Outlook 2021: Canada POV
How the Outlook 2021 trends will play out in Canada over the next few years
Written by:
- Dennis Truong, Director, Digital Strategy & Partnerships, Regional Lab Lead, UM Canada
- Erica Kokiw, VP Digital, Regional Lab Lead, UM Canada
- Cory Peters, Senior Director, Digital Strategy & Partnerships, UM Canada
- Juan Panlilio, Senior Director, Decision Sciences, UM Canada
- John Ross, Investment Manager, UM Canada
- Marissa Cristiano, Strategy Supervisor, UM Canada
- Madelaine McDougall, Senior Strategist, UM Canada
After what will go down as one of the strangest years in history, we are pleased to be here in 2021, with an eye keenly focused on the future. We normally position our annual Outlook as looking at the seeds of changing consumer behavior, which will blossom into mainstream trends in three to five years. While what we have to share today will certainly approach that five-year time horizon, we thought it was important to pull back just a bit and address directly what we expect to develop this year and next. Because after the interruption of 2020, there is less clarity on consensus on the near term.
As we come out of the pandemic, there will be two very different reactions to the new world order: those who have embraced the changes wrought by 2020 and want to push even further, and those who want or expect things to return to the way they were before. This divide will vary widely around the world, as places like China and Australia, which recovered more quickly, will have less established new habits, and will more quickly snap back to the way things were. In contrast, here in Canada, where we have fared less well with the pandemic in comparison, there is more time to establish new habits and adopt new tools.
We’ve identified four ways this forward momentum will play out, impacting how we work, play, shop, and live beginning tomorrow, and through the first half of the 2020s.
THE ANYWARE ECONOMY
In 2020, the kitchen tables became desks, athleisure became the new office-casual, and the home internet modem built its endurance muscle as an additional 4.7 million Canadians transitioned to remote work due to social distancing restrictions brought on by COVID-19.
The pandemic illustrated that while work from home (WFH) comes with its challenges like cramped living spaces and childcare, for the most part, it is a viable and well-functioning work reality. As a result, partial or total shift to work from home is expected to become common practice in the post-pandemic world, at least amongst the industries where that is possible; tech giants Twitter and Facebook announced plans to let their workers work remotely “forever” if they so choose.
Remote workers will rely more on technology than ever before to remain connected and perform their essential job functions. The development of emerging technologies is expected to accelerate as droves of desk-less workers look to enhance communication and connectivity and facilitate productivity. For one, the evolution of 5G networks could hasten, due to an increased need for speed in the WFH experience. 5G is ten times faster than our current 4G infrastructure — you could download Casablanca, in less time it takes Usain Bolt to run 100 meters (9.8 seconds). With 5G, daily frustrations around latency and lagging would become a quirk of the past. Micro time-saving moments powered by 5G are likely to encourage gains in productivity while enabling a frictionless work experience. While 5G is in its infancy in Canada, and mostly available via mobile carriers, the federal government is investing $200 million in upgrades over the next five years, making a more hyper-connected nation a near-future possibility.
Furthermore, a 5G enabled network on a global scale could accelerate the potential of the Anywhere Economy well beyond the opportunities possible within just the four walls of our own homes. The millennial workforce is already enthusiastic about work-from-anywhere (WFA) — a work utopia lived by digital nomads where the previous limitations of the ocean and country borders become obsolete, allowing employees to travel the world while employed, remain in their home country, or set up residency in a city or country with cheaper real estate than where their company’s “office” is located. Estonia, Barbados, and Croatia are among many countries that have already created a new class of visas for these types of workers to attract foreign workers and contribute to the growth of their economies. 5G network capabilities would only amplify these possibilities; whether situated on a sandy beach or a public café, workers would no longer need to rely on spotty shared Wi-Fi networks nor will they need to live within commuting distance of their office ultimately expanding the net of eligible candidates for jobs across the globe.
On the flip side to the optimism and value-propositions associated with WFH and WFA, 2020 has also showcased the consequential downfalls that have arisen as byproducts of WFH realities. Office life can foster a sense of community and belonging — without this physical space, the Canadian workforce is experiencing a lack of interaction with others, blurred barriers between work and personal life, and physical pains due to the lack of physical activity and inadequate home office furniture. As a result, researchers are documenting higher rates of anxiousness, burnout, and depression among employees. As remote work becomes the norm, companies will need to consider all sides of the spectrum when developing new mental & physical health support policies and resources while leaning into technologies that preserve and foster the benefits of office-life in a virtual environment.
Videoconferencing is anticipated to mature into a more elegant and multi-functional tool. 2020 was the year of the great “zoom boom” which subsequentially ushered in “zoom fatigue” as we began to grow tired of days packed with pixelated video calls that lacked the feedback, communion, and the dynamic nature of in-person interaction. Futuristic video conferencing will likely take form in VR or AR environments that facilitate multi-media collaboration in real-time. And some prototypes are already on the market today. For example, Microsoft’s new “Together” mode super-imposes people’s heads in a shared virtual space to foster a feeling of unity, while Microsoft’s Holoportation uses VR goggles and 3D cameras to emit life-size holograms in real-time. Born from the shortfalls of videoconferencing in its current form, third-party apps are ushering in with the goal of boosting engagement during meetings and automating tedious tasks via AI. Headroom transcribes meeting notes in real-time and uses AI to identify key dates, ideas, and action items.
Just as the pandemic accelerated trends in digital innovation & technologies, in tandem, it accelerated the birth of new media platforms and user adoption rates of said platforms. Looking at these advances from a marketing perspective, brands will need to remain agile to the fluidity of digital media consumption habits while ensuring that their brand stories are relevant and adaptable to tomorrow’s consumers and where they’re spending their time online — whether and wherever they are working or playing.
GAMING EATS THE WORLD
Even before the internet, gaming has always played a vital role in entertainment and creating social connections while introducing friends and families to new and immersive worlds. We’ve witnessed gaming’s popularity in Canada explode in a short period, as COVID-19 forced a global shift in how people connect within this new environment. The Entertainment Software Association of Canada (ESAC), reported that out of the 23 million Canadians who play video games, 58 percent of Canadian adults and 80 percent of teens say they’ve been gaming more amid the pandemic. Canadians are turning to video games as a way to safely stay connected, but also using it as a way to escape the constant anxiety brought on by the pandemic.
According to Ipsos, 48 percent of Canadians say they feel “really or seriously stressed” at least once a week, including 16 percent who say they feel stressed “every day”. While stress can be both good and bad, on average Canadians say 47 percent of the stress they face is of the bad variety. Notably, 65 percent of adults and 78 percent of teens found that gaming during lockdown gave them a sense of purpose. Gaming offers various challenges and immersive experiences which require players to co-operate to achieve a common goal — ultimately giving Canadians a sense of control.
The gaming medium in Canada has grown into a mainstream phenomenon. As live events all around the world started to halt, Canadian broadcasters such as Bell Media quickly pivoted towards live coverage during prime-time of the Overwatch League, the first major professional esports league with city-based teams. Canadian Sports Network, TSN, aired NBA 2K where professional athletes competed live during the NBA hiatus. Even student-athletes have leaned into esports as a way to fill the void of competitive sports, with 17 Ontario universities launching the inaugural season of the Ontario Post-Secondary Esports League.
Before the pandemic, spontaneous conversations would naturally happen. Unfortunately, these types of interactions between coworkers are not captured well in a non-structured space and time. Companies have started to leverage emerging communication platforms with baked-in gaming software to elevate virtual interactions. Companies like Lever Canada have gravitated towards Gather Town, also known as Gather, which is a pixelated virtual space where users can walk around select rooms and engage in video conversations based on their proximity to one another. Gather provides a promising glimpse of how Canada, similar to the rest of the world, is slowly crawling towards the metaverse, a persistent, interoperable virtual world that will one day serve as a new layer for all our digital activities and interactions.
Canadian brands that are heavily established within gaming will need to think beyond reaching a gaming audience and consider how they can best show up in immersive spaces. For example, Hudson’s Bay Company announced that Canadians could dress their Animal Crossing avatars in its iconic yellow, green, red, and blue stripes, or use the pattern for items in their virtual homes, such as bedspreads and pillows, ultimately creating positive brand affinity. Other Canadian brands who may be late to the game will need to ensure they’re establishing a gaming strategy. A clear plan of how to reach gamers has become essential as it will provide a unique data source to increase personalization at scale, furthermore future-proofing themselves for the growing gaming platforms.
WELCOME TO THE SPLINTERNET
From humble beginnings in the 1960s as a way for government researchers to share information, to the 1980s when the TCP/IP communications protocol was first developed, through to the end of 2019 where there are an estimated 4.6 billion users online around the world, the internet, more than anything else in human history has opened communication and connected people in profound ways. In recent years, however, these foundational tenets of the internet around openness and connectiveness have been challenged and morphed into something very different.
Enter the splinternet (also referred to as cyber-balkanization), a phenomenon where the internet is splintered and divided due to varying factors such as technology, commerce, politics, religion, and geo-political forces. In China, “The Great Firewall” is a combination of legislative and technological actions implemented by the country to regulate the internet domestically, is a prime example of the splinternet in action. The impact of this includes the censorship of various foreign websites such as Google, Facebook, and Wikipedia and the tiered treatment of internet traffic, throttling external traffic while providing optimized laneways for intra-country traffic.
In Canada, the splinternet manifests itself in a number of ways and takes its cue from the rest of the world. Take for instance the recent situation in Australia, where Facebook banned the viewing and sharing of news on its platform in response to proposed legislation where it would be obligated to pay news publishers for the content shown on the website. Facebook has since walked back the ban after reaching a deal with the Australian government on drafting a revised bill that would make the large digital tech platforms like Facebook and Google pay for journalism. Canada has vowed similar actions to Australia in holding Facebook to account for payment of journalistic content. The situation is developing with Facebook amenable to clearly articulated rules social media companies should comply with regards to content that is shown and shared on the platform while remaining reticent to the idea of paying news media outlets for content distributed on the site. The potential ramifications are clear — Facebook has been shown to not only threaten but also follow-through on disabling access of all news on its site for a country. With 25.5 million Canadian users estimated to be on Facebook in 2021, it presents a troubling prospect that the tech giant is capable of actions that directly contravenes its mission statement around discovering what’s going on in the world.
The issue of national security is one that is also tied to the splinternet, the vast swaths of data that are collected on users by big tech allows for algorithmic customization and content optimization, which means more time spent and engaged with the platform which in turn means more revenue potential and opportunities for advertisers. Still, differing data privacy laws further complicate the global campaigns and divide digital platforms. Following the leading example set by the GDPR, other countries such as Brazil, and Australia have followed suit and created their own privacy regulations. In November 2020, the Canadian government expressed their intention to create a new privacy law, Canada’s Consumer Privacy Protection Act (CPPA), to replace the Personal Information Protection and Electronic Documents Act, which currently governs how the private sector handles consumer data in Canada. If passed, the CPPA would likely coexist with other privacy laws in Canada, like the law solely applying to the public sector and provincial laws targeted at more specific topics like health information.
While it may be an unpopular opinion, the originating ethos of the internet adhering to freedom of information and true globalization is simply untenable in the face of an increasingly fracturing geopolitical landscape. The moral rightness or wrongness of actions taken as a result of the splinternet is subject for further discussion, but what remains is that the internet has not been, and likely won’t be, worldwide in the future. Rather, it is the digital manifestation of national governments and big technology companies extending their sovereignty to the online space. This means brand marketers need to be prepared to navigate the increasingly complex global landscape.
First, we need to acknowledge that the splinternet real and it’s here to stay. This means continued vigilance is required to understand government and big tech policy proposals that may break up dominant platforms where marketing activity is being run. It also means that an audit needs to be conducted to identify alternative platforms and technologies that could be utilized to maintain consumer reach and engagement should the de facto platforms become materially compromised.
Second, brands must clearly articulate a policy and operational playbook regarding their usage of marketing dollars on platforms involved with potentially controversial splinternet activities. For example, if Facebook were to remove the ability to access and share news in Canada, or if was confirmed that China was harvesting TikTok user information for nefarious purposes with an intention to promote a nationalist agenda, brands will then need to address the reputational and operational risk that comes with advertising on those platforms.
REINVENTION OF SOCIAL CONTEXT
The Canadian federal government continues to impose local values and regulations on social platforms and as a result, Canadians are becoming more privacy-aware and are starting to retreat into encryption-based/private digital arenas. This is not to discredit that the U.S. platforms are still thriving in Canada throughout the pandemic. Rather, Canadians are now using more private groups and different platforms to reestablish social context online. The pandemic has reinforced how much Canadians are far more open and willing to fluidly redefine their digital persona across multiple social platforms. For example, consumers are making a conscious effort to present themselves on Discord may be different from their persona on Clubhouse, like how we might shift our behavior when moving between groups at a party. As Canadian attention moves into smaller and more private groups online, the way brands reach them must evolve as well.
A recent study indicated that only 30 percent of Canadian marketers are using social media to connect with their audiences. This is not surprising, as brands have been leaning more into tactical efficiencies with social partners to drive brand outcomes, and to a certain degree, deprioritizing interactions. As Canadians explore more niche platforms and refine their social privacy permissions, brands will need to rebalance their tactical mix to pay more attention to social conversations.
Letterboxd is a great example of this for brands in the entertainment category, where 60,000 Canadians have joined the platform to talk about the movie industry, per the latest data from Comscore. While the audience scale may be too small to drive brand impact on its own, a complementary strategy that entrenches passion-crafted social platforms is becoming increasingly essential in creating an authentic relationship with target audiences. Drop, a Canadian fintech company that leveraged Reddit to engage with tech enthusiasts, and saw higher conversation rates compared to other social platforms by simply engaging in one-to-one conversations with the tech community around their products and services.
For brands, this may mean breaking away from the idea that paid solutions are a mandatory requirement and taking a step back into social strategy, where building an audience is done one connection at a time, with KPI’s tied more to nurturing people vs short-term business impacts. Earning consumer trust will be an important way for brands to enter these increasingly intimate social channels and engage with customers. In addition, this shift opens up new opportunities for brands to target audiences based on contexts provided by the niche, interest-based channels they are in, instead of relying on tracking identities across different platforms and channels. These new approaches enabled by the reinvention of social context should help brands sidestep the increasing scrutiny on data privacy without losing the efficiency of a data-driven campaign.
