The first 6 Macro Trends of the 21st Century

By Jonathan MacDonald
Co-Founder of this fluid world and Managing Director of JMA

October 2009

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

About this paper I am currently asked to speak about the major changes happening in business and for the sake of clarity I have labeled these as Macro Trends of the 21 st Century. This paper is an introduction of the first 6 and is also available in chapters at: http://www.jonathanmacdonald.com/?p=3986 These trends are not exclusive to this Century alone and many, if not all, have appeared before the year 2000. However, I believe these are critical to the moment and are the origin of many challenges that businesses face in the modern world of communication.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Macro Trend 1: Corporate technology in the hands of Citizens The commoditisation of technology has enabled many of us to access, use and develop upon tools and resources that once were reserved only for large organisations - or those with deep pockets. Throughout history we have seen this happen with almost everything constructed, from motor cars to television sets. Communication technology as a commodity has propagated an ultra-connected society who are now, more than ever, empowered to interact and be heard. One of the main outcomes is that normal, everyday folk, can communicate and build valuable products and services, often with little or no cost, that can compete directly with companies who invest millions in developing offerings and spreading the word. The agility of common people, trumps the oil tanker speed of many blue-chips who were once safe in the knowledge their ability was sacred. The last bastion of defense used to be that common people wouldn't be able to market and distribute things, even if they could develop them. Now we live in a world where spreading word is possible via blogs, social networking sites and RSS feeds -all at zero cost. If new services are virtual, production prices seen in the old physical world, cease to exist. But then, with this re-definition we have new challenges. Nobody will interact with things they don't value, and nobody will advocate things they don't trust. Creating trust and value is far different than raising money to spend on marketing. The skill sets required are rarely seen in standard business. However, in the lives of humans, these techniques are common-place. From understanding we begin to highlight areas of resonance. These build connections that can develop into value exchanges of integrity. This, in turn, nurtures trust. Trust breeds loyalty and loyalty is unbeatable. Such methodology is the new framework for creation, either

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

fully or partly developed by every single one of us. Thus, I attest that corporate technology in the hands of citizens means more than cheaper printing equipment. It signals a redefinition of products, services, marketing and advertising communication.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Macro Trend 2: Physical is increasingly Virtual Now we have the tools to express, purchase and discover things without physical entities being necessary, we increasingly do so. It's not unusual for condolence, congratulation or celebration to happen via virtual transmission (SMS, IM, tweet, etc), yet having the same sentiment as writing a card or a letter and posting it through a letterbox. It's not unusual for players of games to spend money on virtual goods. Mobwars on Facebook makes millions of dollars in selling products but no physical stock changes hands. When Second Life started, I paid real money (converted to Linden Dollars, the Second Life currency) to buy masses of virtual land. I then divided it up and sold it for more Linden Dollars, then quickly withdrew in real money. I made a significant profit, very fast, but nothing physical was bought or sold and I never left my seat. Conference organisers are looking more into tele-presence solutions to hold virtual events. Hewlett Packard held their own exhibition and 200,000 attended but nobody physically went anywhere. No plane tickets were bought and the technology used can today be rented in London for £300/hr. The manufacture of physical products that people are increasingly happy to buy virtual replacements of, suffer an extreme risk of being marginalised. Hopes that people "will always buy papers, books and cards" are fundamentally flawed as are hopes that sending a "good old fashioned letter will always be the best way of showing you care" or that "buying a CD is always going to win over an MP3". A while ago a 16yr old said to me that his mate was "so old fashioned he still downloads music". Think about it. In actuality, the dominance of virtual has a life-changing effect on the postal system, logistic companies, the gift market, the publishing industry and the entertainment industry to name a few. But this is just the start.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Technological advances in augmented and virtual reality will fundamentally redefine what our future generations perceive as 'real'. Just as personal recommendation has out-gunned the power of advertiser communication, the market of virtual, instant, free, customisable and extensible platforms, products and services will diminish the physical world and it's already tumbling profits. Thus, I attest that increasingly virtual experience is more than the promise of holographic pornography. It signals a redefinition of all trade. Globally. Now.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Macro Trend 3: It’s about Distribution not Destination Once upon a time the idea was to build something and people would come. Better still, building something that people were forced to come to, ensured the idea was realised. The original AOL model essentially charged people for using the internet, then mobile portals offered limited services and stung you for anything you chose to do outside of the walled garden. Running these ideas past the younger generation rewards you with incredulity. How could companies even dream of forcing people to do things? However - creating a singular destination and then 'driving traffic' - or worse - 'gaining eyeballs', was a priority. The most advanced practitioners would then append the desire for a 'click' from such traffic. The volume of traffic and numbers of clicks was pretty much the essence of online media. Once upon a time. Then, citizens who embrace freedom like a fish to water, found ways of escaping forced environments and accessing things they valued through a variety of means. The effect of which meant that a singular destination was only as successful as the traffic and clicks in one place, whilst the people of the world travelled to many places on various machines and screens. Once the main thing was destination and now the main thing is distribution. Creating ways of accessing value via alternative means, enables people to get what they want, when they want. Singular destinations don't need to die destinations or pathways need to be created. but multiple

One of our clients wanted to increase their e-commerce sales and upon inspection, I found they depended solely on traffic to their website to do this. We created a number of online stores on various platforms and unsurprisingly the sales accelerated.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Another past client, with explicit knowledge and (I thought) understanding of this case study, decided that it was too costly and unpredictable to diversify their retail buying points and chose to stick with their singular destination. One year later, they had lost significant market share and budgets were duly cut in the name of efficiency. Good people were fired and now today, due to the state they are in, it would take a major overhaul for them to get back to where they were, let alone get to where they could have been for the sake of a few thousand dollars of investment a little while ago. Paradigm shifts away from the norm are often seen as dangerous but simple logic will tell you that in a market of (for example) 14 million buyers, having 1 million coming to a single destination will lose the potential of the 13 million others. However - being where the full 14 million people are, will at least increase the chances of purchase. But this trend is more than retail specific. Tools, utilities and applications are currently in an upturn. Both companies and citizens are creating things that people can use but echoing the mentality of destination methodology. It is great to be in a single 'store' but the real fun begins to be in all stores. Creating an application for the Apple store and "seeing how it goes" will only prove how well a single destination works not the full potential of your product or service. It may be that the Android Marketplace is more suitable but you may never find out. The great work of companies creating better priced bundles, better designed services or better worded communication, are often falling over at the final hurdle with naive assumption that attracting attention to a single destination will circumvent a macro trend of distributed interactivity. Thus I attest that distribution over destination is more than a call to give people an RSS feed. It signals a redefinition of product, proposition, placement and pricing. The acceptance

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

of this trend is directly proportional to revenue potential. Right now.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Macro Trend 4: Mass Niche not Mass Groups A target group used to be an age range with gender specification. Males aged 18 - 24 in metropolitan areas may tend to be into football more than females aged 50 - 60. This may well be true, but now we live in a world of personal media devices, the challenge is to make all experiences directly resonant for citizens who organise themselves in masses of niche communities rather than big demographic groups. Niche communities can be around anything where there is common ground. This includes relationship-based (i.e family), or hobby-based (i.e car club) groupings. Individuals can be in numerous communities of interest - but the 'age, gender and location profile' may differ substantially. Added to this - the experiences we demand in a fan club of a musician could well be different from the experiences expected using a health service. Any level of assumption when dealing in personality based communication will lead to negative experience which is damaging to all involved. Yet still, we see elaborate justification of practices in advertising that are deemed "OK, because people don't mind it too much". The trend toward individualisation and personalisation means that citizens are claiming accountability of their own experiences. This trend provides significant headaches for the advertising, marketing and telecommunications industry, as the risk of harming experience is astronomically higher when conversing in personal media than it was in broadcast media beforehand. The media that society is connected with - or social media as it is called - is a new science involving the inter-relationships of real people who are not a number or a demographic subset. Companies are emerging who are good at identifying who the influencers are and how the relate to others.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

To say that social media intelligence is important would be underplaying the role that data will increasingly play in the understanding of social interaction. Understanding the niches is surely the first step to being able to add more value for the individuals involved. The promise phraseology. of understanding is more than just neat

Imagine if you could have a crystal clear view of real-time feedback, free-of-charge access to real-time research, plus the ability to monitor and affect real-time influence on product purchase. Imagine if you could reduce your cost of sales, reduce wasted media spend and build armies of fanatics that adore your products. These armies will market the products themselves - whilst you know, at all times, how people are feeling. Ultimately, this means you can provide things that people value even more which drives ongoing loyalty. Thus, I attest that the visualisation of a world based in mass niche is more realistic and valuable than viewing people in assumed and inferred groups for the sake of convention or convenience. This trend signals a redefinition of the abused terms such as 'targeting' and 'relevance', in addition to demanding a complete re-think as to what the understanding of individuals really means.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Macro Trend 5: Broadcast Control is now Self Scheduled In 1998, two guys called Jim and Mike started trials of a new technology in the San Francisco Bay Area. In January 1999, they exhibited at the CES show and announced the first device would ship on March 31st that year (despite having many months left of work remaining to complete the device). Because the date was a 'blue moon', the staff code named version 1 as Blue Moon. On March 31st 1999, the TiVo Blue Moon signified the end of broadcast control and a fatal blow for the TV advertising industry. Not that anybody realised. Eagerly, Thomson and BSkyB partnered with TiVo and Phillips and Sony both started their own versions. Very few people raised any concerns at the time about possible negative impact on media industries because the devices were in the hands of few - mostly those who had buckets of cash. No risk perceived - disruption quietly grew. The media industry was still highly dependent on sponsorship via advertisements and gradually became aware of losing revenue if viewers adopt TiVo-like systems in large numbers. Knowing this, some countries took protectionist measures, especially when media was already struggling due to poor viewing figures. For example, the government of Singapore banned TiVo, citing the potential adverse impact on the local media industry if usage were to increase. Which it did. The Singapore government faced extreme difficulty in regulating the use of TiVo, as individuals were bringing in sets from overseas, over-joyed at the ability to finally control their own experiences. All was not lost though as TiVo started to create a number of advertising solutions intended to reach the viewer that fast forwards through ads. The company FX was the one of the first to use 'PVR resistant' adverts that appeared during the series 'Brotherhood' in 2006. The Deputy MD of Fox International Channels, Jason Thorp, said at the time: "There are a whole host of issues that broadcasters and

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

advertisers are currently facing, and about to face, that are going to irrevocably change the business. A creative response will be the only solution to all of them." The 'creative response' in their case was to find ways of forcing people into doing something they didn't want to do. Fast forward a few years and the stories of such 'creativity' have quietly been shown the back door. Forcible relationships are never productive. The seesaw of control is never healthy if heavily stacked against one side. According to research, 13% - 40% of all viewing on Sky Plus in the UK is time-shifted. 3 in 10 people watching drama currently self-schedule. These figures rise continually primarily as people increasingly trust that the technology isn't going to fail and 'lose' their beloved show. Companies who have the real data on PVR usage rarely let on what is really happening. Conservatively my opinion would be to double the research stats at least. Yesterday morning, the Japanese Grand Prix qualifying was broadcast on BBC at 6AM and the presenter started the show by congratulating people for having heard their early morning alarm clocks. Why would we necessarily have to watch something at the scheduled time anymore? I doubt many did. But this isn't just about television. This is about experience in general. Control of experience has moved to being jointly owned by the content holder and everyone else. Content that is created by citizens can be consumed by others whenever and wherever we, the public, want. This now also holds true for corporation created content too. Once we were limited as to what device we had to use but now we are increasingly able to do what we want, on any machine and a screen. This trend means that we are more accountable for our experiences than ever before. We can control how we enjoy, to a greater extent. The ability for every single one of us to become journalists has redefined who influences society. Sure, many millions of blogs have few readers (and are mostly all about the author rather than anything else), but a collection of citizen blogs eclipse the entire 'professional' news industry and the influence it once enjoyed. The Twitter feed from 'BreakingNews' currently gets you news within seconds of events happening.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Free. Constantly. On any machine and screen. The paradigm shift has spread across all industry. In the world of commercial communications, for example, the mindset had been similar to the broadcasters of old. Lets send out our message and try our best to make people listen. But now it’s about people also having a say in what they want to listen to and when, and where. The paradox is that people often don't know what they want. But this is not an excuse to bypass the need to understand. Thus I attest that self-schedules replacing broadcast control is more than the ability to skip annoying adverts. It signals a redefinition of user experience. This goes down to root level, placing joint accountability at the centre of value creation. Different rules for a different game - this time with more than one side.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Macro Trend 6: C2C is more powerful than B2C Communication At the time of writing, the buzz-phrase 'word of mouth' is being lauded as an incredible new invention. The term 'conversation' is a very '2.0' thing, apparently. It's almost like personal interaction is a new thing, whereas it pre-dates everything else. Peer influence/word of mouth, will have emerged when there was more than one person on earth. Ironically though, it's only in recent times that the communication industry is becoming aware of how citizens interact because the infrastructure is now in place for fast and wide conversations to happen outside peoples’ family, workplace or village. Plus, media and devices are becoming more personal. This dawn of realisation has sprouted new experts. Those who grasp (what is essentially) elementary psychology, can better understand the 'social' trend, yet many people in the communications world are surrounded by an all-consuming legacy of 'the way things are done', which goes against common sense in many cases. Citizen to Citizen (my version of C2C) is only more powerful than Business to Consumer communication when citizens are in an environment of understanding and better still, trust. When there is understanding and trust, any number of citizens communicating is untouchable in terms of influence impact. But surely that is no surprise? The mindset of treating everyone like a lowly 'consumer' or worse, an 'end user', is the most patronising, insulting and offensive way of approaching any dealings with real people. Understanding will never come from this mindset. Trust will never come from this mindset. To accelerate communication power, businesses must learn from the way that citizens interact most effectively. When we build relationships, we learn about each other. This is a two-way process. Nothing to do with spying on behaviour or implying some kind of pseudo-intellect from scrappy data that resides in numerous silos.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

Many of the practices I see heralded at conferences, are analogistic to hiding in the bushes outside someone's house, breathing heavily and scribbling down notes on a pad for later use. When we best learn about each other, we find common ground. We look for areas in which we can be valuable to each other. Nothing to do with one person treating the other like a slave or acting like a stalker. Thus I attest that Citizen to Citizen communication is more powerful than Business to Consumer communication only because businesses mostly treat people in a sub-optimal way. If organisations can learn from real people then maybe they can grow up to act like real people - ergo, enjoy the symbiotic power of communicating in a fruitful, productive and valuable relationship.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald

About Jonathan MacDonald Jonathan is the co-founder of this fluid world (www.thisfluidworld.com), which is a consulting service that assists companies in their search for business and communications excellence, fitting to the 21 st Century. He is also the MD of JMA (www.jma.co.uk), which is an agency delivering specialist execution in communication strategies. Jonathan has spent the last 18 years assisting over 100 companies including Ogilvy, Unilever, Kodak, BP, American Express, British Airways and Motorola. His experience, contribution to the industry, entrepreneurial spirit and passion means that Jonathan is widely considered as one of the primary strategists and thought leaders in the digital space. He is well known for his popular blog (www.jonathanmacdonald.com) and speaks at many conferences around the world. Previously, Jonathan has been the Sales Director of Blyk, Commercial Director of Ministry of Sound, CEO of a Sky TV channel and a Chairman of the Music Industries Association. Jonathan is also the founder of a communications movement called EverySingleOneOfUs (www.everysingleoneofus.com), which seeks to unite a wide cross-section of mobile operators, advertising agencies, big-name brands and members of the public; to educate the industry and encourage discussions about emerging business models, and to facilitate a step change in communications.

The first 6 Macro Trends of the 21st Century – Jonathan MacDonald