Outlook 2023: EMEA POV

Four trends shaping the future of media & technology in the EMEA region

Led by Kate Walkom, Group Account Director & Deb Cho, Digital Transformation Lead, UM Int’l

With contributions from; Naji Kaddourah, Account Executive UM Int’l ; Joelle Harfouche, Senior Executive UM MENA ; Mia Haddad, Account Executive UM MENA; Rosie Duckworth, Account Executive UM Int’l ; Funmi Aisida, Mediabrands Apprentice; Aastha Malik, Account Executive, UM Int’l ; Maya Alsheakh, Account Executive UM Int’l ; Joyce Lui, Strategy Executive UM Int’l; Fabio Araujo, Comms Planner, UM Ireland

In Ancient Rome, Interregnum was the period between the death of one monarch, and the crowning of his successor. It was a period of transition and uncertainty, where the public knew the old world was ending, but had little idea what would come next. Due to the processes and communication technologies at the time, it could take years for an interregnum to resolve, and even longer for the extended Roman Empire to learn about the new sovereign and his approach to governing. As we emerge from the pandemic and look toward the future, many industries find themselves in a modern equivalent of interregnum: we’re ready to move beyond the major global events that have defined not only the past two years, but the decade prior as well. And yet the new paradigms and behaviour patterns are still developing, with the battle lines yet to be drawn.

We’ve seen a seismic evaporation in trust towards public and private institutions, as evidenced by declining loyalty rates and new legal challenges to holding brands accountable for their actions. Companies have responded with an unprecedented level of corporate responsibility initiatives and accelerated transitioning towards digital channels, as the analog remnants of the twentieth century are modernized and brought online.

As collective action builds for issues as wide-ranging as climate change, worker’s rights, and political movements across every part of the spectrum, businesses are searching for new ways to respond and engage. There is a strong cultural desire for something new — a new technology, a new platform, a new structure — that will give the future shape and focus. This drove much of the conversation of the past year around Web3 and the Metaverse, two distinct but related ideas for what the future might hold, unleashed from the sovereign platforms and power structures of the smartphone era. But while they might prove to be major forces in the future, it now seems clear that they will be but two contenders on a much larger playing field.

In the 1930’s, the Italian writer and philosopher Antonio Gramsci drew parallels from the Roman interregnum to the period between the world wars, famously saying “The old world is dying and the new world struggles to be born. Now is the time of monsters.” In tech and media, we can think of the old world as the digital media duopoly of Meta and Google — far from dead, but reaching a tipping point of unbundling, with new competitors appearing quickly. The new world is perhaps best epitomized by the stratospheric rise of synthetic media, and the AI-assisted world that we’ve long been promised, now starting to take shape. In this scenario, the monsters are the snake-oil salesmen, grasping at power on the crumbling platforms of the previous era, or selling a simple solution for the future, for the minor cost of just a few crypto tokens that will definitely go up in value. But the monsters are also all of us, going goblin mode in search of the last scraps of attention and influence that can be wrung from the current paradigm, in the hopes we can take it with us into the next one.

Our salvation may come from the ashes of the past, as the seismic layoffs in Silicon Valley disperse top-tier tech talent to other industries and a new wave of startups. As consumers continue to slowly turn away from legacy platforms, we’ll enter a new golden age of experimentation, with shifting assumptions and habits meeting a newly empowered creative class, shielded from the demands of the public market. It will be a return to an internet based on hacking and building, a Cambrian explosion of new ideas of how we work, play, socialize, and shop online. Over time, the best of these new startups will collide with advances in AI and XR technologies, and we’ll re-settle into the new world, with new habits and new sovereigns.

But for now, the future is still forming, and navigating the interregnum means balancing what was with what might be, the known with the possible. The most savvy brands and businesses will stay humble, taking advantage of the old world as long as it suits them, but ready to move on when it does not: working to sort the wheat from the chaff of the new entrants in the market, and collaborating with them to invent the new world together.

The End of the Digital Media Duopoly

For years, the digital media landscape has been dominated by two giants: Meta and Google. They control most of the consumer attention online and have leveraged that supply to dominate the online advertising market. However, with the possibility of a global recession and a potential decrease in “easy money”, we’re seeing a lot of new players entering the market. Combined with changing consumer behaviours and increased regulatory scrutiny on big tech companies, it’s clear that while Meta and Google will continue to be major players in the next era, their dominance is not fully guaranteed.

The trigger for this shift comes first and foremost from young audiences with Facebook’s daily users falling for the first time as Gen Z and millennials jump ship. For social media, it’s dark underbelly is starting to resonate on a personal level with young users starting to question their relationship to traditional legacy social platforms. This is causing a shift towards newer platforms. Platforms where the youth can connect to their own individual communities in safer and more uplifting spaces. We have seen a split between two crowds: the younger users that can easily transition to new forms of social media and even the metaverse where they are ultimately united by a desire for stability and escape, and those that have come to the hyper-realisation that people’s lives on social media can create an unrealistic portrayal of reality among other key concerns such as addiction, privacy, mis or dis-information, racism, violence and bullying.

But Google, too, now faces a similar conundrum, with users now turning to different platforms in the path to discovery, which could signal how Google’s long period of online dominance could end. This is where the great unbundling of search comes into place. Consumers are now looking for innovative ways through alternate platforms to get their information. With advanced search engines incorporated in new technologies, like embedded AI capabilities, an increasing number of young people are turning to other options like TikTok and Instagram as the first point of discovery. Even Amazon, while not a traditional search player, is now a direct competitor with Google shopping — consumers are using the platform to discover products, leaning heavily on reviews and ratings to guide them on their path to purchase. And that gradual shift in behaviour has opened the door to other entrants hoping to grab a slice of consumer attention.

Concurrently, the online entertainment space is growing, and companies like Netflix and Disney+ are launching ad-supported tiers across Europe. ​Smaller players like Roblox are growing their in-game advertising offerings, Uber is expanding its retail media push, recently appointing a new head of advertising, and is now testing in-car tablets to display ads and trip information, while Deliveroo is also expanding their advertising platforms to allow brands outside of food and beverage to advertise.​ And then you have new niche social platforms, like WeR8, changing the way we think about consuming advertising and demanding our attention. WeR8 claims it has built the future of social media by offering users the chance to watch ads and get paid for their time.​ While it will take time for them to gain audiences that match Google and Meta’s existing user base, these new platforms are further challenging the dominance of the duopoly. But these alternate platforms do not come without their own controversy. We are seeing apps such as TikTok being banned in many of the UK’s government offices, while they were also fined by the UK’s data watchdog for failing to safeguard children’s privacy​.

We also can’t ignore the increased scrutiny of regulators that is hampering the likes of Meta and Google. They face impending challenges from a legislation point of view, evident in the complex and restrictive European online climate. The Digital Services Act, a European legislation launched late in 2022 allows regulators to police content and set rules for the use of artificial intelligence. Needless to say, most know about the impacts of GDPR for businesses as well across the region, and none more so than META who was recently fined an eye-watering €1.2 billion for violating EU privacy laws by transferring personal data of Facebook users to servers in the United States. ​

Like most generational declines, Meta and Google will not be replaced overnight, but unbundled slowly over time. Users will migrate to these new, more diverse platforms and providers to fill their needs, and brands will slowly catch up to those shifts in attention. In the medium term, of course, the pendulum will swing back towards a re-bundling of services in new configurations. Apple is leading the way in integrating various solutions like health, financial, music, and streaming services across multiple devices and different bundles on Apple One. They are even scaling their popular wearable technology including Apple Glasses and the introduction of an AR/VR headset. This unique bundling of services and closed ecosystems that the likes of Apple have been able to create are becoming more prevalent and is unlike anything Meta nor Google have been able to successfully integrate themselves before, hence missing out on a key opportunity for the future draw of audiences’ attention.​ Another example of bundling that we are seeing is through Super Apps such as Careem which claims to be the ‘everything app’ in the Middle East. It offers a variety of on-demand services for a fully integrated experience including travel, dining, everyday services, and payments.

The battle of the super bundles is coming, where the platforms that gain the highest level of trust and loyalty will expand their offerings to encompass all aspects of modern living, and utilize the data they possess on each individual to provide highly personalized services at an unprecedented scale. It remains to be seen whether consumers will embrace this vision of the future, or opt for the more diverse landscape of an open ecosystem. Nonetheless, they will finally have a tangible choice after decades of limited options. There is much to be seen when it comes to big tech across the region as the current world order of the digital landscape is ever changing and ever moving.​

But no doubt, interesting times are coming. Get out the popcorn and enjoy the show, which could be the end of the digital media duopoly. To make sure you are prepared you must understand the new path to discovery, and find ways to be a part of the new search spaces by thinking beyond the traditional search engine. Ensure you become the ultimate explore by adopting a test and learn mindset and trying new approaches and platforms that will best fit your business objectives. And identify your thresholds as finding new quality audiences will come at a premium cost — but the lemon could be worth the squeeze.

Twenty-Twenty-Me

The pandemic and rapid digitalisation of culture, and communication have fuelled innovative strategies for brands to better resonate with their consumers. Social media, and its developments during the pandemic era in particular, has forever changed the way in which individuals use social platforms as well as the ways that brands can use them for their media strategies.

Digital culture has seen abrupt and significant changes in recent years. As the number of people online remains at a record high, and new generations of users are growing and becoming acquainted with the norms of the digital environment. Media has been quick to follow and identify what content users want to consume in 2023. We have also seen a boom in the shift towards personalisation with algorithmic promotions shifting people’s online behaviour towards individualism and self-centredness.

The Covid-19 pandemic played a major role in shifting this culture. This period of solitude facilitated the cultural shift, turning cameras away from celebrities and pointing them at us, the users. Almost overnight, users became the main characters of their digital worlds. No longer were social media platforms used to exhibit our external selves, content was created and tailored to trigger our inner personality traits which make us unique. Newsfeeds, “For You” feeds targeting capabilities have become much more sophisticated, precisely showing content which would maintain high engagement and in turn, shift culture.

Coming out of the pandemic, a period where instability is ever growing, we find comfort in watching and interacting with hyper personal media bubbles, which allow us to take back control of our storylines, reclaiming the ‘main character’ role in our own lives and giving us the power to tell the story in the ways that we prefer.

The creator economy has also been a key contributor to this shift in culture. It has become extremely easy to flip the camera around and experiment on social media platforms. Suddenly, individuals become influencers, getting paid to travel, eat nice food, promote your favourite clothes brand — who wouldn’t want to make a career out of this? The glamourisation of content creator’s lifestyles is complimented by the surge in interest across EMEA. An interesting study found by the Lego Group found that more children want to be creators than astronauts in the UK. We also see creator incubator programs being developed across EMEA, such as in Dubai which has positioned itself as the “planet’s influencer capital.” The Middle Eastern city has become a huge hub for influencers all around the world, all the way from content creation to reality shows like Dubai Bling where viewers take a look into influencer’s lifestyles.

More than ever, brands have to adapt personalised media strategies to maintain relevance and their market positions. Data, once thought to be the boring, behind-the-scenes aspect of marketing, has emerged as the star of creative campaigns. Spotify has become one of the pioneers of the self-focus trend, namely with its Spotify Wrapped campaigns which go a step further with individuality, highlighting personality types and letting users know where they rank on their favourite artists annual listeners. This trend has also been adapted by brands with less engaging products and services. For example, Tesco uses its data from club card subscriptions to tell customers what their most frequently bought groceries on their loyalty cards, through their Clubcard Unpack service.

The future of media hinges on digital identities. In this era of mass digitalisation, we find that we are looking at ourselves more and more, whether it’s on zoom calls or using our digital avatars to refine our self-expression. Generation Z and Alpha are by far the most invested when it comes to developing their digital appearances and the role at which their real life identity is entwined with their digital world. The rise of virtual worlds and the metaverse has been a big driver of this, with online games such as Fortnite and Roblox becoming major players in the social lives and identity of the younger generation. Additionally, the relevance of immersive social environments is only going up, as these groups are not older than 26 years old. All this spells a seismic shift to what we know as mass media and its future trajectory.

The time for personalisation is now, brands must make the leap out of their corporate buildings and befriend their consumers, learn about their interests, insecurities and hobbies to properly immerse themselves into their daily and now digital lives and personas in order to effectively speak to and influence them. It will be important for brands to think about how they can leverage this obsession with the self and how we give consumers permission to focus on themselves. Make sure you personalise and customise by using data to tap into the heart of what’s important and making experiences with your brand more focused and personable. And get versed in the metaverse where digital identity is just as paramount to real world self and be brave enough to connect with those who are occupying these spaces as their authentic selves.

The Rise of Synthetic Media

One of the more promising technological breakthroughs of recent years, with clearer near-term implications than the over-hyped Web3 or the still-developing Metaverse, is the advent of synthetic media. Also known as generative media, it involves using artificial intelligence to create or manipulate content, ranging from text and images to audio, video, and 3D content. Instead of being produced by humans, this content is generated by AI algorithms. If there’s an indication of which direction “the new world [which] struggles to be born” might develop, it seems clear that synthetic media will play a part.

Generative AI has become increasingly popular, and many of the world’s biggest tech giants are rushing to create their own generative AI technology, sparking an AI arms race. ChatGPT is a prime example of how mainstream generative AI has become, with over 100 million monthly active users. While popular, in the vast majority of use cases it’s best thought of as a prototyping or brainstorming tool — great for synthesizing existing knowledge or breaking through writer’s block, but not yet able to generate something totally new. These tools have the effect of shortening the distance from ideation to realization, removing the technical skills necessary to create original drawings or videos, and emphasizing a new skill: how well one can prompt the AI.

While it may eventually be capable of creating something brand new, for now, synthetic media is one more tool in a creator’s toolbox — it will be those in the media and creative industries who embrace the technology and learn to incorporate it into their workflow who will benefit the most. It has already been adopted by various brands and creative platforms to enhance their offerings. TikTok has incorporated AI effects, such as the AI greenscreen and AI art, into its platform to provide creators with new tools to produce content. TikTok’s integration of AI into its platform is accompanied by updated community rules, including a ban on deepfakes and other uses of AI-generated synthetic media involving public figures. Additionally, the platform requires disclosure of AI-generated media to minimize the potential risk of spreading misinformation.

For knowledge workers, the shift to remote work enabled by the pandemic will likely be seen in retrospect as equivalent to the impact globalization had on blue collar workers a few decades ago. It suddenly opens up competition in the labor market to the entire world, with all the costs and benefits associated with that shift. Similarly, synthetic media and artificial intelligence may yet have the same impact on knowledge workers as robotic automation had on blue collar workers, and may be even set to erase ‘knowledge jobs’ before most blue collar jobs. Yes, some jobs will be displaced by it, but many more jobs will be made less strenuous and more efficient by having humans working alongside automated tools. There’s little question that these tools will soon be as commonplace in the workplace, such as Microsoft Teams, the Premium subscription service offers AI-powered features for meetings, including intelligent recap, personalized highlights, and recommended task, even for those who couldn’t attend. Teams Premium also offers AI avatars, allowing users to participate in meetings visually without turning on their camera.

For brands, synthetic media may soon allow for the next generation of dynamic creative — ads that are truly personalized to the user viewing them, and often preserving the privacy of the consumer by generating them on the fly on their own devices. Coca-Cola has already integrated AI into their “Masterpiece” campaign, which follows a Coca-Cola bottle’s journey through iconic paintings to a thirsty student in need of inspiration. The company has also launched the “Create Real Magic’’ competition, allowing digital creatives to use an AI platform to generate original artwork using creative assets from the company’s archives. The “Create Real Magic” campaign, created by OpenAI and Bain & Company exclusively for Coca-Cola, is the first of its kind to merge the capabilities of GPT-4 and DALL-E. This unique combination provides brands with opportunities to engage with consumers in innovative ways, while also paving the way for a new form of consumer co-creation.

AI is also being used to help improve people’s quality of everyday life, outside of work. Be My Eyes is a Danish app that helps blind and partially sighted people become more independent. It has been upgraded using ChatGPT 4 to help the visually impaired with everyday life — from reading expiry dates on food to describing the appearance of outfits, a map, or pages in a magazine.

Despite the many benefits of generative AI, there are also concerns regarding its use. Deepfakes, for example, have become increasingly popular, and AI-generated deepfakes of celebrities are becoming more common and convincing, making it harder for people to believe what they see. British channel ITVX’s ‘Deepfake Neighbour Wars’ is a six-part series, using AI celebrities in a breakthrough use of AI playing tenuously into the cultural use of deepfakes. Additionally, cybersecurity is a concern, with ChatGPT able to pass a Captcha test, leading to the hiring of a human through TaskRabbit to complete the test. This interaction demonstrates the need for a better understanding of the risks associated with AI.

Despite the risks associated with AI, this technology has proven its potential to transform the media and creative industries. A swift response from stakeholders is essential in order to avoid being left behind. To stay ahead, it is crucial to embrace the AI tools and find ways to tap into its potential as it bridges the gap between brands and consumers and enables seamless co-creation. It is also important to remember that each brand’s AI journey is unique, requiring tailored approaches that align with specific goals and objectives. By embracing AI, experimenting with innovative strategies, and customizing solutions, businesses can position themselves for success in the AI-driven future and seize the opportunities it presents.

A Return to the Kitchen Table Internet

In light of the end of pandemic-era restrictions, mass layoffs and downsizing have begun to plague the largest tech companies in the world. Macro-economic factors have forced tech companies to downsize and reshape their strategies to cope with the new reality that is before them.

Though the mass layoffs are mostly taking place in the United States, there is a new wave of innovation that is waiting to flourish globally. Tech company layoffs in Europe hit the tech industry hard in 2022, a global trend that left more than 150,000 tech workers without a job, with even Meta expected to lay off 21,000 workers before the end of 2023. However, these layoffs in particular present an opportunity for technological revolution. For the first time in history, laid off workers are holding the leverage in market.

Tech professionals are in high demand are available in high quantities — software engineers, designers, cyber security and more will find jobs in a new industries and bring on an innovation revolution. CEOs across the globe are trying to level up the technological knowledge base in their companies by bringing these skills in-house and reduce the dependence on major tech companies significantly. The future of the CEO job itself is indeed becoming more ‘techie’ — even in industries outside the tech industry. Excitingly, digital transformation will be accelerated at an alarming rate in the industries which have resisted it the most.

MENA has become an emerging hub for innovation in tech, fast becoming a global hub for startups due to rapid digital transformation and a growing entrepreneurial ecosystem. In particular, after the spate of big tech layoffs in India, there has been a surge in tech talent movement to the UAE , creating a rich startup environment specifically in fintech, edu-tech and health-tech ventures. Tech companies like Dubai based start-up ShopDoc is an embodiment of the innovation and future of the MENA region in the field of tech and promotes itself as ‘the world’s first happiness community in the metaverse’. The preventative primary care platform promoted a ‘Chief Metaverse Officer’ position and were inundated by ex-Microsoft and Uber personnel.

There is much support from governmental bodies in Europe in driving tech talent too. The European Institute of Innovation and Technology (EIT) has announced the launch of the Deep Tech Talent Initiative. This program aims train 1 million Europeans in deep tech by 2025. The initiative’s long-term goal is to increase the amount of European innovation being created to fight climate change, and build more livable cities. Programs will be available to learners from those in secondary school, all the way to those seeking further professional development. This will level the playing field for groups that are disadvantaged and underrepresented in the worlds of tech and business. Brands will now have the opportunity to poach this new pool of talent but have to sell the opportunities in doing so. To address this we are seeing new niche recruitment platforms like Otta, which is focused solely on the hiring of tech workers and aims to help candidates and employers ‘find the perfect match’ for the role.

New initiatives that identify and tackle existing problems in the tech industry are also having a positive impact on the growth of the tech in the region. Girls Who Code is a unique non-profit organisation which is fighting to close the gender gap in computer science related fields. They do this by creating programs for college and early career women to learn how to code and take on alternate functions within tech. It’s well known that the tech industry is extremely male dominated and girls who code recognise that, as this sector becomes saturated it’s important that efforts are made to close the gap now so that there are fewer barriers to entry for start-ups soon.

It’s worth noting that in EMEA (and the rest of the globe), immense competition and external factors have made it increasingly difficult to develop a large-scale successful company. Thus, emerging tech start-ups are taking a different approach, by launching small scale, personalised tech services and products which will fill in the gap that big players have created. Spill is a great example of this growing trend. An emerging social media platform which was founded by a group of ex-Twitter employees seeks to fill the gap created by social media giants. Spill aims to provide a safer, and more rewarding platform by providing a space for underrepresented creators and publishers to flourish on their platform more easily through affordable media space and favourable algorithms.

A European example currently working in stealth mode is Me3D, a Finnish start-up, founded by an ex-video game developer, who is building the future of social content for the next generation of creators; a world that connects through active, not passive content, described as Roblox meets Instagram. So while we’re thinking about this new “middle class of digital media,” don’t forget that true innovation is going to lie in examples like this with the smaller startups, experimenting with something that might look totally different than what you’re used to seeing online.

It’s evident that there is a lot of hungry tech talent, eager to create their own path in this grassroots era of kitchen-table internet. Whilst the tech industry is a-buzz with new possibility, recent events have meant there are new barriers they are facing with getting start-ups on their feet. In March 2023, Silicon Valley Bank (SVB), the biggest funder for tech startups across the globe collapsed, and with it the hopes and progression of countless start-ups.

However, despite this we will continue to see tech titans forge on and witness a rapid increase in smaller, niche start-ups over the coming years. Without a doubt, this era will give rise to new giants and their own host of problems. But in the meantime, we can bask in the uncertainty, and imagine the possibilities that come when the future is still a little out of focus.Workers will upskill and legacy industries, which are not tech-heavy, will accelerate their transformation journeys and swallow the overspill of tech talent. We know there are big changes coming to the tech landscape. And whilst we don’t yet know what the next big platform will be, we are also sat at the kitchen table, ready and waiting to be served.