The Consumer Electronics Show (CES), which officially kicks off Thursday, is fundamentally a hardware show. It’s a sprawl of new toys that consumers will either really want (drones!) or want not at all (3-D TVs!).
“One needs to be careful about CES, as there are a lot of things on display and aren’t relevant for the people in advertising,” said Tom Goodwin, EVP and head of innovation at Publicis’ ROI agency, Zenith.
Like other ad industry attendees, he’s less interested in 8K TVs and more interested in the way upcoming platforms and content-choosing devices will affect how people interact with media.
Jeff Malmad, Mindshare North America’s head of mobile and Life+, Mindshare’s Internet-of-Things (IoT) practice, said the show is particularly valuable for spurring new ideas.
That’s perfectly fine for many of the marketers in attendance. Before joining News Corp–owned Unruly, Jeff Minksy had an extensive agency career at OgilvyOne, Rapp and Omnicom, and he’s had substantial experience in leading marketer clients around the show floor. The forward-thinking ones are keen on innovation.
“They want to see the newest stuff, even if it isn’t scalable,” Minsky said.
Enthusiasm for CES seems more muted this year, however, as attendees, having barely shaken the tinsel and mistletoe from their hair, approach the show with what can best be described as a sense of professional obligation. In one of the most baffling scheduling decisions since 2012, when CES stopped coinciding with the Adult Entertainment Expo, the tech extravaganza this year runs from Thursday through Sunday.
Because few enjoy having their weekend obliterated by a business conference, much of the advertising-related activity is squeezed into the first two frantic days.
Ad buyers don’t know exactly what to expect before the show formally kicks off, but many want to check in on the incremental progress made by past innovations, such as addressable TV, virtual reality (VR) and artificial intelligence (AI).
IoT and other connected devices are always a big topic at CES, Malmad said. In 2016, many of the ideas blossomed, and marketers really began to anticipate how things like wearables could be applied to campaigns.
This year, Malmad is particularly excited about the connected home.
“Last year, you saw brands partner with Amazon,” Malmad recalled. “Your dishwasher knows how many loads you did, and can automatically order [detergent] through Amazon. You don’t have to think about purchasing those products; they just show up.”
So, expect more partnerships and brand connections with household appliances this year. Goodwin recalled a study Zenith conducted with Microsoft, which asked global consumers what they were looking for with IoT.
“We found that people want brands to connect if it provides value – like notifying about the expiration of food products,” he said.
When Goodwin first began attending CES, connected appliances were a small part of the exhibition – but recently he’s seen gradual growth in the IoT app environment.
A healthy app economy, coupled with brand partnerships, would also indicate that the manufacturers of fridges, dishwashers and other household appliances are now starting to think about advertising implications – a shift from years past, when that wasn’t a consideration at all.
The advent of driverless vehicles means that commuters are going to have a lot of time to hang out and hypnotize themselves with flickering screens. And the next generation of car passengers absolutely must be entertained.
“When people are not driving as much, entertainment becomes the forefront of time occupation,” Goodwin said. “So, autonomous driving is fantastic, because we can put more screens in cars. We’re interested in seeing what that holds.”
For Minsky, that means adding video screens on the driver’s side, to enrapture the driver who is, of course, not actually driving.
That sort of application is still a long way from arriving, as the experiments around how driverless cars fare in the wild are still revving up.
VR and augmented reality (AR) are different technologies with different applications. (Read AdExchanger’s article on the state of AR.)
At this point, VR has better penetration – with Facebook’s Oculus, Google’s Cardboard and Daydream, Samsung’s Gear and Sony PlayStation’s VR all generally available.
While it’s still not scaled, Malmad thinks there will be more of a push this year to proliferate entry-level VR headsets costing around $50. Samsung Gear and Google Cardboard and Daydream fall into that category, while PlayStation and Oculus are premium headsets with premium price tags.
Even still, mass penetration of VR isn’t imminent, meaning that most advertising opportunities will still be experimental one-offs. Minsky doesn’t expect VR to take off en masse for another three to five years.
“Most of it has to do with the headset,” he said.
Most of the hardware is inadequate. The premium devices are too expensive to expect consumers to buy them in bulk, and they’re wired to consoles or other hardware devices, which restricts the user’s movement. And while VR devices like Samsung’s Gear and Google’s Cardboard have better scale because they use the mobile phone as a screen, they suffer from an underwhelming, pixilated display.
“It’s not the full experience a PC or a great computer chip-driven device can bring to the table,” Minsky said.
But these are all problems the VR industry is actively working on. Minsky points out that VC money for VR is close to $2 billion.
“I’m very excited about the future of VR,” he said. “And the impact, from an emotional standpoint, lets you be immersed and be an active player in that storyline.”
It’s been a big year for AI in marketing, though much of the to-do has been around marketing cloud applications. CES will naturally showcase the more consumer-facing AI deployments, including automated assistants and chatbots.
Agency execs expect more scaled AI deployments this year. That’s largely because handset manufacturers are starting to bake the technology directly into their devices.
“It’s interesting to see handsets from Samsung, Huawei and Google talk about AI built into their home screens,” Goodwin said.
Malmad also expects considerable focus on machine learning, which is increasingly seen now with chatbots and voice commands, he said. But that’s AI 1.0.
“Now with the world of bots opening up in the Facebook ecosystem, there will be more engagement with brands,” Malmad said. The applications will focus more on customer service rather than conventional advertorial messaging. But these applications still have the same effect of driving brand engagement and making companies more present in the lives of their customers.
As always, the changing nature of TV still has the biggest impact for advertisers. It’s because of TV that advertisers and agencies first rushed to attend this nerdy little hardware show in the first place. In the late ’90s, video production crews needed to stay on top of improving TV displays, because it affected how they shot commercials, Minsky said.
“Marketing got interested in CES because when you make core changes to television, which is 75% to 80% of media budgets, they need to understand what’s happening with the television set,” Minsky recalled. “That’s reached diminishing returns, but that’s when agencies started to show up.”
Today, the big change isn’t about the hardware but about the addressability. (Read AdExchanger’s article on how addressable TV changed in 2016.)
For all its benefits, addressability complicates the buying landscape, and agencies and advertisers at CES have to figure out how to navigate all of the content and data available from different providers.
The entrance of smart TV manufacturers, like Samsung, adds yet another layer of complexity.
“This year, every TV manufacturer will release their own OS and platform,” said Goodwin. “It’s going to get messy.”
This post was syndicated from Ad Exchanger.