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January 15, 2016
8 Digital Sectors to Watch in 2016
Forecasting significant US marketing developments and how they will affect brands requires chutzpah. So, with a grain of salt, consider these eight predictions.

Internet of Things (IoT). This will be the most talked-about topic. The talk will far exceed the reality, but the number of connected devices and deployed sensors churning out mountains of data will grow significantly. Not only will your smart TV, your NEST thermostat, your SONOS sound system, and your new car phone home, but soon your fridge, washer, and other appliances and electronics will do the same. The promise of the connected “smart” world is remote access, convenience, insight, and control. How the data stream is processed, how we achieve interoperability, and what value it will deliver for consumers are the big, unresolved questions for players like Apple, Google, Amazon, IBM, LG, Samsung, and others seeking a first-mover advantage.

Wearables. Beyond Fitbits, Jawbones, and Garmins, devices to measure medical conditions, physical activity, and even socks to assess whether or not you are still awake enough to watch Netflix will get buzz. My hunch is that a random garment or a device linked to a brand, a sporting or a cultural event, or a celebrity will become cool and viral to accelerate this market.

Virtual Reality. These technologies are graphically superb and extremely engaging. They leverage lessons learned and psychology of use from the web, apps, and gaming. Brands will experiment with 360-degree videos and will try to demonstrate the virtues of VR through online simulations or an app.

The gating factor will be scale. Will the headsets be affordable enough and will the content be compelling enough for millions, beyond hard-core gamers, to embrace enhanced experiences?

Beacons. Major brick-and-mortar retailers will deploy these technologies in hopes of capturing the 30 billion in-store moments of truth each day. The potential to influence purchases and loyalty is theoretically great. So is the potential to annoy and distract customers.

The value to both parties turns on the use of data. In order for beacons to persuade, they have to know who you are, where you are, what you like, and your relationship to the brand. Using this robust profile, they have to serve up a personally relevant piece of information or an offer with the right tone and manner.

Big Data. Big data will get bigger. The challenge will be to manage the inflow of data, connect structured and unstructured data sets, and extract insights on-the-fly to drive customer engagement without tripping privacy concerns.

The Holy Grail is a fully integrated robust multi-channel, segmented, and scored customer profile. This is impossible without considerable investment in IT and data analytics accompanied by close alignment between departments that are usually rivals for management attention and resources.

In the meantime, expect half a loaf. On the way toward robust profiles, look for brands to use the data they have to enhance display and social retargeting, fine-tune segmentation for email or SMS, and engage individuals more directly on social media. This will drive intense competition among mobile engagement automation toolmakers and consultants.

Payments. The battle to control which device or software is used for mobile payments and who gets to process and profit from these payments is a free-for-all pitting banks and credit-card issuers against software and hardware makers, who compete with device makers, retailers, processors, and social networks. A shakeout is unlikely in 2016.

Consumers’ muscle memory for using mobile payment mechanisms is growing. Retale, Inc. reported that 43 percent of all Americans used a mobile payment method in 2015. Half used PayPal. Another 27 percent used a payment app. Acceptance of the smartphone as a wallet is taking hold as evidenced by Starbucks, who took in 15 percent of revenues as mobile payments in Q3 2015.

Phablets. As smartphones got bigger and tablets shrunk, millions of Americans have a Star Trek-worthy device in their pockets. Growth of phablets has been greater than 300% in the last year. One in four new holiday activations was a phablet, according to Flurry. A majority of email is opened on these devices and the number of online sessions and videos watched is skyrocketing. Publishers and advertisers will create content specifically for these devices.

Video. Video and live streaming is becoming the dominant form of digital content consumption. The battle to become the primary platform and monetize audiences will see Facebook, YouTube, and Instagram facing off against Snapchat, Periscope, Meerkat, and Blab.

Look for brands to polish and upgrade streaming content and to experiment by creating unique personas or own-able personalities, expanding live event coverage, or developing serials. How-to, unboxing, behind-the-scenes, and even cat videos will migrate to new channels.

Apps. There are more than 3 million apps. 1,400 new ones are introduced daily. The average American has 33 apps, but uses 12 or less. Most downloaded apps are deleted because they’re not used or are no longer relevant. 

Launching a branded app is an audacious move. An app must have immediate value — utility, convenience, and ease of use — to have a fighting chance. Expect brands to piggyback on, ally with, sponsor, or enhance existing apps with substantial installed bases.

The great common need, in the face of rapid technological and marketing innovation, is to connect the dots, collect the data, derive meaningful insights, and engage consumers with relevant content in real time. The marketing world in 2016 aspires to be data-driven. The winners will be those who help get there.

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Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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