content-models, an evolved form of social management, agent-based modelling and innovation. The communications agency of 2020 has to elevate beyond being a media agency to being a marketing communications consultancy.
The result of all of this will be that by 2020 ‘media agencies’ will be a greater determinate of marketing success. And by 2020, marketing will be a greater determinate of business success.
 Source: eMarketer and IDC 2010
 Source: ComScore, Nielsen, eMarketer, ITU and SNS
 Source: Nielsen
 Source: eMarketer and IDC 2011
 Source: TNS Digital Life, MLDL, ComScore and Cellular News
 Source: FTTH Council – Feb 2011
 Source: FTTH Council – Feb 2011
 Source: PHD’s projections – June 2011
 Source: Google & Ipsos OTX – April 2011
 Source: Facebook April 2011
 Source: Comscore Sep 2011