Reflections of on the Future from the Past

Reflections of on the Future from the Past

At the KAST Enterprise 99 Todd Maffin (www.FutureFile.com)spoke on future trends on the Internet. He suggested that new technology will be based on mobility: 1) use of palm pilots as browser and personal information management 2) wireless Internet service devices 3) specialized content providers (at a cost), 4) integration of cell phones with GPS (geographic position system) devices, 5) specific commercial content delivery as you walk through various locations (for example a shopping mall and as you pass a sports store it will beep you on your pager about a specific item based on your prerecorded buying habits). In 2005 all are common place except #5. Shoppers are able to find more information about the brands they wish to buy and have strengthened their buying power in markets with highly transparent prices. For example:

1) Apple's Ipod earned a tremendous market advantage over its competition because it made the new technology readily available while capitalizing on the overwhelming popularity of downloaded MP3 files. Prior to the introduction of the IPop Sony's Disk man had the largest market lead in portable, personal music devices.
2) "Dell soared to the top of the personal-computer business by cutting out retailers and selling directly to consumers. If Dell changes prices on its web site, its customers' buying patterns change literally within a minute. "That tells you people are well-researched and knowledgeable," adds Mr. George." Economist Mar 31/05
3) Over 80% of Ford's customers in America have researched their prospective purchase before arriving in the auto show room. The purchaser already knows what accessories he/she wants, the overall performance of the vehicle, the price spread between the dealer's cost and the retail cost and the price they are prepared to pay.

"So what will that future hold? "For the first time the consumer is boss, which is fascinatingly frightening, scary and terrifying, because everything we used to do, everything we used to know, will no longer work," says Kevin Roberts, chief executive of Saatchi & Saatchi, part of Publicis. What you have today is an informed consumer who is taking control of the way he learns and hears about products." Economist 31/05 This means, particularly for local business a radical new approach to marketing and a change of attitude towards the consumer.

Current advertising market research shows that customers do not trust advertisements, they are actively looking for ways to avoid ads be it through "muting" the TV, using ad pop up blockers on their browsers, implementing sypware detection programs or incorporating digital video recorders (DVRs) that allow them to skip the ads when they record TV programs.

"Forrester found that 60% of the programs watched by DVR users are recorded, and 92% of the ads on such programs are skipped. The firm reckons that by the end of 2008, 36m households in the United States will be using DVRs." Economist mar 31/05. The greatest growth area in advertising is on the Internet, direct mail, public relations, promotions, sponsorship and product placement. Internet advertising dollars are spent mostly on word matching (pay per click )in various search engines which will link to the company's web site. (It is becoming a general assumption that all businesses have a web site).

"Local search could be the next big money spinner on the internet—for whoever comes up with a winning formula. Microsoft's MSN site, for instance, will provide details about a local shop, and a map to get you there. A9, a new search engine from Amazon, has a feature called "Block View" with pictures of streets and their shop fronts, so if you have forgotten the name of the restaurant you are looking for, you may be able to recognise it in the picture. The next step will be a feature that allows users to "click to call". Initially this service is likely to be free, but in time it could be developed into another big source of online revenue." Economist mar 31/05

Some changes in consumer behaviour that were already under way have been speeded up by the growing use of the Internet. For example, consumers are spending more time with media of all kinds: currently about ten hours per person per day in America. According to Veronis Suhler Stevenson (VSS), a New York-based media merchant bank, this is likely to grow to 11 hours by 2008. For advertisers this "multimedia" tasking presents new challenges to enable them to reach the potential customer. Advertisers can take advantage of this by putting on TV ads especially designed to encourage consumers to go straight to a web site, as Sony has done.