This week on the Digital Velocity Podcast, Tim and Erik discuss important business trends for 2024 including economic stability, AI tools and education, and content creation.
The new year will bring many business opportunities and challenges which can also seem overwhelming and confusing. Erik says, “You really just need to start small. Try something, improve upon it, build it into your process, and then try the next thing. Keep in mind, folks, that the tools that are coming out today will be dramatically different in a year from now. The expansion of the capabilities of these tools is growing every single day. And so, that can't be the limiting factor in your decision of what tools to try. Try what's on the market today. See which ones work. In a year, reevaluate, try some different tools, and see if they do better. Because if you don't start, you're going to be rapidly behind the companies and your competitors that do start.”
Preparation and planning can help brands navigate times of uncertainty can change. Tim says, “The name of the game is clarity. Clarity is the market's option for stability, right? It's that oxygen that feeds the market. If clarity is not there, it makes everything nervous. But in the meantime…focus on what you can focus on and be prepared for a rainy day. But continue to move your business along, lean into innovation. Control the things you can control and don't worry too much about the things you can't.”
Listen to this week’s episode to learn more about what’s ahead for businesses in 2024.
Episode #59: What's Ahead in 2024
Erik Martinez: [00:00:00] Hello, and welcome to this episode of the Digital Velocity Podcast. I'm Erik Martinez from Blue Tangerine.
Tim Curtis: And I'm Tim Curtis from CohereOne
Erik Martinez: Today, Tim and I want to talk about some things you should think about as we enter 2024. This is just a conversation and some food for thought.
So, Tim, how's it going?
Tim Curtis: It's going. Well, I don't think you can start off any conversation about 2024 or prognostications or predictions or whatever we call this. I think you have to start with AI. It still is staring us right in the [00:01:00] face. You know, it's consuming all the oxygen in the room.
Erik Martinez: Are you sure? It's funny because I see some reports out there and saying AI is dead. No, I'm just kidding. Nobody's actually saying that, but the hype is over, right? AI and going to change the way we do everything. I think some of that is true, but the realities of how to use the various technologies are beginning to set in. So, where do you stand on the development of AI, one year after the big GTP announcement?
Tim Curtis: Yeah, I think, when you look at what's happening at a broader picture, let's not just look inside the innovation community. Right? Let's look at the broader use of the hype or what I would classify more is probably hysteria related to ChatGPT and AI coming out. And whether it's Claude 2, ChatGPT, I think some were doing Bard, but clearly ChatGPT was the topic of conversation for most everyone. It was a staggering amount of people, [00:02:00] billions that were utilizing AI to some degree to test.
That has kind of waned. We just don't have people who are just breathlessly talking about this ad nauseam. They've kind of moved on and they're talking about other things. Whereas in the business community, I think the understanding of the realities of AI, the complexities of it, and needing to first set some foundational ground rules, that's becoming more and more paramount.
And, you know, when we were at MAICON last summer, we caught a little glimpse of what companies were beginning to organically do. And now there's sort of a precedent for how to go about setting AI up for success. But I do agree with you, I think this hype or hysteria has died down and now the realities and limitations of what current AI can do for us are becoming really clear and the hype is kind of dissolving.
Erik Martinez: On a humorous side note. I'm a fan of John Oliver, and an episode or two ago, they were talking about AI and they were talking about the hysteria and its clips of every talking head in the [00:03:00] country, whether they are political, operative, or news anchor talking about AI and everybody was referring to the Terminator. It was actually very amusing. So, if you're into that sort of thing, go listen to the clip. It's really funny.
But no, I agree with you, Tim. I think there are lots of organizations that are investing a significant amount of money and developing their AI capabilities and their foundations and how they're going to use it within their organizations. A lot of these large firms are investing in putting people and resources behind these technologies to help improve their processes or improve their products.
I'm seeing that the smaller businesses are still kind of coming to terms with what does all of this mean for us in our daily operations. Like, we know we might need to be doing something, but we don't know where to start. We're concerned that if we don't do something, we are going to [00:04:00] fall rapidly behind. On the other hand, we don't really know where to start and invest our time in. What is the advice that you would give to those people to say, Hey, here's how to go about building a plan, here's how to go about starting the process within your organization, even if you're just a small two or three, four-person operation?
Tim Curtis: Well, I think we kind of have to look back at what's really the driver of success. When you talk about introduction of new technologies, probably the closest parallel we have is to the advent of the Internet and how the Internet impacted the way commerce was transacted, how businesses had to re-architect themselves, and how they had to set themselves up for a new future.
And I think what we're seeing is AI is coming into that now and the realities of, hey, this is going to impact the future of work and we don't necessarily always know where that is. But companies, if [00:05:00] they're staring at this and they're having big question marks, I think the first thing that we see is anytime these new technologies are introduced, you see sort of a bifurcation.
You see those that lean in and have that culture of innovation. They have a healthy foundation and the mindset to lean in and test these things and to learn and find out. Then we have others, which typically are companies that generally don't get involved in innovation at the early stage, at least and rarely even in the mid-stage. Oftentimes their innovation comes further down the path.
In the case of AI, I think what we're going to see is that bifurcation. Those that don't start looking for ways to implement or understand where they could potentially use it if they start their traditional innovation curve as late as they normally do, they won't be able to make it.
So, for small businesses in particular, you have to kind of identify what your business model is, what you're doing, and then are there repetitive tasks that AI may be able to help you with. It's also going to take a lot of [00:06:00] learning and listening and reading to understand how others are potentially using it. Those that are getting involved with it, even in the testing phase are continuing to see all sorts of returns, even the small incremental, but the learning is fantastic.
I remember reading a study that was conducted with Boston Consulting Group. They implemented. AI within a portion of their workforce. They didn't give them any direction. They just allowed them to use AI in instances where they thought it might be applicable. When they assessed the study from the start of the experiment, they had the highest jump in performance, 43 percent when they got to use AI.
They had a 43 percent increase in performance when they started to use AI. That's AI without any direction, any foundations being set. It's just utilizing AI. So, small businesses are going to have to test it, learn about it, and see what happens. But again, that culture of innovation, you just can't get around that. Brands that don't have that, are going to be in for [00:07:00] a very, very perilous ride.
Erik Martinez: I would add to that, for those companies that have relatively small teams and are feeling a little overwhelmed, pick one thing. There are a myriad of tools coming out on the market to solve all sorts of business problems. Some tools are better than others. I was testing some ad creative production tools over the last couple of weeks. One had AI fully integrated into it. The other one had just a little bit, just enough to make some of the production tasks easier.
Both of them took me a couple of hours to set up. I'm not a creative genius. No one's going to hire me to go design a beautiful ad. But I was experimenting to see, hey, can somebody who has limited creative abilities, utilize these tools to produce something on mass for their advertising programs? Within a few hours, I had some really, really good ad [00:08:00] creative. Okay. A creative person may say not really good, but decent enough to go to market with, with just a couple of hours investment in learning a basic tool.
My point in saying that is you can pick one thing that you're struggling with. Or you could have each person on your team pick one thing that they're struggling with and experiment with just a couple of different tools. By the way, when I did my research, there were like 20 tools. I kind of pick two that came up pretty frequently and I tried them. And I think that's what Tim's talking about in that culture of innovation. It's you don't have to invent the new pathway, you just have to try something new.
Tim Curtis: So, how we jump-started that is I created two AI exploration groups. Their purpose was I had an outline of some tasks I wanted them to test and see how these things performed. And I gave them, I don't know, maybe 8, maybe 9 different platforms. And that ranged from language learning models [00:09:00] to more of your design forward type AI tool. So, it kind of spanned the gamut.
The results came back in a purpose. You know, what task or outcome are you looking to use AI to accomplish? Then AI platforms. Which specific platforms are you using for the task and versions? The approach. How did you go about testing or applying AI to perform the task? And then the result. What was your experience? Did AI help achieve the task?
And so, then this small kind of SEAL Team 6 went through and began testing these different platforms. Now, no real direction, right? Other than here's a couple of things that we'd like you to try and test, and then go do it. What we found is, yes, different platforms perform differently. Some are better at pulling in if you're looking at language learning models, some tend to be better at creating metaphors or similes, something that's really abstract, that takes a bit of additional thinking to create. All the AI tools weren't created the same.
That was just an example of you kind of [00:10:00] get something kickstarted. Just something. That alone starts to create the energy and the buzz about learning these things. And it also creates what I think is an environment where you're encouraging people to lean into the technology and they don't feel like they're cheating.
A lot of times what we found in research is that people who are working and maybe using ChatGPT in some form with work, or Claude 2, they feel like they're cheating. And so, there's kind of a tendency to hide that they're utilizing AI in their daily work. So, we wanted to make sure we took that stigma away.
Erik Martinez: I think that's great, Tim. You really just need to start small. Try something, improve upon it, build it into your process, and then try the next thing. Keep in mind, folks, that the tools that are coming out today will be dramatically different in a year from now. The expansion of the capabilities of these tools is growing every single day. And so, that can't be the limiting factor in your [00:11:00] decision of what tools to try. Try what's on the market today. See which ones work. In a year, reevaluate, try some different tools, and see if they do better. Because if you don't start, you're going to be rapidly behind the companies and your competitors that do start.
Tim, let's switch conversation now and move over to the realm of the economy. The economy has been a hot topic obviously, for the past year and certainly, since the pandemic. And we've gone through all sorts of crazy cycles from crazy demand and then supply chain issues, which seems to be not maybe 100 percent resolved, but mostly resolved in today's market.
And then we've gone through this period of hyperinflation, and then that seems to be calming down at the moment, and yet we're in a period of high-interest rates. It's having an impact on the economy in some unexpected ways. So, what are your thoughts [00:12:00] on what is the economic outlook for 2024? What should our brands be thinking about in terms of selling to consumers or other businesses in 2024?
Tim Curtis: So, for the listening audience, I spend a lot of time researching and reviewing corporate intelligence reports, which is basically a fancy way of saying, what is happening economically or politically around the globe that can have economic implications. We were talking a little bit before the show. 2023, a lot of the analyst reports on what's happening typically come down to what we classify as a Goldilocks preview. In other words, there are some things we like, some things we don't like. Some indications are good. Some indications are bad. It's that traditional Goldilocks mix of all of it, right?
The thing that is concerning and is the biggest question mark going into 2024 is the economy, it's specifically in the buying behavior of households, but more specifically, it's really [00:13:00] segmented down to the lower income households. They're under a tremendous amount of pressure. The inflation that we've experienced hits those lower-income households much more dramatically than other people.
Those households are largely paycheck to paycheck. They just don't have the bandwidth to see prices increase or payments increase, including credit card interest rates are crushing them. They're near all-time highs at the moment. You have that simultaneously with credit tightening. So, banks are no longer lending out money like they used to. If you need to buy a car, you need to buy a house, we all know what's happened to those interest rates. In some cases, you're paying hundreds of dollars more a month than you would have two years ago for the same house. That puts those low-income households very much under risk.
There's also a lot of concern for them. From their perspective, the risk of AI replacing their jobs is growing. What are they? Upwards of 50 to 60-something percent of companies are accelerating their investments in AI, and they're testing potential applications for work. [00:14:00] In other words, they're trying to see if automation will have an impact on the hiring because those same companies are under pressure as well to perform.
And then lastly, there's also some concern that's listed in almost every single report about lower-income households worried about migrant worker job replacement. That's been a thing that people have been concerned about. Those issues don't appear to be resolving very quickly. Some of them clearly would not be, and that's the big question mark.
The higher-income households have largely weathered well, because they either have the money to get through the higher interest rates, or they already own something at a lower interest rate, so they're kind of locked in. So, there's just kind of that bifurcation and you continue to see some of those high-end brands, for example, continue to perform relatively well. They may have had a slight dip in performance, but they're largely going to continue on.
But for companies in America who move a lot of product, much of [00:15:00] that product is consumed by those lower households. And that is the single biggest economic risk we have at the moment is spending and saving. If you take into consideration what's happening overseas, the attacks on shipping in the Red Sea by the Houthi rebels, in Yemen, the amount of traffic that's being diverted away from the Suez Canal going the long route around Africa. That's going to have even more impact on an already strange shipping system.
Here in the States, for example, the water tables are so low up in some of the tributaries and rivers feeding the Mississippi that barges have not been able to be used to move transportation like they normally would have. That's going to call for about an additional 70 to 80,000 semi-truck trailers to keep up with moving that product that had been moved through the rivers potentially. So, everybody is focused on the freight industry at the moment, because the rates are going to continue to climb, the delays are going to continue to climb, and we're hoping that that's not going to be indicative of getting us into more trouble in supply chain. But we're all [00:16:00] watching it very, very closely.
Erik Martinez: I think that only spells trouble for the supply chain. I think it spells trouble delivery of our goods to the end consumers. A lot of us have direct-to-consumer operations, and the ability to get product out the door quickly to a customer is still a key consideration. Long gone are the days that you could expect to get your product in two weeks and be happy with it. The expectation is that you're getting your product within a few days of placing an order, with the exception of a handful of things. Even Amazon has backed off that expectation that you're going to get everything same day. You're going to get it quickly, but you're not going to get it all on the same day.
Tim Curtis: Or you'll pay $2.99 for same-day delivery. Even Amazon is having to monetize it in a way that they did not in the past.
Erik Martinez: Your shipping mechanisms are going to be impacted and needs to be paid attention to because that's a real cost. And if you are like many retailers and you're offering quote [00:17:00] free shipping, it isn't free to us. It is a very significant cost in your books.
Tim Curtis: That'll come out as higher prices. Right? Anytime you have those kind of staggering increases on freight, it's not really a matter of sticking it to the consumer. It's that the company cannot absorb by any way, shape, or form on the books, what's happening with the shipping. They can't cover that difference. So, you're going to see higher prices and that's sort of what we've seen driving that inflation as well.
I would add to that, Erik, that I think you're exactly right, supply chain. I think basically the word in 2024 is disruption. There are going to be disruptions that we don't see coming. Some of them, we know like the shipping, but we're all a little bit more skittish about another shoe that could drop.
Erik Martinez: What we're kind of seeing is that everybody's taking a wait-and-see. Wait and see what's going to happen. Wait and see what's going to turn next. But here's the reality, none of us know where we are in the branch of the river. I've been using this analogy with my team, working with my leadership [00:18:00] team to kind of educate them on strategic planning and in thinking ahead and establishing, clear objectives and budget in an area where you don't know what the outcome is going to be, but you have to make a choice.
You can choose a wait-and-see approach. That is a choice. But the companies that do the best tend to have some kind of plan, some kind of direction that they're going. They may not know what branch is in the river that they have to go down because you're still exploring, but you're choosing to go down a direction.
To combat the economic outlook and, you know, the high-interest rates and all that, might be a pricing strategy that you want to implement or a new membership program. Pick something. Pick one thing that you can focus on for the next year and work on it that will have a material impact to your business, and I promise you, you will do better than your competitors. Tim, is there anything else on the economic front, that you think might be really [00:19:00] important for the listening audience to think about heading into 2024?
Tim Curtis: The only thing I would say that I didn't really mention is, you know, the threat of these geopolitical events. Kind of the forecast we have out there right now for 2024, it includes the Russia/Ukraine war. It includes the Israeli/Hamas war. It includes some of those types of events in it. It's not prepared for other major events. So, if other major events unfold as well, then that's going to have a considerable impact on 2024.
The name of the game is clarity. Clarity is the market's option for stability, right? It's that oxygen that feeds the market. If clarity is not there, it makes everything nervous. You're going to have a stock market performance. And with that, you're going to have weary investors, concerned banks, and that'll trickle all the way down to the brands. But in the meantime, do exactly what you said, Erik, focus on what you can focus on and be [00:20:00] prepared for a rainy day. But continue to move your business along, lean into innovation. Control the things you can control and don't worry too much about the things you can't.
Erik Martinez: Let's move on to a slightly different topic, Tim. We can look at all these big picture things and say, yeah, we can make some adjustments in our forecast for these. We got to make room in our budget, and not necessarily dollars-wise, but from a time perspective to invest in testing AI.
Related to that, probably the biggest shift that we've seen over the last two and a half, three years is what content creation is and isn't. Several years ago, content creation was about written language. Any SEO study, if you go back through all the mod studies going back years, one of the key algorithm drivers for Google was long-form content, pieces of 1400 to 2000 words.
Well,[00:21:00] those days are still here. So, the good news is it's still here, but it's starting to take a backseat and it's starting to take a backseat to visual asset creation. And when I say visual asset creation, pictures are one piece. Look at any search engine result today for any type of product that you're buying and notice the number of images that Google are presenting on the search results page. So, that's one piece of it.
The piece that's a little more subtle, but that's coming is video. Consumption of video is way up over the past couple of years. I don't remember the latest statistic, but watch time they're going way up. Video creation, number of people doing it is going way up and yet it's still kind of in its infancy. Even with all that content that's being generated, it's still in its infancy in certain markets.
So, if you are selling a product today and you're not [00:22:00] investing in some kind of video content to showcase the benefit, showcase the features of those products, then you're probably losing out to the competitor who is. That is actually kind of scary. And everybody's like, Oh my gosh, we barely get our photo shoots done to do our catalog production or to do our seasonal website refresh, now you want us to add video to it? Yes, we do. And the cool part is, we were talking about AI to start the show, there are some tools out there that can make that video creation a lot easier.
So, you don't have to go this all full-on production, big storyboards, have a production team that does that. You can do those things, but you can do a lot of simpler things. And what we're seeing in just simple applications like paid search is that when we introduce video assets and quality image assets [00:23:00] into those campaigns, they perform wildly better than the straight text campaigns. While that sounds obvious, but it's getting more and more pronounced. Tim, what are you guys seeing over at CohereOne?
Tim Curtis: A lot of similarities. The long-form content just isn't consumed like it used to be. You have more and more visual asset creation occurring, people making either it's a how-to video or some sort of a video that in the past may have been a long-form piece of content and it is now, you know, a two-minute video. We're also seeing 30, 60, and 90-second videos as well. Basically, anything that's going to be required to capture the attention and also to provide some good juice for the SEO. That's why people are beginning to lean into it. Literally thinking about every single thing you're doing as a content creation opportunity.
I'll give you an example. I just came back from our holiday party at [00:24:00] J.Schmid, our creative and design agency. As a part of that, we had one of our former employees is now a contractor there to capture video and photos of the event. He was with us all evening. He took all sorts of things and we're going to kind of do a fun, little video coming out of that.
It was very creatively set up. It was not at all disruptive to what we were doing, but it was a piece of content creation opportunity that I think I would have missed. I don't think I would have thought about that. And the reality is we have to think about those things. If we're having some meetings or something like that, we might want to have someone there to capture some element of that. Because that's the kind of content that basically the content engines are looking for and consumers are looking for.
So, we have to put on a different hat, and that is one of content creation, and it has to be at the forefront of everything we do. We have to ask ourself, will this be a good opportunity for content creation? Yes or no? And for those of you in the listening audience that are like, yeah, but that [00:25:00] costs a lot of money. Well, it could. And that's why businesses are having to reevaluate their own structure in a world where AI is going to dominate. that's going to come whether or not you want it to or not.
So, you might as well get on the forefront of that and take that into consideration. You have to. Every time you do something, you have to think about, is this a content creation opportunity. Because that's where it's going to be if it's not already there now.
Erik Martinez: It might be expensive, but it doesn't have to be expensive. Your phone has great capabilities to shoot video. You can leverage that particular tool and just do a little how-to segment. If you get somebody who's an expert in a particular product, or you guys have developed a particular product, and whoever the creator of that product is probably knows more about that product than anybody, let's record them for five minutes. Let them kind of free form talking about the product and the features and the benefits.
You don't have to get superscripted because there are lots of great editing tools that will [00:26:00] allow you to cut that video down in the snippets that are meaningful. And you can get that out into your email campaigns, you can get that out into your social media. You can deploy it on your product detail pages. There are lots of different ways you can use this content.
If we were to give you one piece of advice this year, tactically, is to spend some time creating some content. You will get better at it when you do it.
Tim Curtis: Here, here.
Erik Martinez: Do it frequently, you will get better at it. One of the things that we've noticed for those of our clients who haven't invested a ton in their content creation that have started doing it and deploying that content on their social media channels, they're seeing the results come in in their direct site channels and they're seeing those results coming in their organic search. It is improving their rankings. It's helping them rank for more keywords. There are really, really great benefits. You don't [00:27:00] have to dedicate a ton of time to doing it. You just need to dedicate some time. Tim, is there anything else that you have thoughts on 2024? Who's going to win a Super Bowl? You know, anything fun like that?
Tim Curtis: Well, I want to say my Chiefs, but wide receivers got to quit dropping the balls before that happens, so.
Erik Martinez: We'll hope that the Chiefs, recover from their current little bit of a funk, but Hey, better to have it mid-season than that at the end of the season.
Tim Curtis: End of the season. Yep. I agree with that.
Erik Martinez: For sure. Well, that's it for today's episode of the Digital Velocity Podcast. You know, I think there's some key things that you guys should be doing. Just pick one thing, one aspect of a job, or have each member of your team pick one tool and try it and see if it helped them improve what they're doing, improve the efficiency, or improve the quality of their work.
You know, when it comes to the economic plan, pick something to focus on. Obviously, we all want to grow sales and we all want to grow our businesses and that should be a key part of your objectives, but [00:28:00] what are the one or two small levers that will help you achieve that goal and put your attention there? And don't worry about all the little things out in the world that might impact your business because the key word there is might.
The last thing, spend some time on content creation because it is what people want. They want to see videos. They want to understand the benefits of your product. They want to understand how to use your product. So, if you give them some enticing ideas on what to do, how to use your products, you're going to improve your sales and you get some ancillary benefits and improved visibility in the search engines.
We wish you all the best in 2024. That's today's episode of the Digital Velocity Podcast. I'm Erik Martinez from Blue Tangerine.
Tim Curtis: And I'm Tim Curtis from CohereOne. [00:29:00]