Tom Goodwin: Finding clarity from the chaos of CES

Digital tension.

10 July, 2008 saw the Apple App Store launch on the iPhone and within three years the world went nuts. Digital converged, wiped out companies and product lines, companies now worth trillions exploded into life, consumer behavior pivoted drastically, and incumbents ignored it or hoped it would go away.

We think the world is changing faster than ever, but it’s more the case that the tension is greater than ever. Each year the pressure ratchets up a notch, and each year a wonderful, profitable, company doesn’t change how it works and what it makes, and as a result, the cracks form. At CES you get to see large car companies slowly accept they need to be mobility providers not car makers, TV makers see they need to be experience makers, and each year we see pioneering consumer packaged goods companies make the leap to great hardware, software and stuff in tubes. I’m hoping we can now see that the future lies in finding ways to change what you make, how you make it, and even more excitingly, how you can elevate your role in someone's life to become more significant. Become a solution provider, and with it, make a lot more money.

Stuff as a service

It may be the culture, vast profit margins, and relaxed CFOs of software as a service company in Silicon Valley, but it was probably VC firms demanding more revenue security, and a generation of direct-to-consumer brands have launched with subscriptions at their core.

Today, you don’t buy a toothbrush, you subscribe to a life of clean teeth. You don’t buy a razor, you are members of a club. The subscription model seems to have proliferated into every aspect of our life. Music somehow became bundled (thank goodness) while newspapers, TV, and movies have unbundled. Consumers can now get all the content they ever wanted with way smaller payments than they ever expected.

The trend lines would suggest than 2030 would see that every day, 30 tiny boxes of personalized dog food, energy bars, meal kits, shampoos, socks, Kids’ Nikes, razors, scent pods, making their way to your door, with hundreds of small, separate, fixed monthly payments and subscription prescriptions to cure your headache.

It dawns on a casual observer that no person wants this. Subscription models are what happens when companies fall in love with predictable revenue, marketers get excited over lifetime customer value models and expected low churn, but in the end, this year will mark the year subscription fatigue took over.

Privacy battles

Devices get smaller, sensors get smaller, devices get cheaper, convenience is offered, and we invite them into our homes and closer to our bodies than ever before. We cocoon ourselves with a smartphone, let speakers listen in our bedrooms, sensors detect our sleep, wearables our heart rates, doorbells watch our kids, fridges our diets. Data got big and it got mega intimate.

For years, rich personal data held the promise of anticipatory computing: life would become easier, the mundane would be automated, time would be saved, our brains could go back to the hypnosis of an infinite scroll while the dog would be fed. Fitbits and smart scales would guide us back to health, cars would order burritos ahead, adverts would be more relevant and then ever more helpful and perhaps even loved.

The problem is that the most enthusiastic about listening to us, monitoring us, storing our needs are not wonderful consumer electronics companies who ask us to pay handsomely for devices that bring enormous value to our lives, but companies based on monetizing our attention with adverts or by selling us stuff or both. They’ve subsidized the cost of devices to ensure as much data is captured and injected as quickly as possible, and we’ve become the training data.

I see a wonderful future. One where we trust those who keep data to keep it safe, one where we opt-in, one where we can control it and there is transparency. One where we believe the holders respect our rights and use data to reduce irrelevance in advertising, to help us make decisions, to remove friction from the process. Most reasonable people would see the benefit to consumers, platforms, and marketers in this world, a world of privacy trading.

This year could be a step to a progressive, trusted, premium, respectful resolution, but one misstep to too creepy, a data breach, a strategic error, and the debate comes back to paranoia. In the time being, we’ll see an array of companies trading on privacy, private clouds, security layers and ultra transparency at a premium.

A three-layer world

We’ve always labeled media by how it gets to us. It’s on paper, it’s the internet, it’s the radio, and 20 years in, people finally see it’s basically all the internet. What separates the screens isn't their names, it’s their context for consumption and it’s where they fit around our bodies.

Layer one rests on our bodies and is the most personal. From failed AR headsets to wildly popular wireless headsets to smartwatches to fitness trackers, the innermost layer is largely about micro-information. It’s a glanceable notification, a vibration to stand up, a ping to turn right. It’s also about inputs, your heart rate, movements, location, stress levels, orientation and more.

Layer two is always at arms reach. It is the phone.

Layer three is everything around us. The TV, the smart mirror, the smart speaker, the cinema screen, the digital shelf edge labels, the swanky digital outdoor, the LED car dashboard, the laptop, the tablet, the robot in the bank with the screen.

For the last and next 10 years, the battle is to try to snatch attention from layer two. My sense is this is a futile battle and the real goal should be to figure out how to make the layers work together. How can we make cross-device experiences, how can we make advertising less about personalization and more about contextualization?

Tom Goodwin is head of futures and insight at Publicis Groupe.