The futures market

Mike Walsh is what’s known as a ‘futurist’. Somewhat disappointingly, he doesn’t wear a silver boiler suit, he doesn’t employ the services of a rocket pack and he doesn’t know if the Mayans are right about the world ending in 2012. But, by focusing on nascent consumer trends in certain regions that have the potential to become mainstream everywhere else, he does know a thing or two about how the rise of the machines is completely changing the marketing game. 

Everyone who has ever made a prediction is, to a degree, a futurist, but it seems you only become widely recognised as such if your predictions are particularly astute. And Walsh, who was in the country to speak at ANZA’s annual advertising summit, has, over time, earned a spot in that category by having his finger placed directly on the digital pulse.

Now based in Hong Kong as chief executive of innovation research agency Tomorrow, he says he started his career in the first wave of consumer research companies stemming from the dotcom boom and originally did a lot of projections on classified markets and the impact search was likely to have on them. He realised that a lot of the action was moving away from Silicon Valley and into Asia. And, because he strongly believes that consumer behaviour, rather than technological developments, creates change and that “somewhere in the world the future is already happening”, he eventually became much more anthropological in his outlook.

Up until relatively recently, he says digital used to be seen as another medium for advertising to be placed on, almost like cinema. But digital isn’t just a medium anymore. He says it’s leading to a complete realignment of social structures and it’s almost evolutionary in scale. He likens Japan, China and Indonesia to digital Galapagos Islands, because new behaviours, technologies and trends (like smart phones and social gaming) tend to start there and then propagate around the world.

Up until now, the media model has been based on creating content, attracting eyeballs, then renting the real estate to brands for a limited period of time. Now, he says you only need to look at the top 10 brands on Facebook to see that’s all changing, because they’re creating their own media platforms, or what he calls “feedback loops”, with consumers.

“To me, the future of marketing is around content,” he says and he sees content creation shifting from publisher-led to brand-led. This may work for large companies, but what about in New Zealand and what about SME’s? Where do they find the resources to create this fabled content? Walsh believes it is even more important for smaller companies to do this and he thinks many of them would be well served to take one third of their marketing budget and spend it on content creation to get their name on Google and start attracting a following.

One of the major ideas of his book Futretainment is that we don’t live in a broadcast world anymore (to the chagrin of the TV networks). He says we live in a world of audience networks. And, as such, you can’t just buy awareness. You need to earn it before media is shared and popularised. And, as a result, he thinks “the role of great creative [in advertising]has never been more important” if brands hope to rise above the rabble.

Of course, the digital world isn’t just changing marketing. Because you can see where traffic is going and what people are interested in on the internet, he believes media buying is likely to become even more commoditised. In fact, he predicts it will soon be akin to a forex trading floor, with a focus on search traffic and the purchasing of keywords that are trending.

This real-time evolution also has implications for media owners in terms of how content is created. He points to Demand Media, one of the most powerful content companies in the world, he says, as an amazing example of that. Its model is based around creating content for some of the world’s biggest portals. But it uses an algorithm to do it, which flies directly in the face of accepted notions of editorial decision making.

It looks for popular search keywords, then asks its contributors to write, for example, the top five tips for buying pool filters, or make a video about fly fishing. It’s often very niche and it’s all about speed. But it’s what people want to know. So if you’re a publisher, he says you need to start trying to understand how consumers are currently buying products and consuming media and how that is likely to change your business soon.

As Google has shown, the real value these days is not so much about selling real estate. It’s about data. And targeting. And for big  publishers, Walsh says the most disruptive idea is that every single article or clip could be an entry point to a dream scenario, where an advertisement can become relevant, rather than an interruption. Online, and on devices like the iPad, the ability to measure makes it easier to deduce if people are, for example, obviously looking to buy a house. And that’s very valuable information to have.

As an example of the value of consumer data, he points to the next big thing in technology, in-home devices like internet connected appliances or Smart Grids. He says Google has recently applied for its energy trading license and Microsoft, HP and Cisco are all investing heavily in the technology. And it’s not just because they want to get into the energy game, but because the information these devices provide about what appliances people use and how they use them is hugely valuable, in a similar way to the information gained from loyalty schemes.

With developments like this, Walsh believes the internet is disappearing, in the same way as electricity has ‘disappeared’. He points to Indonesia, where surveys have shown that almost 80 percent of respondents say they have never used the internet, despite the country having an extremely high rate of Facebook mobile use. But to them, he says Facebook isn’t the internet, it’s just a blue button on their mobile phones.

The mobile internet, he says, is already huge and it will only get bigger. For many developing nations that didn’t have the ability to invest  heavily in telco infrastructure, they’ve basically skipped a generation of technology and gone straight to mobile, so their first experience with the internet is often on their phones.

Becoming a ‘presentist’ for a while, he says flash sales and daily deals are a big trend at the moment because there’s an element of entertainment to them. He points to Groupon, which recently joined forces with Gap for something of an experiment and managed to shift $11 million worth of stock in 24 hours. Location is also becoming a very powerful idea in terms of what it does for marketing, as evidenced by the fact that, globally, more people now access Facebook from their phone than from computers.

The website used to be likened to the digital version of the sign outside your shop. But he says it’s much bigger than that now. And, as he points out, every online transaction or comment made about your enterprise on social networks is now basically a vote for your product or service. It’s not just about having a web strategy. It’s about looking at the whole social structure of society and how that is changing.

*If you hate words, check out a wee interview with Walsh on Breakfast.

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