January 14, 2022 Quigley Now + Next: The best of CES 2022
In this edition of Now + Next, we’re focusing on the top marketing trends coming out of this year’s Consumer Electronics Show (CES)—including NFTs, Web3, the creator economy, shifts in streaming, social audio, and privacy.
As omicron swept through the nation, CES itself became a demonstration of the challenges companies have faced over the course of the pandemic. As many high-profile exhibitors pulled out at the last minute and guests canceled their appearances, even one of the world’s leading names in technology was challenged by rapid digital transformation. Unlike last year, CES was not able to livestream the entire event. But as in-person attendees explored much emptier exhibit halls, the virtual venues were filled with insights about what’s next.
NFTs are reshaping the creator economy
NFTs were a major theme of the CES digital venues this year, and the subject drew some of the largest attendance to booths on the show floor. Beyond making traders rich in the crypto market, NFTs are giving artists the ability to profit from their work like never before. For the first time in history, it’s possible to provide proof of ownership of a digital asset. This allows artists to work directly with collectors (and brands) without third parties. NFTs also give artists a way to earn revenue each time their work is resold. All of this is driving a new creator community that is connecting over Discord and Twitter. While far from mainstream, NFTs have moved out of the underground, with major brands getting in on the action.
The message for brands: Don’t bully your way into the NFT world
As Erick Calderon, the founder/CEO of Art Blocks Inc., said, “Support the ecosystem before you take from the ecosystem.”
Brands can take tremendous liquidity out of the NFT ecosystem without putting anything into it. Creating your own NFT and pushing it out to huge social media audiences might sound good on a slide deck, but it can end up taking income away from the creators who are building the community. This can, ultimately, create a bad image for your brand with people who are passionate about NFTs.
A better idea is to take an organic approach and partner with an existing NFT creator. This is what L’Oréal recently did by commissioning female digitally native artists to create NFTs inspired by one of the brand’s lipstick colors. The artists retained 100% of the primary sales. A portion of the secondary market sales was donated to support Women of Worth, L’Oréal Paris’ philanthropic initiative that recognizes women making a difference in their communities.
How far are we from mass NFT adoption?
Right now, we’re still in the Gold Rush stage. The main stumbling block is friction. Buying or selling NFTs isn’t as easy as shopping on Amazon. There can be a lot of confusing steps. One of the roles brands and media can play is educating the public on how to be a part of the NFT ecosystem.
Scott Zanghellini, head of Revenue Strategy & Development at WWE, discussed using talent to help show their audience how NTFs work. In the same way that voting on “American Idol” made audiences more comfortable with texting, learning how to buy an NFT from WWE could help break down the barriers of adoption.
Web3 is driving innovation and creation
Web3 is a plan for decentralizing the web though blockchain. Instead of the power being in control of a few big gatekeepers, like Google, Meta, and Amazon, the idea is to build platforms and apps owned by users—who will work together to maintain the ecosystem and share profits.
Clara Tsao, founding officer and director of the Filecoin Foundation, described how the current version of the web is suffering from the Pac-Man Syndrome—every new company that comes along gets eaten up by a larger one. The result is often a technology less robust than the original and diluted so that it doesn’t compete with the parent company. The collaborative and decentralized nature of Web3 could solve for this, allowing new ideas to come to life.
Because of better monetization possibilities, a lot of creator talent is moving to Web3 platforms versus focusing only on activities like building influencer businesses on social media. Products like Celsius Network are providing banking services in cryptocurrency, allowing creators to earn interest and secure crypto loans that can help build their businesses.
Web3 also has the potential to combat misinformation on the web. Blockchain can be a way to store information so that it can’t be altered.
Social audio is growing and has a future beyond the pandemic
Audio has increased in popularity during the pandemic. Social audio is a relatively new format that differs from podcasts because it offers a live experience with the ability for listeners to participate and connect with one another.
According to Stephanie Simon, head of community and content at Clubhouse, the feeling of connection will help social audio remain popular in a post-COVID/COVID-safe world. As she pointed out, loneliness and a lack of connection existed before the pandemic and will exist afterward.
Stephanie has also seen growth of the platform into new markets, like India, and new interests, especially NFTs. The challenge for social audio platforms will be maintaining a sense of intimacy as their audiences increase. The same people who enjoy sharing their thoughts with a group of 30 people might not feel as comfortable talking to a group of 300. Supporting communities and clubs will be key to maintaining the intimacy many users are looking for.
How brands get involved with social audio
Because the business models of social audio are not based on ad sales or collecting data, marketers cannot approach the platforms like radio or streaming audio. Brands should focus on helping support and grow the community by connecting with existing creators—whether that means sponsoring a program or working with a creator to produce content that speaks to an issue important to the brand. However, brands should not look to simply create audio advertorials. The content must explain, entertain, and engage. Brands should also come ready to interact with the community.
Big-tech investment is changing the streaming landscape
In 2020, the dialogue about media was dominated by streaming. While growth remains strong, we’re starting to see that audiences will not subscribe to an infinite number of streaming options. According to Michael Kassan, founder, chairman, and CEO of MediaLink, the magic number is between four and five services. Because there is a lot of capital in tech right now, more tech giants will be moving into the media space. This could lead to consolidation. Amazon acquiring MGM may be the first of many more mergers.
There’s a big competition for sports
Tech companies, like Apple and Amazon, are battling with traditional names, like ESPN, for sports programming. However, not every company knows how to best package sports content. Brands should look beyond audience numbers to see what other value the platform is bringing to the content, including activations with talent and merchandising opportunities. While sports content is expensive right now, Kevin Mayer, chairman of DAZN Group, pointed out that there’s been a sharp decrease in prices in Europe over recent years and predicts the U.S. might follow. As he says, “Prices can’t rise forever.”
Resilience lies in delivering customer connection as scale
Sarah Franklin, president and chief marketing officer of Salesforce, believes that resilience for brands lies in the ability to innovate not just with products and services but also with their perspectives—showing empathy and understanding for their customers with purpose-driven marketing.
Cara Sylvester, EVP, chief marketing, and digital officer of Target, described how the company has gone from episodic messages to always-on support for the issues their customers care about. For example, instead of running ads during Black History Month, the company now deploys communications that help customers find Black-owned brands year-round.
For McDonald’s, delivering a better customer experience during the pandemic meant creating a better employee experience. Tariq Hassan, chief marketing and digital customer experience officer of McDonald’s, said that part of that plan was shifting social messages from food beauty shots to content that supported front-line workers.
Asha Sharma, COO of Instacart, believes connecting with consumers means looking at grocery carts not as a collection of random items but as a set of experiences the shopper wants to create. The company invested in being able to deliver better on occasion-based shopping by adding technology to predict when there will be increased demand for keystone items.
How privacy and innovation can coexist
Data is important to innovation. However, we’ve seen time and time again that too much data in the wrong hands can lead to invasions of privacy.
In absence of federal laws, the states must regulate privacy on their own. This leads to a lot of inconsistency for companies. But Peter Brown, counselor–senior adviser on Technology Policy at the European Parliament Liaison Office, pointed out that broad reaching regulations can have unintended consequences. He described how the EU General Data Protection Regulation (GDPR) was written to rein in big tech companies but hit small businesses harder, because they didn’t have the economies of scale to make changes quickly.
Across several sessions at CES, experts agreed that a good step to take toward balancing innovation and privacy is to give consumers more transparency into what data is being collected about them and how it’s being used. And also providing consumers with a way to address and change any outcome of that data—from something as small as what banner ads they’re seeing to as major as why they were not approved on a credit application. This was especially important now that AI is making more decisions and can have built-in biases.