CAMBRIDGE, MASS: Next year will be “a year of reckoning” for many companies, according to a new report which argues that while the overall marketplace may be healthy, the future of individual businesses is as uncertain as it has ever been.

“Unmet customer expectations are resulting in churn; the lack of digital transformation gains is translating to loss of market share; industry lines that protected some are crumbling; and longstanding, durable business models are failing,” said Forrester Research in its Predictions 2018 report.

Specifically, it forecast that 30% of companies will see further declines in customer experience (CX) performance “and those declines will translate into a net loss of a point of growth”.

And one fifth of CEOs will fail to act to bring about necessary digital transformation, even if that is only using their balance sheet to acquire digital assets and buy themselves some time.

Forrester also expects that 2018 will see the real economic impact of empowered machines emerging, with 10% of purchase decisions being guided by a platform’s “intelligent agent”.

That development in turn points to the urgent need for brands to better understand how algorithms work.

“It is one thing to be disintermediated by the platform and its associated intelligent agent; it is another to not understand or have any real influence on that relationship,” Forrester noted, adding that a quarter of CMOs will fail to recruit the talent able to deliver such influence, with their brand likely to become “undifferentiated and silent in the market”.

Canny CMOs will be focused on increasing spending in certain areas, it asserted, including delivering a better CX in order to drive affinity and stem churn, and synchronising loyalty programs to customer expectations.

They will also seek to understand how to decode digital platform algorithms and invest in martech to deliver individualized experiences at scale.

Consequently, it will not be only brands that face a potentially make-or-break year. Forrester predicts that adspend will be flat, leading to “a painful correction in the agency and adtech markets”.

Sourced from Forrester Research; additional content by WARC staff