Wednesday, November 14, 2018

Wall St. Journal Validates Our "Business Model as Innovation" Predictions

When we recently evaluated our predictions for 2018, we gave ourselves a C for our prediction that said, "Innovation often will come via business models" (part of our "Key Predictions for Trends in 2018, Part II). 

Our basis for that grade was:  
We expected, for example, that upscale restaurants with a delivery-only business model (relying on mobile-ordering apps) would be a bigger trend than it turned out to be. There was some coverage of that sort of innovation – not so much of technology but in the use of technology – but it wasn’t a top story. 
However, in a Nov. 2, 2018 Wall St. Journal column that was published after we posted our grade, Irving Wladawsky-Berger, a regular contributor who formerly worked at IBM and served as a strategic advisor for Citigroup, HBO and Mastercard, actually supported our prediction about the importance of business models. The column makes the case that "It’s All About Business Model Innovation, not New Technology. New technology, no matter how transformative, is not enough to propel a business into the future." (In the interest of disclosure, I worked with Irving back in the days when IBM was a client at a former agency.)

According to his article,
Surveys show that most executives agree, and in fact, many believe that business model innovation is even more important to their company’s success than product or service innovation. 
Another key quote further validates the point we made in our initial prediction:
New technology alone, no matter how transformative, is not enough to propel a business into the future. Nor, for that matter, can past success justify existing business models. The business model wrapped around the technology is the key to its success or failure, argues Mr. Johnson, senior partner at Innosight, the strategy consulting firm he cofounded with Harvard Business School professor Clayton Christensen. 
Irving also outlines four key attributes of a successful business model:
  1. Customer value proposition.
  2. Profit formula.
  3. Key resources.
  4. Key processes.
He also identifies how tech can enable business models such as through
  1. e-Commerce. (This was something that Irving pioneered at IBM.)
  2. Digital platforms.
  3. Models that turn data into assets.
  4. Automation-enabled services.
You should check out his article to learn more and get more details on the eight bullet points. It's worth reading.

And, for us, while we won't go back in an improve our grade for this prediction, it's nice to get validation. 

Monday, November 12, 2018

Track Record: How We Scored on Ongoing Trends

We identified 18 ongoing trends for 2018, and we think we did well with regard to most of them. 
  1. The news cycle will continue to speed up. People are experiencing news fatigue because so much is happening daily. (By contrast, there were only a few stories — like the rescue of the Thai soccer team — that had the staying power to dominate the news cycle over a period of days. Otherwise, most stories, even some that previously would have dominated for a week or two disappeared, often without having much impact in 2018. This will continue in 2019. Grade: A+.
  2. 2018 will be tough for traditional and online media. Unfortunately, true. Grade: A+.
  3. Fake news won’t fade in 2018. Unfortunately, true. Grade: A+.
  4. Cord cutting will continue but still won't save money: Netflix dominated news coverage and more media companies are offering streaming services but we did see an uptick in coverage that cord cutting is complicated and expensive. Grade. A.
  5. Virtual Reality and Augmented Reality still won’t be everywhere. Both VR and AR are making progress but neither is there yet. Grade: A.
  6. IoT will continue to be victim to cyberattacks. This did not get as much attention as we expected but that may be because IoT and Smart Homes have not been broadly adopted yet. Grade: C.
  7. The future is still looking cloudy. This may be the one tech trend that has yet to experience a backlash. Grade: A.
  8. Driverless cars attract significant coverage. Got lots of coverage in 2018. We think it’s going to take longer than most people think for driverless cars to get wide approval. We also said we think electric cars will generate more media coverage. Tesla certainly got tons of coverage in 2018, not all of it positive. Grade: B+.
  9. There's never enough cybersecurity/privacy. Unfortunately, true. Grade: A+.
  10. NFL ratings will continue to decline. We were right for the 2017-2018 season, because overall, ratings were soft. The 2018-2019 season seems to be rebounding (which we realize is a basketball term). Grade: B-.
  11. Corporate boycotts & consumer boycotts will continue. We saw some high profile boycotts from brands that pulled their advertising from controversial hosts. This will continue in 2019. Grade: B+.
  12. Drug pricing will continue to get a lot of attention. And we said, “But there won’t be an easy solution so don’t expect much except outrage.” Grade: A.
  13. Wearable tech will still not be as mainstream as people in the industry were hoping. True, which is why we did not see much media coverage about wearable in 2018. We still believe wearable is making progress but 2018 was not its year for media coverage. Grade: B.
  14. STEM will continue to be important. STEM is important but isn’t getting the media coverage it used to generate. Grade: C+.
  15. 3-D content, 3-D TV and 3-D printers will still not be as popular as they are cool. Correct (we still think). Grade: A.
  16. Artisanal will still be a hot concept. True as far as we can tell but that doesn’t translate into media coverage. Grade: C.
  17. e-Wallets still will gain traction in 2018 but mostly for Millennials as opposed to their parents. True as far as we can tell but that doesn’t translate into media coverage. Grade: C.
  18. Content management remains king.  True as far as we can tell but that doesn’t translate into media coverage. Grade: C.
Let us know if you agree or disagree with our grading or if we missed an ongoing trend in 2018.

Thursday, November 8, 2018

New Prediction: Age of Anxiety to Continue into 2019

We generally wait until all predictions are ready (we predict the list will be ready by early December) but we want to discuss a trend we identified for 2018 that we feel will be a key trend in 2019 and beyond.

Until about mid-2016, we didn't truly understand the apparent (because there's no proven source for it) ancient Chinese curse: May you live in interesting times.

Now, of course, we live in extremely interesting times. 

We've said it before: the news cycle is broken. Once, a major news stories would break and that would be the top story for the next few days, as the country would come to terms with whatever the event/incident was.

Today, major news breaks hourly. We learn about it by notifications on our phones. By what's trending on social media. And then that story is replaced by another story. With no time to process or assess the implications.

Yesterday, for instance, we had five major news stories:
  1. The follow-up from the midterms and sorting out winners, losers, races-to-close-to-be-called and lessons.
  2. Sessions resignation/firing as AG in an undated memo and the naming of an unconfirmed-by-the-Senate acting AG and the implications for the Mueller investigation.
  3. Trump's combative press conference, including the White House's withdrawing of CNN's Jim Acosta press pass and access, along with implications for free speech and the freedom of the press.
  4. The tragic shooting last night in Thousands Oakes that left 12 dead including the shooter and a sheriff's deputy, and trying to ascertain the shooter's motives.
Today, there's more news about the latest shooting and Ruth Bader Ginsburg's fall -- and that was before 11am.

The chaos of our current politics and the impact on our society of a constant stream of news is having an affect on Americans. 

We're seeing news fatigue because we're all overwhelmed by trying to stay on top of the news. (There was a front-page New York Times article,"The Man Who Knew Too Little, The most ignorant man in America knows that Donald Trump is president — but that’s about it. Living a liberal fantasy is complicated," about an Ohio man with a self-imposed news blackout since Trump won the 2016 election; and he seems happier than the rest of us. 

We think the age of anxiety will continue into 2019 and throughout Trump's administration because of his governing style. And that this is not a Democrat or Republican thing. 

The age of anxiety is bipartisan (and we think it will continue past his time in office, unfortunately).

Technology definitely abets our anxiety levels because many of us are now trained to click on the latest notifications. Some of which isn't really news, like the latest celebrity insult or feud, which is designed to make one side or another get upset. 

Social media plays a key role because -- while politics was once something people were told not to discuss (along with salary/wealth/money and religion) -- that's no longer true. People feel the need to express themselves (as we are doing now, so we're part of the problem, too) on social media or in blogs about their perspectives.

And there's great commonality, actually, across political believes, and that is this: we all believe the other side is stupid, short sighted, biased, closed minded, etc. Take your pick (and there's more, we realize). Social media fuels the spread of anger. We read something that we don't like, and then feel compelled to not give the other person the benefit of the doubt -- like their post was intemperate, poorly worded, doesn't really reflect their thinking -- and then post something in opposition; then the other person sees our response, and feels that it is stupid, hateful, condescending, out of touch -- pick your choice -- and posts a snide comment to our snarky post. And so it continues.

We've seen angry, bitter comments to tweets from @RealDonaldTrump and @PressSec as well as to @JakeTapper, @PeterBakerNYT and @Acosta and many others in between. Many are truly nasty and unpleasant, no matter which side you're on. What's worse: you can't always tell what's being posted by real people and what's coming from trolls. (And we're trying to not to provide false equivalencies here.)

The point is this: after the midterms, with a divided congress, the likelihood of continuous dysfunction and internecine battles across the aisles in the Senate and the House, threats of investigations into White House activities and counterthreats of a "warlike posture" against Democrats and retaliations -- we expect that the age of anxiety will continue well past 2019.

The news cycle will continue to hit many times a day; the stories will be supplanted by the next breaking news to grab our attention, and so on. And that social media will continue to fuel anger and incivility so that neither side can talk to the other. The fact that few are able to talk or listen to people with opposing views -- whether in real life or, especially, on social media -- is a real problem that adds to the distrust and fuels anxiety for this other reason: we can't even agree on the same set facts. Was a video that the press secretary posted doctored or not is a question that fuels what the tech industry used to call FUD: fear, uncertainty and doubt. And this is true whether you believe she did just as much as it does for those who believe she did not.

Knowing that we're living in interesting times -- aka, the age of anxiety -- is important for marketing and PR functions because we are dealing with a polarized society, where withdrawing advertising from controversial media may spark a counter boycott/protest. (We saw that happen in starting 2017 and continuing in 2018 and beyond, which was another prediction we made.) Consumers are looking for less stress, and we expect articles about unplugging and de-stressing; to the extent that your products or services can help reduce stress, that will be a positive (even if that's not necessarily newsworthy on its own). At the same time, we think consumers will look to purchase from corporations that share their values -- so it will be important to figure out what your values are and how to navigate an increasingly polarized consumer base. We do expect a growing chorus of people asking for more civility in public and online communications.

In the next several weeks, we will post other predictions, hopefully some of those will be more upbeat.

In the meantime, let us know what you think about this. (We just as that you be civil, whether you agree or disagree.)


The Intercept Validates Our Prediction about the Battle over the First Amendment on College Campuses

Each year, we issue a set of predictions for the following year, and at the end of that year, we evaluate the accuracy of our predictions. Our perspective is a very media-centric; since our goal is to advise our clients on how the media will be covering various topics, we judge how successful we've been by looking at the amount of media coverage on each topic.

For 2018, we had predicted that many companies would offer new services and products geared to millennials. We did not see a lot of media coverage of that trend but we continue to believe that millennials will help change how things are being sold and marketed. But without significant media coverage, we considered that prediction to be somewhat of a dud.

One of the other predictions we think turned out to be a dud was about battles about free speech on college campuses.

As background, in 2017, we predicted:

The first amendment becomes a battle-ground issue. Between campus culture wars(regarding who can speak on campus and who can disrupt those who try to speak on campus),varying definitions of hate speech and the more-open expression of bigotry, the fight to protect free speech will generate coverage in 2018. Part of the challenge is a polarize climate is finding the balance between allowing free expression and preventing bigoted express.
In February 2018, we felt this New York Times' article, "Republicans Stuff Education Bill With Conservative Social Agenda," confirmed that as a trend. The article included pullout text that described a "590-page higher education bill working its way through Congress" as "a wish list for those who say their First Amendment rights are being trampled."

But we didn't see significant coverage beyond that so when we graded all our predictions, we graded harshly. We gave ourselves an F.

But in a recent article in the Intercept -- published by Glenn Greenwald, Laura Poitras and Jeremy Scahill to cover "national security, politics, civil liberties, the environment, international affairs, technology, criminal justice, the media, and more" -- that looked at false media equivalencies in the wake of the white supremacist violence of the last 10 days, made the case that free speech on campus has generated significant media coverage this year.

As a false equivalency, the Intercept article points to a "pattern of both-siderism...and false equivalencies  after any of the 18 deaths caused by white supremacists violence in 2017." As an example of false equivalency, the article noted that:
Instead, rivers of ink have been spilled condemning the disruption of Republican dinner plans and neo-Nazi speeches; according to FAIR, the New York Times alone featured 21 columns and articles this year expressing concern for right-wing speech on campus. 

We already issued our grade so we're not going to go back in and boost the grade. But we feel like 21 columns and articles is a fair amount of coverage on the topic, and that we did a good job on that one after all.

Also, earlier this week, the Wall St. Journal reported that "Amazon in Late-Stage Talks With Cities Including Crystal City, Va., Dallas, New York City for HQ2." We had predicted that Boston would not be picked, and unfortunately, we were right about that, too. At least we won the 2018 World Series (in a prediction we did not make).

Two other articles validate predictions we scored low. Both "Making Talk TV for a Post-TV Generation: 'Busy Tonight' and 'Patriot Act with Hasan Minhaj' are two different takes on what the talk show can be in the age of Instagram and Netflix" in the New York Times and "Office Workers Have a Major Hang Up—Their Desk Phones" in the Wall St. Journal, report on the impact that millennials are having on products and services. We gave ourselves a low score because we didn't see a lot of coverage on this topic but it occurs to us, now, after we initially grade our predictions, that some of the millennials-bring-change stories have been more subtle in pointing out the reasons for how and why some products and services are changing.

Monday, November 5, 2018

Track Record for Our Bonus Set of Predictions

Here's what we're calling our Bonus Set of Predictions:


1.  The media landscape will change in 2018. We got some details wrong, very wrong. We expected the AT&T-Time Warner deal would not go through (it did, despite a DOJ lawsuit) and we expected the Sinclair Broadcasting purchase of Tribune Media to get approved (it did not). We got one deal right: Disney’s acquisition of Fox’s TV and movie studios (but not Fox News, Fox Sports and Fox TV channel). The media world changed in another way, thanks to Netflix, which receives a lot of coverage, attention and awards. We expect more consolidation in the media world, more attention to Netflix and other streaming services, and more layoffs and closings among local media. Grade: B-.

2.  Artificial Intelligence and robotics, now interconnected, will continue to be “hot.” We got this right. A.I. and robotics got a lot of attention in 2018, and we expect that to continue in 2019 and beyond, including scare stories about a “robocalypse” in which A.I.-enabled robots replace human workers as well as more-reasoned articles that debunk the scare stories. We’re not as worried because there we think it will open other types of jobs, and that implementing A.I. seems inevitable because the potential benefits could be so significant. Grade: A.

3.  Innovation often will come via business models. We expected, for example, that upscale restaurants with a delivery-only business model (relying on mobile-ordering apps) would be a bigger trend than it turned out to be. There was some coverage of that sort of innovation – not so much of technology but in the use of technology – but it wasn’t a top story. Grade: C.

4.  Bitcoin and blockchain is hitting it big time. This was our surest best of any of our 2018 predictions. We do expect more bumps in the road for bitcoin and blockchain, but overall, it will continue in 2019. Grade: A.

5.  Is the internet dying? There have been articles about the internet dying, including in the October issue of Wired. But it really wasn’t a “thing” in 2018. Grade: C-.

6.  The first amendment becomes a battle-ground issue. We got this wrong. Grade: F.

7.  Millennials’ impact will change how companies market products and services. Millennials are having an impact on products and services but there wasn’t as much coverage of it as we had expected. The layouts of newly built homes is changing, for example, but it’s not entirely clear that the reason is due to millennials (it could be because of boomers, too). Overall we overstated the amount of news coverage this would generate in 2018. Grade: C-.

8.  Smart-Home automation will gain acceptance but still a niche offering. We said the biggest aspect would be intelligent personal assistants like Amazon Alexa and Google Home. Overall, we were on target for this. Grade: B+.

9.  The ranks of unicorn startups will grow but expect a backlash because unicorns are difficult to sustain. We didn’t see the term “unicorn” as much as we expected but in October, there was a big splash that Uber’s bankers value the company at $120 billion. We did see more articles about unrest in Silicon Valley between employees at startups and regular people who live there — so that’s something of a backlash. We continue to see the challenge as stated by New York Times tech columnist Farhad Manjoo is right when he said, a continued threat for startups is that just “fewer than 1 percent … end up as $1 billion companies” and that the Frightful Five (Amazon, Apple, Google, Facebook and Microsoft) can out-pay key employees (an issue in the A.I. space), out maneuver or just invest in startups and co-opt them. Grade: C.

10. Religious nonprofits will be able to publicly make political endorsements, but doing so will change how they are perceived. We got this wrong for 2018. However, it may be a problem down the road, particularly with people who oppose the political endorsements made by a particular religious nonprofit.