Authored by: Jordan Bitterman, CMO, TripleLift
There’s an old adage that goes: “It takes 21 days to form a habit.” To put that into perspective, most of us have been quarantining for far longer than that. In that time, we have been working differently, socializing differently and spending our money differently. Even if many of our activities go back to normal in the months ahead, a whole lot of change is underway.
On this 50th day of my own shelter-in-place – more than double the amount of time that it supposedly takes to form a habit – I marked the occasion by writing down some predictions for how the world might change when we ultimately emerge from the most serious aspects of this pandemic.
As an advertising community, it’s critical for all of us to study the implications in order to help our brands survive and thrive through this downturn.
Rise of self-serve.
We will see increased investment in automation that replaces human workers in favor of self-serve systems – think: more self-checkouts at retailers. Much of the technology will be accessible through our own mobile devices, not just in-store kiosks. The bet will be made that doing business this way is cheaper in the long-term and more hygienic in the short-term. For marketers, there will be more opportunities to use the interfaces of those systems, as well as the data they throw off, to target our messaging.
Debit and credit cards are already a big part of life – only about 30% of purchases in the U.S. pre-pandemic were made with cash. But there’s still so much room to go. Post-Corona, people won’t want to touch money and it will be easier to go cashless with the proliferation of self-service technologies. Credit card and payment system companies stand to benefit more quickly than they might have previously planned. Still: marketing to consumers in this space is about to get a lot more cluttered.
Decline of traditional broadcast.
Here’s what we know: streaming is fast becoming a habit, cord cutting is spiking, content production has largely shutdown, the fall tv season will be delayed and consumers are subscribing to an increasing number of OTT services. Digital video (a category that includes streaming services) accounted for 8% of all “time spent with media” just 5 years ago. That figure has been growing by a point each year and eMarketer had projected it to hit 14% in 2020. But, due to the habits formed during this quarantine, the shift from linear to streaming will accelerate even faster than the most bullish projections. By the end of this year, we might actually hit the metric predicted for 2022. Marketers had already been shifting their video mix but, when dollars come back, we should see an even greater shift to digital video: in-stream, out-stream and especially OTT.
The ascendency of eSports.
This trend has been coming for years (is it “the year of gaming” yet?), but ad spend hasn’t caught up with usage. It’s entirely possible that the NBA and NHL cancel the remainder of their seasons and that Major League Baseball doesn’t see a single pitch this year. As time spent playing online continues to grow, media & sponsorship dollars will ultimately flow. It might not happen immediately, but we will see it take off with the next economic recovery.
Subsidized WiFi infrastructure.
Living and working in areas of the country with poor connectivity is suboptimal for the affected communities – quarantine or no quarantine. Much has been written about the challenge of school kids not being able to properly e-learn due to low bandwidth. By the transitive powers, that means many businesses have also been at a deficit. Moving forward, governments (perhaps the states, since our federal government can’t seem to rally) will fund improvements, enabling their citizens to better compete. That means: more online services and accelerated opportunities for brands and media companies in rural areas.
The Cloud has become the underlying technology of this generation. What the phone companies were to the 20th century, the Cloud companies are to the 21st. Infrastructure from Amazon, Microsoft, Google and IBM, along with applications like Zoom, Slack, Instacart and Venmo are the way we operate now. We will look at this period of time as the moment when Cloud went from smart business to essential living.
Reduced influence of cities – Part 1.
They’re expensive, they’re congested and they’re petri dishes for disease (relatively speaking). With technology becoming optimized for rural areas, more people will be able to balance their careers and their preferred lifestyle. It’s not just suburbs that could swell, all of those towns in the special issues of Outside Magazine (“Anytown, Colorado” and “This Place, New Mexico”) will become destinations for migration. Employers will follow…and so will brands.
Reduced influence of cities – Part 2.
They aren’t just expensive for citizens – they’re also incredibly expensive for businesses. White collar companies have only made the math work by packing workers into open seating and expanding additional operations to more cost-efficient, secondary locations. Local businesses like restaurants have had to shutter due to reliance on razor-thin cashflow. And, if you live in New York, you know that retail vacancies were already a problem in every neighborhood. Cities are in for a long reset.
Commercial real-estate correction.
The average price of commercial real-estate in London recently was $88/square foot. New York: $83. Boston: $65. Between this (hopefully short-term) economic downturn, the long-term correction coming to cities, and the likes of WeWork and Knotel offering month-to-month solutions, the overall commercial market will see immense downward pressure. Companies will exercise out-clauses, seek smaller spaces and use their leverage to negotiate better deals.
We will go back to the office. But, even companies with previously strict work from home policies will relax their rules. At first, some will be more accommodating because of the ongoing fears of their employees. Over time, it will become a more accepted standard practice since we now have a better gauge on how to evaluate good remote work performance…and bad. The implications are many, including the continued reinforcement of many of the projections above.
Copying the Amazon Model.
Beyond the core businesses of .com and AWS, think about the even bigger juggernaut Amazon has created. All of these divisions – many of them built via acquisition – are perfect fits for the new normal: Audible, Twitch, IMDB, Ring, Alexa, Fresh, Prime, Prime Air and The Washington Post. Each one is built for the Cloud and each complements most of the others. We will see even more corporate investment shift toward cloud-based businesses, looking to the Amazon model as the gold standard.
New data-first industries.
With more-and-more data exhaust being created by all of our cloud-based activities, new start-ups will form to utilize that data (hopefully non-PII). Their aim: helping clients acquire new customers and service current ones — CRM on steroids. Governments will lag in regulating this data giving industries a head start to build out their categories.
New entry level work.
As we see fewer cashier jobs (and bank tellers, and stock clerks), we will see a rise in logistics jobs – from coding to analytics to warehousing. All of these roles will be critical as we shift from in-person to remote demand. As we try to make our way back from double-digit unemployment, these burgeoning job categories will aid our recovery.
Big shakeout in DTC.
Yes, there’s bloat across categories and not all would have survived anyway. But can 50 companies selling $300 watches and 100 companies selling $150 sweatpants really survive in an economic downturn? (Answer: they cannot.) Direct-to-consumer won’t go away, but we will see many of the current ones fold and new categories sprout from the ashes.
All-in: there will be lots of change. But, with big change comes big opportunity.
Billions of dollars are up for grabs in the shifts that are about to take place. Brands that throw out old assumptions and take chances, will adapt, survive and thrive. It’s going to be a rocky road, but it will be a prosperous one for those that keep their ear to ground.