Saturday, December 14, 2013

My 2013 Predictions Scorecard

What? It’s mid-December already? I barely blinked twice and the year has flashed by. That means it’s time to think about my predictions for the upcoming year. Yes, yes, I’m working on them already. But, as is my custom, I will do the right and honorable thing first and review here publicly how I did on my predictions for 2013. OK, taking a deep breath and here we go:
1. Facebook hits rocky ground
I predicted in January that Facebook would experience a slowdown. The company is of course doing well financially and the stock has recovered. Yet the year has passed without any major uproar about Facebook changing something, which is a sign that innovation has started tapering off. On the privacy front, the NSA became the top villain replacing Facebook. Since Facebook hit the magical mark of 1 billion users back in October 2012, there has not been much talk about user numbers. In fact, most media started reporting that teenagers are no longer hanging out on Facebook anymore since their grandparents befriended them. Things have definitely slowed down at Facebook.
I call this point for me: 1/1

2. Everything will be digital
I’ve predicted that 3D printing will trigger a major boom in CAD drawings and the management of CAD files. Yeah, I said back then that I might be pushing my luck on the timeline and sure enough, this hasn’t happened. Not yet. The 3D printing pioneer Chris Anderson has published a great new book called Makers and has given a bunch of inspiring speeches but the 3D printers are still used mostly to create lame plastic toys, albeit sometimes very creative ones.
This was definitely a miss and the score is now: 1/2
3. The rise of intellectual property management
My prediction was that the CAD boom will stir a debate about intellectual property as the CAD files are easy to pirate. Well, since the CAD boom didn’t happen, this one hasn’t played the way I predicted either and I won’t score a full point here. Yet, intellectual property management has become a huge issue behind managing rich media, particularly in the media and entertainment industry. IP rights management and the business processes related to securing, monitoring, renewing, and enforcing IP rights are a huge topic. Interestingly, Gartner just published a report called Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future and the very same 3D-printing related IP security issue has been listed as one of the 10 predictions. Some Gartner analysts apparently read my blog :-)
I think I deserve a half point here.
Score: 1.5/3

4. Internet of iPhone things
The set of Wi-Fi connected gadgets that can be controlled with mobile devices has started growing like crazy. I love, love, love my Nest thermostat which allows me to come home to a warm house after a few days away. I use several WeMo power outlets and my Withings scale uploads my data straight into my Endomondo profile for precise calculation of calories burned. On my Christmas list are a Wi-Fi connected weather station, a WeMo light switch, and a hot tub thermometer (gotta have one of those!!!). I’m still looking for a good Wi-Fi controlled hot tub switch and a sprinkler switch if you know of any. And we are only just getting started.
This is a hit: 2.5/4
5. Mobile market predictions
I predicted that Apple would continue making a killing on margins while Google would keep going after revenue; there would be a price war among Android suppliers and RIM would keep struggling while hanging on to a small group of keyboard loyalists; Microsoft would not make a dent into the market and that would go multi-platform. Most of it happened. iPhone is the high-end status symbol while Android is going after market share. The Android phone vendors are killing each other with Samsung emerging as a big winner of this war. Blackberry is in trouble. Microsoft is still nowhere and if Stephen Elop takes over before the year’s end, we may even see some Microsoft products on iOS.
I’d say this was worth a point: 3.5/5

6. Censorship will succeed
I’ve predicted that after the barrage of government attempts to enact laws regulating the Internet, one of them actually passes. This has not happened but the government got most of what it wanted: tax income and access to everything. The tax income came since Amazon capitulated to California pressure to tax online purchases - a precedence that will likely lead to more taxation on the Internet. The access to everything came courtesy of the NSA that actually already had access to all the data on the Internet worldwide for years but we’ve only now learned about it thanks to the disclosures by Edward Snowden. Knowing that the government is watching will impact what we share on the Internet, which is effectively a form of censorship. Sadly, I score a point.
Score: 4.5/6
7. New wave of computers
I wrote last January that we will start seeing a broad adoption of wearable computers. Well, I might have been a bit too aggressive on my visioneering. Google pre-released the Glass but we can’t talk about a whole lot of adoption. In fact, it got kind of quiet around it for now. Pebble released its watch but as there are no useful apps, the excitement has also cooled off. Perhaps the only wearables that became popular are the fitness bands such as the FitBit or Nike FuelBand. I still believe that the wearable computers are coming but they haven’t made much of a dent yet in 2013. No point for me.
Score: 4.5/7
8. Responsive web design will become the buzz
My prediction was that there will be a lot of buzz about responsive web design. Its promise is to make web experiences look best on any device, no matter the screen size and form-factor. Responsive design has become a significant topic in the customer experience management and the digital marketing space. There has hardly been a conference where several sessions haven’t been dedicated to this subject. But I won’t pretend that this subject has reached the level of buzz of big data or NSA spying. Half a point will have to do.
Score: 5/8
9. Security finally becomes a market
Here, I predicted that customers finally start taking security seriously in the content management context and that convenience will not always win over security. The NSA spying scandal certainly sparked some heavy discussions and security and privacy have become a huge topic. People are waking up to the dire need for security – both at work and at home. The discussion is moving beyond just strong passwords. People understand the need for security and privacy. In fact, in some European countries, they are quite obsessed by it. We may not have all the answers today, but security and privacy are huge.
Score: 6/9

10. IT strikes back
Back in January, when everyone was still claiming that IT is dead and that the line of business managers will be buying their own software in the cloud as they please, I wrote that IT will re-gain power and importance again. After all, someone has to run all those systems, whether on the premises or in the cloud. Did that happen? Oh yes! The number one topic today is the CIO-CMO relationship and the overall sentiment is that the CIO is not only alive but needed more than ever before.
Score: 7/10
Scoring seven out of ten predictions is not quite a Nate Silver quality of clairvoyance but it is not bad. OK, there were a bunch of half points in there, which might suggest that I wasn’t quite right…but close enough. Predictions have to be bold enough to be wrong sometimes. Otherwise, where is the fun in that?
I plan to write my predictions again, and to be wrong sometimes. Stay tuned, I will publish them right after the holidays.

Wednesday, December 4, 2013

New Era of Digital Marketing

Over the last decade, marketing has been all about segmentation. The key to success was to communicate the most compelling message to the most relevant market segment.  That segmentation started first with some basic demographics such as age, gender, and location and eventually progressed to many more data points gathered about a potential buyer over time: company, role, title, income level, decision-making power, team size, purchase-influencing power, etc. The more the better! The principles are the same in B2C and B2B marketing.

Over time, the gathered data was analyzed and correlated with actual buying behavior which resulted in a more and more granular segmentation. You see the result of that every time you visit a grocery store. The data gathering happens using the “value card” which the clerks at the cash register insist you swipe every time you buy something. The card allows the marketers to collect the data about the mix of products you buy. With that, they can learn that you are buying, say, frozen pizza and beer on a work day at 9 pm. Such data gets correlated over a large data pool which then results in definition of a micro-segment of “personas” such as “stressed and overworked single males with poor nutritional habits”. As a result, they may try to place some healthy looking frozen vegetables next to that pizza to suggest you add some vitamins to your diet and to ultimately make you buy more products.

In the online world, data gathering is simple, there is always a digital trail from purchase requisitions and invoices. Therefore, online marketing has been based on segmentation from its early days. When you look at a book on dogs on Amazon, you will start getting suggestions about other books on dogs because ‘interested in dogs’ has been added to your profile as a result of your action. The system now has you tagged as a dog lover and assumes you need more dog-related products. It won’t stop until you look up a few other items which triggers new cross-promotions that eventually crowd out the books on puppies.

Obviously, this method is effective until the gathered data misguides the marketer. The software doesn’t know that it was really my young child checking out the book on dogs while still logged in as me. I may actually not at all be interested in dogs myself. Yet the “dog interest” tag is taking up space at the cost of my real interests - skiing, race cars, iguanas...whatever it is. The software tries to target me as a member of the smallest possible market segment, but the software doesn’t know me at all.

But that’s changing now. With the advent of digital marketing and software solutions such as customer experience management (CEM), customer relationship management (CRM), and marketing automation, the targeting is done not for a market segment but for a named individual. That individual is known by name and the software collects specific personal and professional information about that individual. This is not the fabled “market segment of one” - that approach was still following the path of finer and finer granularity by adding tags and metadata. The new era of online marketing is about knowing you and addressing you with messages and products that are relevant to you specifically.

This new approach to online marketing is promising to be much more effective for both, the marketers and the customers. The marketer only gets a shot or two before being banned into the spam penalty box and addressing you with the right message is crucial. You, on the other hand, only get exposed to messages and products that really could be of interest. Even if you are not shopping for a new sports car, hearing about the new model is actually fun if sports cars are your thing.

But collecting this kind of personal data is not without some challenges. Security and privacy come to mind right away. When the retailer gets hacked and segmentation data is compromised, the damage is relatively limited. OK, so I belong to the ‘interested in dogs’ market segment. That may or may not be a big deal. But if the compromised data includes the names and ages of my children and my home address, that could be a big deal. It sure would be for me!

Of course that’s why the gathering and use of such personal data is usually regulated by law or by compliance rules. Just think about all the regulations related to selling insurance, cars, or investment securities! The marketers, therefore, have to satisfy the regulators that they adhere to all the compliance rules and regulations that they are subject to. This is new territory for most marketing organizations. Remember how hard it was to comply with the do-not-call list and the double opt-in subscriptions? Satisfying the regulators about how we collect, analyse, and use personal data is a necessary requirement for digital marketing today.

That’s serendipitous, because this is where the worlds of CEM and enterprise content management (ECM) meet again. Giving up on the idea of a single platform for all content applications, web content management (WCM) has split from ECM a few years ago and eventually evolved into what we call today CEM. ECM remained focused on its core strengths - employee productivity and information governance. Yet exactly those information governance capabilities are needed to address the compliance requirements in the new world of digital marketing today. And so the two friends are meeting again to usher in a new era of digital marketing - with compliance.