CES 2014: A Year of Progress, Not Revolution

by Kris Magel, Chief Investment Officer, Initiative

CES 2014 was a year of progress and enhancement in some key areas, rather than groundbreaking new developments, which is really a good thing. TVs are getting smarter, higher quality video formats are becoming more accessible, mobile is getting more personalized and helping people organize their lives in new ways – it’s also migrating into wearable watches, bracelets and even…cars.

Here are some of the biggest CES trends that are moving our industry forward:

Increasing sophistication and personalization of mobile – now the remote control for your life. There are now hundreds of usable features on your mobile device that carry your information and make your life easier. Eventually your phone will recognize and react to your personal needs (and even recognize YOU) based on how you hold the phone, the actions you take and your location at the time. Functionality is migrating to more convenient wearable devices like watches and wristbands, offloading functionality that doesn’t require you to pull your phone out of your pocket to email, take pictures, search the Internet, receive notifications and take phone calls.

Continued growth and accessibility of 4K TVs (although still too expensive for most). 4K content is already available (e.g. most personal cameras, most theatrical movies, Netflix shooting House of Cards in 4K); it will likely become the next HD standard in the next five years.

Smart TV ecosystems are far more accessible and easy to navigate for viewers, and some “over the top” brands are beginning to partner up with OEMs as operating systems (i.e. a Roku partnership with Heier). Over the top video viewing on TV sets is here to stay and will continue to grow (via TVs and connected devices like Roku, Apple TV, X-Box, etc.- even Amazon is rumored to be getting into the business).  As streaming takes over, it’s very likely that Blue-Ray/DVD machines will begin to phase out over the next 4-5 years. One thecooler things I saw was the Samsung TV overlay display, which lets viewers stream live tweets on the screen at the same time they’re watching a show, enhancing the experience, particularly for sports or reality TV.

The automotive environment is activated and enhanced by mobile connectivity (e.g. Google android operating system integrating into GM, Honda, and Hyundai models). Cars are the new mobile device. You might soon add your car to your AT&T data plan.

Connected devices in the home continue to progress. Connected home devices are becoming easier to use and improving connectivity between devices and functionality, but the truth is they will only really work best when managed through a central platform that’s programmed and controlled by the homeowner – not multiple separate appliances that offer their own siloed controls, which is where things seem to still be today.

Fun gadget findings.

• Eye tracking technology for easier web browsing: This futuristic technology is on the brink of breaking into the mainstream. You can point with your eyes and open up links to webpages on your browser. No need to move your mouse around anymore. It has the potential to speed up all sorts of things in computer use in the office or at home.
• Advances in drones for convenience, transportation and changing the way certain jobs get done (i.e. drones assessing/fixing downed electrical boxes rather than a human).
• Advances in fitness-driven wearables with tremendous data-tracking and analysis capability.
• GeoPalz ibitz: This digital pedometer tracks children’s activity and rewards them for achieving their fitness goals. They can exchange points for prizes on Club Penguin or Wilson Sporting Goods, or parents can set their own prizes.

In addition to the tech show, CES continues to act as an incredible networking opportunity for the marketing industry, as all of the top leaders from marketers, agencies and media companies converge in one place. We at IPG Mediabrands participated in several partner meetings at CES – each meeting focused on sharing ideas around the big trends that are impacting the media and marketing businesses, today and in the future. Below are some from IPG’s partner sessions/panel events:

• Yahoo and Mobile/Millennials sessions: Your mobile phone is the new remote control to your life. Yahoo has embraced “mobile first” as a rallying cry for developing new products. To market to Millennials, marketers must decide what and who they want their brand to be; don’t just talk about it, let your actions speak for themselves, and if you’ve done it correctly, Millennials will embrace you and become your greatest advocates.

• AOL: Big bets on open architecture content distribution partnerships (with most media companies), custom content capabilities, and morphing into a technology platform supplier – building a new-world programmatic platform to cross Digital and TV (AOL One).  And programmatic is moving into the premium space.

• Meta: Advertising is moving away from “interruptive and adverting attention” to “interactive and engaging, storytelling and providing value to customers.” Meta has now seen declines in usage among Millennials, who are advertising-adverse. Meta enables marketers to “know everything about you,” and with that comes tremendous responsibility to market to users in relevant and value-driving ways. A non-relevant message is a crime when you know everything about your consumer.

• Clear Channel/iHeart Radio: The tremendous value of radio hasn’t been fully recognized by advertisers for the last decade. It’s a mobile medium, a personal medium. Radio is your companion, as opposed to TV as your looking glass. Clear Channel sees radio a content business, not as an over the air medium. It’s multi-platform, and they don’t mind whether the content is distributed over the air, or via mobile and digital (i.e., iHeart Radio). There’s a shift toward greater accountability, as Clear Channel is willing to build ROI measurement into their agreements with advertisers, nationalizing their local radio sales, and looking to build their relationships with the thinkers, marketers and strategists in the business (at clients and agencies).

• Microsoft: X-Box One continues the shift from gaming system to full living room entertainment system and connected TV device. It’s now competing with Amazon, Hulu and Netflix in the production of original video content.

• Amazon: The site is offering tremendous data, targeting capability, and business-driving value to advertisers who sell their products on the platform. But, they also create advertising strategies for non-endemic marketers as well (e.g. autos). They test, prove and scale, then repeat, everything, so it can be a very measured and slow approach to building their advertiser base. Everything Amazon does is about enhancing the customer experience so they can buy more stuff.  They would never do something that works for the marketer more than it works for the customer.  Their content strategy is simply a way to drive more value for Prime customers, who shop exponentially more on Amazon than non-Prime customers, to drive more Prime memberships and grow convenience and sales.

All in all, I walked away feeling energized by the innovation going on in our business right now, from storytelling and content development, convergence of content, technology and data, mobile and Millennials, to programmatic. We’re sitting on the cusp of major future innovations – an exciting time to be in advertising.