The Forces of Change Shaping the 21st Century

When you look back to the 20th century, there were a number of forces that profoundly changed the world. Most economic historians highlight the game changing impact of the telephone and electricity, both invented the century before, along with the automobile, the airplane and the worldwide web.

What will those forces be for the first half of the 21st century? This is an important question as these forces, likes the ones that shaped the last century, will have a profound impact on both how businesses operate and how we live our lives every day.

There are three forces for change that I believe will shape the future – two positive and one negative. They are: “data informed everything”, near “real time” connectivity and ever more pervasive security threats.

I suspect that a lot of people will concur that these will be powerful forces, but the extent to which they will impact our world, and the timing of the changes that will precipitated by these forces, is open to debate and discussion.

Let’s start with “data informed everything”. Much has been written about the enormous amount of data that exists in the world today. Only this morning, I came across a mind boggling statistic about the amount of data that is now being created. In the last two years, we have created 10 times more data than existed in the world from the beginning of mankind up until two years ago.

What all this data means is that businesses are going to know more about how they are performing in real time and they’ll understand more about their customers than ever before. They will have far richer insights into our needs, likes, preferences, interests and media behaviors than ever before.

The sources of data are increasing daily as we surround ourselves with more smart things. It is estimated that there will be more than 50 billion connected smart things by 2020, so the richness of the data is only going to increase.

This means that companies will be able to deliver more relevant experiences/products/services to the right people, at the right time, in an appropriate context like never before. And, they will be able to do this with unprecedented efficiency. We are entering the golden age of personalization. We’ll get what we want, where we want it and when we want.

Two brands that excel at leveraging data to deliver highly personal, almost intuitive experiences are Amazon and IBM.

As a loyal customer, Amazon knows what I like to buy, when I tend to buy it, on what device I tend to shop and the sites where I spend my time. Now that we have three Alexas at home and we are all now avid users of Amazon Prime Video and Music, I am sure they are building a pretty rich tapestry of the Cadman family’s interests, entertainment preferences and buying behavior.

With all this data, Amazon seems to be able to reach me consistently with relevant messaging about the products I have been searching for, at the times I like to shop, on my favorite device and on the sites that I am browsing. And, what is remarkable, I never feel like I am inundated with messages from Amazon. Maybe that is because I don’t feel like I am being cross sold to because they come to me with offers on the things that I am genuinely interested in.

Last year, I had an amazing experience with IBM. I went to the US Open last September and saw a lot of IBM advertising and signage at the tournament. When I got home, I was watching the US Open highlights on TV, while browsing on Facebook. In my news feed, I noticed an interesting sponsored story about how IBM’s data analytics tools could provide a genuine competitive advantage, even in tennis. They created some very interesting infographics that showed how 70% of Serena’s services to the advantage court went to the backhand. Knowing that would be pretty handy given the speed of Serena’s second serve. The next day, I was served some other content about how marketers could better leverage data analytics, so I clicked on that story too. Within two days, I received an email inviting me to a thought leadership seminar on data analytics for marketers. And, I was hotly pursued by them for the next couple of months.

Data will enable more than just hyper personalization. Data is the fuel behind Artificial Intelligence, which will be a major force for change in its own right. Much is being written about this topic right now, but it would appear AI and robotics has the potential to impact everything from automated transportation to cyborg technology (enhancing the performance of our bodies and, in time, our minds), to medicine, to care for the elderly, to basic companionship.

The second disruptive force that is going to shape the future is “near real time connectivity”. The availability of gigabyte internet speeds is growing as AT&T and Google race to upgrade their fiber networks. This will take time, but Google already have 450,000 broadband customers and AT&T Fiber is already available to nearly 4 million homes & businesses today. Both Google and AT&T have aggressive expansion plans, so penetration will build rapidly. I suspect the speed at which this build out occurs will only increase when, and if, the net neutrality rules are rolled back by the new Trump administration. As it currently stands, AT&T plan to reach 12.5m locations, across 67 metro areas, by mid 2019.

However, it is the roll out of 5G wireless networks that will turbo charge the availability of “near real time connectivity”. All of the major providers have tests underway and the 5G arms race is really beginning to heat up. Only today I read that T-Mobile is planning to launch some form of 5G service by the beginning of 2019. That is only 18 months away and I suspect AT&T and Verizon will want to beat them to market.

5G effectively reduces latency and will enable vast amounts of data to flow across the network in near real time and inform amazing, everyday experiences. So, what will actually change?

The first thing that 5G networks will enable is the promise of the “Internet of Things” to be realized. Drones will be able to deliver goods and services to you, wherever you may be. Your driverless car will be able to communicate with the parking meters and you’ll instantly be able to find the nearest available vacant parking spot. Your sunglasses and your car may well become your preferred method of payment.

The AT&T film that we recently aired in The Masters paints a picture of what the near future of 5G might look like:

Some of these changes may appear a little frivolous and whimsical, but I recently came across a 5G/IOT use case that shows how profoundly our world could be transformed by the next generation of connectivity.

At AT&T’s Healthcare Foundry in Houston, they created a prototype of a connected home healthcare station for elderly patients to monitor their health. The unit incorporates simple measurement tools that monitor blood pressure, blood oxygen, body temperature, pulse and weight. 5G technology enables this information to be instantly shared with the physician, along with alerts customized for friends & family. The unit also incorporates a simple touch screen video conferencing facility so that the patient can easily connect with the physician. Based on his/her diagnosis, the physician can then send instructions to the the unit to dispense medication at the correct dosage.

This sort of innovation, enabled by data and 5G connectivity, will have a very profound impact. For the patient, it means that they will be able to live more of their later years in their home, rather than moving into a costly nursing home. For friends & family, it provides peace of mind. For healthcare providers, it has the potential to deliver operational efficiencies via remote care facilities. And, for health insurers, it could help avoid long term residential care and reduce the need for hospital admission.

Secondly, 5G networks will enable the potential of virtual and augmented reality to be fully realized. As uptake of this new technology accelerates, this will create profound change at scale. According to IDC, shipments of VR and AR headsets are set to climb to just under 100 million units worldwide by 2021, up from 10 million shipped last year.

Everything from entertainment, to learning, to business collaboration, to retail experiences will be transformed. Imagine being able to stand next to Jordan Spieth on one of the hallowed greens at Augusta and be able to read the green, in the heat of competition. Imagine being able to go into a store and try on a myriad of outfits, without having to put on a single item of clothing. Imagine the amazing new ways that children will be able to experience history. Maybe our children will actually be able to walk with dinosaurs as they graze in a local park.

Inevitably, there will be some negative consequences of this 5G world as “smart things” start to replace people. Just think about the impact of driverless cars. There will be fewer delivery and cab drivers needed. There will be fewer accidents and therefore less work for local garages. Less accidents probably means less emergency services. It will certainly have an impact on automotive insurers as there will be fewer risks to insure against and I can’t imagine there will much need for driving lessons.

The final force for change is the increasing number of security threats impacting our world today. Terror is becoming a worrisome way of life for us. Every day, there seems to be a breaking news story about a terror attack somewhere around the world. These attacks are inevitably creating social division and causing fear to slowly seep into our daily lives. However, as ghastly as these events are, they impact few people directly. However, there is a new breed of threat that is going to have massive ramifications for us all, cyber security threats.

In a world where data is a powerful currency, the number of threats will increase and the nature of these threats will become ever more complex and cunning. They will emerge from every corner of the globe, and will emanate from both individuals and nation states.

They say that 2016 was “the year that hacking went mainstream”. There are some 170,000 cyber security attacks on businesses in the US every day. Cyber security is no longer the domain of the CIO, CTO and the IT department. It is equally important to the CEO and CMO as cyber security impacts the share price, customer loyalty and a company’s competitive advantage. It was a security breach at Yahoo that enabled Verizon to reduce their offer by $350M.

It was as recent as May of this year when the world experienced the biggest ransomware attack in history. The impact was felt in over 100 countries around the world and it affected both large companies, like Fed Ex and Telefonica, and government bodies, like the national train operator in Germany and the National Health Service in the UK.

The growth of the Internet of Things increases the potential impact of these attacks. As Smart Cities become more of a reality, imagine the potential consequences of a major security breach into a city’s utility system. Traffic lights could be compromised, street lights could be shut off, emergency services could be grounded, air traffic control could be switched off etc etc.

These threats are even more worrisome when you consider that as we live in a world that is more open than ever before. As consumers, we are increasingly open to sharing more and more data about ourselves. At the same time, companies are also operating in a greater spirit of openness - open to new ways to connect with customers, open to new payment methods, open to employees working from home on their own devices and open to partnerships with consultants and other companies. So, companies in the 21st century are going to be forced to reconcile two incredibly powerful forces – the need to be closed to threats and the need to operate in a more open way than ever before.

Interestingly, data is our shield in this world of growing security threats. Security algorithms are becoming ever more sophisticated and can quickly spot abnormal traffic flows across networks and deploy counter measures to close down these threats. Machine learning v human cunning – it will be an epic battle.

What I find interesting is the inter-relationship between these three forces. The power of data can only be fully realized on the back of the actions and experiences that are delivered across 5G networks. Major security breaches could inhibit the impact of the other two forces. Maybe people will be a lot less inclined to share data with brands and businesses in a world where data breaches become more common place?

So, what are the implications of these three forces for marketing and communications?

Firstly, marketers need to fully embrace data and apply their energies to making all of this data actionable. We need to use it to design products/services/experiences that our more relevant and interesting to our customers than ever before. That doesn't mean just chasing them around the internet with offers on a product they clicked on once. It means thinking about offers and experiences that expand their horizons beyond their current needs.

For communications, we need to use the data to answer 4 seemingly simple questions:
-       WHO is the right audience?
-       WHAT is the right message we should be delivering to them at each stage of the buying cycle?
-       WHERE is the right context for this message to be delivered?
-       WHEN will they be most receptive to this message?

In many respects, it is back to the future. We are returning to the days when rigorous marketing analysis actually informed marketing and communications strategy.

Secondly, experiences are going to become an even more important source of differentiation. As Pine & Gilmore concluded in their book, Welcome To The Experience Economy: “From now on, leading edge companies – whether they sell to consumers or businesses – will find that the next competitive battleground lies in staging experiences”. Jeff Bezos, who has arguably built an entire business on the back of creating a simple, effortless shopping experience made the following observation in his Top 10 Leadership Lessons: "In the old world, you devoted 30% of your time to building a great service and 70% of your time shouting about it. In the new world that inverts."

This bodes well for the brands who are in the business of creating or facilitating brilliant content. The Media Entertainment & Technology conglomerates – Facebook, Google, Netflix, Amazon and AT&T (post the Time Warner acquisition) – will, I suspect, go from strength to strength.

Thirdly, new technology and improved levels of connectivity will continue to enable new competitors to disrupt established markets. Your competition today is unlikely to be your competition in 10 years. Who would ever have thought that Amazon, an online bookseller that became a data/logistics/cloud company, would ultimately become one of the most successful content studios, taking on the power houses of the entertainment industry at The Oscars?

Fourthly, 5G is going to create a raft of new, highly targeted opportunities for marketers to connect with customers. For example, Visa and Mastercard have already joined forces with connected car manufacturers to make electronic payments through smart vehicles. Used in conjunction with location targeting, retailers will now be able to offer special offers/discounts as a driver approaches a store.

Finally, I think these forces of change will only have a positive impact on the advertising business.

More data should lead to tighter briefs, with genuine insights, which should lead to more relevant and compelling creative work.

Given the myriad of channels open to marketers, there will be an even greater need for big creative ideas (increasingly referred to as creative platforms) which can be harnessed across the entire communications ecosystem to create a coherent impression of a brand.

Creating experiences for brands will become an increasingly exciting opportunity for agencies. This will mean that creative agencies will need to embed different capabilities within their creative departments .As our canvas expands, we'll need this richer palette of creators. We'll need architects, music engineers and interior designers sitting alongside art directors, copywriters and UX developers. 

And, finally, more data will enable the industry to prove out the effectiveness of the work we do. Maybe that will give us greater negotiating leverage with clients.