Outlook 2020: The EU POV
How the Outlook 2020 trends are playing out in Europe
Co-written by Kate Walkom and Jordan Pini
The European markets face some similar opportunities challenges in media and technology innovations as the U.S., but the policy makers there are taking a more proactive approach to address issues like data privacy and monopolistic practices, resulting in a distinct and interesting market dynamic. Here are how the four Outlook 2020 trends are playing out across the EU region.
Democratized Creativity
With the democratization of creativity, we see the growth of creative economies throughout Europe, which are being fueled largely by the internet, as well as the fragmentation of media. This means that traditional media players are now having to compete with digital-native brands and platforms, often for the same audience. This, in turn, creates challenges for traditional offline media strategies, as agility and speed become much more important.
With the continuous reinvention of digital and creative possibilities, we find new ways to enhance how we can work with old media channels, particularly fueled by a young, digital native audience of influencers. This democratized access to creative tools and distribution platforms has driven the rise of the consumer-creator, proliferated via social networks and media platforms, enabling the everyman to make their work accessible and remixable to millions around the globe.
These developments have created a real shift for brands, particularly those with a Gen Z audience in Europe, who are key drivers in democratizing creativity and fueling the influencer boom. These young YouTube stars, filmmakers and entrepreneurs are their own creative directors. European Gen Z’s lead in the number of social accounts they are actively using globally as they move away from Facebook and into multimedia platforms such as Instagram, YouTube and TikTok. Rather than wait for brands to take a stand, they are taking the lead on issues, demonstrating their creativity through social platforms.
Increasingly, we also see brands using these platforms and encouraging the democratization of creativity in order to promote specific agendas, whether it be brand advertising or driving more purpose-led campaigns. #TheRealChallenge campaign, led by UNICEF and the European Union, engaged the TikTok community to mark the 30th anniversary of the United Nations’ Convention on children’s rights. The campaign encouraged TikTok users to share their views on children’s rights by recreating and sharing their own versions of UNICEF’s four short videos on issues around equality, bullying, and child labor. In this example of democratization of creativity, a young and influential global community was enabled to spread its message, with outstanding results: the videos were shared more than 1.2 million times, garnering more than 280 million views across 41 countries.
Whilst larger platforms like Instagram and Facebook have been key drivers in democratizing content, we are also seeing greater fragmentation into more specialized digital communities and businesses. One such example is Genero, a London-based creative platform that aims to facilitate collaboration for brand marketing productions from every corner of the globe. Through its online platform, marketers can tap into a diverse global network of creative talents. Businesses like this continue to proliferate as their creators continue to find gaps within the market, harness the power of democratized creativity, and offer better experiences for big brands to discover niche audiences that wish to engage and create.
Ambient Computing
Amazon continues to grow its marketplace presence across Europe, especially in key markets such as the UK, Germany, France, Italy and Spain. However, it also faces fierce online competition from both regional and local players. Brick-and-mortar retailers are quickly learning to defend market share by digitizing their physical infrastructure. In the fashion category, the U.K. saw designer and high street labels open almost one new store every day. In contrast, Amazon accounts for about 14% of online menswear spend, and about 4% of womenswear currently in the U.K., according to GlobalData’s latest report. Therefore, it is critical for Amazon to grow its hardware share, in order to drive new consumers into its ecosystem.
In the smart speaker wars, Amazon Echo has built a significant user base across Europe by being first to market. However, Google is closing the gap by leveraging previously built language models and mobile device integrations not initially available with Amazon in markets like France, Italy, Spain, the Netherlands and several Nordics countries. The International Data Corporation (IDC) put smart speaker market share at 41.8% for the Amazon Echo vs 45.1% for the Google Home across Europe in 2019.
Another advantage that Google has in this space is Google Assistant’s integration with Android OS, which consistently enjoys over 70% of the mobile market share in Europe, according to the tracking data from StatCounter. This allows Google to enter new markets across the region before smart speakers become available, allowing consumers the opportunity to experience localized versions of Google Assistant and become familiar with it prior to arrival of smart speaker products.
Regardless of brand preference, adoption and ownership of connected devices that fuel smart homes continue to increase, with markets like Germany and the UK leading the way across Europe — ranking third and fourth globally, according to Statista, in terms of the overall value of the smart home market. By 2022, market penetration is set to hit 35%, based on Gartner’s forecast, and while currently the main devices being used include smart heating, lighting and speakers, home surveillance products are also on the rise. Set to grow by 18% this year alone, the smart home security market is benefiting from consumers’ somewhat lackadaisical attitude toward relying on technology to keep us safe.
Further developments in smart city infrastructure are also accustoming consumers to the IoT system powering everything around them. The European Commission’s efforts to partner with local cities, technology providers, researchers and small businesses to improve urban life through more sustainable integrated solutions addresses city-specific challenges such as energy, mobility and transport. It has created a smart city hub for officials, businesses and consumers to view in detail projects happening all over the region.
Algorithmic Culture
Active social media penetration across the UK, Germany, France, Spain and Italy sits at about 58% as of the end of 2019, according to Hootsuite data. While this is below the U.S. average of approximately 70%, European consumers are, in general, more concerned about the societal impact social media platforms are having, thus suppressing social media usage.
In response to the growing concerns, the European Commission is carrying out an in-depth analysis into the transparency of the algorithms that online platforms deploy. This project has three main goals, according to information on its website: First, it aims to create a wider understanding of the role algorithms play on online platforms and raise public debate on emerging issues raised by their use. Second, it seeks to identify and establish a solid evidence base about the main issues in algorithmic decision-making. And third, it will propose solutions for a selection of issues, including policy, technology and private sector and civil society-driven actions.
With new EU regulation and legislation on data protection, privacy, hate speech and copyright, the European internet is turning into its own unique online environment compared to other markets around the world. For advertisers, particularly those operating in global markets, specific go-to-market strategies may need to be developed for Europe, given some messaging, targeting parameters and data capture could be restricted under this new direction.
A recent article from The Guardian goes as far as to suggest Europe create its own social platform for news, prioritizing European public values such as diversity, solidarity and liberty, attempting to reduce the control and influence platforms like Facebook have over public conversation and influence.
Outside of social media, the use of algorithms is prevalent in news sites such as The Daily Mail (UK), where homepage content is optimized based on how well a particular story may be performing (using page views, dwell time, and comments as key metrics). Product recommendation engines also use algorithms across many fashion and grocery brands. Tesco, a UK grocer, is working with researchers to analyze huge datasets generated from its loyalty program, aiming to better understand consumer shopping habits and recommend products based on previous purchases.
The Age of Anxiety
Across Europe, threats to online safety, relentless data breaches and the rise of fake news and disinformation are all deeply troubling, particularly in these times of Brexit. One could argue that the pervasive sentiment in Europe today is anxiety, with a resulting need for protection. Seemingly the high-tech future which we all dream of in Europe is met with fear, the need to protect and the belief that regulation is now widely accepted as the solution. In many instances, Europe has chosen to prioritize data protection over investments, such as in AI, which is deemed to stem from an over presiding analog mindset.
Over the past few years, the spotlight has been on data protection, and whether tech companies and brands are being transparent enough about their use of personal data. The EU was a forerunner in creating formal guidelines for regulating this via the General Data Protection Regulation (GDPR). GDPR puts the responsibility on the businesses gathering personal data to comply with a set of technical and organizational measures to safeguard that data. There have been questions whether GDPR is focused enough to rule out all instances of data manipulation, and it will certainly need to be updated regularly given the speed of technological change. With the rapid uptake of voice search and AR, it will be interesting to see how GDPR policies evolve.
Trust is wavering for those platforms that harness the power of our data, with governments starting to label them as digital gangsters. Additionally, the knock-on effect shows that trust in advertising is at its lowest, according to research by the UK’s Advertising Association. While it is platforms that bear the brunt of this decline in trust, brands are close behind. Not long ago, the UK government released the Online Harms White Paper, which puts forward ambitious plans for a new system of accountability and oversight for tech companies, moving far beyond self-regulation. This includes creating a new regulatory framework with the intention to improve protections for users online.
The widespread disinformation is another major challenge in Europe, causing confusion and anxiety among citizens. In response, the European Commission is working hard to implement a broad set of actions to combat the spread and impact and protect European values and democratic systems. Consequently, there is a European action plan on disinformation which is focused on improving detection, stronger cooperation and joint response to threats, enhanced collaboration with platforms and raising awareness and bolstering societal resilience.
Despite regulatory moves in response to the rising anxiety around data security and privacy, we still see the advent of new businesses that use the most private sphere of user’s data, their DNA — and consumer willingness to provide it if it offers personal benefits, such as health and wellbeing. DNA Nudge, which opened a flagship store in London’s Covent garden, offers the world’s first DNA-based service for consumers to make healthier food choices. Through a simple in-store DNA swab, users’ genetic nutritional profiles are mapped and stored on a wearable band, which can then scan and recognize more than 500,000 barcoded products in UK retailers, informing consumers on whether that product they are buying is good or bad for them. However, such innovation would never pass in France, where such tests are prohibited. And in the age of anxiety, this patchwork of DTC testing legislation across Europe is sure to not last long, as policymakers and scientists are looking to harmonize regulations across the EU.
