What's Next, Now: November 2022
This month, our crystal ball predicts a new era of social media, the rebirth of cable, a spotlight on salary transparency, and more.
We couldn't write this month's report without acknowledging the obvious: Twitter is on a knife-edge right now. From fluctuating features and a slew of resignations and layoffs (followed by sorry-we-laid-you-off-please-come-backs) to the hostile takeover of the platform by parody accounts, it’s hard to go a single day without seeing a headline about Elon Musk’s next move. Some brands have been reacting to the chaos by pulling advertising. The exodus has forced Musk to cater to ad execs in the hopes of retaining the much-needed revenue stream (or come up with another quick-turn tactic to make up for it).
But while certain users are calling for the death of Twitter, some hopefuls continue to hang on, including many journalists who have built careers on the platform as a medium to reach their audiences in an instant. It’s safe to say all eyes will be on Twitter in the coming months, awaiting what’s next as the platform adjusts to life under its new chief.
While Twitter news might be the focus of our timelines, Meta and Instagram are also suffering under the weight of economic pressure and misaligned leadership. Meta continues to go all-in on experiential technologies like VR and the metaverse that have yet to produce viable results for the company, while Instagram is facing backlash for its harried attempts to emulate the success of every social media platform’s number one rival, TikTok. Like several of its Big Tech siblings, Meta also recently announced mass layoffs and disappointing earnings.
Among the tumult, winners have emerged: the current king of social, TikTok, and niche social media platforms, like Mastodon. TikTok seems to have the current magic formula when it comes to social media — trendy, appealing content and a strong algorithm that feeds the hyper-personalized content to users. Another key to TikTok’s success is a healthy relationship with its creators, which Twitter has never been able to master, and Meta continues to struggle with. And alternative and niche platforms have been on the rise since pre-Musk Twitter, but the purchase has prompted a boost of émigrés from Twitter and other legacy platforms looking for a new home.
It’s a moment of reckoning for social media. No, it’s not dying — just evolving. A new wave of challengers is emerging and legacy players are being forced to shift strategies to keep pace. Several startups are joining the throngs, and as we watch to see how things settle, the market is primed for someone new to break away from the pack.
The first player to take a shot was Mastodon, an open-source social network that markets itself as an alternative to Twitter. While Mastodon saw an influx of new user sign-ups of late, the platform has been struggling to keep up with its growing user base. Also, many users are finding the features clunky and confusing, leaving some to wonder if it’s the next Clubhouse. Who will be next to enter the ring?
As a result of the chaos, brands are currently facing added scrutiny for their social media decision-making, as the media is closely following which companies are making changes, especially as it relates to Twitter. Brands Musk make a decision — whether to ride out the current uncertainty or shift budgets and efforts elsewhere.
While we’ve heard non-stop about made-for-streaming media taking over TV consumption, recent moves from market leaders may have turned the tables. Netflix officially introduced an ad-supported tier, something it had avoided since launch. Disney+ also recently announced an ad-supported version of its platform. Could the return of TV ad breaks signal a movement to mimic the once-outdated cable model?
Ad revenue via streaming platforms is projected to rake in $21.2 billion dollars this year, and advertisers are trying to reach the most niche audiences possible. As this trend spreads to more streaming services, we may begin to see the landscape mirror the days of cable TV, since many users already pay for several platforms per month. While Disney currently offers a bundled plan that includes access to Disney+, ESPN+, and Hulu, YouTube is taking it a step further and creating what some are calling the cable bundle of the future. The platform will be rolling out Primetime Channels, a streaming feature touting movies from more than 30 services. And, as more ads break up once-uninterrupted TV shows, we may even see the return of the cable-style shows that were previously on their way out, such as sitcoms and network procedurals, according to New York Magazine’s John Hermann.
Has streaming become too complicated and expensive? Maybe. But the growth of streaming advertising brings an opportunity for brands to reach their target audiences on the platforms they frequent the most. According to Insider Intelligence, subscription platform digital-ad spend is expected to reach $10 billion this year. While that’s just a fraction of the roughly $70 billion that is spent on traditional TV ads, the streaming ad space will be very attractive to advertisers as new ad spots open up.
Advancements in AI have been accelerating over the last decade. But recently, we’ve been experiencing a conversation shift as those advances are integrated into our daily lives. Consumers are accepting — and expecting — AI in their entertainment and everyday interactions.
This is especially evident in the recent spotlight on digital humans, or AI-generated replicas of real and fictional people designed to look, talk, and behave like an actual person. As the technology improves, these imitations can sometimes look 100% real. To make matters even murkier, these digitally-replicated clones, known as deepfakes, are often created without the consent of the human they are based on and have been associated with hoaxes, fake news, revenge porn, and fraud. But as the technology goes mainstream, consumers are starting to be more comfortable interacting with AI-generated people, and digital humans are beginning to move beyond their shady origins into entertainment and across industries.
James Earl Jones, the iconic voice behind Darth Vader, became one of the first celebrities to sign away the rights to his voice to an AI company, allowing the Star Wars villain’s distinct tenor to live on, even as he retires from the role. Other stars are also looking to AI as a way to preserve their legacies. Golf legend Jack Nicklaus is working with a simulation company to completely digitize himself and extend his golf empire. And it’s not just real people getting the digital twin treatment — these technologies can also be used to create digital humans from the ground up. In South Korea, virtual influencers land brand deals and sponsorships just like their human counterparts. AI-generated humans are also popping up in the world of business where the technology has been used for employee training and education, contact centers, and customer service.
It’s clear consumers are losing some of their trepidation around AI as they come to understand the practicalities of integrating artificial intelligence into our everyday lives. Instead of being afraid of the robot overlords taking over, people are starting to address the real concerns of advanced AI. One of the biggest considerations is the question of AI ethics. Discussions are already happening around the need to avoid bias built into AI, issues of privacy and rights to publicity, and determining when it’s necessary for real human intervention.
With the power and possibility that AI holds, the risk factor is going up for brands. Deepfakes and digital twins are more than just parody accounts on Twitter — they can replicate executives and officials with disturbing accuracy. And it’s not just recordings brands need to worry about — deepfake technology can now be used to create live interactions. Communications teams need to be prepared for what reputational risk in the future could look like.
God and the fight against climate change got big boosts this quarter as the billionaire founders of Hobby Lobby and Patagonia upped the stakes for corporate activism by giving away their entire fortunes to the causes they believe in. Then recently, Amazon founder and 4th-richest man in the world Jeff Bezos told CNN he plans to give the majority of his billions to charity during his lifetime.
The moves punctuate the increasing importance of brands promoting purpose as much as product, with a recent study from Deloitte finding 34% of customers have stopped purchasing a product due to ethical or environmental concerns. However, “Just stating a purpose is absolutely not enough,” said one consulting firm CEO at a recent Fortune panel. In other words, actions speak louder than words — and consumers are on the lookout for brands whose deeds don’t align with their value messages. As a result, businesses are facing the consequences when their actions fail to map to their stated purposes, seeing staff or customer losses, a decrease in trust, and/or an uptick in legal action.
Of course, not every founder is giving away the farm — some retailers are putting their priorities on display (literally) using store space to tell a cause-focused story they believe in, rather than the tale of the products they sell. Other brands have demonstrated their values by drawing a line in the sand with regard to injustice (e.g. brands refusing to do business with or in Russia) or misaligned ethics (e.g.. Balenciaga’s decision to leave Twitter).
Consumers are sending a message to brands: If you don’t move with purpose, you risk disillusion among your audiences. Those that invest the time and resources to develop a data-driven case for organizational purpose will see enhanced value in return. In an increasingly skeptical marketplace, authenticity around purpose is key.
As of November 1, a new pay transparency law in New York City now requires employers to disclose a salary range under all job listings. According to the NYC Commission for Human Rights, the law applies to any advertisement for a job, promotion, or transfer opportunity that would be performed in the city. The law aims to promote transparency in the workforce and make it easier for applicants to negotiate their pay. Violators could face a fine of up to $250,000.
However, the law is off to a bumpy beginning. The legislation requires businesses to post a good faith salary range for each job posting, but some companies have found a loophole — many recent job listings have offered extremely wide ranges. A trauma surgeon in the Mount Sinai Health System, for example, could allegedly earn anywhere from $384,000 to $800,000 or more, according to the hospital’s job ad. Similar instances have been found under numerous other listings, and call into question whether the companies are truly acting in good faith.
A similar law is set to go into effect in California starting January 1. California and New York often lead the charge with progressive legislation — like the Golden State's recent ban of gas-powered cars — and it’s likely not long before other cities and states follow suit. However, with the law in New York off to a rocky start, other states will be keeping a close eye on how the changes play out before moving forward with their own policies.
The balance of power between employers and employees is in flux. Workers continue to push for better working conditions, spurred by the pandemic’s sweeping effects on workplace culture. Meanwhile, companies are attempting to navigate a looming recession, turning to mass layoffs as a cost-cutting measure. Laid-off workers will again be operating in a tight labor market as they fight to return to the workforce. In moments like these, brands that come out on top will be the ones who remain authentic to their purpose and values.
In the midterm elections, Gen Z led a pushback against the predicted red wave and backed Democratic candidates in record numbers. The growing emphasis on social-focused politics, key to the new generation of voters, will be of increasing importance as priorities are set for the new session and politicians and pundits gear up for the 2024 presidential election.
The pandemic ushered in a complete overhaul of workplace culture and expectations, and women are taking advantage — whether that means finally letting their hair go grey or leaving leadership positions for bigger and better things.
The stage is set for a massive boom in the climate economy: President Biden’s Inflation Reduction Act is jumpstarting investment with a cash boost, venture capitalists are pouring billions of dollars into climate tech, and several green markets are growing rapidly, including clean energy, electric vehicles and batteries, and even alternative meats.
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