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CARAT USA CES 2018 Key Trends Report

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CARAT focuses on brand and product experiences that start and end with what is relevant and meaningful to consumers. As we continue to focus on people-based marketing, we look to these trends to understand the contribution they will make to consumers' lives and how brands can offer value in this evolving market.

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CARAT USA CES 2018 Key Trends Report

  1. 1. CARAT@CES2018 CES 2018 WRAP UP REPORT CARAT
  2. 2. CARAT@CES2018 Approximately 180,000 people attended CES this year, hitting a record high. Nick Brien, Dentsu Aegis Network CEO, Americas took the stage on the first day of the DAN Clubhouse with David Bell and Tim Armstrong, CEO of Oath to talk about their experiences as leaders in media and the importance of shifting to a people based approach the real question was, "Why come to a conference where you could learn everything you need to about the topics online?" The answer is evident, people crave human experiences. These experiences happen in real life, and the shift has begun to move to a more intimate people based approach digitally. With the vast amounts of technology displayed at CES our Carat Innovation and Strategy team was determined to fully immerse themselves in the CES experience to find the most meaningful (and also uncertain futuristic) technology. Check out what we have found out on our travels… “HOW DO WE INNOVATE THE WAY BRANDS ARE BUILT... WE FOCUS ON MARKETING SOLUTIONS FOR REAL PEOPLE” - Nick Brien, Dentsu Aegis Network CEO, Americas
  3. 3. CARAT@CES2018 SAFETY & SECURITY VOICE & VIDEO 5G AUTONOMOUS CARS AMAZON VS. GOOGLE SCREENS: TV, VR & AR ROBOTS SMART CITIES CARAT’SCES 2018TRENDS
  4. 4. CARAT@CES2018 SECURITY &SAFETY Brand safety and data security have been hot topics in the press, and CES 2018 was no exception. With the ever expanding universe of IoT products, pretty much anything in your life with a Bluetooth connection could provide a serious data breach. 145M Americans were affected by the Equifax breach and hacks are becoming a regular occurrence in the press, so this should be a key focus for all of us as consumers and brands. The creativity of hackers will continue to evolve along with consumer behavior. The launch of 5G networks will enable an enormous number of new devices to flood the connected marketplace, creating the opportunity for new breaches from new entrant devices. When looking to create deeper connections with your consumers on a one-to-one level, we'll need to consider the platforms we ask for sensitive, personal information to ensure the safest experience for all. Brands should be looking into their own data protocols, understanding not only their software shortcomings, but their hardware too. Marketing buzzword of the year, Blockchain, will have some interesting solutions for device safety. Companies like Californian based, SmartAxiom, are building end-to-end, scalable, IoT security platforms that can secure personal items in your life such as your connected home, and (eventually) autonomous vehicle, to smart cities and industrial IoT. Consumers will expect brands to be able to keep their data safe, and as we saw with the recent data breach from brands like Uber, it will make or break consumer retention.
  5. 5. CARAT@CES2018 NETWORKSFOR THEFUTURE:5G As consumer expectation for speed and quality content streaming increases, so do the needs of the network delivering this data. Enter the next generation network, 5G. 5G stands for fifth-generation network technology, and it should transform our digital lives as we start to expect more of our devices and services to be always connected to the internet. The expansion of IoT (Internet of Things) devices in households and the reality of autonomous vehicles needing to be connected and sharing data, we need a network that will be robust and fast enough to handle the increased data pressures. As 5G technology matures and processing moves to the edge of the network, experts anticipate not only a bevy of new services, but also device improvements thanks to the reduction of power consumption. In the U.S., the telco giants are battling out their 5G rollout with AT&T announcing they are spending over $40M as part of the pre-5G evolution program in Minneapolis, Minnesota ahead of next month’s Super Bowl, easing that ‘stadium network freeze’ that usually happens with network access at crowded, public events. However, many experts were quick to point out that until 5G chips are in smartphones (predicted by early 2019) the rush to rollout in 2018 is pointless.
  6. 6. CARAT@CES2018 AUTONOMOUS CARS Autonomous Cars may feel like something out of a sci-fi movie, but CES proved that self-driving car technology is coming on leaps and bounds. A partnership with Lyft and Aptive provided over 400 rides to CES attendees with 99% of those miles covered by its autonomous mode. This successful first pilot means Lyft is looking to expand it’s testing to another U.S market. Autonomous announcements were widespread from big auto brands, with Nissan looking into building a platform infused with human reactions, Ford’s self-driving delivery vehicle in partnership with Postmates that will be testing in a currently un- named city this year, and Toyota showing off their concept cars and delivery vehicle the ePalette. The ePalette looks like something from future, but with collaboration from partnerships inked with Uber, Amazon, Pizza Hut and Mazda, the future development of these vehicles seems realistic. With the ‘Self Drive’ Act clearing the House in a unanimous vote in Sept 17, it seems autonomous cars will become a reality in the U.S. sooner than later.
  7. 7. CARAT@CES2018 BATTLEOFTHETITANS: AMAZONVS.GOOGLE CES 2018 was dominated by voice assist infused products, and who’s voices are battling it out? Amazon’s Alexa and Google Home. CES 2017 saw Alexa dominate as the preferred voice platform for new consumer products coming to market. However, we’re seeing the chips fall with providers making an ecosystem bet on one or the other, and some building for both. E-Marketer in April 2017 shows Alexa’s share of US voice-enabled Speakers at roughly 71% with Google Home sitting at 24%. Interestingly, Alexa is winning in functionality, offering simple voice commands paired with market leading fulfillment in Amazon, however Google Home is powered with the enormous superior language recognition and search functionality, so we expect this current share of market to balance out as we see consumer expectations of voice evolve. There was SO much voice assistant integration at CES 2018 that it came to be expected. The Verge’s executive editor, Dieter Bohn put it perfectly ‘…we will be reporting when a gadget DOESN’T have Alexa or Google Assistant.’ As products become more reliant and provide better services for consumers in voice, we will see adoption rate continue to increase at a rapid rate, and brands need to test now to ensure they don’t get left behind.
  8. 8. CARAT@CES2018 “People are 22x more likely to remember stories than facts. We are all hardwired to see and create stories.” Jen Zimmerman, Global CSO of mcgarrybowen said as she opened the Dentsu Aegis Network Clubhouse stage planned for a day filled with discussions on The Future of Storytelling. However, given that people are smarter and more distracted than ever, brands need to be clear and focused in their approach to storytelling. Jen and Pam Drucker Mann, Chief Revenue and Marketing Officer of Conde Nast, discussed the challenge of being a subtle storyteller. Brands need to be bold and brave to breakthrough today’s complex media environment, and Conde’s brands are doing exactly that. Teen Vogue took a sharp turn from mainly reporting on fashion to being a leading voice in social issues relevant to the female youth audience. The discussion wrapped up with a rallying cry urging brands to think about "story-catching" vs. "story-telling," to create the most relevant content that will captivate the audience. ”TIMES CHANGE, AND CONTENT IS A REFLECTION OF THE TIMES WE ARE LIVING IN." - Pam Drucker Mann, Chief Revenue & Marketing Officer, Conde Nast
  9. 9. CARAT@CES2018 VOICE& VIDEO Google was impossible to miss at CES this year with an extraordinary takeover of super-sized digital billboards, wrapping the Las Vegas monorail, topped off with their giant installation, the Google Playground, that played host to the MASSIVE number of IoT devices it is integrated with. From doorbells to humidifiers, connected cars to connected watches, however for us, it’s development of smart displays with manufacturers Lenovo, LG and JBL show off the power and functionality that the full Google suite can offer. By connecting search, to reviews, to maps, as well as the power of voice AND image search, Alexa may have some serious competition in this powerful combo from Google. Video and voice are transforming the way we search and discover things at breakneck speed. Scientifically, text is much more complicated for the human brain to process whereas visual information can be processed 60,000 times faster than text and is easier to remember. As we see the evolution of search move into more ‘human-friendly’ interfaces, we will see the power of voice paired with video becoming a game changer for entertainment and utility. Voice commands will enable more functional, quick experiences, with video becoming pivotal to discovery and context.
  10. 10. CARAT@CES2018 THEFUTUREOF SCREENS:TV,AR&VR It wouldn’t be CES if we didn’t talk a little bit about TVs. Over the last few years, 3D TVs and curved screens haven’t really taken off, and at CES this year we saw manufacturers concentrate on picture quality, voice integration and a sense of screens in house, without overpowering people’s homes, with projectors from Sony and Hisense. 8k TVs are definitely on their way, but until we see content created for 8k screens, there’s little point in worrying. As with all technology, we’re seeing the cost of 4k, smart TVs drop, which will provide a range of exciting opportunities in screen advertising across programmatic TV. Samsung’s enormous VR experience at Tech East looked like a tech-infused theme park and shows the power of immersive experiences in the right use case, but VR has lost momentum for brands and consumers alike. It seems AR (Augmented Realty) has become the new hype trend for experts and the show floor was littered with AR headsets, some akin to the awkwardness of Glass but others starting to take on a more appealing form factor for consumers. The application of AR is undoubtedly more scalable with it’s integration into mobile, and is rumored a key focus for Apple moving forward. We recommend brands start experimenting in this space to entertain and add informative layers to brand and product experiences.
  11. 11. CARAT@CES2018 When asked about the biggest thing in B2B marketing in 2018: “more marketers need to use AI to get insights, not just data. We need to know what the data means. It helps us predict what moves our customers may make next.”- Liam Blackwell, gyro. When thinking about implications for clients: When you aren’t a tech company, making the case to invest in AI and automation can be like moving a mountain, but it’ll be critical to get ahead in 2018 and beyond. However, algorithms will not necessarily highlight brand concerns and cultural context issues, a balance will need to be made. Hot of the press with the fusion of human and AI solutions, Google has just announced it’s response to brand safety concerns across the platform. This solution will leverage both humans and machines and will involve 10,000 new hires in 2018 focused on brand safety. They’ll be focused on both resolving issues and creating proactive solutions including: o A new approach to monetization on YouTube o Manually curating Google preferred o More control and transparency for brands and agencies o More rigorous approach to controversial content “EMPTY CALORIES OF CHEAP CLICKS AND RISE OF FAKE NEWS IN 2017 HAVE MARKETERS RETHINKING THEIR APPROACH TO DIGITAL” - Jann Martin Schwartz, Global Director, Agency & Channel Strategy, LinkedIn
  12. 12. CARAT@CES2018 ROBOTSFOR BETTERORWORSE Year on year, we see more wild and wacky robots that can cause controversy or amazement at CES. We love robots that can offer solutions to human problems or frustrations; hate vacuuming? Get an iRobot Roomba. Need your washing folded? Get a Foldimate. The options are becoming endless. Interestingly, companion Robots have been a growing trend and can offer one-to-one attention to consumers in need. Below AvatarMind’s iPal robots function as teaching assistants in the classroom or as companions that can help with elder care. There was, however, a seedy underbelly to the Robot trend, with Sapphire Gentleman’s Club showcasing an art installation from British artist Giles Walker. The original purpose of the work was to make a comment on the voyeuristic culture of CCTV, however his work has somewhat morphed into a broader conversation over the future issues of sexualized robots. This pole-dancing installation got a lot of coverage in the press as a gimmick, but should be a cautious reminder to brands in this space when thinking about human interactions and intentions with robots.
  13. 13. CARAT@CES2018 SMART CITIES With the rise of consumers taking charge of their utilities at home with connected thermostats, smart blubs, connected sockets, we’re seeing this trend scale, as governments start looking at ways to improve infrastructure, sustainability and quality of life of their citizens through the rise of smart cities. Global spending on smart cities is projected to reach $34.35 billion by 2020 and this was the first year the conference launched CES Smart Cities to cover this booming market. Why Smart Cities? Steve Koenig, Senior Director, Market Research at the Consumer Technology Association (CTA)– the owner and producer of CES eloquently says “The tech community is committed to and passionate about changing lives for the better, and smart cities have the potential to address the need for more sustainable and livable cities around the world. With the Internet of Things (IoT) as a foundation, technologies such as automated street lighting, smart energy meters, parking assistance apps and sensors have the ability to make cities safer, more efficient and more accessible… The United Nations predicts 66% of the world’s population will live in urban areas by 2050 – so, now is the time to harness technology’s potential to improve urban life.” Brands should start thinking about their impact on cities in their manufacturing processes, and how new technologies can make them more efficient and sustainable, as well as looking at the data they collect that could be used to help smart cities e.g. connected car manufacturers providing data to cities to aid congestion and road safety.
  14. 14. CARAT@CES2018 CARAT focuses on brand and product experiences that start and end with what is relevant and meaningful to consumers. As we continue to focus on people based marketing, we look to these trends to understand the contribution they will make to consumer’s lives and how brands can offer value in this evolving market. 5G As consumer expectation for speed and quality content streaming increases, so do the needs of the network delivering this data. Enter the next generation network, 5G. However, many experts were quick to point out that 5G chips won’t be in smartphones until early 2019, which means we have some time until it’s mainstream. As quality of service and streaming increases on devices expect consumer appetite for content on channels currently seen as ‘second screens’ will become prevalent. AMAZON VS. GOOGLE CES 2018 was dominated by voice assist infused products, and who’s voices are battling it out? Amazon’s Alexa and Google Home. As products become more reliant and provide better services for consumers in voice, we will see adoption rate continue to increase at a rapid rate, and brands need to start testing now with this more personal medium to ensure they don’t get left behind. VOICE & VIDEO As we see the evolution of search move into more ‘human-friendly’ interfaces, we will see the power of voice paired with video becoming a game changer for entertainment and utility. Voice commands will enable more functional, quick experiences, with personalized video becoming pivotal to discovery and context. AR The hype of VR has moved onto the possibilities of AR. The application of AR is undoubtedly more scalable with it’s integration into mobile, and is rumored a key focus for Apple moving forward. We recommend brands start experimenting in this space when they need a more immersive solution, to both entertain and add informative layers to brand and product experiences. IMPLICATIONSFOR BRANDS
  15. 15. CARAT@CES2018 CARAT USA 150 East 42nd Street New York, NY 10017 Carat.USMarketing@carat.com CES 2018 WRAP UP REPORT

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