living digitally

© 2011 Forrester Research, Inc. Reproduction Prohibited1 © 2009 Forrester Research, Inc. Reproduction Prohibited

Living Digitally:Marketing in the Era of Experience

James L. McQuivey, Ph.D.

VP, Principal Analyst

Southwest Media Group Digital Summit 20113 May 2011

Follow me on Twitter: jmcquivey

© 2011 Forrester Research, Inc. Reproduction Prohibited2

Dr. Everett Rogers

S-curves

Diffusion of Innovation

Syracuse


World Wide Web

I get this

CD-ROM

Predict the future

Forrester


A digital adoption revolution is occurring

New adoption characteristics have emerged

Something is making people adopt faster than

they ever have

The same factors that have combined to create

new adoption patterns are still at work

They will change the experience of every other

product and service


Consider the top digital products of 2010

Kindle: Approximately 8 million US users

– About half of these from the 2010 model, Kindle 3.0

iPad: Nearly 10 million sold in the US in less than a year

– We expect Apple to sell another 20 million domestically in 2011

– All but 2 million iPad 1.0 buyers will buy another tablet this year

Kinect: 8 million units sold globally in 2 months, 10 million since

launch

– Microsoft still has 40 million Xbox 360 owners to market Kinect to

– More than 50 million people will have tried a Kinect by year-end 2011


Are these products momentary anomalies?

NO


These successes are the product of a virtuous cycle that is enabling a digital life

1. How

we connect


Consider the connection facts

2006 2007 2008 2009 2010 2011 2012 20130

20

40

60

80

100

120

140

All US Households (mil-lions)OnlineBroadbandHome network*

Base: US households

*Source: The State Of Consumers And Technology: Benchmark 2009, USSource: September 21, 2010, “The State Of Consumers And Technology: Benchmark 2010, US” Forrester report

Half of online homes now have a home network



NO1. H

ow w

e connect

2. What we connect


105.3

Types of

connected devices

Millions of

US adults

Base: 3,990 US online adults

Source: North American Technographics® Consumer Technology Online Benchmark Recontact Survey, Q2 2010 (US)

Multiple connected devices are now the norm

2+

3+

4+

5+

6+

7+

8+

79.357.737.022.113.38.0

9+

4.5



NO1. H

ow w

e connect

2. What we connect

3. H

ow w

e ex

perie

nce

These products have not just changed our digital lives, they’ve changed the experience of every other product


We are entering the Era of Experience

• From the beginning of the Industrial Revolution, we have passed through two distinct eras:

• Now, in the new era, experience will• Differentiate you from your competitors, and

• Create distinct value for your customers.

The Era of Production The Era of Distribution


In the Era of Experience, digital products enable other, non-

digital products to be reborn as digital experiences

to be reborn


Hair

Eyes

Lips

Skin

Redo my…


Early examples of these experiences are already widely available


In the Era of Experience, we call these digital life moments Total Product Experiences

TOTAL: Extends the experience of a product

beyond its traditional boundaries

PRODUCT: Reinforces the product itself, not

just the brand

EXPERIENCE: Creates a new depth of

customer experience that is more:

– Persistent

– Meaningful

TOTAL:

PRODUCT:

EXPERIENCE:


Total product experiences depend on three elements

Device

Platform

Service

Together, these things enable total product

experiences that go far beyond our prior

expectations


Tablets will continue to advance at a rapid pace

15 million tablets worldwide at the outset of 2011

Forecast: 82 million tablet users in the US by 2015


Tablet users have fully embraced this digital life

Base: US online consumers (n=4587); tablet owners (n=210)

Source: Forrester’s North American Technographics® Consumer Technology Online Survey, Q1 2011 (US)


Game consoles are the next enabler

50

million

There are more than 120 million homes worldwide with connectable

game consoles

Depending on the market, half of these boxes connect to the

Internet, at least occasionally

The Xbox 360 Live community has 30 million members

50

million

85

million


Kinect is the Total Product Experience enabler for the home of the future

This $150 peripheral went on sale November 4, 2010

It provides voice control, face recognition, and 3D motion sensing

for the Xbox 360

Kinect goes far beyond gaming, giving people:– Voice control over video

– Video conferencing

– A deeper channel for marketing, sales, and anticipation of product experience


Kinect has a modest impact on product experience today

Gatorade sponsors Ubisoft

Fitness Evolved, a Kinect fitness

trainer

But there is no “virtual

experience” of Gatorade

Chevrolet’s got the right idea

with its Volt electric car, which

can be “driven” in a Kinect game

But where are the Kinect apps

that will enable a Total Product

Experience?


What do we learn from the home beauty mirror?

Social

Interactive

Rewarding


What Total Product Experience will you develop for the future?

How can you digitize your current interaction with your

customer?

What additional interactions could you have that weren’t

feasible before?

Are there any movements or visualizations that you

could simulate to make your total product experience

more compelling?

When can you take advantage of context?


Marketing and product will now expand into each other

Marketing Productoverlap

Promise Experience

Digital marketing simulates product experiences

Anticipation

Total Product Experience


Picking platforms for experimentation based on penetration, engagement, and audience size

US Penetration0 50mm

Wii

Xbox

360

PS3

iPad

Connected

TV

Non-

iPad

tablets

Xbox

w/Kinect

Leve

l of

Eng

agem

ent

5

4

3

2

1

50mm

Size corresponds to

how high the device

indexes for those

that spend big on

entertainment

100 - 125

125-149

150-199

200+


It’s time to take an active role

The platform providers are experiencing all the success

The app developers are reaping all the near-term

rewards

Product strategists and marketers are taking a back

seat to the development of the future

By pooling their resources, product and marketing

teams can create Total Product Experiences that win

consumers’ hearts and minds


What to do about it

Embrace the idea: All products will be reborn as digital product

experiences with the help of new digital devices and platforms

Look for opportunities to extend your product experience

– What devices might present new digital opportunities for product

discovery and engagement?

– What platforms are your customers on that you should build on?

– What services can you offer – what information can you deliver – that

will enhance the value of your product?

Pool your creativity and resources with product strategists and

product marketers to ensure that you have a shared vision of the

Total Product Experience you want to deliver

© 2009 Forrester Research, Inc. Reproduction Prohibited

Thank you

James [email protected]

jmcquivey

www.forrester.com

Follow me on Twitter

living digitally

Documents

digital life1

digital lifebase

digital experiencesto

digital lives

nondigital products

digital adoption revolution

us households

new era