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Alexander Turtschan

SXSW 2023 Day 5: Brand Science

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Last recap daily for SXSW 2023 with a couple of great sessions on marketing and pretty pictures from space! Usually, Tuesdays at SXSW see the attendance for the interactive tracks going down, with the music tracks and showcases ramping up – not so this year, every session we attended was completely packed.

I think SXSW will be very, very happy with the attendance this year, after the dramatic decrease of visitors in 2022. At times it felt like the crazy days of 2018 and 2019, it casts a positive outlook on the coming years. More attendees mean more attention from high profile speakers, visitors and brands what keeps the conference as relevant as it is. I think that’s worth the queue times. 

The future of marketing is all about convergence

The day started with a session full of high-profile marketeers on the biggest stage. Conny Braams from Unilever, Jeremi Gorman from Netflix and Tim Mapes from Delta Airlines discussed current trends and developments in marketing strategies for the FCMG, entertainment and service industry. 

I already mentioned in previous recaps this year that convergence was a big meta trend in many fields, with the most interesting things happening at the intersections of different areas. It’s the same in marketing. Conny Braams stated that the way forward for not only FMCG brands was the increased integration between branding, performance and sales. Tackling the challenge of combining brand building while also driving conversion at the same time was the #1 task for marketers and agencies. Unilever’s internal structure already reflects this with a combination of previously separated teams now all working together for the common goal, going as far as adjusting product design for this new reality. 

Tim Mapes from Delta even went one step further – for him, every Delta employee is a brand ambassador and potential brand touchpoint. For Delta, generating first party data through their frequent flyer program with its corresponding app is one central pillar of this strategy – the other one: making the data available to customer facing roles, so consumer facing staff can use it to deliver more authentic and informed interactions with each individual traveller. 

Another big topic of discussion was the rise of retail media: for Unilever retail media is a perfect tool to control the elusive last mile at the store where crucial purchase decisions actually happen – that was previously controlled exclusively by retailers. Digital retail and retail media let’s the brands take much more control here – assuming the interactions with consumers are not purely transactional, but creative and entertaining and brands get access to the data generated. Again, convergence is key for future marketing. 

The five laws of brand science 

My second session of the day was a highly interactive and entertaining talk by Ethan Decker from Applied Brand Science. In his presentation, Decker went over five laws of brand science, that marketers should be aware of – backed by years of research and data. 

He offered an interesting way on how marketers laud customer loyalty as the pinnacle of marketing – despite the fact, that most consumers, for most categories, will buy a repertoire of brands and the more someone buys from a category, the bigger that repertoire gets. For many verticals, it also makes little sense to chase deep consumer connection, because people simply don’t care what their e.g. toilet paper brand of choice does on social media or what their brand purpose might be. 

Decker stated that shoppers are “mental misers”: the average consumer simply is too lazy to deal with hard and complicated questions when making a purchase decision and suggested that marketers should focus on the easy questions shoppers are asking themselves when buying from a category. 

Additionally, when it comes to light / medium / heavy buyers, the curve for almost all brands looks like a banana. High amount of single time / low frequency buyers, very few medium and heavy buyers – negative binomial distribution, or simply: the good old long tail. For growth, market penetration is 5 to 15 times more important than buying frequency according to a study conducted by Bain & Company, so marketing should focus on that lever first. 

Advanced Space Photography 

One thing to love SXSW for: they don’t shy away from giving keynote spots on the biggest stage to topics most of us know very little about. In this case: NASA and an all-female panel of astrophysicists sharing insights on the first few months of operating the James Webb Space Telescope. In addition to showing some of the mind-blowing pictures taken by the JWST in recent months, the panel discussed the massive effort of international collaboration between 14 countries to make this happen, the scientific breakthroughs this already led to and their deep-rooted love for discovery and human curiosity. 

Advertising’s guilty secret

SXSW is a great spot for inspiration and creating new food for thought from various disciplines. But at the end of the day we are still advertisers, so it’s always refreshing to see sessions that speak the truth about our day-to-day work. Today, Welsh advertising expert and CEO of Creature London, Dan Cullen-Shute together with Ivonne Kinder from Avocados from Mexico, gave us exactly that: A critical look at what the advertising business has morphed into, at least at award shows. Looking at the recent Cannes Lion Grand Prix winners, 90% of them were purpose-driven, which of course is a honorable messaging and there’s nothing wrong with that, but often these great award ideas either never reach a broader audience outside or aren’t linked to an equally good media strategy.

Dan spoke many truths today: Advertising is brilliant. We can make things that have genuine cultural touchpoints, boost the economy in needed areas, spark happiness and connect communities. The cherry on top: There are not many other jobs where the level of seriousness and ridiculousness can be the same. It should always be our mission to leave the industry better than we found it, in one way or another, so let’s get back to that: Make people laugh again, create epic things, even be totally ridiculous if appropriate. Get back to the heart of what we do and love – creating awesome stuff that makes brands grow and touches the hearts of our audiences. 

Random observations from Day 5:

  • Props to the SXSW organizers for enabling encore sessions for popular talks – and double props to the speakers of being just as engaging in round 2. 
  • It’s surprisingly hard to find good filming locations at SXSW – unless you want to give your video interview on the latest trends in tech & marketing strong 80s Dallas vibes – as the main color scheme of every conference hotel is beige, even the one built in 2017. 
  • I don’t know if it’s the overall inflation, the fact that Austin has been attracting thousands of highly paid tech workers in recent years or simply SXSW price gauging – but getting food is making your credit card bleed. 
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Alexander Turtschan

SXSW 2023 Day 4: Thinking about the future

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When dealing with innovation – and that word gets thrown around a lot at conferences like SXSW – you need a certain level of resilience towards frustration. Most people, when being confronted with something new, tend to be dismissive about it. Most innovations don’t have immediate world-changing effects. Nor personal relevance for everybody. And often they are hard to grasp and easily dismissed. Our fourth day of SXSW 2023 dealt with this topic in various ways. 

Will data privacy ruin digital advertising?

Yes, probably. If “ruin” means fundamental change, that is. In our first session of the day, Noor Naseer from Basis Technologies delivered an excellent talk on the current state of the effects of increased data privacy on digital advertising. A consumer base growing more conscious about how their data is being used, increased regulation and a changing media landscape will require marketers to rethink their digital advertising strategies. We all know the 3rd party cookie will go away and will cripple a lot of  tracking and attribution systems and targeting options. The big question the digital ad industry is concerned with: will we have viable alternatives by the time this ultimately happens and the answer is: probably, but not as a 1:1 replacement.

In her talk, Naseer laid out the importance of first party data usage, the use of permissible data sources & alternate identifiers, and a coherent tech-stack strategy for data management to keep digital advertising viable – with one downside: we won’t see exact 1:1 replacements for everything we got used to in the last 15 years, so a certain degree of flexibility will be needed. Dismissing any alternatives as non-viable, just because they aren’t exact replicas of the toolset we have today is something we will have to deal with. After all, it might change the future for the better – a digital advertising ecosystem that comes with more trust, user control and ultimately better results, even at the cost of higher friction. 

The slides are available for download here. 

The best storyteller at SXSW

In the afternoon I attended a particularly enjoyable session by Mike Bechtel, Chief Futurist at Deloitte. In his highly entertaining and insightful presentation titled “A Brief History of the Future”, he laid out the history and evolution of information technology along the three central pillars of computing: interaction, information, and computation. One of the key messages: futurism is all about pattern recognition. To adequately talk about the future, you need to understand the past – as emerging tech progression isn’t random, it follows enduring trajectories over and over again.

The main thesis: AI will turn into an ubiquitous, useful set of tools to make our lives easier – even if it isn’t always perfect. The future of computing lies in decentralized systems and the interfaces of today – screens – will look like anachronistic things of the past very soon, when the main interface will be voice controls and contextual automation. None of the technical aspects were of any surprise to me – in fact we have been talking about these topics for years. But Bechtel is an amazing speaker and turned this session into a masterclass in storytelling with a rare ability of explaining complex concepts with well picked examples and relatable analogies. Being able to learn from a true master in one’s own professional niche is what makes SXSW such a rewarding experience. 

Quick, Look East!

Web3, Metaverse and AI – are these the only hype topics of our decade? In today’s session, Tom Nixon, co-founder of Qumin and expert on Chinese digital marketing, threw in another contender for the mix: Social Commerce. In the West, the term often refers to the option of buying a product directly on the app, which is a feature that has been available on many platforms for years. Shoppable Social Ads do have merit for a couple of use cases, but this short-term opportunity to buy within the app should be treated with caution: The customer journey is not linear and not every purchase happens within that respective ecosystem. Looking at China though, Social Commerce can open up a whole new world of possibilities for brands to win the war for sales by including direct customer engagement. WeChat is a great example of an early-stage superapp that might be able to completely revolutionize this business model by offering a seamless costumer experience. 

China is pioneering in various promising fields, one of them being community group buying, where, for example, a village comes together to buy products in bulk from vendors for low prices. The process of buying is happening at the respective apps, while the organization between community members can be done literally anywhere else – from going door to door with pen and  paper to the magic allrounder WeChat. Another important touchpoint for Chinese brands are KOCs – Key Opinion Consumers. These are creators without huge followings that appear as trustful consumers instead of inauthentic influencers and help to validate the products they’re reviewing. From Metaverse experiences to virtual influencer, live shopping and gamification elements: The biggest learning the West can take in from China is the importance of immersive interactions, the aspiration to create something new and innovative, and the diversification of personalized services for the individual user. Taking into account cultural differences between China and the West, many approaches might not work for everyone, but they are no doubt intriguing opportunities worth exploring.

„Us“ Against The World

We’re celebrating a big birthday, because Reddit is turning 18 this year! Jen Wong, Chief Operating Officer of the world’s leading social news aggregation site, sat down with reporter Kerry Flynn to talk about the evolution of online communities. From the producer of the recent hit show „The Last Of Us“ speaking directly to fans about the ups and downs of the show to an award-winning cocktail bar owner that started his passion for fancy drinks on the subreddit r/cocktails 12 years ago: Reddit has always been about connecting communities and shared passions. While content on apps like Instagram is highly polished (some might say even fake) and follow a one-to-many approach, Reddit feels more like a many-to-many conversation that perfectly satisfies the desire for authenticity, which Gen-Z greatly appreciates. You want to get the real deal on product reviews, from real people that literally don’t gain anything (monetarily or influentially) from it other than the satisfaction of helping out others? Reddit is the place to be. Social clout means very little on the platform, it’s all about the idea itself. 

While agreeing with many statements from Jen, Reddit is not always the happy place it is often made out to be. With every social content platform comes the good, the bad and the ugly, and that’s also true for Reddit. There is a unique structure of governance within the community and the ability to flag and remove „bad behavior“, tons of of questionable content remains on the platform. 

Random observations from Day 4:

  • One thing I love about SXSW: people are on their best behavior. Nobody skips the long lines. The volunteers are cheerful and happy to help. Need a phone charger? Power adapter? Piece of gum? Directions? Someone will have your back, always. 
  • I’d love to understand the thought process of people standing in line for 30-45 minutes at Starbuck’s to spend $10 on mediocre coffee. I’d rather stand in line for an amazing session, but what do I know. 
  • A very German problem to have – could y’all not stand on the left side of the escalators? We have places to be. 
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Alexander Turtschan

SXSW 2023 Day 3: The Ketchup is out of the Bottle

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One particularly enjoyable aspect of SXSW conference is the immense diversity of topics covered in its program. Technology, business, marketing, design, entertainment, healthcare, politics, psychedelic drugs – there’s a lot of everything. Things get even more enjoyable, when you realize that despite the often fundamentally different backgrounds of speakers and industries, certain challenges are the same. Today was one of those days, and it has a lot to do with Ketchup.

Learning to speak machine 

Technologist and designer John Maeda is Vice President of Design and Artificial Intelligence at Microsoft and a regular on the SXSW stage ever since he released his first Design in Tech Report in 2015. 

Today’s talk was about system design and artificial intelligence and Large Language Models (LLM) in particular. While Maeda is a really engaging and entertaining speaker, his presentations can be difficult to follow, as he rapidly jumps between slides with lots of information, personal anecdotes and colorful analogies to share his thoughts with the audience. And he has a lot of them. 

One comparison really hit home with me – we are at a certain “Ketchup Bottle Moment” when it comes to Artificial Intelligence. Maeda compared the sudden influx of AI tools at our disposal as comparable to the old issue with glass ketchup bottles. You open them, you shake, you prod with knives and spoons and only get very little ketchup and some water out of them. But you really don’t want to eat your fries without ketchup, so you shake some more and then suddenly there’s way too much on the plate, as it all came out at once. AI has been lauded about the next big thing in technology for nearly two decades and 2023 seems to be this ketchup bottle moment. We will have to learn what to do with the abundance of AI models and tools now. 

A second analogy was treating AI models as building materials. Design isn’t really about the design itself, it is about the materials you select to get the job done – some better suited than others, but it requires a good, fundamental understanding to do that. System designers reached this point now with AI: the pre-trained foundation models of today are new materials and will help us design different things than the ones we know. But to actually get good results, we will have to learn a lot more about context and cognition when building these systems. In Maeda’s words: Designers will have to learn to speak machine to interact with AI tools – prompting is about more than getting the job done and really good prompting not only adds context and provides instructions for the model on how to solve a task, it also keeps efficiency in mind to lower computing costs. 

The need to change business culture 

Today’s keynote session featured Patagonia CEO Ryan Gellert in an interview with journalist Katie Couric. Gellert shared insights on Patagonia’s recent restructuring around the transfer of ownership from the Chouinard family to the Patagonia Purpose Trust – with the stated goal of using the profits of the business to combat climate change and protect nature while protecting the integrity of the company. When asked about how this affected daily operations and management of the business, Gellert said very little had changed as the company was still operating under the same set of values, a commitment to radical transparency and honesty. 

One central message of the interview was, that businesses, especially in the sectors of fossile fuels, agriculture and clothing, are amongst the worst polluters on the planet and responsible for many of the problems we currently face with climate change. So it is their responsibility to clean up the mess they created. Quoting Gellert: “Business leaders will do the right thing, after they exhausted every other option.” Basically, the solution is to create another ketchup bottle moment. 

A central role to keep up the pressure in this regard falls to consumers, according to Gellert. He encouraged consumers and employees to be very cynical and critical of every company’s messaging around sustainability to keep up the pressure, especially through social media. In addition, he wants Patagonia to be on the forefront of changing the business mindset overall – maximizing shareholder value should and must no longer be the number one priority. 

Some TikTok creators need to take several seats

With hundreds of sessions to chose from, you can’t only pick winners – my last session for Sunday was proof of that. It featured TikTok creator Robyn DelMonte aka “Girlbosstown” alongside UTA Digital Talent agent Scarlett Perlman. The pair shared insights on how brands should work with TikTok creators to address Gen-Z. While none of the insights were wrong (in fact they were all absolutely right), we might have reached a point where certain creators need to reevaluate their own self-assigned importance. Any brand strategist worth their dime knows that humanizing your brand, understanding your audience, being authentic, utilizing trends in a smart way, and co-creation of campaigns are the key to success on TikTok. In fact, even ChatGPT probably will tell you exactly this, so when getting on a SXSW stage you should bring more than that and not act like you invented TikTok marketing in your living room and as if you were “changing the digital landscape” (that’s a direct quote) on your own. 

What I enjoyed though, was treating TikTok as the internet’s inside joke. I’ll gladly steal that analogy for future reference and probably act like I came up with it myself on the couch in our Austin AirBnB while writing this recap. 

It’s the end of the media world as we know it

Media, as many other areas like entertainment and content, needs fundamental rethinking – that’s a fact. Every brand wants to be present on the same media platforms, every brand fights about the same dollar, every brand wants to be the #1 subscription service. You don’t need to be a media pro to realize that this is not a sustainable model for the future. Ideally, there would be a one size fits all blueprint, but in reality no big tech media can figure out their own business model anymore. In today’s session, Evan Shapiro, creator of the “Media Map” which tracks the massive changes in the world of media, talked to Steven Rosenbaum about the big drivers of change for the next decade.

In the last couple years we already experienced quite a hefty generational shift. When before, boomers and Gen-X ruled the world, it’s now Millennials and especially Gen-Z and Gen-A who took over the steering wheel. Young folks grew up in a global polycrisis while having the highest rates of anxiety and depression of all time – therefore when making decisions, they’ll be making them completely different. We’ll see a drastic shift of consuming content online, as they’re not going to be chill about giving their personal data away for free. Bad news for media. At the same time, they’ll gladly pay for media and content they love. Good news for media. 

Going forward, winners will be those companies who can cater to both age groups at the same time and find the right mix of having single unit sales in form of ads as well as recurring revenue models like subscriptions. Between the two, this should not be a battle, but rather a balance.  Many big tech providers are struggling with that: Meta almost completely relies on ads while Netflix does the same thing but for subscriptions (and yes, this already counts in their ad-based model as well). It’s not enough to get consumers in the door. The real challenge is to keep them inside and entertain them every single day. Ending subscriptions after binge-watching blockbuster series is the new normal, the new channel switching on TV. Consumers aren’t loyal to providers but take power into their own hands. Will this lead to a superapp ecosystem? Future will tell.

Recent numbers are showing another big media change: Ad spend has gone down significantly in some sectors like retail or auto – and even though this money will come back, companies will look for other ways to advertise their products and services. Instead of the good old ads they’re doing for years, companies look out for more performance focused media. According to Shapiro, media has always been about ultimately selling your stuff. Even though Netflix doing PreRolls like it’s 1999 is kind of adorable, impression based ad campaigns are out. From machine learning targeting options to influencer marketing based on sold units: Performance media will be the metric of the next decade.

The Future of Play

Sunday was also the kick-off for the game industry track, with more to come in the next few days. One of the first sessions today brought together some of the most influential people in gaming, like game developer Paul Bettner and Nate Mitchell, co-founder of Oculus. While gaming is already one of the most important entertainment industries, there’s still room to grow if games become even more accessible and broadly available for everyone. It’s about redefining the definition of „the gamer“. From „hardcore games“ like Elden Ring (which is just really hard to play and defeat) finding mainstream success, the rise of mobile platform games to game titles emerging as a huge spectator sport that attract more viewers than big traditional sport events. Everyone can be a gamer in their own way and how they want to be. When meeting new people, do you ask them if they are movie-goers? Probably not. So why are we still asking the question „are you a gamer“? The pandemic already showed that video games are the new schoolyard where people hang out with their friends. This is not only true for kids, but also adults who create meaningful friendships over Discord or Twitter. This convergence of gaming and social will change the way we interact not only with games themselves, but also publishers, game developers and content creators in a major way.

Random observations from day 3:

  • Goodbye Rainey Street. The historic street, once home to many old bungalow style houses turned bars & nightlife spots slowly but surely loses its iconic face, with more and more soulless apartment towers replacing the old buildings. Another major downside of Austin’s ever increasing popularity. 
  • If you ever wondered why the lamp posts, telephone poles and columns around the convention center are wrapped in plastic – it’s because there’s a constant sticker & flyer battle going on. Dating apps, NFT projects, concerts, events, brand activations, viral campaigns – the high-traffic spaces are popular for advertising whatever you currently want to promote. 
  • An equally fascinating amalgamation of weird things, that don’t really fit well together: The Creative Entertainment Expo. Showcases of very niche tech prototypes, often from Japanese companies, live next to the business and investment development booths of various countries, airlines, mobility providers, software companies, and the CIA of all things. 
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Alexander Turtschan

SXSW 2023 Day 2: Convergence points

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Duality is a major theme at SXSW, down to its programming, speakers and organisation. Tech and business meet entertainment and arts: A-List celebrities and highly specialized niche experts. A massive 10 day conference planned for over a year by a small team at SXSW, but only made possible by the contributions of hundreds of volunteers over the course of the actual event. Duality, and with it the inevitable mixing and mingling of different ideas and processes and cultures, let’s us make the most interesting observations at the convergence points in between.

The Internet as we know is gone – we just don’t see it yet

We focused our 2nd day at SXSW 2023 on the heavy hitters in the speaker line-up, starting with CEO and founder of the Future Today Institute and SXSW legend Amy Webb launching the 2023 edition of the Emerging Tech Trends Report. Queuing up shortly after 8am for the 10am session turned out to be a good decision, as the room was absolutely packed and many attendants didn’t manage to get in at all. 

The talk itself focused on roughly 35 out of the 666 (!) trends from the latest set of reports and – as mentioned in the intro – the most interesting things will happen at the convergence points between different trend clusters, two of which Amy Webb talked about in detail.

Cluster one, the convergence between web3, cloud computing and – you guessed it – artificial intelligence will lead to a major reshaping of business and society. Or as Amy Webb stated: The Internet as we know is gone. The question we have to ask ourselves is: What if you don’t search the internet, but the internet searches you? With the proliferation of AI and Large Language Models (LLM) combined with Reinforcement Learning from Human Feedback (RHLF), everything around us becomes information that is ready to be processed and used to train AI models – with highly capable generalist AIs on the horizon that will shadow anything we see today. 

The infrastructure to power these AIs can realistically only be provided by a couple of big tech companies, further solidifying the existing monopolies in digital infrastructure, late and lacking regulation and very little ethics involved, if these companies are left to regulate themselves. 

Amy Webb drew two possible scenarios for the year 2033 – an optimistic one, with people centric AI and data management centred on the common good in a transparent and decentralized setup with opt-in data sharing where this new infrastructure works for the user and provides real and tangible benefits. And the catastrophic one, where our digital footprints are constantly scraped into models, leading to aggressive curation and recommendation instead of true user choice. We end up surrounded by information, but can’t get the actual things we want. Chances of the latter happening according to Webb: 80 %. 

The second cluster, the convergence between AI, the Metaverse, bio-engineering and healthcare focused on assistive computing of the future where generative AI and the industrial metaverse act as invisible and ubiquitous tools leading to major improvements not only in medicine but in almost any profession. The danger: creating a new digital divide for those who weren’t trained to use these tools early on. The optimistic scenario for 2038: we invest in education and upskilling and these new tools positively transform the workforce. The catastrophic one: assistive tools are mere ways to increase revenue, we face a massive digital divide and let the AI cause actual harm due to inherent biases and a lack of human reinforcement. Chances: 50:50. 

The complete reports and additional goodies from Amy Webb’s session can be downloaded here.

The only future we can make is one we are able to imagine

The next session had a much less gloomy outlook on the future – even though it focused on similar themes. Rohit Bhargava, SXSW regular and author of the highly successful Non-Obvious Trends newsletter and book series teamed up with trend forecaster Henry Coutinho-Mason to speak about technology, that might have looked like science fiction just a few years ago, but will feel totally normal to us soon. 

Metabolic monitoring for better understanding of personal diets, virtual companions that can have positive impacts on our mental wellbeing, synthetic food, that might require a completely new way of brand storytelling, that for the longest time focused on championing “natural”, immersive entertainment, and augmented creativity supported by generative AI. It was a refreshing interpretation of what technology can do for us, if we think about it positively. The fact that the talk happened right after Amy Webb’s session just further reinforces the theme of duality at a place like SXSW and shows that both these ideas can co-exist – it is up to us, what we take away. 

Fixing the Complexity Crisis 

The afternoon started with a session by Nick Law, Global Lead for Design and Creative Tech at Accenture Song. You might think I’m starting to make things up, but duality was a major topic in this talk as well. Law spoke about the necessary structure in organisations to enable great creative work in an increasingly complex environment. The combination of copywriting and art direction, brand and performance, design and storytelling – and the ideal connections between people from different fields to create truly outstanding work what neither party could have done on their own. It was a convincing call to invest the time and effort to transform the organizations we are part of, illustrated with many examples from the history of advertising down to his own illustrious career at R/GA, Apple and Accenture. 

Artificial Intimacy 

What better way to end the day than with a session by another prolific SXSW speaker – renowned psychotherapist, podcast host and author Esther Perel asked important questions:  to what extent is artificial intelligence a conduit to artificial intimacy? What effects do the growing popularity of AI therapy bots have on mental health? How are our relationships affected by the proliferation of hyper-connectivity and the performance metrics we apply to our digital self expression? For Perel the answer is clear – human relations are way too complex and ambiguous for AI systems to grasp and our hyper-connected digital lives prevent us from being truly present in our real relationships. 

Random observations from day 2:

  • Instead of exporting SXSW to Australia, the organizers should think about opening a branch in Brazil – then again it feels like half the Brazilian tech & marketing crowd is already in Austin anyway. 
  • Did I mention: the lines are back? SXSW has really perfected the art of queue management and every year new I get introduced to new creative ways of lining up. And all of it is surprisingly analog, considering the digital and techy nature of many of the sessions. 
  • I want to hang out with the person in charge of decorating in the hallways of the downtown Hilton. Keep celebrating the tacky 90s vibes! 
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