6 Key Trends and Takeaways from SXSW

Last week I attended 2014’s SXSW Interactive conference and wanted to share the top trends and insights I saw based on the sessions I attended as well as the conversations I had with colleagues, other brands, vendors, and exhibitors.

As a first timer, I had to learn a lot of lessons the hard way, such as always be charging your devices, call cabs 2+ hours early, and sessions fill up a half hour in advance. More importantly, here are six key trends that I witnessed at SXSW Interactive: Wearables, Data, Privacy, Integration, Brand Advocacy, and Discoverability.

Wearables

After last year where Google showed the Talking Shoe and of course talked Google Glass, it should be no surprise wearables were a major focal point of many of the sessions this year. The exhibition halls were flooded with different prototypes of wearables, and sessions on this topic were plentiful. Even Shaq held a session on wearables!  Undertone walked people through the virtual reality of wearing a ring that would serve your personal recommendations when turning on your TV, at your laptop, waiting for the bus, picking a movie at the theater, or shopping at the mall. Logbar Ring, a Japanese company, displayed a prototype that lets users control a number of things, gesture control, text, and pay for purchases. Nike and Epson discussed how smart watches could revolutionize the healthcare industry and foster a healthier user base. It also became just as normal for people to wear Google Glass while watching a DJ at night as watching the different sessions. The Google Glass fad also fostered some anti-Glass sentiment where one guy attached a digital camera to his hat and asked people to tweet pictures of him with the hashtag #NotGlass. I also saw a GoPro used in the same fashion.

Photo Courtesy of Jeff Semones (@Semones)

What interested me was the dialogue around how to get consumers to not only buy but always wear these devices. It seems like these early adopters are motivated by fashion and the motion of self-discovery.  Many current wearable users wear these devices with pride because of the statement it makes about them. Weather it is health consciousness, being athletic, or being an early adopter, these users are motivated because these devices compliment their wardrobe as a personality indicator. Some brands are incorporating this input with their design by creating different colors and sleeker options to seamlessly match the product with the wardrobe. Others are motivated by self-discovery and learning more about everything. Understanding how that stressful meeting, light dinner, or new hobby is affecting your health gives satisfaction to these data hungry users. This also leads to the topic of Gamification. One speaker said their biggest challenge with usage of wearables happens when a consumer showers and whether or not they will put the device back on. By gamifying the data with levels, points, leaderboards, or challenges, users will continue to use their device as well as tell their friends.

So what is the next step of wearables? While the name hasn’t officially been coined, some are already predicting wearables will evolve into “Ingestibles” or “Implantables” where wearables are literally a part of us. This alleviates the new fight for wrist space and could lead to true 24/7 reporting of data including things like nutrition that are still only as accurate as the user’s input. Of course the big issue here is regulation and safety. At the “Connected Body— Can We Get Value From Wearables” session, they discussed two barriers for this type of innovation: the social norm and the FDA cycle. Most companies that will venture into this frontier are going to be startups, which, by nature, are cash focused and cannot afford to wait 5+ years for FDA approvals. But if someone can transform the social norm and alleviate that Minority Report fear, consumers might be willing to help pay for some of these technologies which will fund additional research.

Key takeaways: While wearables are still in their infancy, many brands like Nike, Reebok, Epson, Samsung, and Apple are paving the way as early adopters. Brands should consider whether their consumers are currently wearable computer users and whether their products and services can be enhanced through this always on type of technology.

Data

Between collection, reporting, visualization, and sharing, data was also a topic that seemed to come up in most conversations. Specifically for wearables, data can be a gold mind. Imagine having a patient who wears enough wearables to track every vital necessary. Each of these wearables sends data into the user’s smartphone which can add additional information around the data like taking a sound clip when the patient had a higher than normal heart rate. Or even taking a photo and reporting their location when appropriate. But is that actually helpful for a patient? Why not add a layer of coaching to these devices that helps inform the user how to regulate his or her vitals. Or what if the platform could compile a daily log of activities and locations complimented by the data to truly tell a story of the user’s life? Or what if the data could be aggregated and sent to the head of the household or even head of human resources of a company so that they too can make better informed decisions about their family or coworker’s wellbeing?

Key Takeaway: Data is only as good as the story you can tell with it. Brands and agencies shouldn’t track everything unless they intend to base actions on the data tracked.

Privacy

Of course anytime data is discussed the logical next conversation is privacy, which was even truer at SXSW where Edward Snowden graced attendees with a live video chat.

Starting his conversation with the now famous, “The NSA is setting fire to the future of the Internet…and you guys are the firefighters” quote, he reiterated the need for tech companies to dedicate efforts to security. He reminded attendees that most of the platforms and devices we use every day are made by advertisers. Google Chrome is the most used Web browser, Android is the number one mobile device operating system, and of course Google is the number one search engine.  And they are all run by Google, the king of advertising. We then check our social networks like Facebook and Twitter that have their own advertising goals. It should be no surprise to users that giants like these are more relaxed on security as they are founded and make money off of data collection.

In the session, “It’s Complicated: Teen’s Social Media Practices,” the speakers discussed each of the prominent social networks and the reasons for their popularity. What struck me the most was Instagram and Snapchat. Instagram and the explosion of selfies is the art of publishing a profile picture in real time. It allows users to share their lives through a cycle of self-portrait photographs, not text. Snapchat is a branch of this where users can share the same type of image to a select group of friends while truly holding the recipient’s attention. Think of when you use networks like Instagram, Twitter, and Facebook.  You flick through line after line of text and image after image, never really focusing on one specific. Snapchat is different because it forces the recipient to hold on the screen to see your image, not allowing for any multitasking.

The second important part of Snapchat is the privacy. The teens and preteens they interviewed reiterated their love for sharing without the need of storing old photos. The idea of a Facebook album did not appeal to them because they’re not interested in storing the past. While of course some of this desire for privacy brings up the question of what photos are teens sharing, the fundamental desire remains unchanged:  teens want to remain visible throughout their public lives while not building a permanent record.

Key takeaways: While privacy is becoming more important every day, most companies are not prioritizing it which leaves many consumers with a sense of distrust. Pair this with hesitations of our current government, consumers feel more vulnerable than ever. If data collection is a cornerstone of your business, make sure to market your privacy policy and be very clear about the steps you are taking to keep the data secure. For example, sites like Netflix are tracking every action of their subscribers but they make sure to build trust with these consumers.

Integration (Breaking Down Silos)

Integration and breaking down silos seem to be the buzz phrases of the decade, but these concepts still seems to stump companies large and small across all industries. While the principles sound simple, they usually requires a corporate initiative and sometimes major restructuring.

Specifically this can help companies who truly want to be data driven. When listening to how the Obama reelection campaign used data to make better advertising decisions, it was clear that data cannot live in silos either. Their motto was Reduce, Reuse, and Recycle data. Step 1 is to figure out exactly what you need, which we already covered. But the reuse and recycle steps ask departments to look internally for data before collecting additional information.

This was also a major point in the session “Future of TV in a Digital World,” with Richard Wolffe and Thomas Roberts from MSNBC. They were tasked with integrating the TV experience with their digital experience. Leveraging numerous studies on what their viewers care the most about, they redesigned their website to be as optimal as possible for their TV viewers. For instance, they learned that their viewership were very loyal to the specific anchors on their show, rather than swimming in sensationalized headlines. So with this knowledge, they used large images of their news anchors to draw the Web user to click accordingly. And for the few that did like to click based on story title, they aggregate a top ten list users can explore.

The modern day CMO has an unnecessary amount of departments and directors reporting into him or her. In additional to the traditional advertising and marketing channels, he or she can sometimes oversee the new mediums, innovation, technology, and even consumer retention/engagement. Each one of these silos shares little communication except at the very top. Not to mention they rarely integrate efforts with non-marketing departments like operations, engineering, and finance. This ultimately leads to many departments attempting to reinvent the wheel that a fellow coworker already mastered, which ultimately costs the company money.

Key Takeaway: Find points of integration at the different levels of your company whether it is on strategy, data, process, or anything else where this newly fostered communication can enhance your product/service or save you money.

Brand Advocacy

The first SXSW Interactive session I attended was “Z.E.R.O Paid Media As the New Marketing Model,” a session by Joseph Jaffe and Maarten Albarda on a recent book they wrote. Their vision was brands utilizing no paid media budgets by fostering brand advocacy to do the advertising for them. Of course this does not mean getting rid of a marketing budget but rather a shift in investment. They urged companies to invest in their product and service to build a best-in-class offering. This paired with consumer engagement programs will not only help repeat sales but also enable consumers to be brand advocates and market your product through word of mouth — both online and offline. Z.E.R.O. is actually an acronym for Zealot (advocacy), Entrepreneurship (innovation), Retention (customer-centricity), and Owned Assets (direct-to-consumer channels).

Their example was Beyoncé’s latest album release.  Instead of going through traditional paid media options like Target and Amazon, she quietly released her album on iTunes and Twitter. Twitter (Entrepreneurship) ignited her loyalists (Zealots) to help circulate the new album as well as become the repeat customers (Retention). She then leveraged her fame and wealth (Owned Assets) to further achieve sales by going to Tewksbury, Mass., and buying products for everyone in the Walmart at that time.

At another session, “A New Dialogue: Your Input Is Changing E-Commerce,” by Ethan Song, CEO of Frank and Oak, they reiterated the need for brand advocates. Frank and Oak, an e-Commerce site for male apparel, doesn’t try to appeal to everyone but rather finds consumers that fit into their brand. They make sure that their online shopping experience is personal and think of their brand as a shopping experience rather than just a point of sale. By doing this they engage brand loyalists and transform them into advocates. From there they build onsite communities where consumers can interact with each other and the brand by logging in via Facebook. 

Key Takeaway: As MEC put it at their event with Spotify, there are no brand managers but rather brand leaders. This is because a brand lies within the mind of the consumers, not on the marketing team. Pairing this with the notion of investing more in the product and brand experience should have a better return on investment in the long run.

Discoverability

Lastly, the notion of discoverability was a topic that resonated with me. One session I attended was called “Search is Dead: The Secret Sauce Behind Discovery.” As an employee of a search marketing agency that firmly believes search is far from dead, I was thrilled to  hear that this was in reference to onsite search and its relation to discoverability. Talk about a sensationalized title but luckily the content was informative. The presenters were from Birchbox, a subscription based cosmetic e-Commerce site, Stitchfix, a subscription based online department store focused on style, Peek, an online travel agent, and Netflix, a subscription based movie and TV shows viewing experience.

According to them, Search is great when a consumer has a specific product in mind or is looking for the quick, easy, and most of the time cheap option. For instance if a consumer is looking for a specific HDMI cord for their new TV going to Amazon.com, searching for the product and ordering by using their Prime service is the optimal shopping experience. But what happens when they are looking for a prom dress, eye makeup for light skin, places to visit in South France, or a romantic comedy for a first date? Search becomes a table stake when consumers know what they want, and websites need to be equipped to serve them the result quickly and easily. But when a consumer is browsing or still unsure, that is where discovery plays a vital role. Fun fact: onsite search only accounts for 25% of Netflix views; the rest is recommendations from their algorithm.

Now the question is how to build this algorithm? The answer is: it has to be a combination of data from a self-identified questionnaire and onsite behavior. Self-identified questionnaires can often be skewed when a consumer answers them with aspirations in mind. Netflix says many of their usersclaim to like watching thought provoking films like Hotel Rwanda when their viewing history shows indicates an interest in movies more like Paul Blart: Mall Cop. Peek tries to avoid some of this by serving up images instead of just text based questions. Another options is asking questions like “what did you last buy,” “what do you aspire to buy,” and getting feedback on every purchase.  However, no matter what the onsite behavior data says, these brands have to serve content users self-identified with as well as encompass an element of human recommendations. For instance Stitchbox uses the algorithm to find styles and specific items for an actual stylist to choose from. Of course, you have to juggle acquiring all of this data while maintaining the trust of your consumers and tell the proper story with the data.

Discoverability was also a huge theme with many of the apps that I found while visiting the expo hall. WannaGo, for instance, is an app which allows you to share your favorite places with their friends while discovering new places based on recommendations of the larger network. Delvv provides personalized suggestions for mobile content based on the data on your smartphone and how you use each app.

Key takeaway: For brands with emotional products, using this type of data to build a discoverability engine can lead to a better shopping experience which in turn brings in more repeat customers and brand advocates.

Conclusion

Those were the large trends that I saw while at SXSW Interactive. There is so much more to my time there from app launches, brand activation, and many more great sessions. If you have any questions about any of the above trends or something else at SXSW, let me know in the comments section below.

Header Photo Credit: Felicitas Hackmann