New, York, New York
alex@thesevengroup.com

2018 tech & marketing predcitions

As the new year approaches, here are my predictions for the tech and marketing space:

Voice becomes mainstream

  • It’s no secret that voice is the future. People like Gary Vee have been saying it for a while – Siri, Alexa, Google Assistant and Cortana are just getting started. In 2016, 20% of searches were already coming through voice. By 2020, that number is expected to rise to 50%. I think this will come sooner… I bet, by the end of 2018, nearly 50% of searches will be coming from voice. Why? Not only is it becoming normal to use voice on your phone, but voice enabled speakers are growing rapidly and are expected to be in 55% of US households by 2022. These two trends combined create a perfect storm for growth. Also, the market is ready for it – people are busier than ever, always on the go and overwhelmed with written content…. voice allows them to multitask more effectively. In 2018, you will see brands developing voice-first content (i.e. podcasts) and advertising (i.e. paid search ads) on a regular basis. Tactical takeaway: if you develop content and host it on any website, it’s time to start optimizing for voice search. Focus on developing high quality content aligned with the typical questions (what, when, how, why). This will ensure a better user experience and quality score. Also, voice searches are more likely to be longer phrases, so make sure you account for those possibilities in your content.

VR settles as a niche play, mobile AR thrives

  • Don’t get me wrong, Virtual Reality is awesome, but the idea of someone having to buy (and wear) an unfashionable device that costs $200-500 in order to experience VR creates scale problems. Also, if you remember, when Google Glass launched (technically an Augmented Reality (AR) device), everyone (including Google) commented on how goofy it looked. Even Snapchat glasses (also an AR device) have been struggling to gain traction. So, the issue isn’t the technology, it’s the fact that most people want to be fashionable (whether they admit it or not) and avoid wearing some bizarre contraption on their face. Even if it is in their house. VR doesn’t fix this issue. On the flip-side, companies like Apple and Disney are going all-in on mobile AR (and for good reason). Mobile AR has the opportunity to turn into an everyday help for the common person, whether it’s making decisions about food, clothes, transportation and more. It’s very adaptable and the primary device it requires (your phone) is already in your pocket. Now, I think VR will continue to play a roll, whether that be gaming, counseling or military training, but will struggle to go mainstream. While some people might want to spend their lives in virtual world, it’s not realistically possible (right now at least). Expect a spike in companies investing in AR technology and for you to be using AR tech more frequently by the end of 2018. Tactical takeaway: continue to watch the trend closely and begin thinking about how AR could play a role in your business. I think it’s going to take some time to mature, but the minute it does, watch out.

Amazon’s ad service eats into Google & Facebook

  • 2017 was a big year for Amazon’s Ad business. It generated a lot of hype and set itself up for a big year ahead. Yes, Amazon’s Ad platform is small compared to Google and Facebook ($1.5B vs. $17B & $35B), but 63% of brands said they would increase their Ad spend on Amazon next year, compared to 53% (Facebook) and 54% (Google) respectively. Additionally, the majority of searches (38%) are now starting on Amazon as a first-touch point. What makes their platform dangerous is that it’s very robust – covering everything from search, to display (banner advertising), to video, to device-based advertising (i.e. Kindle). With Amazon-first product search continuing to grow and the company investing heavily in this space, I believe they will beat expectations and generate over $3B in Ad revenue (projected to do around $2.3B) next year. Tactical Takeaway: if you have a product or business that could possibly be bought on Amazon, think about allocating some of your Ad budget to the platform while it’s still small(er). It’s super intuitive. If you promote other brands products, leverage their affiliate program as much as you can in your marketing.

Snapchat gets acquired

  • In early November, Snapchat’s stock fell 20% after the number of daily users hit 178 million – 4 million fewer than the 181.8 million analysts projected. The company also reported a loss of $443.2 million. As a result, Spiegal (CEO) said the plan was to redesign the app in an effort to reach a larger audience and separate personal relationships from branded content. While the redesign may help with user growth/retention in the short-term, it may hurt bottom-line growth long-term. This is due to the fact that brands now have less of an opportunity to reach people, have an authentic voice and cut through the noise. With this redesign, and Instagram continuing to grow at a blistering pace, I think it’s time they get bought.  So, who will buy them? In my mind, the best candidate is (still) Google. As Google continues to lose ground on search & advertising to Amazon (see above), and with Google+ not even being a thing anymore, they need an acquisition in this space. So, whether Google makes another play (they once offered $30B for Snap) or some other big tech brand swoops in, look for someone to push for a buy. Tactical takeaway: if you’re a brand or influencer, and have a presence on snapchat, continue to play there but watch your metrics carefully. If you see a drop in engagement over the next few months, it may be time to allocate your content resources somewhere else.

Influencer marketing continues to boom, but corrects itself

  • Over the past few years, influencer marketing has blown-up. In fact, it’s the fastest customer acquisition method over search and email. I’m a massive believer in influencer (or what should be called creator) marketing. People want to buy from people, not brands. It’s an incredible way for people to create content of their own, partner with brands and add value to the world. That said, there are a couple of major issues with the influencer marketing landscape – 1. the fact that a number influencers have built a business off fake followings and 2. that some of the content being developed is misleading or provides little-to-no value. Addressing #1 – if you didn’t know, anyone can go and buy massive amounts of fake followers to give the perception of a community. Because of this perception, companies throw thousands of dollars at a person without knowing much about their audience and expect a high ROI. In result, they end-up seeing little-to-no return. Apparently it’s a big problem in the Advertising space. The good news is brands are starting to catch-on and I expect people with fake followings will lose to those who have built authentic communities. Addressing #2 – The amazing thing about influencer marketing is that anyone can become a creator. That said, there has been a lot discussion around quality of content and value being added by influencers. This poor quality content can come in the form or misleading advice, fake news or surface level information. As things evolve, I expect people to begin flushing out poor quality content as they become more selective due to over saturation. Tactical takeaway: if you’re a creator, focus on 3 things – 1. document content (in addition to creating content). Authenticity is hard to come by these days and documenting allows you to be more transparent and authentic. Gary Vee wrote a good piece on this topic. 2. No matter your expertise, aim to provide value in every post, whether it’s a tip, some motivation, comedy, trend advice, workout plans, etc.. 3. get smart with editing tools, whether it’s Adobe, a video editing software or something simple like WordSwag. This can make you a much more dangerous content creator in the new year.

Online + offline connection becomes make-or-break for retail

  • With Amazon dominating, online marketplaces continuing to pop-up everywhere and social buying becoming more of the norm, it’s no surprise the brick-and-mortar retailers have hit some bumps over the past few years. Especially for major retailers… think about this – Sears, which once had 3,800 stores, is down to 1,104. Macy’s closed 68 stores this year.  JCPenney is expect would close 128. Why is this happening? It’s not because there’s a spending problem… consumer confidence is the highest it’s been in 17 years. It’s because a lot of retailers haven’t been able to bridge the gap between online-and-offline and invested too much in physical stores. The physical store is still critical and not going away. In fact, 88% of all purchases in the U.S. still take place in physical locations. Companies like Sephora have focused on this multi-channel experience and are winning because of it. Sephora has captured more than a 20% share of the cosmetic and fragrance market in the United States. They’ve done this by using shopper data and integrating it into the retail and mobile experiences, online reviews to build in-store customer confidence and infusing an online-explore-mentality into their physical stores (aka less annoying sales associates). This integration of online-and-offline has enabled them to thrive in space that has been very doom-and-gloom. Expect this to become the norm in 2018 –  less retail stores, more investment in digital and a bigger focus on the online-to-offline connection. Tactical takeaway: if you have a retail store, invest A LOT in digital (content, data, advertising, email, social) and spend time understanding how it can supplement your business. If you are digital-first, see how you can leverage physical spaces, whether it be pop-up shops or partnering with other brands to drive in-person connections with customers.

On-demand delivery is widely adopted

  • With the rise of Uber, Lyft, Postmates and Seamless, the on-demand economy is something people have come to expect, but so far, it’s been a small number of brands that have capitalized. Heading into 2018, more players are expected to make moves in this market. Whether it’s big retailers like Target and Walmart, or smaller companies like Rushlook.com65% of retailers plan to offer the service. They all have the same objective in mind – make it as easy as possible for consumers to consume. These companies are also investing in new technology to help them deliver faster. Amazon and Rushlook are building drone-based systems to deliver packages from their local fulfillment centers. By the end of 2018, I expect 1 day (and under) delivery to be adopted by most retail brands which will put serious pressure on Amazon. Those who don’t will struggle to compete online. Tactical takeaway: if you work with a brand or have a company that delivers physical products and you/they haven’t started to think about same day delivery, tell them to put in on their 2018 roadmap. This is going to be a game changer.

Bottom line:

A LOT happened in 2017, good and bad, but the one constant is that speed of innovation continues to increase. Products get released faster, fads die quicker, fakes get exposed easier. Expect 2018 to be a lot of the same and more. It’s going to be an exciting year.

-Al Cavalieri

Let’s connect on Instagram: @AlCavalieri

 

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