2014 Wrap-up: Skating Toward the Puck

Each December since 2005 I’ve written a year-end review and made some predictions concerning technology as it intersects with audience development, marketing, and fundraising. I’ve just created a page with links to all of my previous wrap-ups, so if you’d like to go back and see how accurate my predictions were, click here.

One of the most interesting books I read this year was The Second Machine Age by Erik Brynjolfsson and Andrew McAfee. It explains how Moore’s Law — which roughly states that the capacity of the computer chips that power computers would double every 18 months — continues to hold true, and has been driving some of the most amazing things we experience today and will see in the next few years. The notion that I can talk into my iPhone and dictate a message with 99% accuracy, or ask Siri a question and most of the time get a reasonably good answer, would have been considered science fiction only five years ago. The naysayers complain that Siri misses a lot, but let’s think about what’s really going on here. You talk into your phone in a normal speaking voice, in the street in traffic, and with your very strong (you fill the blank: New York, Midwest, Canadian, Southern) accent, and in under a second you get a reasonably intelligent response. And then stop and think that we are only entering the “stone age” of machine understanding!

The book also argues that the rate of technological change is increasing. Your responsibility as a manager is not simply to keep up with that change but to anticipate it. You can no longer think only in terms of next season; you have to look out three or four years. The famous quote from Wayne Gretzky, the great hockey player, applies here: “I skate to where the puck is gonna be, not where it has been.”

Here’s where the puck has been this past year and where it’s going in the future. Some of these things are reason for excitement; others are cautionary. Each is worth pondering as 2014 comes to a close.

1. The Shift From Desktop to Mobile

The Microsoft Windows empire was built in a world where work took place on a computer accessed at a desk. Even within the Windows operating system, the nomenclature “desktop” seemed entirely appropriate. However, the desktop PC is giving way to iOS and Android operating systems on handheld devices. Accessing business information on every size of mobile device imaginable is the new normal. And soon the concept of mobile devices will change again. I had a few minutes to try Google Glass recently and though it’s not yet ready for primetime, like it or not, soon wearable devices (watches, rings, and even contact lenses) will put information even closer and more accessible than at your fingertips.

Think about how useful this is for us in the arts! After all, our organizations are some of the most inherently mobile in the world. We have box offices separated from management offices, rehearsals in different venues, and meetings with donors outside our office. Our industry screams for mobility — having all your vital business information at hand when and where you need it.

Prediction: Mobility will mean the end of the traditional office as we know it.
(see also this blog post from 7/14 by Michelle Paul on this topic)

2. The Shift to Video Marketing

YouTube started the online video revolution solely as an entertainment service. But today it has become a marketing and fundraising tool. The best marketing and sales websites lead with a short, well-produced video (think about every Kickstarter campaign you’ve seen). This year, video was at the center of the hugely successful “Ice Bucket Challenge,” which we published a blog post on 8/14 about here. What arts organizations offer can often be more compellingly described by video than by any quote from a newspaper critic.

If video isn’t yet a tool in your marketing process, you should start thinking about how it can be. Soon enough, live-streamed video from a mobile device will enable every organization to become its own cable company. I am pretty sure I’ve been saying this for six years and just last week I paid to watch on www.concertwindow.com Matt Turk, a singer-songwriter friend, perform a live set from his living room (which you can watch on YouTube here).

Prediction: Video, both recorded and live-streamed, will become ubiquitous.

3. The Shift to the Cloud Gains Momentum

Our partner Salesforce.com started its business 15 years ago, at a time when there was still a robust debate about cloud computing versus self-managed servers. Some Fortune 500 companies still manage their own servers, but the realities of cloud computing in terms of scalability, technological development, and cost have made such a compelling combination that Salesforce is a now a $5 billion company with hundreds of thousands of corporate clients, and more than 10,000 non-profit ones.

And yet there is confusion about what cloud computing is. Having your data available on your iPhone is not cloud computing. Rather, a cloud-based service means that your system resides within a technology platform designed to share resources across thousands or even hundreds of thousands of companies. It is this shared resource model (the techies call it “multi-tenancy”) that makes the entire thing work.

Owning (or leasing) your servers means having servers that are either on premises or remotely hosted. Many organizations confuse moving their servers from the basement of their theatre to a remote server location with cloud computing. Your ability to log in and access your data remotely may look like an “on ramp” to the cloud, but it’s not the same thing. Whether your server is in your basement or in Texas, you (or someone on your staff) are still responsible for monitoring, managing, upgrading, and repairing these machines. Therein lies the cost and the liability. In resource-constrained arts organizations, technology is not our core competency. Today, not moving to a cloud system becomes the debate in the boardroom, not the other way around.

Prediction: Most organizations in the arts will move their technology to the cloud, as it’s simply a better model for our industry.

4. The Shift From Facebook for Friends to Facebook for Business

A few years ago, well before advertising was as prominent on Facebook as it is now, I heard Sheryl Sandberg, Facebook’s COO, describe how Facebook would become an advertising powerhouse. She explained how its proprietary algorithms can understand your interests better than any standard targeting technology could possibly achieve. And now that Facebook’s ads are front and center within the newsfeed, it seems obvious that she was right. It’s an extremely powerful way of reaching people. At some of the arts conferences I’ve attended recently, I’ve seen case studies that show that marketing investments in Facebook have yielded staggering results.

Not only that, but Facebook also is ending the era of “free” self-promotion for organizations in their own newsfeeds. Yes, you heard me correctly. This article in the Wall Street Journal describes how in January Facebook will “filter out unpaid promotional material in user news feeds that businesses have posted as status updates.” Facebook is now a real business, and it’s your chance to leverage it for all its worth.

Prediction: Facebook will become a marketer’s dream, beating out Google AdWords as the most effective digital marketing tool.

5. The Shift From Data as an Asset to Data as a Liability

This year we witnessed database breaches from companies whose names we know well, such as Target and Home Depot. Companies that own and store data — which describes any company with customers — are more than ever before in a vulnerable place because the customer data can be hacked. This isn’t to say that these companies didn’t have good protections for their data, but it does reinforce how crucial is the investment you make in protecting your customers’ “PII” (Personally Identifiable Information) in terms of staff and technology upgrades. You may want to look again at your cyber liability insurance policy, assuming you have one.

There is no foolproof way to store your data safely. The question is simply how you allocate risk and investment. I don’t know many arts organizations that have the budget to invest in the technical protection of their data as well as a Fortune 500 company could. (And as we have seen recently, even Fortune 500 companies can’t always get it right.) So as you think about how valuable your data is, you should also think about how big a liability it would be to your organization if it were hacked.

In a cloud environment, the companies that manage these platforms (Amazon Web Services, Salesforce, Microsoft Cloud) spend orders of magnitude more money in developing data protection systems than an arts organization could ever afford, so using a cloud-based system is one option for giving your data a higher level of protection than you could afford yourself. If you do choose to store your data locally or in a server farm, for goodness’ sake, don’t store financial information such as complete credit card numbers. Ultimately, whether you go with a cloud- or server-based solution, it should be a top priority to understand how valuable your data is and how best to protect it.

Prediction: Managers and boards will rapidly become experts in what it takes to protect the data their organizations retain about their customers, wherever it is stored.

In closing, last week Seth Godin sent out an email that summarizes for me everything about the past year:

We live in an extraordinary moment, with countless degrees of freedom. The instant and effortless connection to a billion people changes everything….

We have more choices, more options and more resources than any generation, ever.

If you agree with my takeaways, let’s make 2015 the year for mobile, cloud, Facebook, video, and, most of all, protecting your data. Each year seems more incredible than the last, and I wish you all a wonderful holiday season and new year.

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