Hard to believe, maybe, but we’re hurtling towards the four-year anniversary of COVID lockdown. The specific date will vary, of course, according to your location and what you count as the beginning of lockdown, but for me, in New York City, it all started around the time the museums, libraries, restaurants and bars closed. That was around mid-March 2020.
I dig up this old history — old by marketing technology standards anyway — because of my reaction to a presentation released last month by Winterberry Group, the management consultancy. “Outlook for Advertising, Marketing and Data 2024: A Market in Transformation” (registration required) takes its time digging through the despondencies of 2023 but also anticipates macro-trends for 2024.
Those trends have some common features and it’s worth looking at where they came from.
Key trends for 2024
Of the many macro-trends identified by Winterberry, here are the ones that caught my attention:
- Connected commerce will accelerate.
- Video will be everywhere.
- Content spend will continue to grow.
- Creative intelligence adoption will increase.
- The consumerization of B2B marketing will continue.
- Marketing attribution will be more severely challenged.
True, Winterberry does highlight generative AI as the major macro-trend for the coming year. No surprise there. But that provides fast developing tools for marketers to negotiate our present environment. It’s the environment itself I’d like to examine.
Face up to the phygital
Apparently we can blame the Australian agency Momentum Worldwide for coining the word “phygital,” a neologism that neatly obscures the good old Latin-derived terms “physical” and “digital.” But whatever you think of the term, we’ve been shifting into phygital reality for a while now, a shift accelerated (hackneyed but true) by the transformations wrought by COVID.
Think of all the well-documented changes lockdown brought about — in our already digitally-connected culture anyway.
We had already become accustomed to buying some goods online; now we were buying everything online down to perishable daily groceries, either for delivery or pick-up-in-store. Plus, being online most of the day meant that it was harder to switch off the constant stream of digital and social ads, promotional emails and texts, and eager advances from influencers.
Many of us were now working remotely too which could mean passing from channel to channel, device to device, and seamlessly from work to personal matters and back again. Meetings were remote; most human contact was remote.
All of the above is familiar enough; I am simply staking out the extent to which most (not all) of us found ourselves “in the digital.” Slowly, however, the physical crept back; but in a new guise.
We could browse in stores again, but we had become habituated to browsing online (or in app) and for a much wider range of goods than ever before. We wanted brick-and-mortar stores to bridge the gap between that digital experience and the physical reality of shopping. We wanted to interact digitally, perhaps via QR codes, with in-store advertising. We wanted (with consent) to get offers and discounts related to our actual location.
And let’s not overlook payment. It has become extraordinary to be asked for cash payment in a store. We tap and go (in New York City we do that on public transit too). At Amazon Go stores, you don’t even do that; you just walk out while Amazon dips into your digital wallet.
The physical environment is rapidly becoming digital through-and-through. Hence, with apologies, phygital.
A world for digital (and phygital) natives
We used to talk about the Internet of Things. That’s here, of course, with connected refrigerators and super-connected vehicles. I suggest, however, it’s time to move on from things and think in terms of a connected environment. Google Glass didn’t take off and AR headsets are still clunky. But the hardware will get fixed and we’ll be engaging digitally as well as physically as we move through the world.
That means a generation of phygital natives is on the way. But let’s pause for a moment and look at digital natives; specifically, digital natives in B2B. Fifty percent or more of B2B customers, according to Winterberry, research products and services online before making purchase decisions (we knew that), look for information on social media, increasingly access content on mobile and are more likely to interact with brands delivering high-quality, personalized content. That means digital content, of course, not personalized direct mail.
It’s not just the consumerization of B2B, says Winterberry, “it’s the elevation of digital natives into B2B decision making roles.” Yes, B2B buyers are acting like consumers, partly prompted by the enforced remoteness of COVID. Wait until you see the phygital natives. If anyone attends a marketing conference this year that isn’t phygital (through apps, smart badges and interactive screens) let us know.
Those other trends?
Just follow the through line. What more needs to be said about what’s driving connected commerce? Here’s Winterberry:
“Its about reaching the connected, omnichannel shopper wherever they are. $15BB a year is shifting into commerce media networks (not just grocery!) to drive demand and conversion. Brands seek to optimize trade promotion investments both on-platform (digital and in-store) as well as off-platform (open-web and social).”
Video — or, more broadly, graphics and visuals — will indeed be everywhere because we’re not going to drift through the phygital with our noses in an essay or white paper.
Consumer touchpoints have become so multiplied and diverse that multi-channel attribution has already been taking a beating. How about the current evolution from a multi-channel environment to an environment which is itself a vast, always-on channel — just with multiple facets. Ninety-five percent of consumers have a mobile device in hand, or at least on hand, while watching television. Here’s a phygital soup of influences on behavior: likely a connected TV, not just the phone but whatever might be open on it — an app, social media, chat. How about adding an Apple Watch, an adjacent tablet or laptop?
What do all these devices have in common? They serve content. No wonder content spend is going up and no wonder investment in “creative intelligence” is increasing. I place that phrase in scare quotes because traditionally it has referred to the ability to come up with innovative solutions to problems; not necessarily anything to do with software.
From the context of the Winterberry report, I think it’s fair to say that they are refocusing the term on the use of AI, generative AI and machine learning in content creation. Yes, we had to come back to generative AI. It might not be responsible for ushering in the phygital world, but (if it can overcome some significant challenges) it will be responsible for a lot of what we find there.
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