Digital trends 2021: who owns the space?
Next year’s digital trends can all be understood in terms of a battle for space: specifically, the spaces where businesses and their customers interact online.
Some of this change has been accelerated by Covid-19, but it’s important not to dwell on the pandemic.
Long before February 2020, the most forward-thinking brands had been building digital spaces so valuable to their users, that in some cases, they had eclipsed the enterprise value of what previously was the ‘core’ business.
It’s a trend that has generated a lot of exciting news. The turf wars between Facebook, Apple and app developers, the meteoric rise of TikTok and Disney+, the swift mastery of branded communities by the likes of Supreme, are only a few examples.
You can break down the battle for space into five key trends:
- A boom in branded communities: value increasingly being found in online and social audiences, as businesses become more skilled at managing and monetizing them.
- Consumers collaborating with brands: marketing becoming increasingly two-way, as consumers demand engagement from brands, and brands learn how to leverage that shift.
- Truly great B2B experiences: technology enabling genuine improvements to the ways that offline space is used, managed and monetized by businesses.
- Tech for good: brands building new digital experiences to serve popular causes, and pivoting those environments as profitable enterprises.
- Big tech vs. the world: wrangling at corporate level, and at consumer level, over the right of ownership of online environments, and over responsibility for how they are governed.
You could have made a case for this story last year, but 2021 is going to be different. That’s partly thanks to global lockdowns, which have forced brands to innovate online, but also thanks to a long-term cultural shift, as consumers and business alike warm to the mutual benefits of interacting in digital environments.
These environments have become so sophisticated, and so dependably profitable, that owning digital space has become the all-conquering goal.
1. A boom in branded communities
The essence of a branded community is a proprietary audience which can be owned, managed, and marketed to, without the pitfalls of traditional advertising: intermediary costs, data leakage and opacity, attention fatigue, and so on.
Brands used to licence third-party space for this kind of marketing; I argued in my digital trends piece for 2020 that the businesses that can help brands leverage these communities were in for a bumper year. Certainly for Brave Bison, a social publisher X digital content studio that I invested in via Tangent and recently became Chief Executive of, business has never been so fast paced.
Recently, however, brands have realised they can go it alone.
The groundwork was laid from around 2018 by the likes of Footasylum, whose knack for branded entertainment has now earned them 750,000 YouTube subscribers (October 2020) without a penny of traditional ad spend.
More recent iterations of this tactic have progressed from simple content creation, to community management. The North Face (TNF), for instance, has spent recent months building a community of influencers who travel the world as TNF-branded adventurers.
Intriguingly, the positioning of this initiative is as much around the digital community as it is around TNF’s product line.
Hardy outdoorsmen in the community include a chap called ‘MP3’ - a DJing model with 8k Instagram followers . The promotional landing page, too, draws direct attention to the digital channels which underpin its success.
2. Consumers collaborating with brands
When Supreme, a skatewear brand, sold a branded brick in 2016, customers weren’t really investing in the product, but the marketing experience.
It was such a profitable discovery that it presaged the dawn of ‘drop culture’ – essentially, charging high prices for short-run products – and by the end of 2020, Supreme had become a prize acquisition for VF Corp. Glossy, a fashion business journal, noted that…
“VF will also gain access to a growing younger market, who are willing to spend upwards of $100 for a T-shirt and will purchase products so feverishly that new collections sell out in minutes.”
But if the experience is so valuable, do you really need to sell a product at all?
Recent evidence indicates a desire amongst consumers’ desire to actively participate in brand marketing for little or no tangible return; the brand engagement itself is the reward.
The #RateMyKFC campaign illustrates this neatly.
With stores forced to close by Covid-19, KFC invited fans to attempt frying their own chicken at home. The restaurant’s judging panel wasn’t particularly nice about some of the entries, but it didn’t matter. Twitter users got the brand engagement they were looking for, and everybody won.
This is only one small element of TNF’s marketing strategy – but the overall mix appears to be working. It saw positive growth in 2020: only 3% against 9% last year, but better than many of its competitors fared during Covid-19.
Publishers, however, are not getting left behind; TikTok would appear to be one of the greatest beneficiaries of this trend.
This year, the most popular personality on TikTok hit 100m followers in only 9 months. It took 14 years for any YouTuber to hit the same mark. Media companies have become so excited by the scale of this community, they’ve started brokering commercial deals with TikTok before it even has a B2B commercial model.
Geoff Schiller, Chief Revenue Officer for Group Nine (which includes PopSugar and Thrillist) said in November that “TikTok is not considered to be a material driver of revenue”, but that he expects that to change in 2021.
That expectation of change, alone, is drawing a lot of investment budget. This autumn, Blackstone Capital – a venture capitalist with $35bn assets under management – invested in gal-dem – a magazine for black and ethnic minority women, with 3,000 digital subscribers.
With VC behemoths making bets on tiny media companies, the smart money seems to be on branded communities growing rapidly through 2021.
You could also consider Vans’ long-running ‘Not Just One Creator’ campaign, in which fans respond to creative challenges in exchange for brand exposure.
At the start of the pandemic, Vans asked customers to get creative with shoeboxes. They were rewarded with reams of free Instagram content – not to mention free, user-generated display materials for their Oxford Street store.
Its possible that the ascendency of self-publishing platforms has lubricated this cultural shift. Patreon topped a $1bn valuation in September . OnlyFans’ employee headcount on LinkedIn was 78 in April; now, at time of writing, it’s 360. Instagram grids are ‘painstakingly curated by users to present their best lives’.
With customers now so often accustomed to be content creators in their own right, they have – wittingly or otherwise – become potent forces which brands can leverage for their own gain.
In June, The Economist reported on the trend in musicians using social media to collaborate with fans by working their suggestions into songs. This has enabled content creators to go direct-to-consumer off their own bats, often leaving their co-created material online as free content. The hashtag #writethelyrics, used by musicians using the same tactic, had been viewed 3.8bn times as of June 2020.
This development demands a rethink over what constitutes branded space.
Far from needing a retail location, you no longer even need a promotional message, or the possibility of a product purchase, to earn marketing impressions and high degrees of customer engagement.
For many consumers, the opportunity to share their digital space with brands may be enough.
3. Truly great B2B experiences
B2B has traditionally been the slower-moving area of marketing. As a result, end-users had become accustomed to some truly awful experiences.
Thankfully, that’s been turned on its head this year, with the arrival of startups such as Hopin, a virtual events company founded in 2019, and now sporting a princely $2bn valuation.
What makes Hopin so valuable is not simply that it’s better than any other virtual events platform (of which there are now many). It’s that it’s better than a lot of existing events solutions.
Consider your experience of a typical events company.
The relentless pestering of over-eager junior sales staff. The promises of ‘content marketing’ packages which proved to be half-baked, ineffective or even non-existent. The wandering around crowed rooms on sore feet in search of leads, only to realise every other punter was also trying to sell to you.
The value of the offline space simply isn’t enough.
Or, consider Eventbrite. To set up a webinar earlier this year, I had to use three tools: EventBrite to promote the event; my CRM to capture and use the data; Zoom to host the webinar.
Hopin does the lot.
This success is inevitable to inspire a wave of copycats and competitors through 2021. When Covid-19 first broke, a Forrester consultant said that…
‘…the rise in virtual events could be a “shot in the arm” for B2B marketers to better integrate the events side of companies with the marketing and sales functions. That could include more of a focus on high-quality content and new measurement features that don’t exist with in-person events.’
By April, the founder of SaaSock, an events tech firm, said that “It’s been a bit of a wakeup call… Now we’re thinking about how we bring value 365 days of the year.”
About time too.
Of course, in-person events won’t die; rather, digital experiences will correct and enhance features off the offline world.
This blended state is also considered by many to be the future of work - good news for companies which had already begun innovating in that area.
Last year, I spoke about serviced office provider IWG – a Tangent client – whose diversification into services (28% of their portfolio at the time) had produced a far more resilient business than that of WeWork, then recent victim of a very public IPO failure.
In CEO Mark Dixon’s interview with the New York Times, he said,
“Corporates just want space as a service, and if you do it in a shared way, it’s cheaper, it’s more flexible, and it’s not on your balance sheet.”
Fast forward to this year, and IWG has positioned itself as a partner in flexible working: offering ‘homeworking packages which include furniture rental, insurance, telecoms lines, video conferencing, stationery and repairs’.
A $2bn valuation for Hopin seems ironic, when only 12 months ago, when some people were slating WeWork’s valuation on account of it owning too little physical real estate.
Now, we see the real problem: it didn’t own enough digital space either.
4. Tech for good
Brands have been jumping on social causes for several years now. A good example would be BrewDog, which has bought a chunk of the Scottish Highlands and pledged to plant a tree for every beer sold.
Such efforts are commendable and they earn valuable PR exposure. But in 2021, we’re likely to see more brands harnessing greater marketing benefits from their chosen causes, by serving them with branded, digital experiences.
A great example is Patagonia, long established as a kind of anti-brand: spurning Black Friday, influencers and magazine ads, and maintaining a bail fund for employees arrested during protests.
In the last two years, the activewear brand has been pumping out content about environmental causes, and has launched Action Works, an online community to help people find local events and causes that they care about.
It certainly doesn’t shy away from capturing data: these are the two boxes you need to bypass to reach the landing page.
It’s also worth noting that the 1% of the pre-tax profits, that Patagonia donates to environmental organisations, isn’t far different from the 0.25-1% of sales that many brands give out via their loyalty cards – just as easily rolled into margins, but with none of the operating costs.
This is an area where brands will need to tread carefully.
When the likes of JPMorgan report a surge in sustainable investing, the consequence is a lot of pressure on marketing chiefs to follow in Patagonia’s footstep.
Users may not necessarily object if brands benefit from the data that their digital social endeavours confer. But neither will they be unaware of the potential for this data to be abused.
Many people object to Facebook’s ‘Marked as safe’ feature which has sometimes resulted in the spread of fear and falsehoods.’ This Guardian journalist noted that a 2016 suicide bombing in Lahore, Pakistan, triggered safety notifications as far away as New York and the UK.
A cynic would note that this innovation is a tool for free, automated content creation, which drives surges in platform engagement: ultimately, the fuel for Facebook’s revenue stream.
Unsurprisingly, Facebook has also been working on tools for good during Covid-19. In collaboration with the UK’s University of Bristol, they’ve built a tool for analysing business activity across the US, to enable the government to better understand and target relief efforts.
The potential value of such social enterprises is not in question. The issue is that these innovations are often by the same companies which, some say, have shown a worrying disregard for their effects on democracy, social cohesion and mental health.
Brands certainly should take inspiration from these efforts through 2021 – but with due consideration for the company they’re keeping, and how those associations may be publicly received.
5. Big tech vs. the world
The potential of big tech to cause harm is now so widely acknowledged, some companies are falling foul of regulators before they’ve had time to do anything wrong.
One is TikTok - borderline-illegal in the US, following a Presidential order to split off from its Chinese parent company, ByteDance. Britain has also founded a new tech regulator, with a remit to enforce “ex ante” regulation – effectively creating rulebooks for technology firms to follow, rather than waiting for them step out of line.
The principal fear is these companies’ tendency for monopolistic behaviour. But these scraps are not only fought out at regulatory level; corporate entities have come to blows between themselves, most notably Apple and Epic Games, over what the app developer sees as unfair marketplace fees.
Epic’s dispute – however well founded – could be considered almost prodigal; raised to maturity in someone else’s environment, it now resents the confines of that space.
The general public, too, is increasingly wary of big tech’s omnipresence in their daily lives.
72% of American adults say social media firms have too much power. A 2020 Netflix documentary, ‘The Social Dilemma’ (admittedly, somewhat sensationalised) included a terrifying graph suggesting a link between social media and a surge in suicides amongst girls.
Through 2021, lawsuits will be waged, and soap operas will play out.
Apple’s response to Epic Games has been to halve fees for its smaller clients – arguably, a cynical ploy to erode a potential supporter base for the troublesome app developer.
And the US has finally thrown the anti-trust book at Facebook: the federal government, and a coalition of 40 states, launching two separate lawsuits against the social network, alleging anti-competitive behaviour.
Experts, however, expect little to happen at a regulatory level due to protracted legal wrangling.
Personally, I think some of the more interesting changes will play out at ground level.
Writing on the Apple-Epic saga, Eric Castronova, an economist specialising in digital economies, said:
“It’s like that old saying… If you owe the bank $1,000, the bank owns you. If you owe the bank a million dollars, you own the bank.”
In this case: if the hours of your life spent in a digital environment, or the business you conduct there, is solely responsible for a tech firms’ fortunes, it’s hard for that firm to deny you a say in how that space is governed.
Big tech will defend its space, but historically, it has always been highly successful at meeting customers’ needs.
Cookies are already planned to be gone from Chrome browsers by the end of 2021; the App Store has now banned tracking without express consent.
Whatever legal fronting plays out through 2021, it seems likely that these firms will shore up their positions by making their spaces safer, and more palatable to share.
What does digital transformation look like in 2021?
The question is what these trends signify for your next year of business. If you want to stay competitive, I would suggest – unsurprisingly – thinking about new, digital spaces you can create and manage for customers.
But I would also be cautious in my expectations, and urge you to consider the groundwork that is fundamental to turning these feats into genuine business successes.
If you look at the real winners 2020, they were businesses whose digital transformations had been underway for some time.
Look at Disney.
In Spring 2019, Disney had already set out on a mission to acquire 60-90m new customers by 2024. As it turned out, they hit 60m in eight months. Previously, this was an almost exclusively offline business, relying on merchandise, theme parks and cinemas. Courtesy of a digital strategy, a pandemic, and a meaty content budget, they now seem set to own an audience of 300m+ within three years.
Look at Booking.com, a perennially innovative, digital-first business.
They suffered only a 60% YOY drop in business in Q3 2020 – a big loss, but nothing like BA’s 83% in the same quarter. While the airline auctioned off its paintings to stay afloat, Booking.com grew its domestic travel business, and even stared adding new air travel inventory.
Look at Lyft, which made the timely innovation of a subscription loyalty program in December 2019.
With ridership diminished by Covid-19, they quickly added GrubHub as a partner to their loyalty program, and boosted earnings off locked down consumers ordering food from home.
However forward-thinking your business has been this year, you almost certainly won’t enjoy the good fortune – for want of a better term – of a pandemic to catapult your digital innovations to stardom.
But by continuing to invest in exciting, new, digital spaces for your customers, you will be pegging your brand to a trend that has proven consistently profitable in recent years, and shows signs only of accelerating in years to come.
Speaking from the perspective of a digital agency, that’s an exciting space to be in.