In the wake of numerous privacy scandals during 2013, including the Edward Snowden and Chelsea Manning (formerly Bradley Manning) leaks, UK citizens are becoming much more concerned about privacy.
Describing the recent security scandals as a wake-up call, Symantec, a computer security company, said companies will no longer be able to get away with poor security and collecting and storing customers’ data.
The company is tipping Tor, which enables online anonymity, to become a popular application for browsers and instant messengers in 2014.
Users are also likely to go back to using aliases and fake names on social networking sites to protect their privacy.
The growth of services which allow users to stay anonymous supports what security companies are saying. DuckDuckGo, a search engine which does not track or store users’ data, saw a four-fold increase in traffic.
In addition, a study by the Information Commissioner’s Office, the independent data protection and freedom of information advisor, found nearly half of all app users have decided not to download an app because of privacy concerns.
But it’s not just consumer pressure on privacy that is causing companies to change – businesses are also stepping up security levels to avoid cyber attacks. Cyber crime costs the economy an estimated £27bn a year and science minister David Willets has introduced a cyber-security “kitemark” which all companies that do business with the government will have to meet.
For 2014, increasing protection will mean more demand for VPN (virtual private network), which enables a computer to be part of a private network through the internet, and other security features, particularly as a larger proportion of the workforce moves to remote working, according to security company Kaspersky Lab.
2. The new advertising
Most advertisers still base the success of online advertising campaigns on the number of clicks an advert receives, and advertising is most commonly sold on a pay-per-click basis. However, this is all set to change in 2014, according to Rakuten Marketing, a retail marketing company.
Modern measurement techniques are now emerging, particularly because not all shoppers click through on ads, says Mark Haviland, managing director of Rakuten Marketing.
“Consumers are much more likely to interact with an ad when it doesn’t take them away from the page they’re browsing, in fact according to AdKeeper [an online advertising platform that allows consumers to keep online ads for future use] 61% of shoppers say this is the main reason why they don’t click. Measuring this engagement is much more reliable as brands know when and what part of their ad has generated a reaction,” he says.
Sending blanket emails or even separating types of customers into segments will not be enough going into 2014, says Anthony Wilkey from cloud marketing company SmartFocus.
“Marketers will increasingly be using technologies that look at the individual preferences and behaviours of millions of online customers and delivering targeted recommendations across all channels.”
Using this approach, businesses will be able to move beyond traditional segmentation-based marketing into personalised marketing that boosts conversion rates, customer satisfaction and loyalty, he says.
Customer retention is important for 2014, with more businesses focused on growth within their existing customer base, rather than attracting more.
Research is now starting to show that customer loyalty is falling rapidly, with loyalty cards and schemes doing little to help this. In a survey by engagement marketing firm Constant Contact, 82% of companies said loyal customers were the main way they grow their businesses and this is likely to continue.
3. Apple’s downfall
Apple lost its place as the world’s biggest company by market cap this year, when its share value dropped and it was overtaken by Exxon Mobil.
Apple shares plummeted in the first half of 2013 but made a slight recovery towards the end of the year. However, this will not be enough to keep the company ahead of other tech giants in 2014, according to commentators.
Part of this is a failure to attract business users to the iPhone, said Bob Janssen, founder and CTO of RES Software, a user workspace management company.
“Apple has a reputation for ‘wowing’ its customers, but recent deliveries, namely the iPhone 5s and iOS 7, have arguably fallen short of expectations and failed to win over business users. The backlash from customers and the industry clearly shows that Apple’s technology isn’t leading the pack in the same way as it once was, both in a consumer and an enterprise context, meaning that the innovative halo effect that was once synonymous with the brand is shrinking,” said Janssen in an article for Information Age.
“At the same time, Android devices are seeing increased adoption, with more than 75% of devices now operating on Android systems. It is also looking likely that Microsoft will fill the gap left by Blackberry in enterprise mobility, and that it will increasingly compete in the mobile market alongside Samsung and Apple.”
On the consumer side, one of the problems Apple now has is the cost of the new handsets. At a minimum of £469 for the iPhone 5c and, with prices going up to £709 for the iPhone 5s, it has priced itself out of the mobile phone market, which it currently holds most ground in, and will be unable to recover in 2014.
4. Brands communicating like people
It’s every consumer-facing company’s dream to crack social media. While there are a great many ways to engage with customers though social media, one trend began to flourish in 2013 and is set to be huge in 2014.
The Tesco Mobile tweets of 2013 will probably go down in the history books as classic marketing genius.
People use social media to communicate with other people – “people” being the important word in that sentence. Tesco Mobile seemed to be the first to recognise that on a large scale, either through accident or intelligent design.
— Tesco Mobile (@tescomobile) October 29, 2013
@JayFeliipe Are you really in a position to be turning girls away?
— Tesco Mobile (@tescomobile) October 16, 2013
And once they got going, everybody wanted to join in.
Joel Windels, EMEA marketing manager at Brandwatch, says the trend was slowly being picked up by other brands which were moving away from being faceless corporations with scripted responses.
“If they want to join in the conversation with regular customers, they have to behave like them, which means playing around and communicating like normal people do,” he says.
“The cynic might quite rightly point out that this humanising of brands is merely a bid to drive engagement, and ultimately sales, but it’s an approach that’s working effectively.
“By tailoring responses to social media users in a personal way, especially when brands are targeting customers and prospects that may not have even been expecting a response, brands can uncover new advocates and buyers.”
One example of this is when hotel booking agent LateRooms spotted people were chatting on Twitter about holiday tips. Tweeting them with a personal, helpful response saw 30% of them then go on to use a LateRooms service.
5. Alternative funding
During 2013 banks were still unable to shake off the reputation for not lending to businesses. Not only will this continue into 2014, but businesses will begin to cotton on to other options for funding.
Banks are the source of nearly 80% of the credit going to businesses, but the financial crisis means there is a “new normal” for funding.
Peer-to-peer lending and crowd-funding sites are where businesses will look in 2014.
YouGov research reveals that 65% of UK businesses prefer to secure funding against their businesses cash-flow rather than personal assets. Julio Vildosola, CEO of Liquid Finance, believes alternative lenders are becoming more popular because they are able to share the risk.
“Businesses will of course continue to use banks for long-term financial investment, but this will be alongside alternative lenders where funds are easily accessible and the risk is shared,” he says.
“We have already started to see a positive change in confidence over the last three years, and this new approach to funding will continue to bolster confidence and drive economic growth.”