The Year of the Great Reversal: Trends To Watch in 2023

By Justin Emond

While the future is definitely unknowable, it sure is fun to speculate.

In this spirit, and it being the end of the year, we wanted to share three major trends we expect to impact business and all things digital in 2023.

The first is less about something that will happen and more about something that won’t, so you should plan to cancel your plans around it. The second trend we think will be a secret weapon of most high-performing digital marketers in the United States next year, or if not in 2023, likely by 2024. Finally, the third trend zooms out to look at the consequences that will impact marketing and digital from one of the most dramatic demographic reversals that has ever occurred, perhaps in the history of our species.

Let’s dive in.

Trend #1: The metaverse is dead

For the last two years, the supposed next evolution of the Internet has been a popular topic of prognostication: Vanity Fair famously said that the metaverse was about to change everything. Bill Gates said that most of your work meetings would be in the metaverse. It was supposed to change everything: work, love, marketing, television, movies, music, shopping, politics. The metaverse was going to remake our very society.

Fast forwarding to today: How is the reality of the metaverse going?

Let’s start with NFTs. Trading volume this year is down a stunning 97% since January. The Beanie Baby thesis around digital collectibles has proven startlingly prescient. In short, the market has completely collapsed.

How are the actual virtual worlds of the metaverse faring? Not much better, it turns out.

Decentraland, one of the biggest, has less than 0.3% of the daily active users of Fortnite, a game your 12-year-old niece and nephew play incessantly. Meta, née Facebook, with its unlimited budgets and vast pool of talented developers, has also struggled with its metaverse called Horizon Worlds.

Half of Horizon’s headsets, the required equipment to enjoy the metaverse, are never used after the first six months, over 90% of the worlds created are never visited once (not even mom comes by), and nearly 100% of users fail to return after a month (yes, that statistic is correct).

So what went wrong with the metaverse?

The problem is that the metaverse requires three miracles to be successful:

1. New content
2. New hardware
3. New consumer behavior

When it comes to consumer products, you can pull off one of these miracles with enough work, some luck, and maybe two with incredible difficulty (and eye-watering expense). But pulling off all three is essentially impossible. The iPhone worked because it only required one. 3D televisions failed because they required all three. The metaverse requires all new content, a headset more expensive than the iPhone, and a person to wear a heavy thing strapped to their head for hours.??

The metaverse hype is eerily similar to the release of the Segway. Do you remember when Steve Jobs said the Segway would be bigger than the PC? Well, he wishes you didn’t, but he did. Likewise, the metaverse is just like the Segway: An idea that makes so much sense that its time will never come.

Will there eventually be a metaverse? Yes, if western civilization continues long enough neural interfaces will eventually sufficiently advance for a new generation to embrace the metaverse in a comfortable way. But this is a timeline measured not in years, but decades.

Until then, and for the rest of our working lives, the metaverse is dead on arrival.

Any plans and investment you and your organization have for the metaverse for 2023 should be reallocated elsewhere.?

Generative AI is coming

A few months ago Sequoia Capital (until recently a rather acclaimed venture capital firm) released an illuminating chart defining a new space in the tech ecosystem:

Broadly, Generative AI refers to the recent emergence of a variety of large-scale machine learning algorithms that are capable of uncanny feats. The first, most popular example exploded on the scene this year: algorithms that instantly generate an image from a simple description input by a human.

For example, from this simple prompt—“glass of water, fishes, photo realistic, fine details”—a generative AI created this image:

But images are just the start.

Just looking at the narrow use case of digital marketing, expect Generative AI to have wide ranging impacts next year, including tools that create short form video, write headlines and body copy, tune your SEO, and automatically personalize content and images on-the-fly for individual users (potentially finally delivering the promise personalization has been making for a decade).

If your paycheck comes from websites, watch this space closely. You likely should be adopting tools in this space in 2023.?

The Great Reversal

When a trend lasts six months you notice the change. When a trend lasts a year, or even two years, you still notice it from being different from “normal.” It’s visible. But when a trend exceeds the length of a generation (20 years) it becomes invisible. Instead of it being considered a trend, it becomes what everyone thinks of as normal. And normal things don’t change, right?

In their provocative book?“The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival,” the authors argue that we are in perhaps the most meaningful demographic shift in human history. The consequences of this shift mean that much of what we consider “normal” about how the economy functions is about to change.

For the last three decades the world has benefited from profound demographic tailwinds: The size of the global workforce kept growing, keeping the ratio of the number of working adults to the number of old and young very favorable (lots of workers, few dependents). Meaning that there were lots of workers making lots of money and these workers had few people to support that didn’t themselves work (kids and retired people). China contributed mightily to this trend, but the same dynamic played out in many countries around the world.

The result? Thirty years of global disinflation (consumer goods kept getting cheaper every year), rising income inequality (when there is always more labor next year, labor has a weak negotiating hand), and lots of extra money sloshing around the economy to spend on consumer goods and services (since there were so few kids and old people to care for).

But the thing about demographic trends is that they often remorselessly go into reverse. Starting just a few years ago these beneficial tailwinds have vanished and a new headwind is starting to rage: the number of workers is shrinking and the number of people that don’t work and need support (mostly the old) is growing rapidly.

This throws many trends into reverse. On the plus side we should see income inequality (and the populism it inspires) diminish as scarcer workers are able to negotiate for better salaries and get a bigger share of the economic pie. We may have already hit peak polarization in the United States.

But other trends will be more challenging, chief among them inflation and the end of free money (low interest rates). Without the disinflationary force of goods getting cheaper, inflation is likely here to stay, to ebb and flow, for the next several decades.?

Sustained inflation will reward businesses and leaders that take steps to build greater price control into their brands. In short, when it comes to digital marketing prioritization, less demand, more brand.

I’ll see you in 2023.