Lasting Gen Y Legacies

Matt speaks to the ADMA conference about the millennial impact on business.

Live From Sydney Australia

Matt gave his first talk ever in Australia during a keynote to an audience of global marketers at the ADMA GLOBAL FORUM while discussing 'The 8 Lasting Legacies Of The Millennial Generation"

See coverage on this talk by CMO Australia

Transcript of keynote:
So, I'm going last on a Friday, and I'm going after a NASA rocket scientist. Thank you ADMA. Great to be here, I'm going to make it worth your while. This is actually my first time in Australia. I really love this country. I spent some time snorkeling the Great Barrier Reef, which if you haven't done, I'm surprised how many people who live in Australia still haven't done that, but it was really fascinating. I live in New York City and I still haven't seen the statue of Liberty, so I guess I kind of get it. But today I'm not here to talk about tourism as much, although I will touch on it, but the Millennial generation. Are there any Millennials in the audience today? Okay. So I used to think that meant you were really young, but actually what I'm talking about today is the lasting legacies of the Millennial generation.

And we're talking about legacies because this generation is kind of phasing out. So the Millennial generation was born between 1980 and 1996, so the youngest Millennials are actually now 21 years old, and they're starting to phase out in favor of Gen Z. But the Millennials have had a profound effect on our world. A lot of people ask me, what's the big deal about Millennials? Why does everybody talk about it? In some terms, it's kind of become a punchline in terms of brands targeting Millennials. But there's a reason that the Millennials are such a big deal, in that they were the first generation that grew up in the internet in the household. So I'm a Gen Xer, and when I had to look things up, I had to go to Encyclopedia Britannica to look up information. I had to use the good old rotary phone to connect with people.

I didn't have access to the internet, but the generation after me did, and that makes their brains hardwired in a completely different way. It makes decisions to them intuitive, where for some people like us, it's not so intuitive. They think quicker, they think about things in the future, and because of that, they've changed the world forever. So what we're going to be talking about today is the 10 lasting legacies of this generation. What are the 10 things that they're going to be remembered for, and what does it mean for us kind of moving forward? And one other point I'll say is that, so I spent my entire career helping big brands target teens and college students. And at the beginning when I started my first agency in 2002, the brands were in control, because advertising still kind of ruled the day.

Brands could talk about their unique selling propositions, their 30% more absorbency or their V6, 360 horsepower, right? They got to talk about those product terms. They got to actually dictate what happened. And then somewhere around 2006, 2007, 2008, the script kind flipped a little bit where they were no longer in control. It was the consumer that was in control, and the decisions about the future of the company didn't happen in the board room. It actually happened on the sidewalks, and it happened by consumers, and that notion's now taken over. What's really fascinating is that Millennials have not filled up the C-suite yet. So the C-suite, the CMOs, they're still Gen Xers, and a lot of them are still spending 80% of their media budget on TV, because they grew up watching The Cosby Show, right? And they grew up with Cheers and Friends, and whatever the sitcom du jour is here in Australia.

So they actually think that way. But once Millennials fill the C-suite, once they're actually in a position of power, intuitively LEM they're going to say, I can't remember the last TV spot I ever saw outside of a live sporting event. There's no effing way I'm going to spend 80% of my budget on television. And that's when you're going to really start to see shifts happen, and I'm really fascinated with what the implications of that are. So the number one trend, or the lasting legacy that this generation's going to leave, is the new status symbol is the status update. Okay? So growing up with Gen X or Boomers, the way that you would represent yourself to the public, was through the cars, the houses, the watches and the sneakers that you could accumulate. People bought stuff as a way to kind of socialize and broadcast to the world what they were all about.

The brands meant something [inaudible 00:04:15], to them, and the brands were actually able to be showcased. And the whole era of consumerism in the 90s was really driven by consumers wanting to actually wear brands that they could showcase what they were actually all about. Because back then, if you had an incredible experience, you went to a concert, you sat front row to the game, there was no way to actually share that with anybody besides the people who you are right in front of you, who could maybe look at your photo album. You couldn't share experiences at scale. But now you can share experiences at scale, and because you can, experiences are the new social currency, which is why the status update is the new status symbol. In my book, Youth Nation, and I talk about something called DIFTI. I'm sure no one in this audience is a big enough fan of me to know what DIFTI means, so I'll explain it, which is, "did it for the Instagram".

And what "did it for the Instagram" means is that consumers are so obsessed with experiences, that they're pursuing them not even so much to enjoy them, but to prove to everybody else that they were actually there. So they will jump off cliffs, some people have died unfortunately for that Instagram shot, because they want everybody to know that they are adventurous, that they are somebody who can kind of go out on a limb, and it's driving people to do new things that they've never done before. Case and point, this is Mission Peak, it's in Fremont, California. It's been around for a very long time because it's a mountain. Okay? But in the last five years, Mission Peak has been plagued by overcrowding, complaints from local visitors, pollution. Why? Because Mission Peak is a very easy hike, and when you actually ... it's off of two major highways, and when you actually get up to the top of it, you can climb this pole and take actually the ultimate selfie.

And now all of a sudden, everybody's an adventurist, everyone loves the outdoors, right? Because everybody actually wants to actually get that shot. It's not driving necessary a renaissance of interest in hiking, it's driving a renaissance of interest in people actually portraying that they're outdoorsy. And this is a real thing, because what you put actually on the Instagram, dictates the jobs that you get, the relationship that you're in, the way that you're actually perceived to the world. The same way it did in the 90s if you rolled up in your cul-de-sac with a Lexus, right? And you were the first one that actually did it. That is a new way that people are building status, and it's driving a whole, huge interest in travel. This is an app that's taking off called, GTFO, which stands for, "get the flight out". Okay?

What "get the flight out" does is you could actually be home chilling on a Friday afternoon, and you could actually see what the cheapest flight to go as far away as possible. Oh, it's $169 to go round trip to Budapest, I guess we're going to Budapest. And people want to check it off their bucket list, and this is so emblematic of this generation. I did a Millennial panel for Citibank a couple of weeks ago and asked everybody what their favorite new app is, and almost every single person named the travel app as something that they actually really love, because it allows them to explore, it allows them to build their personal brands. And has anybody heard about "Color Run", which is a global phenomenon? So Color Run is actually really interesting because it's emblematic of how kind of this whole phenomenon on the showcasing experiences, has impacted the fitness space.

So, there's a gym company in the US called Bally's, and Bally's is now out of business. Why? Because they were a gym and they had weights and machines, and that's it. Normally that would be okay for a gym, but it's not, because that actually doesn't give a consumer anything to share and actually build who they are. Color Run conversely, is a race that's un-timed, people show up, they spend 200 dollars to race in it, wearing white shirts and the second they show up, they're doust with colorful powder. Nobody is not bringing a phone to this race. Now when you see people running marathons usually, they don't have their phone out, right? But at this, everyone has their phone out. It's un-timed and people who get to the end are treated to a concert from a live DJ. This is experience. This is status. The new status, people are doing this not so much for the fitness element, but to build their own personal brand.

Number two, the inner city will be dominated by the creative class. So growing up, the Gen Xers and Boomers knew that the inner city was sort of like the rough inner city, and the blue collar inner city, and the wealthier people who actually were out in the suburbs with their sprawling houses, and their two car garages and their white picket fences. But that version of the dream family, and where you're going to be moving out, has actually taken a u-turn. Urbanization has really taken over. This generation does not want to move to the suburbs. When we were growing up, we couldn't see what 20 year olds were doing when we were 30 or 40 years old. But now everybody's living with the same information, and in the same news cycle, and younger people are living younger, later and later in life, and because o that they have no interest in moving to the suburbs. They see that as giving up on their youth. And as a result, in major cities around the world, real estate prices are skyrocketing, and in the suburbs they're kind of flattening out.

And since they're skyrocketing, the working class, the blue collar working class, is actually getting pushed out to the suburbs, which is a really interesting phenomenon. You have places on the fringes of cities, that used to be crime ridden, in Brooklyn outside New York, there's places that are selling $2 million townhouses that were littered with gunshots, five, seven years ago. Why? Because the livable boundaries of cities are getting pushed outwards and outwards and outwards. Construction is going everywhere. In Seattle, Amazon actually is planning on hiring more people than is currently the entire population of Seattle. The entire city has cranes there. Okay? The young people who work for Amazon, and work for Microsoft and Starbucks and all the companies in Seattle, have no interest in actually ever moving out to the suburbs, so they're staying there.

And it's pushing out, and what it's doing is it's causing massive gentrification in major cities all around the world. Since the real estate prices are going up, the mom and pop shops are going out of business because they cannot afford the rents anymore. And we'll talk about Amazon, obviously in a little bit, I'm sure you've heard plenty about that during this conference. What's interesting to me about gentrification though, is once a local mom and pop store goes out of business, one of three things usually opens up in its place, a Starbucks or a type of restaurant, because it is an experience, right? And people still like to go out and actually convene, even if they're starting at their phones with the person next to them staring at their phones. They still like to go to restaurants.

A bank, because people still feel that they need their money, although I think that's going to be changing very quickly, because I see cash eroding. And a pharmacy, somewhere where people can kind of get their conveniences, things that they need right away. Those are really the only retailers that are still thriving and taking up these 2500 kind of square foot footprints that are happening in retail, as all of the local businesses go out. And that's really fascinating to me, and that is really the Amazon effect coming into play. Because anything that you don't need today, you can get tomorrow, in major cities where Amazon is, people would just order it on their phone and get it a lot easier and more cheaply, which is putting tremendous pressure for retailers everywhere.

A couple of weeks ago, I have these Bose headphones that I use when I talk on the phone. I had a big conference call, I left them at my apartment, so I neededt once and there was a Best Buy across the street from my office. So I walk to the Best Buy across the street, I found the headphones, I was waiting in line to buy them, and the woman in front of me was fumbling with her rewards number and it was five minutes, 10 minutes, 15 minutes, and I just didn't have the patience for it, right? Maybe it's the Millennial in me or the ADHD in me, but I just really didn't want to wait. So I walked out of Best Buy, on the way out, I just pushed one click shopping, and I ordered the headphones on Amazon. Sure, I wouldn't get them today, I'll get them tomorrow, but now Amazon can deliver the same day.

And as I'm walking out of this huge three story complex that Best Buy has, I'm thinking, this is going to be an apartment complex in two years. There's no way that this massive business with all these employees is going to be able to stay in business, and it's happening over and over and over again. And the other thing that's happening with Millennials staying in cities, is people are getting married much later in life. There's apps like Tinder, right? Dating apps, which made people get married later in life, obviously. But there's also the notion that marriage is expensive. Women are actually much more career driven than ever before. People are actually staying in [inaudible 00:11:55] , it's more expensive. They're pushing off having a family. Since they're living younger later in life, having a family is actually becoming deprioritized, which has tons of implications to CPGs, companies that are marketing to the mom, etc.

Number three, services are making us buy less stuff. This whole access over ownership mentality, since experiences are now driving personal brands, people don't want to go to the big department store or the big box retailer and load up the back of their SUV with stuff and bring it home. Stuff just isn't as cool anymore. Stuff weighs you down. Stuff does not build your personal brand, and that's why you see retailers going out of business. And what's fascinating to me is, the two things where consumers have traditionally spent the most amount of their discretionary expenditures, cars, they really don't want to buy anymore, because they're in cities and owning a car combined with the cost of gas, tolls, parking and insurance, is just way too expensive. So why would you ever want to own a car with the ubiquity and ease of Uber? So as a result, people aren't buying cars.

And with tools like Airbnb, you really don't need to own a home anymore anyway. You can rent out your apartment when you're traveling, rent out other people's homes. So cars and houses, the rite of passage for young people to kind of establish themselves financially, really doesn't exist anymore. Even services that people would walk into on the street, are not being utilized as much anymore. There's Glam Squad, which is a service where it's kind of like the Uberfurcation of home beauty, where instead of going to a salon where women can get their hair blown out or get their makeup done, you push a button, you have a team of stylists that actually come to your apartment, actually do a for you. These companies don't have to pay exorbitant retail rates, that have a nice little store on main street, and the consumer gets the convenience in their house.

But even buying clothes, there's "Rent the Runway". Why would women need to buy a $2000 dress that they might wear once? Rent it, take a great Insta with it, right? No one's going to know that you don't really own it, and I won't tell if you don't tell, and then you can return it and with the money you're saving, you can spend that on an experience. So all these things are changing. The fact that consumers don't actually need to own what they thought they did. Even music, the one thing Steve Jobs, rest in peace, got wrong is he thought people would want to own their music, and the iTunes all about buying music. But then Spotify and streaming services came along, where you essentially can rent your music. You pay a monthly fee, because the changes of music are so fickle, right?

There's only so many times I need to hear Despacito, right? That if I can actually hear it once and that's cool, or maybe listen to it a couple of times, that makes sense. So the whole rental, access over ownership thing, is going to be a huge lasting mark of this generation. Number four, the global middle class is rapidly evaporating. This is a really scary thing. Right now there's four companies, which is one of my other rules, number 10 actually, but four companies that seem to be dominating the world, Facebook, Apple, Amazon, Google, combined to have a $3 trillion market cap. We all know that, but really what's starting to happening is, consumers or workers that are able to touch that ecosystem, whether you work there, you work with them, you're somewhere within that ecosystem, are generating tremendous wealth, and consumers who aren't, are on the outside looking in.

And what's happening in market after market around the world, is this notion of a barbell economy, meaning that there are people that are on the wealthy side, and that there are people who are struggling, and there's actually really not much in between anymore. You know, the manufacturing jobs going away, there's things that are being off-shored, outsourced, or artificial intelligenced, out of business. And people who used to have jobs, actually no longer have them anymore. Now, from a business standpoint, there's obviously huge social and geopolitical issues, obviously coming out of a barbell economy in countries everywhere. But from a business issue, you actually need to understand how you could take advantage of this. So, on the value side of the equation, there's Dollar Store, Dollar Tree, Dollar General, Miniso, who's a Dollar Tree equivalent in China, who basically are selling the best possible product for the lowest possible price, right?

They're winning on supply chain innovation. They're figuring out how they can get you a flat screen for $199, like Vizio can, or a car for $13000 like Kia can. Those companies are winning because they know on the value side of the equation, consumers just want to get what they can get. They can't afford to play with brands or innovation or anything of that front. And companies that are cracking this, are doing incredibly well. And then on the luxury side of the equation, there's companies like JetSmarter, which is a private jet rental club where you pay $15000 a year, and you can access private jets flying everywhere, right? There's Aman Resorts that charge $2500 to stay in one of teh luxurious resorts for an evening. Okay? There are so many companies that are winning and killing it on the luxury side of the equation, but the issue is, not enough companies are picking a side, and they're being stuck in the middle.

The Gap. Perfect example. Gap shares flop, after chain says, it will close more stores than expected. Why? Well, the value side can't afford to shop at the gap. The jeans are just too expensive. They're $49 instead of $19 or $15, and the luxury side actually doesn't want to shop there. So Gap, and so many other companies, are actually finding themselves in the middle. And companies in the middle right now, have absolutely no shot. They should just pack up shop and just call it a day, and actually leave. So companies need to reinvent themselves. So some companies can come up with an entry level brand, and a luxury brand, and actually try to pull it off. But in most cases, you see airlines taking the choice of, I'm either going to be the lowest possible provider, I'm going to sell the seats for dirt cheap. And [inaudible 00:17:18] might sell you for every little thing, including a crummy can of peanuts, but they're actually going on the value side.

And then you have companies like Delta, who's launching Delta One and they're saying, we're going to go to the luxury side of the equation. So the elimination of the middle class, nott complete elimination, but tremendous erosion, is definitely going to be another legacy of the Millennial generation. Number five, brands are built direct or no longer built at all. What that means is that so many companies, so many merchants, so many manufacturers have for so long lived on the fact that if a buyer from a major department store bought their product and actually sold it in their stores, that they would be okay, and If they got an NCAP, that they would be okay. And because of it, there's so many businesses, CPGs, beverage companies, food companies, that have so gotten used to the fact that as long as they get sold in the big retail, they'll do well.

But now these retailers aren't going to exist anymore, and a lot of these companies are going to have to struggle with selling direct, whether it's over Alibaba or Amazon, regardless of who it is, they're going to be responsible for actually selling to consumers, and a lot of these companies don't even know who their consumer is, because the retailers have all the data. They actually don't know the demographics, the purchasing habits, the purchase drivers, and they have no data. They don't even have email addresses or anything on who their customers are, and that's going to be a massive shift for these companies. They're going to have to establish direct relationships. And in its absence, a lot of companies are coming in and taking on 800 pound gorillas like Warby Parker in the eyewear space, taking on a huge company like Luxottica and they're saying, we're going to build strong direct relationships with our consumers.

We're going to have supply chain innovation and get our customers the cheapest, best possible products, and we're going to have kick ass customer service. But most importantly, we're getting to know our customers. We're going to communicate with our customers. We're going to have data on them, we're going to serve them the right content at the right time. I have his luggage called Away Luggage, they're now up to 50 million in revenue, two women in their 20 somethings, God bless them, started this company. Yes, it does have an iPhone charger in the luggage, which is super cool and definitely a neck turner in airports, but Away went into a market where not a lot of brands had personality. Not a lot of brands had differentiation. They became a lifestyle brand. They became about travel and experience. If you go to their Instagram, you'll see that right away. But most importantly, they built that direct relationship with consumers.

And the first time I bought their product, it broke and I had a new one a day later. And they apologized, and they were actually real people behind it, and they're scaling this personalization. They're scaling these relationships. And now there's new companies coming up and saying, you know what? Brands don't actually even matter anymore. This company, [Brenless 00:19:54] just raised 50 million in funding. They're not going to advertise, they're not going to come up with the brand. They're having the best possible organic, cheapest products that ... so the best, cheapest, products that they can get the consumers, because they know that deodorant and toothpaste and hair gel and shampoo, doesn't build consumers' personal brands, they're going to Instagram about it.

Consumers would rather save that money and spend it on the real thing. So because of it, strip the brand out of the equation. And the power of the brand, and what a brand really means moving forward, especially when you don't have direct relationships, is something that's really going to come out of this generation. And so many companies that have built their brands and their businesses, spending money on TV, building brand equity, that actually may not matter as much anymore. Number six, we now see gigs instead of jobs, and education has forever changed. In so many countries around the world, education is so backwards, and the notion of higher education, people going to college, racking up debt and then actually preventing them from following their dreams because they're in debt and taking a job at a company that they hate, and throwing their careers, is something that is just so befuddling to me, in terms of why people would do it.

But it's kind of the way it's always been done. I think the notion of a liberal arts degree, or a general studies degree, is very asinine in this culture right now, in a world where everything's being off-shored and outsourced, because the fact is that if you have to come into work every day and wait for your boss to tell you what to do, your boss will just tell somebody in Costa Rica or India or China what to do a lot more cheaply, right? So you need to come in as a young employee, if anybody has kids in the audience, a lot of people ask me, what should I tell my kids what to do, how do I set my kid up for success? My answer is always the same.

Go deep into an art, or deep into a science, because those are things that machines necessarily can't do. Deep into a science means someone's got to turn on the machines and operate them, someone's got to code them, someone's got an innovate them. Someone needs to understand how to use the technology to empower businesses. That's going deep into a science. Deep into an art is being a writer, a designer, somebody who's creative, somebody who can ideate, because I don't believe that machines will ever be able to do it that way. Although I heard last night that something called Daddy's Car, on YouTube, where basically they took every Beatle's song ever combined and created a new Beatle's song, based on artificial intelligence. So maybe, one day, a computer will write songs, but I still believe going deep into an art, will still have a lot of value.

But being in the middle, not having a deep specialty, is really going to screw you up, and you're starting to see it with this notion of a gig economy right now, because what's happening right now is companies are having a lot of struggle to grow and drive earnings, and what they're doing, is they're driving addition through subtraction. So they're cutting costs to have more profit, and when they're cutting costs to have more profit, they're getting rid of that middle management layer. But instead, they're seeking out specialists, and they're seeking out freelance specialists. So if you're a specialized tech developer who can develop voice applications, or a humor writer, or A YouTube search engine optimizer, right? You can actually be a freelancer and have an enviable career, without ever having to work for a company.

You can actually be on your own, and have the lifestyle that people dream of. You can travel, you can use "get the flight out" and go to Budapest and even actually work from there, right? So you can live that nomadic, dream, Millennial lifestyle, if you're a freelancer. And in running my agency, I've had people turn down huge offers because they're making half a million dollars, basically freelancing for five different companies because they actually have the skillset that companies need. And because of it, there's a huge collaborative workspace industry that sprouted, like WeWork, which is now one of the largest tenant of commercial real estate, in almost every major city across the world.

And in WeWork, I can rent that guy in his blue shirt's desk, for $200 a month, and sit next to a programmer, next to an engineer, next to a writer, and have a cultural that rivals Google and actually have massage therapists come in and gave me a little massage every Friday, and have a conference room and a receptionist. When I started my company, I started out of my bedroom, and I woke up and I went to a desk in my bedroom, that's how I started. I would've loved WeWork, growing up. But now WeWork as empowering these young entrepreneurs to become the CEO of them. So I think the gig economy is real. I think companies are going to start contracting their full time workforces, and we're actually already seeing it. Companies are moving away from these huge suburban enclaves, like Visa in Foster City, California, moving to San Francisco, right?

And Microsoft now moving much more offices from Redmond, Washington, into Seattle, because they want to be where the young talent is, which is in the cities. But when they're doing so, they're contracting their workforces, they're getting smaller, they're getting more nimble, and they're using freelance talent. So specialism, going deep into an art and a science, is really the way out for a lot of young people growing up. But schools are still teaching kids handwriting, which is just, why? Why are you teaching them handwriting? I actually, one of my next ones is, I actually don't even think they should be teaching them typing anymore, right? Because everything's going to be voice based. So why are we teaching kids things that are in the past, when some of our global counterparts are teaching kids how to write algorithms? Who's going to win 10, 15 years from now? We can't be romantic about where education was. We need to be where it's actually headed, which takes me to the next, typing will go the way of hieroglyphics.

Typing is going away, right? We are not going to be typing for much longer. We're not going to be getting carpal tunnel for much longer, and actually sitting there on our keyboard because voice is getting better and better and better. The iPhone 8 series is going to blow people away. It's coming out this fall. The voice recognition is going to go from 95 to 98, 99%, and any technology or any innovation that saves consumer's time, will always win. And voice saves consumer's time, because it's a lot easier to talk than it actually is to type. So I believe that voice is going to be much bigger than people think. You have the best companies in the world, like Amazon with Alexa, or Google with Home, actually really investing Microsoft with Cortana, in these voice based systems.

And going back to like, what's going to happen in the future of brands, if you actually have an Alexa in your house, and you try to order batteries and you say, Alexa, buy batteries. Alexa will say, we'll give you Amazon ... in the Alexa voice, which I'm not going to try to mimic, we'll give you AmazonBasics batteries. No, I want Duracell. Do you want AmazonBasics batteries? No, I want Duracell. We're going to get your AmazonBasics batteries. Basically what Amazon knows is that low involvement categories, like batteries and soon toothbrushes and soon toothpaste, right? The CPG category, which is a huge percentage of brand building and advertising, that the convenience of ordering over voice is much more impactful than getting the right actual brand. So Amazon is actually stripping the brand out of it, and they're going to sell you an unbranded product.

Think of the billions of hours that Procter and Gamble has spent on building the Duracell brand, is it all going to become evaporated just because voice is actually going to go into the house? And even Google might be screwed with voice, because if I'm using Siri and I say, Siri, what's the next pizza shop? Apple may use Microsoft's Bing technology to deliver it, because I'm not seeing the Google logo. And if it's just easier for me to ask Siri, then does Microsoft trump Google? And if that's 85% of Google's revenue, what happens to Google? Not sure, but I think there's so many implications happening with voice, because the visual stimuli goes away. The future of the phone looks like this, they look like AirPods. In three to five years from now, that will be the phone, and I believe contact lenses are going to be the actual screen interface that goes over your eyes and it's actually going to overlay, so if you want to see something, you actually tell them.

And obviously people have tablets and things like that, but I actually don't think they're going to be carrying phones around. It's going to look a lot like the movie, "Her". Anybody see his movie? Incredible movie, Joaquin Phoenix, he actually falls in love with his phone. But his phone actually isn't something he's looking at, it's actually a earphone in his ear, that actually becomes the main part of the device, but I actually think the phone isn't going to exist. And people can look at me like I'm crazy, but if I told you 10 years ago that I could talk to somebody in Uganda, in high def, for free, right now by pushing a button, you'd say, I was crazy. Right? So, the technological innovation and the rate of change is only going to actually accelerate. And I don't think the phone is going to be here in 10 years from now, and it may not be here in five to seven years from now.

It's going to be voice base, people aren't going to be typing anymore, and when you want to see an image overlay, there's going to be contact lenses that actually allow you to do so, or glasses, or whatever it may be. I think wearables are here to say. The first iPhone was terrible too. The first MP3 player by Archos, was terrible too. People say, oh, it didn't work the first time. There were so many video sites that went under before YouTube took off, and oh, My Space. I mean, there's so many examples, just because it didn't happen yet, it just meant it was too early, but wearables are going to be the new form of computing device, and that's going to change branding, because if it's easier for you to order something without seeing it, and there's no visualization, then it's going to become about convenience over the power of the brand, which really means marketers have to become way more tech focused companies than actually ever before.

Number eight, fame is now completely democratized. If you have a child age eight, nine, ten eleven years old, they will not know what a TV network is. They will not know what Fox, NBC, CBS, ABC, even HBO is. It actually means nothing to them. They don't tune into TV networks anymore. What they're doing is they're going on YouTube and they're following individual people. Individuals are the new network. If somebody wanted to get out a very important message 10 years ago, they'd go to News Corp or Viacom or they'd called Sumner Redstone or Rupert Murdoch and say, I'll give you $50 million, I want to broadcast and all your TV networks and newspapers, etc. Where now, if I wanted to get a message out, I'd call Kim Kardashian and Justin Bieber and Kanye West and LeBron James and actually tell them to share the message, because you would get it out a lot more impactfully and quickly. Individual is actually a new network. The consumer is actually now empowered. The people who are really winning, moving forward, are actually the celebrities, which is really interesting because tech has really shifted.

When tech first started, it started in Silicon Valley. It was about the coders and the technology, actually building the platforms. But now most of the platforms and the technology are actually on solid ground. The next iteration went to Madison Avenue, because all these tech companies saw, after bubble burst, that they needed to figure out how to make money and they all went to Madison Avenue to try to get it from advertisers, and they did so with flying colors, as evidenced by the revenue of Google and Facebook. But the third iteration, the third web 3.0, it's moving to Hollywood, it's about content. Google spending ... Apple saying $1 billion with a B to buy content. And Netflix is spending $800 million, and Amazon's probably going to spend $1.1 billion after it heard Apple's spending a billion, all to get their own content and actually, a battle for eyeballs.

The best taste of the power of celebrities, is the Kardashians who are a fascinating case study. I believe they've had a bigger impact on culture in their generation, than actually the Beatles have. I believe that. Now people hate when I say that, especially in music, aficionados, but what they've actually done with media, which it started with a large audience on television, and then had voyeuristic, deep relationships with individual consumers over social media. When they post stuff on Instagram and they get $500000 to post something, the websites that they're directing people to, actually, they break down and they can't actually handle the traffic. Product actually sells out immediately. Everybody talks about influence this, influence that, well, if you really have influence, you sell shit. And these guys sell shit and that's why combined, their whole clan, including the Jenners, are going to make a quarter billion dollars this year, in total revenue, more than most sizeable media companies, because they have an audience and when they want them to do something, they actually do it.

And they have a rapid group of young woman as their audience. And as Instagram launches tools like Live, where consumers can actually broadcast what they're doing in real life, the power of the celebrity's even going to get bigger and bigger and bigger. There's a video of Justin Bieber that actually cracks me up, where he's laying in bed and he goes on Instagram live and he shows himself just laying in bed. His dog's there, he's chilling, he's not really doing anything, and the numbers go up from ten thousand, twenty thousand, fifty thousand, to two hundred fifty thousand people, just seeing this guy lay in bed, maybe rub his eye a little bit. Okay? He didn't plan it. There was no brands behind it. Coca Cola would've paid, God knows how much money to have him sip a coke or Starbucks in the morning.

These people have so much attention right now, and it's fascinating, which leads me into the next point, and this is amazing because I wrote this before the news came out today, but the TV is going to become a giant iPad hanging on your wall, and I've been saying this now for 12 years. If you Google "giant iPad on your wall", you'll have a bunch of articles of me that came up because I knew, the second Apple TV came out, the Apple TV would one day be an Apple TV, because young kids go to Best Buy and they try to swipe a TV, because the reality is you should be able to swipe it. And Apple announced today that in September or October, they're going to be rolling out, I don't know if they announced it or it's a rumor, but I guarantee you it will happen, a 4K TV. Amazon just did it as well. That's the hardware application's going be in the home, and the TV's going to be a giant iPad hanging on your wall.

But you see, Apple TV today looks a lot like this, where there's networks that you actually can click on and tune into the network, but as I mentioned earlier, this generation, they don't know what networks are, so I think the new Apple TV or the new TV, is going to look a lot like this. It's going to be individuals, like these YouTube stars that have massive audiences, that are going to build an audience. It's going to be shows, many great content producers, as I said, the next evolution of web 3.0 is in Hollywood, are actually probably going to go direct, and actually sell their content direct because content is king, or they're going to work with one of the big platforms. And then live sports, which has more power than ever before, FIFA, the National Football League, the power of those companies are just only going to continue to grow.

But what's going to happen is a consumer's going to pick a show, and when they pick a show they're going to be given two choices, much as they are right now. Do you want to pay for the content, and not be subject to the commercials, or do you want to get it for free and see commercials? But in a barbell economy, does that only mean the value side of the equation's going to see the commercials? That's going to be interesting to see. TV's going to become addressable, which means Joe's pizza will be able to advertise during the Superbowl to people within a mile of its location in Duluth, Minnesota, which means that Victoria's Secret can advertise during NFL football games, because the NFL is the most watched live program of male and female viewers, but right now every single ad is for Budweiser or GMC Truck. But female viewers, if they know a female person is watching, will be able to target them.

Because when the TV is a giant iPad hanging on your wall, you're going to be in a logged in Facebook state, and I believe Facebook is going to one day serve every single advertisement that happens on television. That's going to be the data layer, and you're able to buy TV programmatically the same way you can buy ads right now today on Facebook, it's going to be no different. And today's announcement by Apple, just makes me believe that every bit more. And number 10, four companies now run the world. And I wrote my book at the end, kind of 10 productions, and one of the predictions that I wrote when I wrote the book, at the end of 2013, as that these four companies, Google, Apple, Facebook, and Amazon, are probably going to be broken up by the government and there's already kind of talk about that right now, because they're going to become so powerful, in terms of the ecosystems they have built.

And it's funny, because every single year, one of the ones I actually think is less dominant today, I think Google's the one who probably has less moats in their system right now, just because of what I just said about voice, since Apple has a device in people's hands, but all these companies have ecosystems that really makes them unpenetrable. One of the biggest races they have right now, is the race for the living room. Who's going to run the living room, because who's going to own the entertainment device in a living room? Who's going to actually serve the content to consumers? Who's going to serve the ads? I think Facebook wins no matter what, because their network effect is too strong. They've logged over 3 trillion posts from consumers, so they know more about anybody than any company, in the history of humanity.

So I think every ad is going to be served by Facebook. When you going to your car, which will be a giant docking station itself and you drop in your phone, then your phone will know who you are, and it might change the billboard you see, or what ads are actually played on your radio stations. So I think Facebook becomes the data layer, and I think that Amazon, you know, they failed with Amazon Fire and Kindle, relatively speaking, but now with their TV, they're making a comeback and with with Alexa. So now they have an ecosystem in a home. We all all know about Apple's, and Google really has YouTube the really bet on, moving forward. But I think these companies, it's really hard to see anything get in their way.

I think a sleeper in this equation's probably Microsoft. I am not long on Netflix at all, for the main reason that content is just about who has the biggest wallet, right? And Netflix is not going to have the biggest wallet when they're competing with these guys, and they also don't have an ecosystem. So with with Prime Video, you get free shipping with products, you get all these other things. With Netflix, you just get the content. So I actually don't think they're going to be one of the winners. A lot of people were saying, Fang, where they had Netflix replace Apple, which I think is kind of laughable, and maybe it even replaced Amazon, which is even more laughable.

So to wrap it up, what's next? I get asked that a lot. Gen Z, I think Gen Z is going to be just more Gen Yness, if you will, because I think that big gap between Gen X and Gen Y in terms of the people who did not grow up with the internet household, and the people who did, was just a very stark difference. Now this generation, it's obviously not going to be mobile first, it's going to be mobile only. It's going to be faster. It's going to be kind of more intuitive use of technology. And I also think when the real accelerations, again, is going to be when Millennials felt the C-Suite. So I don't think you're going to see sweeping changes by the change of generation, just by the marketplace getting filled with more of this Millennial mindset, as it looks like this audience has as well.

Back to speaker HQ Pageο»Ώ