advertising and innovation2

A Reflection on a future role for the creativecommunications business. Arguing the case:

ADVERTISINGmeets

INNOVATION

MARCOS BENDRAO & ROSA OLIVEIRA | UNIVERSIDADE EUROPEIA > EXEC. MASTER MARKETING MANAGEMENT

The Creative Communications industry has been in crisis during most of the last decade. Part of it is caused by the current economic crisis. But the biggest cause has arguably been it’s incapability to adapt and keep up with the evolutions in society.

This presentation explores a possible solution througha convergence of the Advertising and Innovation areas.

01.02.03.04.05.06.

Context Proposed SolutionReaching the SolutionTen ResolutionsMaking It Happenfinal Thoughts

01.ContextThe systemic problems of the communications businessand how they came to be

According to Yves Beharthe standard billing model

of the communication’s industry is “so basic that a

twelve year old could run an advertising business.”

THE TAXIMETER

MODEL

ALL RIGHTS BELONG TO GETTyIMAGES AND GOOGLE IMAGES ©

Ever since the separationbetween advertising and

media agencies that there’sbeen a need to work on a new business model to charge for

creative services.

The current economic crisisonly made matters worse.

ADAGENCIES

MEDIAAGENCIES

Society evolves, businesses evolve but the advertising and design businesses, in essence, have remained the same for the past 50 years.

Most agencies remain factories of doing the same repetitive things over and over again: 30’ ads, posters, logos,... And every new technology is quickly framed in the context of what “we” already know and feel confortable with.

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DIFFERENTIATION

ENTERTAINMENT&

We sell differentiation, but if all use the same approach, the same research, if we see the same things, the results will always end up being the same:

A collection of clichés in pre-determined formats destined to entertain and be fun to an audience that’s simply not listening anymore - lost in the ever growing fragmentation of media channels.

Above all, we’re failing to realize that the CMO’s role within the companies has changed a lot over the past 10 years.

More amazing than Clooney’s charm is the fact that Nestle re-imagined the way people consume coffee at home and created a unique brand experience around it.

By being increasingly labeled as “producers of funny stuff”, agencies are closing themselves in a niche and failling to see the bigger picture.

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Nowadays, as Alex Bogusky and John Winsor argue in their new book “Baked In”, CMO’s are becoming increasingly aware that:

THE MARKETINGIS IN THE PRODUCT

In the most innovative companies the walls between the marketing and r&d departments are being overthrown.

THIS IS A HUGE OPPORTUNITy FOR CREATIVE COMPANIES

When things are done right the results are outstanding...

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Apple’s brand idea is about simplicity of use, delivered in beautifully designed products.

The forbidden fruit,object of desire.

everY new obJeCt adds a new laYer to “apple eCosYsteM”.

Innovativeinterface andrevolutionary

approach

The product can take the centre stage in

the ads

Disruptive innovation to the distribution model

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02.Proposed Solution“Getting on the boat” early on

“The Brand as a driver for innovation is different from the brand in marketing communication.”in “Brand-Driven Innovation”

IT’S DIffERENT IN PROCESS, PEOPLE, ROLES BuT ALSO IN THE OPPORTuNITIES IT uNCOvERS fOR THE CREATIvE AGENCy Of THE 21ST CENTuRy.

Brands and Innovation “need” each other:

> Brands need innovation to deliver their promise.> R&D depts. benefi t from having a strong brand idea guiding their innovation eff orts.

CreativeIndustries

BRANDDRIVEN

INNOVATIONInnovation

The Key Point

The Key Point:

CREATIVE COMPANIES ARE OfTEN BROUGhT IN AT ThIS STAGE

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The Key Point:

CREATIVE COMPANIES ARE OfTEN BROUGhT IN AT ThIS STAGE

“WE” hAVE TO BECOME RELEVANT ENOUGh TO BE INVITED fROM ThE VERy BEGINNING Of ThE INNOVATION PROCESS


This makes perfect sense:

> Creativity is the magic ingredient for innovation;

> We’re naturals at divergent and lateral thinking;

> Design thinking should be applied to challenges other than communication;

> Our business is/should be about creating true and compelling brand narratives that start with the product;

> Some of the most visionary creative companies are already following this route (Wolff Olins, IDEO, WK, Sid Lee, Moving Brands,...)

The marketing departments have the mission of constantly breaking the mold and bringing disruptions to the market.

The creative industries can be the perfect partners in the quest for Disruptive and Exploratory forms of Innovation particularly in the design of services and experiences.

If the marketing is in the product, then we must be in the process right from the start.

CREATIvETHINKING

BuSINESSTHINKINGThe challenge, is to fi nd within the agencies of today, a set of individuals

capable of bridging the gap between creative and business thinking.

We believe the key to solving the challenge lies within the strategy and planning departments.

Planners are naturals at combining creative and analytical thinking. They have knowledge like no other of consumer trends and motivations.

The next logical steps is going beyond consumer insights applied to communication to insights applied to the creation and development of new business opportunities.This will provide the agencies with new revenue streams and, more importantly, set a new role for the creative industries in society.

03.Reaching the Solution

unfortunately, this kind ofprofound change just wont come falling from the sky.

It will force “us” to re-think our mission and value

proposition.

MAKE BRANDS MATTER IN

CONTEMPORARY CULTURE

CREATIVEBRANDIDEAS

A CampaignAn IdentityA Website, ...

- - - - - - - - - - - - - - New ServiceNew Business

New EventNew Experience,...

OUTPUTSOFFER

(no pre-determined format)

MISSION

A possible framework for creative intervention in an Innovation Process

DISCOVERY ELABORATION DEPLOYMENTROADMAP IDEATION

> DIAGNOSIS> AUDIT> CONTEXT EVALUATION> CORE COMPETENCIES> TEAM PREPARATION

Building a different point of view about the future andexploring different perspectives. Uncover hidden truths about the market.

The ideas generated are far more powerful because they’re built on trends, consumer insights and other key elements.

Organization of ideas into clusters and development of value propositions around the most powerful ideas, in terms of business opportunities.

Development of the Business Model around the selected value propositions. Envolving all the necessary business units for prototyping and testing.

Preparing the team for the Innovation Journey. Defining the challenge.

Definition of Objectives

Field Researchand Analysis

Innovation LabWorkshops

From Ideas toValue Propositions

Brainstorming and“Crashing” of key elements

for idea generation.

TRENDS, COOLhUNTINGAND MEGATRENDS

NEW IDEAS

GENERATED fROM ThE“CRAShING” Of KEy ELEMENTS

VALUE PROPOSITION

> CONTEXT> OPPORTUNITy> IDEA> MONETIZE

SETTING UP ThE ChALLENGE

> BUSINESS OPORTUNITy> SOCIAL NEED/PROBLEM

Using a Divergent to Convergent Approach

CONSUMER INSIGhTS

DISCONTINUITIES

ORThODOXIES

WEAK SIGNALS

BU

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MO

DEL

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EVEL

OPM

ENT

PR

OTO

TYP

ING

AN

D

EXP

ERIM

ENTA

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LAN

exploratIon

ADAPTED fROM STRATEGOS METHODOLOGy ©

Altough it may not be possible to accurately quantify beforehand the potential impact this kind of change can bring to one creative company’s P&L, it’s fairly easy to aknowledge that the potential for exponential growth is certainly there. Plus, it opens a new fi elds of possibilities.

accurately quantify beforehand the accurately quantify beforehand the impact this kind of change can

bring to one creative company’s P&L, it’s fairly easy to aknowledge that the potential for exponential growth is certainly there.

it opens a new fi elds of possibilities.it opens a new fi elds of possibilities.

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And it’s already happening at some of the world’s most forward-thinking agencies...

IN fAST COMPANy:

Ad execs are increasingly turning to alcohol, and neither stress nor Mad Men has anything to do with it. To better showcase their branding and marketing chops--and to add a secondary revenue stream--many agencies are launching their own liquor brands. “It’s our job to be smart businesspeople fi rst and strategic creative partners second,” says Cory Isaacson, whose ad fi rm, Walton Isaacson, has conceived two diff erent liquors in its six-year history (including Tequila Avion, which was eff ec-tively a recurring character on Entourage). “We have all this expertise, and the multiples in the spirits business are high. This is the future.”

04.Ten Resolutions

“yesterday the world changed.

Now it’s your turn.”Mike Walsh (in futuretainment)

01 Learn the other P’s of marketing and the basics of business in order to be useful.

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02 Try experimenting with diff erent business models. Be a partner not a supplier. Take this to new levels!

“Ask our clients why they invite us into their biggest innovation challenges and your top three answers will be the business model, the business model, and the consequences of business model.”

“It’s remarkably simple. We put up to two thirds of our fees at risk, subject to the initiative hitting pre-determined milestones on it’s path to market.”

03 Encourage Design Thinking and a Human Centered Approach. Apply it to everything!


04 Stay close to Start-ups. Be agile, fast and always keep an entrepreneurial mindset.


05 Be more global minded. Seek growth markets where the new value proposition is needed.

06 trendhunt. “The future is already happening, you just have to know where to look.” fuTuRETAINMENT, MIKE WALSH

new trends fuel InnovatIonand new busIness opportunItIes.

ESTABLISH PARTNERSHIPS WITH TREND CONSuLTANCIES AND TREND OBSERvATORIES IN uNIvERSITIES AROuND THE GLOBE.

07 Value and meaning over aesthetics. Memorable experiences come from the uniqueness of their value.

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08 “Hack into” the digital plattforms to search for opportunities and for what consumers value most.

Data drives decisions - Marketeers are listening to what consumers are saying on social platforms, analyzing traffic spikes and studying keyword search behavior.


09People talk about their positive consumption experiences as a form of social currency. It defines their social personas. “We” need to develop experiences that add value and drive conversational capital.Conversational Capital is a concept and book writen by advertising agency Sid Lee. <www.sidlee.com>

brands as IGnIters

05.Making it happen

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Keeping up with trends and turning them into business opportunities and unique service/product experiences requires a deep change in the mindset of creative companies.

Everyone in the organization needs to be on the same page for this kind of transformation take place and not stay on a mere aspirational level.

What if we...

BBUSINESS

REWARD

ENCOURAGEACTE A R

in the Business

bBUSINESS

There are many ways to slice a pie. Be willing to take risks. Contemplate this ideology in the budgeting process. Consider new business models: partnerships, fees by objectives, launch joint ventures...


Encourage and Stimulate

eENCOURAGE

Encourage team members to develop side projects of their own in the form of start-ups. find the means to fund, partner with and incubate the ones with high growth potential.


eENCOURAGE

Invest in the continuing education of the team.Provide regular workshops in topics such as creativity, innovation, service design and entrepreneurship.


eENCOURAGE

Organise CreatIve breakfast talks at least once a month!Reach out to other creative minded people (writers, film makers, directors,...) in other areas and check out what they’re doing.


eENCOURAGE

When possible, extend business travels in 1 or 2 extra days.Meet with local experts and business leaders. Take time off to observe the local life in search for insights and qualitative data to bring back.


aACT

Do Business in Beta Mode, constantly evolving it and Prototyping it.Open-source your product to unlock its full potential. Plan and act fast.


Reward

rREWARD

Re-adapt the performance reviews to the new business models.Encourage risk taking and reward top performance.


06.final Thoughts

Change!

Change is the key word here. We live in an age defined accelerated change and great ambiguity where the foundations that hold our ground are being shaken. The rules are being re-written. By the end of this decade, the way we build brands will have transformed significantly.

Most of the advertising we know today will become contextual to our actions and designed to encourage a specific transaction. According to Karl heiselman of Wolff Olins, by 2020, the winning advertising methods will be those that compress the time between the advertising impression and the transaction being made, and do it in a highly measurable and predictable way.

On the other hand, true brand builders have a great set new tools to work with and much to be confident about. New technologies will be giving marketers and business leaders a more sophisticated understanding of their customers. The knowledge and insights thus generated turning marketers into key actors in the delivery of innovation and the creation of new layers of brand value. We believe that by 2020 we will see three major areas of brand building innovation take over the role that advertising plays today: Total Experience Management, Marketing and New Product Development, Content Ecosystem. (1)

The route we argued in this presentation is just one possibility. There will certainly be others. But evolution is unavoidable. And it’s up to you to decide which kind of agency do you want to lead!

(1) in “The New Brand Building Reality”, Wolff Olins blog

“A revolution doesn’t happen when society adopts a new technology.

It happens when society adopts a new behavior.”Clay Shirky

Thank you!

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