Altimeter’s Top 13 Digital Trends For 2017
Each year Altimeter’s team of analysts pull together a list of the top technology, business and digital trends leaders should be thinking about in 2017. Each analyst brings a unique perspective of how they see 2017 unfolding and what you will need to do about it.
This year’s list includes 13 insights from four of Altimeter’s experts:
From Charlene Li, Principal Analyst
Heading into 2017, I had several conversations with C-suite leaders about what it means to be digital and disruptive, and how they can set a strategy and culture that reflects this new way of thinking. More than ever, a strong mission and values that are aligned with customer obsession must be the guiding light for organizations. With that as context, here are some of the emerging trends I’ll be watching:
Customer experience becomes a strategic priority for the CEO and board.
No one will argue that creating a compelling customer experience (CX) is essential. But which ones to invest in? How do you measure how CX impacts the bottom line?
It’s time to move CX away from its traditional homes in marketing, product design or research and add it to the agenda of every executive and board meeting. CX must be thought of as a strategic asset that deserves strategic attention and investment. Until this happens, CX will remain a discussion of customer touchpoint optimization rather than becoming the linchpin for creating deep customer relationships.
One simple step to take in 2017 is to put customer experience metrics, even basic ones such as customer satisfaction and loyalty, at the top of your executive and employee dashboards. You can’t manage what you don’t measure. If customer experience truly is important to your organization, then make sure it’s represented in your metrics.
Communication, advertising and storytelling emphasize authenticity and loyalty.
The way we connect and communicate was upended a decade ago with the advent of social media, requiring marketers and leaders to adopt new mindsets and skills. We’re about to see another stage in that revolution take place driven by two key developments.
The first is Snap (which is set to IPO in early 2017), the company that has become a verb meaning to capture something happening in the moment. Its new product, Spectacles by Snap, make first-person perspective videos (pioneered by the likes of GoPro) easier to create and share.
But even more important is the move from the public space to more private and privileged messaging platforms like Snapchat, as well as WhatsApp and Facebook Messenger. Organizations will need to develop a different voice for speaking with its core followers, one that is more authentic and spontaneous than the polished (mostly) agency-written posts on social media platforms today.
Similarly, people will get over being shocked and surprised by President-elect Trump’s daily Twitter torrents, and see he’s a master at using it as a communication platform. Organizations and their leaders will be emboldened by Trump’s use of Twitter and wonder how they can leverage digital platforms to start and support a movement for change.
Leaders who shy away from embracing digital communication platforms, internally or externally, will lose out to organizations with leaders who do. If your organization still has leaders that communicate primarily via email you should explore ways for them to extend their leadership via digital.
Winning the talent war and accelerating culture change will rely increasingly on technology.
Marketing, operations, and supply chain have been the beneficiaries of technology advances for the past two decades. But using tech to leverage organizations most important asset, its people, is resulting in the digital transformation of human resources.
Online recruiting is shifting from being just about sourcing to developing relationships before, during and after employment; with digital marketing expertise moving to HR to support the digitization of the talent brand. Organizations focused on developing a more agile, fast-moving and disruptive organization are using platforms like Slack and even stalwarts like SharePoint to connect and align people.
If you have audacious strategic goals on your agenda in 2017, be sure that you have strong digital talent on the HR team to be able to hire the talent and develop the culture you’ll need to execute on that plan.
From Susan Etlinger, Industry Analyst
2016 was a watershed year for artificial intelligence. Google’s AlphaGo beat a world champion Go player, a driverless truck completed its first commercial delivery (a 143-mile beer run!) and Microsoft researchers claimed to reach human parity in conversational speech recognition.
It was also a year of stumbles, massive hype and painful failures such as Microsoft’s chatbot Tay, which learned from the people it interacted with on Twitter, thereby morphing into a racist, hate-spewing embarrassment in less than 24 hours.
And, lest we forget, Facebook was widely panned for (and is now taking some steps to address) its laissez-faire attitude about propagating fake news and the possibility that this may have affected the outcome of the presidential election.
Taken together, these stories contain the seeds of the major trends I’ll be following this year.
The narrow, less hyped use cases for AI are the real opportunity for organizations.
You’re going to see a lot more “Oooh! Shiny!” examples of AI in 2017, and people will send you links to news stories asking why you haven’t implemented them yet. Be amused, be inspired, be outraged, but DO NOT BE DISTRACTED (unless you work for Google, Microsoft, Facebook, Amazon, IBM, etc.).
Many of the most interesting use cases for AI in organizations will be the ones data scientists will call the “weak” or “narrow” ones, e.g., those that can solve one problem really, really well (as opposed to a “strong” or “generalized” AI that is multi-purpose and, at this point, more aspirational than real).
Do not confuse “weak” with “unimportant.”
Examples: optimizing marketing budgets, reducing customer churn, predictive models for sales, adding intelligence to knowledge bases/graphs, automating software development, medical diagnostics. They may not make for the splashiest headlines, but this is the real opportunity (at least, right now) beneath all the hype.
AI will create an era of data haves and have-nots.
The reason that the Googles and Facebooks of the world are making huge headlines in AI is that they know data is core to their business, they treat it strategically, and they have massive, massive amounts of it. Just as the Industrial Revolution relied on access to coal, data is the fuel that enables machines to learn, act and learn again.
For this reason, AI will be the forcing function for data strategy in organizations; and data strategy–what do we collect, use, compare, store, and for how long–will be a critical success factor for AI.
We will see new economies based on data as a form of capital (even if not recognized as such on balance sheets). Having enough data, the right data and access to the right kinds of data science and engineering talent will be key.
The most important success criterion will be clear priorities about the types of problems machine learning is best positioned to solve for your business. As a result, companies and other organizations that are not able to gain access to critical data sets will be at a competitive disadvantage as machine learning becomes more prevalent. To misquote George Santayana:
Those who cannot [machine] learn from the past are condemned to repeat it.
Treating digital ethics as part of the customer experience.
Whether you think of these issues as privacy, ethics, data opt-in, algorithmic transparency, preventing bias, trust, CSR or even just personalization, it is going to be critical to ensure that the way your organization uses data and algorithms is transparent, trustworthy, empathetic and fair as digital strategy aligns and converges with corporate strategy.
This goes beyond privacy into uncharted territory. There have been so many stories of machine learning bias in 2016 that it’s hard to choose which to spotlight. Suffice it to say that they all have an impact on your customers’ trust and potentially even Net Promoter Score (NPS) and other business metrics. To reduce the likelihood of unintended consequences, it’s going to be critical to scenario-plan for AI deployments.
Think of this in the case of Tay, or the Tesla driver who was killed with the car in autopilot or the outcry over offensive automatically-generated tags on Flickr photographs. This will require new process flows, new and expanded policies and collaboration among engineering, marketing, strategy, HR, legal, compliance and subject matter experts in the business, among others.
There’s a ton more to talk about, but I’ll leave it here for now as I wrap up my next research report. Stay tuned!
From Ed Terpening, Industry Analyst
As we learned in our 2016 State of Social Business research, we’re still in the early days of social media as a business tool. In a market where social networks replicate each other’s best software-based features in only a matter of months, emerging hardware attuned to social and the rise of new commerce models will differentiate key players and provide brands that are able to act quickly great opportunity to innovate.
IoT differentiates social platforms.
The battle for user growth and engagement will intensify in 2017; not through software, but hardware. Facebook’s replication of popular features in social networks, like Snapchat, was a constant theme in 2016. This led to the commoditization of cool features once unique to upstart innovative platforms.
Copying software is relatively easy—which is why hardware will differentiate platforms in 2017. Facebook’s bet on Oculus for AR/VR and Snapchat’s new Spectacles are examples. Given hardware development generally takes much longer than software, we could see an upstart disruptor—or a mainstay with deep pockets, like Facebook—change consumer adoption and shift the social network leaderboard through hardware.
In addition to social network-owned hardware products like Oculus, look for deeper integration with general-purpose IoT devices, like Google Home, Amazon Alexa, Microsoft’s APIs and Apple’s SDKs.
Brands that will succeed will look beyond the “media” aspects of social and consider the broader growing ecosystem at the top of the social graph. They will also mine social data to better understand opportunities to innovate products and optimize customer experience. Digital teams must exist within brands and those teams must become experts in the software and hardware SDK/API’s that give them direct access to features and data that can empower their own connected devices and services.
In particular, brands will have to think about new situational use cases for social devices, like Spectacles, which remove friction from social media engagement. For example, in retail, how do you discover, engage with and reward a customer who uses these devices in your stores? I expect the immediacy of stories told in social to increase as we move beyond the phone to capture more of life’s experiences in new devices.
Digital arbiters of truth.
You have to go way back to 1996’s DMCA (when the US updated copyright law to reflect the reality of instant, widespread distribution of information through the Internet) to point to serious, broad legislation to govern digital. A key provision of the DMCA is the “safe harbor” clause, which protects distribution points of information (websites) from being sued for copyright infringement if the site provides a means for copyright owners to report the theft.
Fast-forward 20 years: Today, IP in the form of copyrighted material is relatively safe, but what isn’t is the veracity of information. The US presidential elections exposed an issue that has always existed. Driven by consumer expectation of “free” content and the advertising that must thrive to support it, false information—as long as it delivers clicks—has enjoyed the same currency as truth. While Facebook and Google attempt to disrupt this cycle on the front end through user reporting, and on the backend by denying ad revenue to these parasitic businesses, some kind of government intervention is likely. Look for this to start in Europe.
Social commerce revisited.
“Social commerce” — yes, that subject again! But it’s a conversation we must have. Social platforms like Facebook will start to reach the peak of search and content advertising growth. Under pressure to keep an incredible pace of revenue growth, social platforms will need to close in further to the end game in the marketing funnel: the sale.
Unfortunately, there are few examples of social commerce working for two key reasons: user expectations for what social networking is doesn’t include commerce; and there is a lack of innovation in the area. Twitter’s short lived “buy button” is a great example of lazy thinking. Trying to tack-on commerce approaches that have worked in other contexts (typically, the web), doesn’t take advantage of the unique nature of social, nor does it fit user expectations.
The social graph—and the commerce that surrounds it—could be a key differentiator that hasn’t been effectively exploited. Given how difficult it would be for an upstart disruptor to replicate the social graph, it’s on Facebook in 2017 to find the right user engagement model.
Look for them to continue to invest in Facebook Messenger, where they can exploit the best of both worlds: continue building the social graph through social engagement on Facebook and use that data through Messenger, Facebook Login and their APIs to invent new commerce approaches that users don’t view as disruptive.
To edge towards social commerce, brands should invest in Facebook Messenger’s emerging engagement models, such as live video and chat bots. Consider building a team focused on conversational commerce. That thinking can then be applied to both social and home IoT devices, such as Amazon’s Echo and Google Home.
From Omar Akhtar, Analyst and Managing Editor
In addition to ongoing research on content strategy, this year I’ll branch out into research around digital advertising and immersive experiences, looking for new opportunities and practices that brands can take advantage of. I’ll continue coverage of marketing technology, but specifically through the lens of customer experience. This means getting into tech that isn’t quite marketing specific, and is more focused on unifying operations and data across sales, service and marketing. With those topics in mind, here are my digital predictions for 2017:
Content strategy, not content marketing.
In 2017, we’ll see more companies progress from “content marketing” to using content to achieve goals beyond the marketing department. If the first incarnation of branded content was focused on creating brand awareness or improving brand health, today’s digital content is being used for much more. This includes fueling customer communities, promoting transparency and loyalty, recruitment efforts, customer support and generating direct revenue.
In our 2016 State of Digital Content research report, we found 80% of companies agreed or somewhat agreed they had a unified content strategy that applied to the entire organization, and 70% were increasing efforts in aligning multiple teams around content strategy. These numbers make it clear that content isn’t just a marketing game anymore.
Digital outdoes TV.
This will be the first year where spending on digital advertising will be more than TV advertising (at least in North America). Companies are finally understanding that digital advertising gives them more bang for their buck than spending millions of dollars on TV campaigns.
Not that TV ads are going anywhere, blockbuster events like the Super Bowl or top-rated TV shows like “The Walking Dead” will still be able to command exorbitant ad rates to reach their massive audiences. But we’ll also see many more companies making ads related to the Super Bowl, without paying the exorbitant ad rates for the audience (see how Newcastle beer did it in 2014).
It’s interesting to note that what we think of as TV is already being classified as “digital” à la Netflix, HBO and Hulu. This means that not only will digital advertising continue to outpace TV advertising, but also the line between the two categories will become increasingly blurry.
If video was big in 2016, live video is going to even bigger in 2017. This year, for the first time, we saw presidential debates being streamed live on Facebook and Twitter. In fact, live video is one of the few bets Twitter made this year that’s paying off and Instagram is following suit with its own live video offering as it continues to try and one-up Snapchat.
We’re also seeing more experimentation from companies using live video. Potential uses include press conferences, investor meetings, product announcements and quarterly updates. Live video has an authentic quality about it, since it’s taking place in real-time, in an unfiltered visual setting. This explains its appeal — and continued growth – among users exhausted by the glam and gloss of curated images and edited text.
As you’ve read, we expect 2017 to be marked by major shifts in the digital landscape. Organizations and their leadership need to determine ways to leverage these digital trends to drive growth, build brand awareness and improve customer experience.
What digital trends do you think will define 2017?
Read it in Chinese: 2017年13个关键的数字化趋势