1. The end of the digital beginning

Obviously digital maturity differs by country globally but there was a phrase used in PWC’s “Global entertainment and media outlook: 2012-2016” report which resonated for me.

They describe that we are at the “end of the digital beginning as companies reshape and retool for life in the new normal”.

With digital now at the core of business-as-usual, PWC believes that experimentation and execution are no longer sequential but will proceed in parallel:

The technology to deliver the enterprise with digital at its core is here now. The main challenges are around leading and marshalling the talent and innovative culture needed to make it a reality.

I entirely agree.

There are some significant implications for the phase we are now entering:

  • Restructures and ‘re-orgs’. A lot of companies are restructuring ‘digital’, in some cases dissolving it completely as a separate function. In some instances the good digital people stay, with wider roles and remits; in others their passion for pure digital, or frustration at the re-integration with the corporate mother ship, cause them to leave for a start-up or pureplay digital company.
  • M&A. A lot of consolidation has already happened. A lot more is to come. As digital has gone mainstream the big incumbent players are either going bust, painfully trying to transform, or, in most cases, buying digital assets. This is particularly true for agencies and consultancies but also true ‘client side’.There aren’t many big purely digital agencies left now; in any case their competition is increasingly from the big consultancies (Accenture, PWC, Deloitte, Capgemini, KPMG etc.) as projects get bigger, more complicated, more strategic.
  • Business model evolution. Many ‘traditional’ business models remain under threat because of the rise of digital. Most notably publishing which is being further squeezed by their erstwhile advertising clients investing more in their own content marketing and their readers’ move to mobile devices which make advertising difficult to deliver effectively.But digital businesses are running out of digital-only growth too and facing increasingly stiff global competition online. As digital matures it feels like digital alone will not always suffice; and being “medium sized” is not a good place to be.

Whilst we might be at the end of the digital beginning we are a long way from the beginning of the end of digital. In any case, before we reach that stage I believe the distinction between digital and non-digital will have become largely meaningless.

For those of us who have been in digital for more than fifteen years it is strangely almost a surprise that digital has finally ‘gone mainstream’.

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2. The war for digital talent

I talk about this a lot because I feel it is probably the biggest challenge for most things digital. There are three notable things I’d draw out for 2013:

The size of digital teams has grown a lot

Forrester did a report called “Right-Size Your Interactive Marketing Organization” where they found that:

  • At the end of 2009, 60% of marketers surveyed had fewer than 10 people dedicated to digital.
  • By 2012 only 17% had teams this small.
  • 45% boasted more than 25 dedicated digital marketers.
  • 20% had 100 or more digital staff.

I now talk to Heads of Online (or whatever the most senior digital person is called) who manage digital teams of 1,000+. Likewise for agencies or consultancies. There is a huge need to feed these organisations with digital talent. The demand far outstrips supply.

The ‘big and boring’ companies are most desperate

Start-ups, and internet companies like Google, have been cleverly luring the best digital talent for years.

It seems only recently that bigger ‘traditional’ players have woken up to just what a problem they have in attracting and retaining digital talent right from graduate level to the more experienced staff.

Often they can’t compete on salary, despite deep pockets, because of pay inequality issues compared with other staff; they struggle to compete on the working environment (Wot no bean bags? No BYO device approach? No everything run as SaaS? No Agile throughout?); and they can’t offer meaningful equity.

Digital Marketers aren’t the most in demand

I’m afraid to say that whilst digital marketers and ecommerce professionals are still very much in demand, particularly in certain niches, those even more in demand typically have ‘product’, ‘data’, ‘engineering/developer/technical’ or ‘architect’ in their job titles.

Combine those words with ‘mobile, social, video, content strategy, platform’ and ‘manager, director, head of’ and the recruitment consultants are drooling.

We recently did an interview with Chris Ramsbottom, Sky’s Mobile Product Manager. Not only is that clearly a killer job title (see last bullet above) but his description of how Sky works sounds pitch perfect for the kind of approach I predict all large organisations will need to adopt if they want to attract and retain digital talent:

We work within an agile (scrum) framework, with a Mobile Product Manager responsible for one particular part of the business, such as News, Sports, or Movies. We then typically have a number of development teams working on different products on different platforms, but all the teams are co-located in London so there’s a lot of knowledge sharing that goes on between them.

The Product Managers will research, define and then drive the product strategy, working with user experience experts and designers within our Sky Creative department to help create wireframes, story cards and acceptance criteria.

Everything we propose is based on anticipated customer need, so we do a lot of user testing, usability studies and market research before and during development.

The development teams then have a solid basis to begin work from – we research, design, develop, device test and then launch to market – but scrum allows us to be flexible in the functionality we decide to prioritise, meaning we can respond much quicker to change in the external environment, which, working in mobile, is the only thing that can be guaranteed.”

Useful Econsultancy links:

3. Optimized cross-channel customer experiences

Basically this is what we should all be focused on delivering, right?

Currently mobile is particularly weak for most companies (including Econsultancy…) so that’s getting a lot of focus. And integrating online and offline, whilst not a new topic, is still a big, and complex, journey for most companies.

We need to be delivering outstanding customer experience across all channels and touch points. They should be personalised intelligently, relevantly, responsively, in real time. The customer journey should be seamless across channels and each should play to its strengths.

There is a lot of cool stuff happening (control the web with your phone via a QR code scan), the internet of things and intelligent environments open new possibilities, behaviours like ‘show rooming’ bring new challenges and opportunities.

We’re not short on buzz words, or marketing theories, or even best practice. Actually delivering it is much harder. For that you need the right people. See point 2.

Useful Econsultancy links:

4. Focus on the head rather than the long tail

For a long time the long tail has been part of digital lore. A recent Econsultancy article heretically suggested that perhaps the long tail of referral traffic is short.

I think there are few reasons that the ‘head end’ might be coming back into fashion in 2013:

Focusing on the biggest bang for your bucks

Given we all have limited resources, it seems that focusing on the long tail can sometimes be an awful lot of work for limited results. Or, at least, easily measurable or short term results.

So whilst we might want to engage with all those niche bloggers, or build links to tiny product categories we stock, do we actually have the resources to do this?

With so much fragmentation I think we’ll see increased effort on the few rather than dispersed effort on the many.

This reminds me of one of my favourite internet articles of all time by Mike Grehan back in 2004 called Filthy Linking Rich And Getting Richer!

Polarisation of attention

There is increasing evidence that we now have far too much choice and actually we crave less, but better and more relevant, information and services. We are starting to settle on particular sources as those we trust.

If this continues then there should emerge a smaller number of ‘winners’ leaving a swathe of insignificant players. This polarisation favours concentrating on the head end.

Ossification of consumer behaviour

We all talk about ‘the next Google’ or the ‘next Facebook’ sagely noting that these could spring from anywhere at any moment such is the world of digital change. But do we really believe this? I don’t.

I can’t believe Google is really worrying that much about some students in a garage eating their lunch. As Fred Wilson says in a recent article, I think we’re seeing consumer behaviour ‘settle’ much more, though it varies globally. It is now much harder than it was to become a global force quickly.

If this is true then again it makes more sense to focus resources on the existing ‘head end’ big players rather than expend lots of effort on many niche players who may never gain real traction.

Useful Econsultancy links:

5. Internationalization

With businesses looking for growth in stagnant economies their gaze turns to digital not just in their home markets, which are becoming more mature and saturated, but they see digital as the obvious route to international expansion and growth.

My recent post on “China: a special report on digital marketing and e-commerce” shows a digital giant that has yet to turns its attention aggressively to the west. But, in the words of Brad Pitt, this is inevitable.

The war for talent (see point 2) is also encouraging companies to look internationally, particularly for technical skills.

Why not have a play with Google’s Global Market Finder tool to see where you could be expanding this year.

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6. GAFA

The big four of the internet: Google, Apple, Facebook, Amazon. I don’t think Twitter, Pinterest or even Microsoft quite merit entry yet into the GAFA-rati.

For me there are four interesting broad themes here:

Resurgence of Google

At some points in 2012 (the leaked results, ‘disappointing’ G+ performance etc) it felt like we’d seen serious chinks in Google’s armour. But anyone writing off Google in favour of the likes of Pinterest, Twitter or even Facebook are, in my view, much misguided.

Android is soaring; YouTube is starting, finally, to seriously eat into the territory of traditional broadcasters; G+ is really starting to grow on me, and others; Google Communities, Google Pages… all starting to nibble at Facebook, LinkedIn, WordPress etc.

Google also has the best ad platform for mobile; Google’s own marketing and creativity, in ad format innovation too, is impressive.

Amazon, the dark horse

Amazon is a global e/m-commerce steam train that has just powered through another massive Christmas sales success. And yet it is building a media business; and yet it has an awesome cloud services business; and yet it owns LOVEFiLM and IMDb.com and is taking ever more share of the consumer wallet.

Amazon gets less press coverage than the likes of Facebook or Twitter but it has a built a behemoth that it looks very hard to compete with given the scale and complexity of the e-commerce operations in particular.

Amazon as a broader platform for paying for, and getting delivered (physically or digitally), pretty much anything makes it a fascinating one to watch.

Will Apple set out to conquer TV?

Apple’s hardware no longer seems as sexy and distinctive as it once was with the likes of Samsung doing very well. Apple’s software, likewise, is looking less differentiated, particularly in the mobile space.

The Maps fiasco left a slightly sour taste in the consumer mouth and are you, like me, getting somewhat tired of constantly re-approving increasingly draconian T&Cs every time you use an Apple service or downloading huge software updates?

But Apple makes obscene amounts of money and has $100bn+ in cash. So what is it going to do with it? TV has to be the big prize. Not least because the current TV user experience is so broken that even a smattering of Apple user experience magic could transform it.

Rationalising your choice of platforms

There is growing evidence (see point 4) that consumers don’t want to manage and maintain presences across all the platforms and networks available. It’s just too much effort, too many logins to remember, too many profiles to try and reconcile etc. So perhaps most of us will settle on only a couple?

If I think about it I’d consolidate around Google (for apps, G+/identity/networking, blogging, search, content) and Amazon (for commerce, delivery) rather than, say, Facebook and Apple.

Over 2013 and beyond I imagine more people will start to settle on a preferred ecosystem. If so this will clearly have important ramifications not just for those businesses, but for us marketers.

Useful Econsultancy links:

7. Personalisation

This is really a sub-set of point 3. But as I point out in more depth in my article on “The 4Ps of Personalisation”, personalisation is very much back on the digital agenda.

I recently came across a concept I liked the sound of: “automagic”. We must aim to create digital services that are self-aware and personalised to the point that, for the customer, they just seem to magically know what they want and make things generally easier and more enjoyable.

If automagic is achieved then I don’t think customers will care too much about giving the personal data and permissions required to make it possible.

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8. Content marketing

I’ve always been uneasy with the terms ‘content marketing’ or ‘content strategy’. Not because I think focusing on earned/owned media, rather than paid media, isn’t a sensible approach, but because it feels like we’re inventing a new term for something that should be blindingly obvious and shouldn’t need buzzword-ing.

Really ‘content marketing’ is again just a sub-set of point 3. It isn’t about ‘marketing’ content. It is about creating outstanding customer experiences which, inevitably, involve content in its many guises.

The rise of ‘content marketing’ has also been fuelled by the realisation that actually a lot of the success of, say, SEO or Social Media or Email Marketing or Most Forms of Marketing, isn’t about “doing more SEO” or “investing in social” but is about creating great content that people will want to read, link to, talk about and share.

This shouldn’t be the Damascene moment it appears to be for so many businesses. 

This said, there are considerable implications of the increased investment in owned media. In particular, where ‘brands’ are investing in content instead of advertising. Firstly, these brands will have to try and find the talent and get used to working with editorial which most aren’t used to; secondly, this will further disrupt the publishing and media business models of old.

Within content marketing, there are three areas which interest me:

  • Content curation. In fact, content business and operational models generally. Assuming we’re going to be creating more content, the question is then how, and how much it will cost versus the ROI.In a recent presentation I gave (“What can retailers learn from publishers online?”) I talked about hybrid models e.g. 70% Aggregated, 20% Curated, 10% Original.
  • Content creation, curation, experience platforms and services. Related to above there is an interesting new set of platforms and services appearing that enable these new content models, often enhancing existing CMSs (Content Management Systems). We at Econsultancy, for example, use both Idio and Flockler to add more capabilities to our core CMS. There are a host of new decisioning engines, social curation platforms, content provisioning and production technologies and services emerging (e.g. Storystream, Smartology, iTrigga etc).
  • Content as data. Obviously all digital content is data. But the future of content is most interesting when that content becomes ‘smart’ through data: semantic, meta, or otherwise. This allows the content to be efficiently distributed, packaged, “sliced and diced”, to maximise its value.Thinking this way might even save a few publishers’ business models. Have a read of The World Is Not Enough: Google and the Future of Augmented Reality to see an example of how we should be thinking more intelligently about ‘content’ as data.

Useful Econsultancy links:

9. Mobile

Clearly the year of mobile was a few years ago. There is so much happening in mobile that it would need a full post of its own: mobile search, mobile ads, mobile payments, m-commerce, social/mobile etc.

So I’ve highlighted just two themes for 2013 which interest me:

Mobile, especially native apps, is less ‘ossified’

With reference to points 4 and 6, I think mobile is where there is still most to play for. People get excited about social, video, connected TV etc but it feels to me like mobile is where there are the biggest chances to be disruptive, to be small, but still have a good chance.

Look at the sheer range of answers in “Econsultancy’s favourite mobile apps from 2012” – this is a fragmented space.

So whilst you are unlikely to have a *really* big app, and the costs of creating, maintaining and marketing it across multiple OSs are bigger than you might think, there are still opportunities to get real engagement and long term loyalty if you deliver a great app that serves a particular need.

M-commerce

For me this has to be the big focus for 2013. And it’s just about getting the basics right: mobile search marketing, a good mobile web experience, better integration of mobile into the multichannel experience, and better integration of mobile throughout the company (marketing, customer service etc).

Responsive design is great but isn’t always realistic as it is more difficult than most people think, therefore hard to find the talent, expensive etc.

Just having a stripped down mobile-specific site that does the basics well would be a good start for most (and, yes, Econsultancy is guilty of not having this). Not wishing to pick on B&Q but when I was out shopping this Christmas and wanted to find the opening times of my local B&Q store on my phone, to then go and buy something in store, I got the following:

Full marks for having a mobile site but it’s not much good when it is riddled with 404s. This reminds me of the early days of websites.

Useful Econsultancy links:

10. Social media

As with mobile, a huge topic. So a few areas I’d single out:

  • Talent (see point 2) – people who actually understand social and how to ‘execute’ – the biggest challenge. Also, how to do social media at enterprise scale is still a big challenge in terms of process and, to a lesser degree now, technology.
  • Personalisation. This is the topic of point 7. There is a lot of talk about ‘social CRM’ and how we can personalise based on social data points but still relatively few executing successfully on this (Amex, KLM, Photobox come to mind as brands who have). So 2013 should see more experimentation and results here.
  • Campaigns making better use of social. In the previous year or so there has been a great improvement in marketing and advertising campaigns that make powerful and effective use of social.Read our “10 of the best social media campaigns from 2012” or look at Google’s Creative Sandbox resource for examples. We’ll see more examples in 2013.
  • Owned versus earned social media. Or ‘onsite’ vs ‘offsite’ social as I tend to think of it i.e. social activity happening on properties you own, like comments on your blog, forums you run, reviews on your site etc, versus externally controlled properties like Facebook, or Twitter, or LinkedIn.I think this distinction is helpful since some companies mistakenly think they own their Facebook pages or friends. They don’t. Facebook do. In previous years the focus of activity and investment has been in offsite social, most notably Facebook.

    In 2013 I think we’ll see a slight redress in the balance towards onsite social integration, including community management, underpinned, of course, by plenty of ‘content marketing’.

Useful Econsultancy links:

11. Interactive design and user experience

With increasing numbers of devices, at different resolutions, coupled with a desire for efficiency and streamlining of costs and content management, responsive design is understandably a focus for 2013.

However, given the proliferation of devices, it is increasingly difficult to deliver responsive design that isn’t actually somewhat of a compromise all round. As Stephen Pinches of the FT explains below I expect we’ll be designing not for specific ‘devices’ but for different screen sizes which have different use cases.

In an ideal world, responsive design shouldn’t be just about designs that scale for different devices, but about ensuring your customer experience is responsive to the customer journey and use cases across channels.

Web experiences will become increasingly influenced by mobile devices: the tablet-ization of websites evidenced through above-the-fold-swipe-y designs. Personalisation, video, social integration, chat, HTML5… richer experiences generally that are more complex to design for but which must appear simple, elegant and beautiful to customers.

In the War for Digital Talent I expect great interactive designers to soon out-trump even the engineers in scarcity value.

Great interactive designers will be close in nature to the great digital product managers: sensitive to both the customer experience and business needs and able to knit a compelling experience from APIs, content and data that may already be available and craft new digital services and products from them.

Useful Econsultancy links:

12. Advertising

There is lots of on-going interesting experimentation with online ad formats, YouTube is doing some innovative things with ads, the Facebook Exchange (FBX) is proving interesting, but the buzzword in digital advertising at the moment has to be ‘native advertising’, coined I believe by Fred Wilson in this talk.

Native ads are those formats designed for a specific platform and which only exist on the platform: iAds, promoted tweets, Facebook ads, Adwords in Google search, Foursquare etc. This TechCrunch article on “Native ads in 2013” has a good round up, with examples.

In 2013 I’d expect to see continued experimentation here as media owners try to find the right balance between monetisation and the user experience.

In the first instance this focus on native advertising is not really about users, or marketers, but about the business models, or lack of, behind online publishing. It seems you have four choices as a publisher trying to make money out of advertising online:

  • Have native ads. This is great if you can make it work because you should be able to charge a premium AND the advertisers can’t get this form of advertising anywhere else AND the ad experience should be the best it can be for the users in your ecosystem, making it effective. But you need deep pockets to invest in creating and marketing the formats in the first place and you need huge scale to make it worth advertisers working with your bespoke format.
  • Don’t have native ads but have massive scale. You can still make money out of banners and the like but only if you have massive scale.
  • Don’t have native ads but own a valuable niche. You can still command very good CPM rates with standard ad formats but only if the audience you attract has genuine scarcity and value.
  • Be super lean on costs. If you run your site on next to nothing then it is possible to make a living with the smart use of network ads and affiliate networks e.g. as a blogger.

The problem is that most publishers aren’t in any of the categories above, certainly those that have historically relied on print and been focused on a single nationality.

Business model problems aside, the implication for digital marketing of native advertising is primarily yet more fragmentation, and yet more need for specialists that are hard to find. Key will be to prioritise those platforms that work best for your business and target market.

Useful Econsultancy links:

13. Analytics

A lot of the focus for 2013 as regards analytics will be just doing what we’ve talked about a lot already (see next point). As ever, the major challenge here will be finding the right talent to do it.

Following are areas of interest for me which mostly relate to supporting earlier points:

  • Social data and analytics to power ‘social CRM’. See point 10. Lots of talk about social data and social CRM but less obvious successful action to date.
  • Web analytics and business intelligence converge. This has been happening, slowly, for years. It will continue to happen through 2013 as the back end and legacy systems of enterprises become more connected to the digital front ends and web analytics systems and processes.
  • Personalisation and the analytics relating to this. As per point 7.
  • Mobile analytics. Getting better at understanding and optimising mobile usage and behaviour.
  • ‘Agile Browser-layer Content Delivery’ (“ABCD”). These are technologies which live in the DOM of the browser and allow marketers to change what users experience without going back to the server (like Monetate). This is empowering from a marketer’s point of view; perhaps terrifyingly so for anyone in IT or web operations.Forrester calls it ‘dynamic content delivery’. I think of it also like ‘goal hanging’ in football: whatever any other system has done you can nip in right at the end and claim the credit for achieving a desired goal 😉
  • Attribution modelling fatigue. I’m as much a fan of attribution modelling as the next man. However, there is a point where the Return On Analysis Resource (“ROAR”) starts to flatten out i.e. there is only so much attribution modelling worth doing before you conclude a) most of this stuff is worth doing b) social media has a value c) so does email d) so does offline marketing etc.Yes, you need to understand and optimise the mix, but I contend it still comes down to point 3: if you focus on the customer needs and the customer experience across your ecosystem then that effort will pay dividends even though you cannot hope to analyse every attribute.

Useful Econsultancy links:

14. Conversion rate optimization (CRO); marketing automation; video; real-time bidding; agile.

These are all things we’ve talked about a lot in 2012 and which are good things to do. So in 2013 we should get busy actually doing them, or doing them better.

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15. Connected / internet TV

Back in my 2011 digital trends post I thought that connected TV would make more of an impact in 2012 than perhaps it did, despite the Olympics.

Most of the action around ‘internet TV’ in 2012 was not about the TV itself being connected to the internet but around “second screening”: mobile devices being used in conjunction with linear TV viewing to provide interactivity.

During 2013 I expect ‘social TV’ to gain traction primarily as TV producers and broadcasters become more aware of the commercial and viewer engagement opportunities and begin to commission and produce content that has interactivity and social ‘baked in’.

This is not new but it is becoming more mainstream.

However, the more important shift I expect to see over 2013 is increasing numbers of consumers actually internet-enabling their TVs, many of which have been internet-capable for years.

Many more consumers will have purchased new TVs over Christmas or in the New Year sales with Wi-Fi connectivity. They will connect these TVs primarily to get on demand services like BBC iPlayer and streaming services like LOVEFiLM and Netflix.

Then they’ll find themselves starting to watch cute kittens doing funny things on YouTube, but on their TVs. Then they’ll start watching more and more ‘TV’ off the internet but on their TVs.

If this happens it ushers in an era of huge potential disruption in the broadcast market. Not only does it threaten existing broadcasters and operators but even the likes of Sky should feel threatened. If a Google, Amazon or Apple went aggressively enough after content rights to premium content (sport, films etc) what could they achieve?

At the same time the TV manufacturers (e.g. Samsung and LG) own the interface to this content and thereby potentially displace EPGs (Electronic Programming Guides), like Sky’s, and create new revenue streams for themselves. It feels a bit like the ‘walled garden’ AOL days of the early internet.

Useful Econsultancy links:

16. Honourable mentions: email and SEO

“If I was down to my last dollar I would spend it on PR” is a famous Bill Gates quote. In digital marketing I would cut almost everything else before email or SEO despite them both being supposedly ‘dead’ according to many commentators.

There are some mildly interesting trends happening in both email and SEO, particularly SEO, but nothing that seems fundamentally different to what has gone before or which doesn’t relate to things I’ve already talked about but just applied to email or SEO e.g. social, content marketing, video, mobile.

Most of us still don’t do a good enough job of email or SEO so 2013 is still about better execution.  This is not a technology challenge any more. It’s about people and process.

Useful Econsultancy links:

17. The ascendance of long-form blogging

And finally… I predict a rise in popularity of very long blog posts.

Digital Cream FX is an elite edition of our invitation-only event for senior client-side marketers, now in its eighth year. There’ll be 20 roundtables with discussion centred around marketing and ecommerce. This event is one of five that make up our week-long Festival of Marketing.