22 Predictions for Digital Optimization in 2022

The digital world moves fast. Amplitude data shows that from 2020 to 2021, daily active users of digital products increased by 54%. With that increase in activity comes higher expectations from customers for digital experiences, and new demands among internal teams for the data and insights to drive outcomes.

As pioneers in digital optimization—using product data to optimize your business—the Amplitude team is well-equipped to answer questions of what the future for growth marketing, product, and data analysis might look like. Below, some of the foremost experts in the field share their top predictions for digital optimization in 2022.

2022 Predictions

Spenser Skates, Chief Executive Officer

The advertisement-based internet is dying, and privacy will finally become more than talk.

• The tech industry has been talking about digital privacy for years, but it’s mainly been all talk and no action. That finally changed in 2021 with big moves from Apple and Google Chrome, which are basically a death sentence for the third-party data industry. Since companies will no longer be able to target people in the same way, digital ad spend is going to decrease dramatically. We’ll see the return of marketing stunts and big branded campaigns, but most importantly, organizations will need to figure out how to better use their own app and website data to understand what their customers actually want.

Companies are starting to see the downside of staying private for too long.

• A lot of hugely successful businesses have stayed private for far too long, and that’s bad for companies and for the ecosystem. When your company reaches 100M in ARR, it’s time to go public. The bar for execution goes up when you go public, and good companies rise to meet the moment because it ultimately makes them better. It is great to see some hold-outs like Stripe have plans to go public soon, and next year we’ll start to see more companies see the benefits—liquidity, credibility, awareness, etc.—and file sooner.

Direct listings will start to be normal.

• Traditional IPOs feel like the safe option, but CEOs are starting to feel more confident about the direct listing path after seeing other companies pull it off. Executives used to believe that a company had to be a household name to successfully do a direct listing, but this past year proved that’s not true. The upsides of a direct listing—better pricing, better outcomes for employees and current shareholders, less dilution, and less volatility—are no longer a secret.

JJ Johnson, Chief Marketing & Strategy Officer

• The C-suite will see a fundamental shift in 2022. The CMO role will undergo a major transformation to become product-led, just as the rise of marketing automation transformed the role to demand generation-led more than a decade ago. As products become more of a direct connection between the customer and business growth, we will also see the rise of the Chief Product Officer. With this rise, the CMO will need to adapt and expand cross-functionally to align closely with the product organization, in the same way they have traditionally worked with the revenue organization. Those looking to attain CMO roles in 2022 should consider their full stack capabilities, meaning they can expand from strategy to execution and operations, and evolve their demand marketing strategy from the traditional sales model to a new product-led model. This will require a more analytics and data-driven approach and a deeper understanding of how products drive customer experience.
• Marketing teams will not only become more data-driven, they’ll look to new data sources to support business growth. Traditionally digital marketing looked to web analytics such as page views and traffic to understand paths to acquisition. Now a new data source, product data, will help them evolve beyond acquisition and look at the broader customer lifecycle and lifetime value. This focuses on in-app behavior to drive insights. For example, the content or features that users engage with in the product are correlated to growth metrics such as increases in subscriptions, retention or revenue. The teams that leverage in-product or in-app insights will have a competitive advantage because they’ll gain more granular visibility into their users and better understand what drives growth and customer lifetime value.
• Customer support teams are no longer the dreaded, long wait-time call centers. Today customer support and success teams have transformed into whiteglove services, all through data-led insights. In a recent data report, my team found that customer success teams are increasingly leveraging product data to drive decisions—that never would have been the case a few years ago. In 2022, I expect to see even more teams outside of product, engineering and data science leverage these insights to build better products and reach their organizational goals.

Adam Greco, Product Evangelist

• Product teams and marketing teams will begin to merge and work together to focus on the entire customer experience instead of living in separate silos.
• Digital advertising spend will decrease as privacy laws, browser changes, advertising fraud and Apple’s ITP make it more difficult for marketers to show the impact of digital advertising spend. This may lead to a return to larger brand campaigns that haven’t been seen since the early days of advertising, and we’re already beginning to see this with brands like Domino’s recent campaigns with advertising agency VCCP.
• Apple will become the new powerhouse of digital ad spend as its ITP efforts shift power from Facebook and Google to Apple.

John Cutler, Product Evangelist

• We will see more CMOs with digital product/experience chops expand their reach to product. A great example here is Julia Goldin, chief product & marketing officer at LEGO. Leaders with experience in both areas will ascend very rapidly.
• DBT will continue to change the way analysts work by encouraging more modular and reusable approaches to transforming data. DBT isn’t going anywhere!
• The pandemic has seen a huge shift in how teams collaborate, with an increased focus on asynchronous communication and writing. Along with a focus on sharing context over prescriptive “specs,” this is forcing product managers to up their writing game. The great writers are winning and getting promoted!
• Enterprises are accelerating their “project to product” transformations. A key signal here is changing legacy funding models—based on project completion and limited views of ROI—to more entrepreneurial, long-term impact friendly approaches. We’ll see continued large investments as the focus on digital transformation broadens to encompass fundamental value-producing activities (e.g. optimizing digital experiences) in addition to long-standing investments in architecture, cloud, and revamping old IT operating models.
• Big hiring efforts for developers and designers with experience building MMORPGs (massively multiplayer online role-playing games) due to focus on Web3 and the metaverse.

Daniel Bailey, Vice President, Sales, EMEA

The Era of Digital-first Business

• While digital transformation began well before COVID-19 impacted the business world, the global pandemic accelerated rapid digitisation across every sector. Even traditional brick-and-mortar businesses have significantly shifted their focus in the past two years, initially out of necessity, then to meet rapidly changing customer needs. But digital transformation is just the first part of a much longer journey to successfully leveraging data insights. In 2022, we will see the last remaining legacy businesses, who have not done so yet, embrace digital transformation in order to better understand customer behavior and leverage their digital products to drive company revenue. This will be crucial if they are going to compete successfully against organisations born in the digital era.
• As regulation becomes tighter around data (for example, France’s €500m fining of Google in August 2021) organisations will need to not only ensure that they are complying with local policy, but also ensure they are acquiring and developing their own first-party data, rather than relying on third-party data. The way for organisations to do this is by putting digital product at the heart of their business model, giving them competitive advantage, creating better and more meaningful customer experiences and allowing them to make more informed business decisions based on known customer behaviours as opposed to anticipated customer activity.

The Changing Phases of C-Suite

• In 2022, I expect to see significant changes to the C-suite due to the explosion of digital products and the data they provide. With this growth, the CMO role as we know it will fundamentally change. A new, product-led CMO will enter, working closely with the emerging Chief Customer Officer (CCO) and Chief Product Officer (CPO) roles to own the customer experience and its impact on the bottom line. In some cases, we may even see some of these roles combined. As businesses gain deeper customer lifetime insights, I also expect the role of the CCO to become more commonplace across industries. The companies that will win out in 2022 will be those who organize their marketing and customer-facing teams alongside the product team to create a common set of goals and alignment on company positioning and product strategy.

The Next Hot Sector

• With the use of fintech products increasing by 337%, there is no doubt that fintech will continue to be one of the most dominant sectors in the market in 2022. And with a staggering 300% increase of VC funding in EMEA, I expect to see even larger investments into global infrastructure next year as organisations around the world will be looking to build better products through data. But with $6.8 trillion invested into digital transformation by 2023, it is likely that the fintech industry will not be the only sector looking to radically change the way it engages its customers. With the rise in digital products, e-commerce has become commerce, apps that solve problems for buyers—from food delivery companies to companies that support small businesses with specific solutions like photo editing software—can expect to see massive growth in 2022 as the pandemic creates a lasting impact on the digital economy.

Julio Bermudez, Vice President, Sales, APAC and Latin America

Companies must learn how to embrace digital naysayers. This will become mission-critical in 2022.

• The pandemic has driven an acceleration of digital activity— daily active users of digital products having increased 54% from January 2020 to August 2021. But while digitalization has permeated every aspect of our lives, many people aren’t happy about it. They don’t want to look at menus on their phone or conduct doctors’ appointments virtually. In 2022, winning businesses will find a way to embrace digital naysayers by making technology easier to use, less intrusive and more akin to “normal” digital-free experiences.

Businesses will be challenged to balance privacy concerns with customer expectations for personalization

• Against the backdrop of increasing data breaches over the years, privacy has become a major concern for consumers and governments across the globe. But a myth continues to lurk among business leaders: personalized digital products and privacy can’t coexist. They’re wrong, and in 2022, more businesses will see privacy-centric personalization as a competitive differentiator. This will be the year privacy goes from talk to action.

Government investments will accelerate digital transformation in APAC

• While countries like Singapore have used the pandemic as an opportunity to digitize, others are still lagging behind. In the coming year, we can expect to see more governments in Asia, especially in India and Indonesia, ramp up efforts to drive digitization. I also expect to see more collaboration between governments and the payments sector—there are big incentives to shift to a cashless society.

Fintech products will continue to dominate the app market in Asia

• The pandemic drove fintech adoption, and now digital financial products that facilitate near-instantaneous and secure financial exchanges are dominating the mobile app market. This year alone, the use of fintech products surged by 337%. But this is just the beginning for fintech. I expect adoption to continue to increase and regulations, especially related to cryptocurrencies and digital-first banks, to tighten.

Resources

• The Guide to Digital Optimization
• Digital Optimization vs. Digital Transformation Explained