Campaign

Yes a great event guys. Thanks for having us. What happened to the Red Bull though???

How about "The finest times available to humanity"?

I love watching pundits watching television on a Saturday afternoon - it shouldn't work, but it does. The sooner it returns to Virgin, the better - I have to watch it online at the moment.

Did you manage to steal a pair?

Nice. I just had a squinkwhizzsnotling myself when I realised how close I was.

I enjoyed reading Saturday's edition of The Sun. While its editors were placed in the baffling position of having to endorse the BBC (which it has been making vitriolic attacks on almost daily for months now) it deserves praise for its strong condemnation of the BNP and Nick Griffin.

But the paper's coverage of Griffin's appearance seemed to lack some of the relish and sharpness that usually characterises its coverage of major events. Maybe this was because it's such a serious subject or maybe because The Sun's staff were confused at having to support the BBC.

For once, it was Saturday's edition of the Daily Star that eclipsed The Sun on a major story. The paper opted for a p2/p3 DPS on Griffin's appearance and ran a side bar story comparing him to an evil Captain Pugwash. This together with the best sports quiz/crossword page in UK newspapers (a must for all travelling football fans on a Saturday)made the Star's package a winning one.

That said, it was good to see The Sun doing the right thing within such a volatile debate, especially as, judging from the texts it ran from readers, many of its audience don't agree with its stance.

The establishment assault, from both left and right, on "Booze Britain" culture is pissing me off. Labour hiking taxes on alcohol while the Tories are threatening to double duty on drinks such as super strength lager and cider while leaving their favourite tipples like malt whisky and fine wines untouched.

Sometimes more balance is needed in the argument. It's not all about pissed up idiots knocking seven shades of *** out of each other after downing 20 shots on a Saturday night. And Channel 4's documentary The Red Lion, which aired last Thursday, captured this beautifully.

Part of the Cutting Edge series, The Red Lion film, directed by award-winning documentary maker Sue Bourne, was an entertaining and, at times, moving snapshot of some of the characters that populate the thousands of Red Lion pubs around the UK.

We saw old ladies who needed their pub as a refuge against loneliness, a tee-total women's darts team in Scotland, a rugby team and a ladies hockey team who used their Red Lion pubs as places to drink heavily and a character called "Reg the Hedge" so called because "There's a very large hedge down my way and a couple of times, I actually fell in it. I fell in one time and couldn't find my way out."

A real mix of people who showed that the life of the British pub is vibrant and (Reg and the rugby boys aside) not all about getting as smashed as possible. And the close of the film, which showed the impact on people when their pub has shut down, illustrated that everything should be done to save the local. So check out The Red Lion on 4oD if you get chance.

I’ve long been a fan of Sir Roger Moore, so was amused by his appearance in the latest Post Office ad.

Once I’d got over the shock of seeing Sir Roger in this context - after all he’s more associated with boring, worthy charity work for the likes of UNICEF these days - I couldn’t help feeling a bit depressed.

Has it really come to this? A man of Sir Roger’s stature, he was once James Bond for God’s sake, is reduced to flogging financial products for the Government.

The ad itself is predictable but no great embarrassment (Sir Roger does a knowing raised eyebrow to camera and is involved in a cheesy “smoothie” gag but by no means disgraces himself).

But then it seemed sad to see him spending time doing this stuff rather than enjoying himself in the South of France or on the ski slopes somewhere.

He can’t need the money but that’s never really mattered to Sir Roger who just seems to like earning the stuff. And why not? Sir Roger has always been the type to turn a turkey into a golden egg, seeing film as a highly commercial enterprise rather than an artistic endeavour. Any man who has starred in movies such as The Cannonball Run, Bullseye! and Spice World can’t afford to take himself too seriously.

And hopefully the ads will prompt UK TV producers to consider Sir Roger for parts again as he’s never actually retired from acting. The Midsomer Murders creators could do worse than revisit their idea of approaching Sir Roger and his friend Sir Michael Caine to feature in an episode.

I've got no real problem with the nation's obsession with Strictly Come Dancing and The X-Factor. An obsession fed each and every day by the national press - so there's instantly several pages of every paper I have little interest in as I watch neither show.

But it's the tone of reverence some journalists use when discussing these shows that grates. It's as if Simon Cowell, Bruce Forsyth and Cheryl Cole were Gods on a higher plane, the way some commentators bang on. No wonder the stars of these shows behave in such an out-of-touch manner.

I really must stop listening to Radio Five Live but its morning news programme today carried a lengthy and earnest review of both shows as though they represent the greatest artistic achievements of mankind rather than the cheap and easy entertainment they really are.

So more disrespect and general piss taking towards these shows should be obligatory. This should keep Cowell's ego in check and make Strictly participants think twice before abusing their new found fame.

I'm a big fan of MasterChef and wish it were on commercial TV. And the current MasterChef: The Professionals series is moving along well.

The role of big gurning Gregg Wallace, usually so central to the MasterChef experience, is hard to fathom though. While he's usually a crackerjack of enthusiasm, opinions and expressions he's not himself on this version of the show.

Probably because he has to blindly follow the opinions of top chef Michel Roux Jnr. who, as a god of the commercial kitchen (he has two Michelin stars don't you know) is held in awe by each contestant. He might look and act like a simian automaton but his pronouncements carry the weight of Zeus.

That's a shame for Gregg because he's essentially become Roux's nodding dog. Albeit one who scoffs a lot of creme brulee, but a nodding dog all the same.

And though all young chefs seem to want to be Roux (a bit like all nine-year-olds on the play ground want to be Wayne Rooney) professional cooking doesn't look as much fun as professional football. Why would anyone, anywhere, want to be a chef? It's hot, repetitive work with long hours and low pay so what's the point?

Even with the perceived turnaround in the global economy, we are all aware that the global recession has caused, and continues to cause, seismic shifts in the advertising and marketing industry, precipitating the need for rapid change. One area being impacted by the combined forces of recessionary pressures and technological progression is organisational structure.

One of the macro trends that we are starting to see is the deconstruction of the silo mentality that has been the status quo within client organisations, and which is mirrored by agencies in the major holding groups.

Discipline-specific fiefdoms exist around silos, with individuals and agencies behaving territorially to protect their specific areas of competence, guarding revenue streams or marketing budgets fiercely, and having accountability solely for delivery in the channel for which they have been responsible.

“My hope is that the recession will have been a huge wake-up call to clients with regard to that siloed mentality,” explained Bob Jeffrey, Chairman and Worldwide CEO, JWT. “It’s not only inefficient from a cost-savings perspective, but the more you collapse the silos, the more integration you drive, ultimately leading to a more effective environment in which to deliver better ideas and stronger creative output.”

 




Bob Jeffrey

Chris Colborn, Executive Vice President & Chief Experience Officer, R/GA, sees the silo mentality as a fundamental problem in developing effective creative work: “Many clients operate traditional structures where leads sit within verticals, each in charge of a discipline-specific agency and responsible for maximising effectiveness in a single channel. This model creates an artificial disincentive for collaboration, and therefore doesn’t engender an approach in which holistic synergies naturally form.”

 



Chris Colborn

“It’s a huge challenge for clients to evolve that model,” says Colborn, “to be leaner, more dynamic, cut costs and develop a more holistic structure, whilst still getting the best out of their agencies.”

The siloed organisational structure not only proves detrimental in terms of developing exceptional creative work, but actually creates natural disharmony and tension within the holding group verticals.

“I’m constantly saying that agencies need to work smarter,” Jeffrey continues. “They need to know when to compete and when to collaborate. Agencies are inherently territorial, tribal and competitive, but it’s critical to take an agnostic, less ego-centric approach to collaboration, and to have a bigger view of the world and the direction in which the world is heading if agencies are to achieve the ultimate goal of making their clients successful.”

Jeffrey understands that, “absolutely each agency needs to develop their own brand and build a reputation for creative excellence, but if client organisations start to evolve to be structured less around verticals, then agencies will be able to collaborate more effectively to deliver better work.”

The recessionary pressures on revenues and costs are forcing every client to analyse in fine detail how effective their marketing department is, and whether they are operating the most efficient ROI structure in a fast-changing environment.

As digital, mobile and social media platforms become more prevalent across all consumer segments, the discipline-specific silo mentality seems increasingly outdated and ineffective.

With CEO’s and CMO’s the world over looking to cut costs and increase the value of their spend, the time for significant and radical structural change is upon us. This will not only impact the client organisations themselves, but by definition the relationships with roster agencies across all disciplines.

Bob Greenberg, the Founder, Chairman, CEO & CCO, R/GA, believes that, “if you’re organised with a client around the consumer, then you’ll be much less affected by the storm than if you’re part of a siloed organisation. If you’re organised in verticals then the impact will be felt much more keenly, as cuts across each silo will need to be made. Nike are a client that have reorganised their internal organisational structure to revolve around the consumer, which is a model that I believe is much more efficient and effective.”

 Bob Greenberg

If we look at some of the work that Nike are delivering, through R/GA as well as a number of other roster agencies, it is clearly evident that the reformulation of their organisational structure is paying dividends.

Ideas such as Nike+, the Ballers Network, NikeID, and HEAD2HEAD demonstrate that the company has truly put the consumer at the heart of all its thinking, delivering multi-platform solutions that are implemented more effectively by running a streamlined, de-siloed structure.

Chris Colborn summed up the dilemma facing many clients by describing why digital agencies are increasingly being perceived to offer greater value for money than the traditional agencies: “Initially digital agencies were one of the siloed verticals, but it quickly became apparent that every other silo needed a digital equivalent, in some form or another.”

“If you combine the breadth of experience, therefore, that digital needs to deliver, along with the relatively low spend in comparison to other channels, you can see why digital agencies are able to think more holistically in their approach to marketing, and also to deliver solutions that improve ROI levels.”

Although Colborn and Greenberg are approaching the topic from a different angle to Jeffrey, they are all in agreement that the concept of the traditional silo structure is fundamentally flawed.

The deconstruction of this model, reformulating around a more consumer-centric structure that has engagement and participation through digital platforms at its heart, is one of the major shifts that the recession has precipitated.

As with many of the changes this recession has brought, and will continue to bring, it is not that the shift wouldn’t have happened eventually; it’s just that the economic downturn has forced dramatic change to happen much more quickly.

The problem is that a rapid, fundamental structural revolution within the advertising industry has caused, and will keep causing, a great deal of pain while it happens.
 

India is one of the most important economies in the world. This was true during the boom times, and is even more so now, with the rest of the World mired in the worst recession since 1930.

The growth rates that India has experienced in the first half of 2009, during the worst phase of the global slowdown, has led to increasing levels of expectation and hope from America and Europe that India, along with China, will be one of the key engines that drags the global economy back to its feet.

For this report on the state of the advertising industry in India, I was fortunate to have the opportunity to talk to some of the country’s leading figures about the success and distinctiveness of Indian creativity, and about the buoyancy of the market.

One of the key themes that emerged, surprisingly, is that the recession is perceived as a positive force in India: a correction of imbalances that will fuel growth rather than put the economy into a tailspin, as has been the case in Europe and America.

The other important factors explored in this post include: the collaborative approach that industry leaders have adopted to drive success; the country’s rich heritage and diversity of cultures; a burgeoning middle class with modern values; a huge degree of autonomy from global networks; an increasingly competitive landscape; a technological lag; and a vibrant, dynamic entrepreneurial spirit.


The recession is a good thing

In India, the recession has not meant negative growth. It has simply meant a slowing of exponential growth from a peak of 9% in 2007, and 7.3% in 2008, to a more stable 5.8% in the first half of 2009. Additionally, the nature of wealth distribution in India meant that a tiny proportion of people got very rich during the boom years, whilst the vast majority of the population saw no benefit at all.

R. Balakrishnan, universally known as Balki, Chairman and Chief Creative Officer of Lowe India, told me: “In India, the boom and recession is a bit of a myth. The boom period only affected the cream of Indian society: the top 10% of financiers and property developers.”

Balki, Lowe

“It’s actually a great thing for the 90% of consumers who are seeing prices drop,” Balki continued, “especially the growing middle classes in India, who are now seeing property and cars becoming much more affordable. During the boom time, the middle classes were simply priced out of the market in some sectors.”

Colvyn Harris, CEO, JWT India, continued the theme, explaining that, “India is like a pyramid, with the size and scale at the bottom, and that is what you are seeing kicking in right now. The real India is now emerging.”

“Certain sectors are seeing growth of 20-30% year-on-year,” Harris continued. “FMCG giants like PepsiCo and Unilever, the affordable car segment, scooters. All are seeing exponential growth right now, because ordinary Indian people are seeing their disposable incomes increase in real terms as the economy corrects and prices drop to a more realistic level.”


Collaborative approach

On top of the widely perceived notion that the recession is actually fuelling domestic growth, it is evident that there is a collective spirit of collaboration where the health and wellbeing of the industry is concerned.

The advertising industry in India is huge, but also relatively young in terms of the infrastructure for ensuring that creative standards remain high, and that the industry remains buoyant.

Colvyn Harris continued our discussion by telling me that, “we created Goafest four years ago, because we wanted to develop an iconic forum for the advertising industry in India.”

Colvyn, JWT

Goafest, most recently held in April 2009 in Goa, is a huge event for the industry, with over 2,500 delegates attending, and over 4,500 awards entries. In 2009, the guest speakers at the event included Dan Wieden, John Hegarty, and Jean-Marie Dru, which in itself signifies the iconic status that Goafest has achieved domestically.

“We have worked with all the other agencies in India,” Harris said, “to make this happen. It’s totally non-profit, and we need our clients to sponsor the event every year in order to be able to create the full structure of conference centres, meeting rooms, awards areas, restaurants and display rooms.”

“And our clients are always willing, because they understand that we are trying to educate each other, especially the young talent in our industry, about how to push the creative envelope further.”

“At JWT alone, we send 280 people to Goafest, at a cost of $90 per head including all flights, accommodation and food and drink. We see it as a training program. The focus is on learning and education, and our clients make it possible by sponsoring the event and sending large numbers of their own people to attend, so that they too can stretch their minds in terms of understanding how far creativity can be pushed.”

“It’s a very positive event for Indian advertising,” Harris concluded, “because we want to build on the recent successes that we’ve had, and ensure that we continue to get the international recognition that has come our way over the last few years.”


Increasingly competitive landscape

With growth rates of 20-30% in many sectors, plus a buoyant, emerging middle class, it is no surprise that the world’s biggest brands are focusing more and more of their attention on India.

Add to that a greater degree of international recognition for Indian creativity, such as the Film Gold Lion at Cannes 2009 for JWT and Times Of India, and the ingredients are there for a vast array of new players to enter the market in order to try and grab a slice of what promises to be a very profitable pie.

A Day In The Life Of Chennai, JWT & Times Of India


Both Wieden & Kennedy and BBH have set up operations here recently, looking to replicate the successes that they have experienced in the US and Europe, and therefore challenge the big agency network structure that exists in India.

Currently, through JWT, O&M, and Y&R, WPP control over 50% of the market in India, so there is plenty of opportunity for new entrants to come in and challenge the status quo.

Subhash Kamath, Managing Partner of BBH India, told me: “We are not here to be an outpost of BBH London. BBH India will utilise some of the core beliefs, principles and value systems that have made BBH so famous, such as a focus on long-term brand effectiveness and brand fame, and will bring the BBH DNA to life through the unique context of Indian culture, knowledge, insights and creativity.”

Subhash, BBH

“Our focus is on developing a balanced portfolio of strong local and international clients,” Subhash continued, “and proving ourselves in this market. Creating effective ideas for our clients that deliver growth strategies for a digital world is the key to our success in India. And perversely, the slowdown has made this a batting wicket for us, as clients look harder at their spend, and focus more on effectiveness.”

“Of course, there is also the opportunity to begin conversations with some of the brands that BBH look after globally,” concluded Subhash, “but there is no arrogance or expectation on our part. There are existing relationships that must be respected. However, one of the reasons for BBH coming to India is to ensure that there is a presence in one of the key growth markets for our biggest clients.”

In addition to internationally-renowned creative agencies like W&K and BBH coming in, there has been a significant movement in the first few months of 2009: a large number of top Creative Director’s have left their senior positions at big agencies to start up their own shops.

This is an interesting shift because, firstly, it signifies a belief that India is at the start of a huge growth spurt in terms of consumption and marketing, and secondly, it introduces a new type of entrepreneur in India: an employee who has the kudos, fame and collateral to break away from the big agency networks to set up and be successful, without necessarily coming from ‘old’ money.

Agnello Dias, former Chief Creative Director at JWT, and Santosh Padhi, former Executive Creative Director at Leo Burnett, have set up TapRoot India. Narayan Kumar, previously Head of Disruption at TBWA, has set up Metal Communications. Jagdish Acharya (former ECD of DDB Mudra), Sukumar Menon (former ECD of Leo Burnett), and Brijesh Jacob (former ECD of Grey Worldwide), have all set up their own shops in the last few months.

Agnello Dias, better known as Aggy, who has just returned from the One Show in New York, where he was the only Indian representative judging the work, told me: “The environment has changed; a lot of people have a financial cushion as a result of the boom during the last five to ten years, and there is a sense of opportunity that didn’t exist before.”

Aggy, TapRoot India

“I feel that it’s the right time to challenge myself and start a new phase in my career, having worked for a long time at Leo Burnett and then JWT. Additionally, the big agencies are saddled with overheads that are legacies of the traditional system, which of course have to be passed on to the client.”

“We are small,” Aggy concluded, “and totally media-neutral from both an ideological and a commercial perspective, so we can work for clients on a project-by-project basis and pull in the best talent depending on the creative solutions. The business model is much more flexible, and we can provide exceptional value to our clients.”

Overall, it is evident that a new, dynamic phase in Indian advertising is about to start, with lots of hungry smaller fish snapping at the bigger agencies’ tails. Only time will tell if the domestic start-ups, like TapRoot India, and the international entrants, like W&K and BBH, will be successful in this booming, dynamic, fascinating market.


Local Autonomy

The growing economy, emerging middle class, and increasingly competitive environment are three of the reasons why big network agencies in India like Lowe, JWT and O&M have a huge amount of autonomy from their central offices in London and New York.

However, there are more important factors at play regarding local autonomy. It is the extraordinary diversity of cultures within the country, and the fast-changing behaviours of the modern Indian consumer, that creates a genuine need for truly relevant, locally developed creative work.

One of the best examples of a global brand letting their agency develop strong local work in India is Nike, who created one of my personal all-time favourite spots with JWT, focusing on the passion and fervour that every Indian has for the game of cricket.

Nike Cricket, JWT

India is made up of an enormous population of over 1 billion people, and there is an incredible amount of cultural differentiation, cut along religious, regional and caste lines. Add Western influences to the heritage, traditions and mythologies that are an everyday part of Indian life, and you get an exciting, dynamic dichotomy of cultural forces that is leading to increasingly fresh, innovative thinking.

“Young Indian people need to balance out the diverse influences in their lives,” Balki told me, “steering a path through the strict traditions of their parents and the global forces of capitalism. And what we are finding is that young people are developing very contemporary interpretations of Indian traditions and heritage.”

“This clash of cultures within the emerging generation is letting us find new and interesting ways to develop creative work, looking at our traditional values in a light-hearted way that is very relevant to today’s consumers.”

“The global network has very little to do with how we develop creativity here, other than through shared planning tools and processes, because it’s our humour, and the little nuances in our relationships with friends and family, that make Indian life so distinctive.”

“India,” Balki concluded, “is the best place in the world to be right now from an advertising perspective, because we get a great deal of autonomy from the global networks, and our global clients don’t want to push homogenous global solutions on us. They recognise how important India is as a growth market, and we get the time and space to deliver world-class local creativity.”


Technology Lag

Not only is there more freedom to develop strong work than in developed markets, but there is another critical factor in explaining India’s rise as a centre for creative excellence: the technology lag.

In Europe, the USA, and parts of APAC, the internet, and the multiplicity of digital platforms, have become an integral part of everyday life. The global advertising industry is being forced to evolve and adapt to a new Web 2.0 era of social networking, delivering success based on relatively new metrics such as advocacy and recommendation.

India is at a very different stage in its sociological and technological lifecycle.

“Indian’s still love advertising on TV,” Balki said. “It’s so different to the cynicism in the West. Indian consumers are much more savvy now, and they see through the fluff, but there is still a desire to fall in love with advertising.”

Colvyn Harris summed up the situation by explaining that offline media is still in a growth phase. “We need to reach 1 billion people with a campaign, so digital media simply won’t give us the reach we need. It’s a very limited audience. TV covers 55% of the population, while Print covers 35%, and we’re seeing new magazines launch everyday here. The traditional channels are still the backbone of any campaign that we run.”

However, there is recognition that the future for Indian marketing will be in the mobile arena, with contextual services a huge growth area for brands to explore. Location-based services, powered by GPS and the ‘semantic web’ (Web 3.0), combined with the sheer weight of numbers on the streets, will become a very powerful tool for brands to utilise.


Conclusion

It is evident from the conversations I had that the advertising industry in India is in very good shape. Young, passionate talent is streaming into the industry, and a vibrant middle class is fuelling domestic demand.

New agencies are changing the shape of the industry, but the booming economy means that the pie is getting larger, and everyone can grab a slice of the action. International and domestic clients are focusing their attentions on delivering strong, effective creativity that drives both commercial objectives and international recognition.

The digital and mobile revolution is at its nascent stage, still too young to be causing the seismic soul-searching that is evident across the developed world. And the uniquely diverse cultural maelstrom of the country means that homogenous global solutions are rarely, if ever, forced down from London or New York.

In summary, there is no guarantee that India will be able to right the wrongs that have led to meltdown in the West. But domestically, under the recently re-elected (and now more powerful) Congress Government, India is on the verge of a golden era of growth, prosperity and creativity, and the advertising industry is perfectly poised to ride the wave.

 

The advertising and marketing world is finally starting to get its head around Web 2.0. Apart from a small number of agencies and clients, who embraced change swiftly, and nimbly re-formulated their organisational structures and internal processes, the industry in general has been incredibly slow to adapt.

For an industry that prides itself on innovative thinking, and utilising creativity effectively to drive corporate objectives, the last few years have not been our finest hour. Now, thanks in large part to the recession, clients and agencies are finally being forced to look much harder at their budgets, their processes, and their creative product.

The problem is, things are changing faster than the industry can keep up. No sooner has the agency world got its head around Web 2.0, than the semantic web (aka Web 3.0), powered by linked data, rears its sizeable head.

We are now entering the era of the intelligent internet, where consumers intuitively interweave their daily online and offline lives through smart devices that are powered by advanced operating systems (OS) and GPS-functionality.

This new breed of smart device enables: enhanced, multi-dimensional social networking functionality; enhanced connectivity to friends, family, colleagues and brands; and enhanced opportunities for highly targeted, location-based advertising and marketing.

This phase of the internet is now here, and it is only a short matter of time before it becomes truly mainstream.

This post looks at the future shape of a converged, vertically integrated Web 3.0 economy; and the fundamental impact it will have on brands, advertising and marketing.

The fact is that consumers are far, far ahead of the advertising and marketing industry at the moment. Clients are aware of this and are trying to adapt their organisational models to reflect the fast-changing behavioural shifts in developed societies. Agencies are likewise trying to understand how they can completely change their monetization models without totally decimating their revenue streams.

The problem with all of this, for the advertising and marketing world, is that the nature of technological change within today’s society is driving increased convergence across highly differentiated industries. The lines that have been drawn between the worlds of entertainment, computing, hardware, operating systems, and telecommunications are blurring rapidly.

And the pace of change is accelerating as a consequence of two primary factors.

Firstly, consumers are adopting new technologies faster than ever before, as a result of: widespread, ultra-fast wireless broadband; increased choice of platforms and providers; and a vastly increased level of trust in technology generally (versus the hesitant adoption of new technologies just a few years ago).

Secondly, the recession is proving to be a catalyst for powerful organisations to look beyond their narrow field of vision for incremental future growth opportunities. This is a sound defensive strategy at a time when rock-bottom share prices weaken companies’ abilities to ward off aggressors, but is also a progressive offensive strategy at a time when vertical integration appears to be the organisational model for the market leaders of the future.

This vertically integrated model is the reason why the likes of Microsoft, Google, Apple, Cisco, and Oracle have all recently taken up very aggressive positions versus their competitors, in fields that have not previously been their natural domain.

Oracle, for example, has just bought Sun Microsystems. This is big news, in so much as Oracle are predominantly a database and business software company. By buying Sun, for $7.4bn, Oracle have effectively acquired a hardware firm that delivers tightly integrated ‘systems’ of hardware and software to corporate clients.

Additionally, Oracle’s purchase of Sun gives it both Java (a programming language that powers both business applications and software that runs on mobile phones) and Solaris (an operating system used as the platform for Oracle’s databases).

The point about this purchase is that it clearly demonstrates Oracle’s strategic objective to have vertically-integrated ownership of sophisticated operating systems, the technology that powers them, the platforms on which they run, and the hardware in which they will be consumed.

By integrating these elements, from previously differentiated industries, Oracle is creating a powerful position from which it can mass customise highly tailored solutions to clients, whilst at the same time enjoying economies of scale and increased margins. It’s a strategy that seems to be prudent in a long-tail economic environment where margins are being squeezed.

Oracle, as we know, exists in the corporate space. But this example is important from a consumer perspective for two key reasons.

Firstly, because it is directly relevant to the advertising world in terms of the increasing power that the operating systems and hardware owners will have in a Web 3.0 environment. This will be a world where content, data and information live in the ‘cloud’, and where brands need to intuitively understand the intersection at which they can add tangible value to consumers.

Secondly, the move towards vertical integration and diversification is happening at lightning speed in the consumer space as well. Again, from a marketing perspective, the ability for brands to create technologies and/or content that is relevant and has true utility within a closed, but community-based open-source, environment is the key to future success.

Vertically integrated brands that deliver synchronised solutions to consumers are already here, but it is my opinion that we are just at the start of the convergence phase in the lifecycle of this economic era. And this state of flux could have serious implications for some of the biggest brands in existence today, as well as for the advertising world.

Apple, for example, has had huge success recently by diversifying its hardware offering into the smart mobile device space (with the iPhone and iPod range), and by creating a proprietary and category-changing operating system that intertwines its software products (such as iTunes and the App Store) with the hardware. But what is Apple’s next step to cement its place at the top table in a converged environment?

Google has diversified from being a pure search engine to developing the Android operating system for smart mobile devices, and is taking on Microsoft in it’s own back yard with the development of the Chrome browser for Windows, and Wave (a highly advanced, sophisticated mix of realtime email and social connectivity that will redefine internet communications). But again, where does it go from here?

Microsoft, in turn, has unveiled Bing, a search engine designed to challenge Google’s dominance. It has also had great success by diversifying from its phenomenally successful PC-based Windows operating system with the Windows Mobile Platform, and hardware products such as the Xbox, which is more of a connected home entertainment system than a pure games console. It has just been announced that Facebook & Twitter will be available on Xbox Live soon. Where next for Microsoft, I hear you say?

It is my personal opinion that these behemoths of the modern world are just beginning a new cycle of convergence and consolidation, where they are looking to acquire other organisations that can add incremental value to their existing integrated offerings.

By acquiring the elements of the ‘vertical mix’ that they are missing (for example, Microsoft or Google buying a mobile hardware manufacturer) they will strengthen their competitive advantage further, and increase their ability to deliver seamless, intuitive, synchronised, and highly tailored mass customised solutions to consumers through a variety of ‘owned’ platforms (even if those platforms are built on open-source technology).

If we look at entertainment, YouTube has already gone under the hammer, and the behemoths are fighting ugly in the war for control of brands such as Facebook & Twitter, as they try to acquire the content that people want to interact with. The television networks, and the newspaper industry, both currently on their knees, are ripe for plucking.

The question is, after entertainment and content, what is the next step in the pursuit of global domination?

It is purely conjecture, and a personal opinion, but the answers I keep coming back to are mobile hardware and telecommunications networks, media owners of outdoor digital signage, and both in-home and out-of-home entertainment companies. If I am right, it will mean the brandscape we now exist in will alter dramatically, and the communications industry will change at a most fundamental level.

It may be that the likes of Nokia, Samsung, LG, Vodafone, Telefonica and Deutsche Telecom can evolve their models to become key players in the new, cloud-based Web 3.0 world, and I truly hope that they do, because a couple of them are brands that I have a personal affinity for.

Nokia, for example, have just launched Ovi, an operating system that connects all of your maps, music, content and friends, and is designed to compete with the Google’s and Microsoft’s of this world. It is Nokia's stated strategic objective to become an internet company, rather than a hardware manufacturer. But is it too little too late?

What can a telecoms giant, such as Vodafone, for example, do to ensure that it remains competitive in a world where software and OS are the differentiators? How will the telecom networks become more than just pipes in which other peoples content is streamed? And if that is their future, what defence do they have if Google and Microsoft come knocking with a big bag of cash?

Equally, OOH billboards will be dynamic and digitised, and both in-home and out-of-home entertainment will become extensions of the synchronised online/offline community-based architectures that people cocoon themselves within. These industries fit the bill perfectly from a vertical integration perspective.

Obviously, predicting the future is a fool's game, and I could easily be totally wrong. As I’ve said, this is pure conjecture.

But from a purely strategic perspective, it seems to me that these are the types of industries highly likely to be in the cross hairs of Google and Microsoft very soon, hunted aggressively and without mercy in the next phase of the race for full vertical integration.

And the implications of this revolution on the advertising and marketing world are huge. The model for targeting consumers will be hugely data-driven, and the SEO algorithms that have propelled Google to such heights will be reworked to include GPS and linked, social data into the equations. Owning the platforms through which consumption, participation and interaction take place is a natural next step.

This formula will become the standard mode through which branded utility, content, and information will be processed. Advertising agencies and marketers of all shapes and sizes need to be thinking now about how they will provide relevant solutions in a world where consumers are protected within the strictly guarded walls of vertically integrated, data-led eco-systems, and where highly tailored, mass customisation is the norm.

 

Continuing on the theme of the evolving value exchange between consumers and brands, I spoke to Marco Rimini, Head of Business Planning at Mindshare Worldwide, to understand more completely how media agencies are adapting to the Web 2.0 world.

He explained to me that they have taken the core definition of value exchange from the digital world, blown it out to include all forms of communication, and re-structured their entire organisation around it: “The three big trends for the future are data, digital and content, and we have created three operational silos focused on these areas: the Business Planning unit (data), the Invention unit (content) and the Exchange unit (digital).”

“The Exchange function of Mindshare really highlights the way that we believe the world is changing from a traditional model of buying media space, to a new era where media is a place in which brands can exchange ideas, products, services, emotions, information, functionality or indeed anything with consumers, in exchange for advocacy, opinions, recommendations, ratings, contact details and, of course, money.”

“One of the things that brands will be able to exchange with consumers is content,” Rimini continued, “and that content will be both entertaining and/or functional, depending on the type of brand. For example: with a clients of ours like HSBC, the content will necessarily be more informational and functional than for another client, such as Playstation, where consumers will expect to be entertained in some way.”

“Mindshare’s Invention unit works exclusively to develop innovative and engaging solutions to content creation, one example of which is a project for Unilever, where we’ve bought the rights to take Ugly Betty to China.”

“We will co-create a new version of the soap with Unilever for the Chinese audience, and will then leverage the Ugly Betty property as a platform to deliver content for Unilever across multiple channels. This model gives consumers the chance to engage with Unilever brands through relevant content, participatory media, and both digital and experiential activation.”

“And all of the content created will be driven by data, from the Business Planning unit, which is how the three spokes of our business model intertwine and add value to each other to deliver effective, relevant media solutions to clients in a fast changing consumer environment.”

This evolved media agency model is a very convincing response to the doom-sayers who have recently been decrying the death of the media agency. Indeed, in the new world of total transparency and increasing channel fragmentation, it could be argued that media’s role has never been so important.

The discussion continues with Rimini explaining that a more effective process for developing creativity in a Web 2.0 world is data-driven and quant-led, rather than the intuitive, qualitative approach currently favoured by creative agencies.

And this shift in emphasis means that media agencies are increasingly going to be brought into the creative development process much earlier, working with clients to formulate the briefs and develop a channel planning architecture to maximise the value exchange opportunities, and understand the type of content that needs to be created, before creative agencies are even briefed.

“It’s not about developing a big idea and then wondering how to go to market anymore,” Rimini continues, “you need to analyze who you want to talk to, how you want to approach them, and where and when you want to make a value exchange, and only then should you be thinking about what it is you want to exchange, and the creativity that will enable you to make that exchange.”

“Just look at Martin Sorrell’s latest big acquisition into the WPP fold: TNS. He is beefing up the Kantar Group, which is already the world’s biggest market research and data company, because he knows that the future of the industry is in data-driven creativity.”

Understanding the complexities of value exchange within a Web 2.0 (and Web 3.0) world, and the role that data will play in fuelling the creative development process, is fundamental in determining how successful creative agencies will be in the future.

The traditional advertising agency model simply isn’t designed to deliver solutions in this new world, and it will be fascinating to see how agencies evolve to ensure their future relevance to clients.

I want to focus my first real post on the most important macro trend affecting the industry; one that impacts everything else that I’ll be talking about over the coming months.

That trend is of course technological progression, and the resulting shift in the nature of consumers’ interactions with brands. The nature of the value exchange between brands and consumers has gone from extremely simplistic – product or service for money – to something much more sophisticated in a Web 2.0 world.

In a socialised environment, where transparency is expected and knowledge is infinite, brands now target forms of engagement, advocacy and recommendation as a success metric in this new value exchange, while consumers want to receive either functionality or entertainment, or both, across multiple platforms.

Bob Greenberg, the Founder, Chairman, CEO & CCO of R/GA, told me in New York a few weeks ago that, “the relationship a consumer has with a brand has to be informational, wrapped in some kind of utility, and tied to community. Whether it is entertaining or not is secondary.”

“The work that we have done with Nike,” Greenberg continues, “demonstrates how a client that wraps its organisational structure around the consumer can deliver work that brings genuine utility and value to the consumer, across multiple platforms, and links to a social network.”

Greenberg cites the Nike ID work, which has moved on from the mass customisation of personalised trainers to a Nike ID Team Kit Builder, currently being developed by R/GA London, in which people can design every element of their personal or team sports kit online or in-store.

Greenberg also mentions the Nike Ballers Network, in which players or teams use a Facebook app to pick up basketball games. This app has proved to be hugely useful to high school coaches in the US, who have limited resources, and ties into the online, mobile and indeed print channels in which the players are tuned into throughout their daily lives, bringing them tangible value everyday.

These ideas, as well as the hugely successful Nike+ work, demonstrate precisely how Nike have set a benchmark for marketing within the Web 2.0 environment, where brands need to shift their mindset from being broadcasters to facilitators if they are to deliver sustained success.

The next phase of technological progression will be Web 3.0. This is the development of a contextual, intelligent, semantic web that exists in the cloud and, as Greenberg told me, “will be totally synchronised across all 5 screens, to the extent that the distinction between TV, PC, Mobile, Cinema and Dynamic Signage will become extinct. This phase will take some years to become a reality but it will happen.”

The work that R/GA have done in developing Nokia viNe, which I am proud to say that I worked on as part of IPG Team Nokia, is an idea that truly pushes the boundaries of technology towards the Web 3.0 era.

By linking informational and entertaining content with context, immediacy and your personal community, the very definition of social networking is infused with a multi-dimensionality that can only exist when your digital and physical life is totally synchronised, and the power of GPS and mobile devices are harnessed to the full.

Incidentally, Creative Review have just announced that Nokia viNe is one of the chosen projects in their Annual Best in Book – see the article and an explanatory video at http://tinyurl.com/cjmydo or sign up at http://vine.nokia.com/

As I said at the start, I’ve started with this very broad overview of how technology is fundamentally changing the value exchange between brands and consumers, because it is this unstoppable force that is driving every other seismic shift within the industry. The recession is simply a catalyst that is forcing change to happen faster and more painfully.

This really is a topline overview of the topic, and there’s plenty more to discuss, but I’m aware that this is already a very long post so I will keep my powder dry for another day.

Would love to hear your thoughts.

We're now six months old. And for all sorts of reasons Garry and Robert have decided to do something that Ogilvy, Mather, J Walter Thompson, Doyle, Dane and Bernbach, never did: take their names off the door. So now we are just (Beta). And all the beta for it.

Why?

Because losing Campbell Lace is the right thing to do. (Beta) is much bigger than Garry and Robert already. (Beta) is a philosophy...a way of being...continuous improvement...never satisfied...always new....testing...testing...testing...speaking of which, we're incredibly excited to announce...

1) Mark Wood has joined us as our chairman.

Those of you who know Mark and his awesome reputation in the world of business and finance will understand why we're so lucky to have him. In recent years Mark has been CEO of both Axa, and The Prudential. Latterly he set up pensions company Paternoster. He's also been a great friend, inspiration, and sanity check for (Beta) in its formative months.

It's thrilling for us to have Mark on board. His presence adds a dimension to (Beta) that ensures we will never be just another advertising agency. Yeee Haaa.

2) Malcolm Green joins (Beta) as a partner.

From Gary Lineker for Walkers to Howard at the Halifax, Malcolm has one of the most awesome showreels in the business. But Malcolm is not a man who rests on his laurels. Since he left DLKW he has worked with Naked Communications, directed commercials, and videos. He joins us January 1st. Happy new year indeed.

Welcome Malcolm. It is a pleasure and an honour.

We had a modest soiree last week to celebrate the news of Mark, and Malcolm, the heartless slaughter of Campbell and Lace, and to say thank you to some of our friends, colleagues and clients who have got us through the first six months.

Nat and Lol came and we were delighted to hand over their grand. The cheque was so big it needed two strapping lads to hold it up!

We're delighted to announce that Nat and Lol scooped the Beta Blog Bonanza with nearly half of your votes!

 So they get the grand. We think they might be on holiday, so as soon as they get back we'll present it to them.

So congratulations to Lol and Nat.

Thanks very much to the rest of you for your time, efforts and support.

There have been some wonderfully amusing, thought provoking, moving, and at times offensive moments.

We've had fun. We hope you have.

To Jack Gardener, who quite rightly campaigned for us to give the money to a children's charity - Jack we already are actively supporting two children's charities. The time, money and resource we give far exceeds the £1000.

And to Niail, who suggested that we were 'twallocks' for blogging and staying at the Mount Nelson  instead of attending to our clients - Robert is in fact staying at the Mount Nelson with a client. They've been shooting a commercial for some days now. The shoot is going well. So thanks for reminding us Niail what our priority should be, but trust us, we're on it. You twallock.

We're thrilled Nat and Lol won.

Let's celebrate.

http://www.youtube.com/watch?v=YwEMxYggoKQ

Yes. That was me you saw in the Mount Nelson.... I am everywhere, and no where.

Entries for the amazing Beta blog £1000 giveaway are now closed. We want you to decide who wins the £1000. See below our shortlist of potential winners. At the bottom of the page is a natty polling device.

IN SUMMARY....

1) The amazing Campbell Lace Alpha blog by James Mitchell.

2) Two virals from the girls that invented virals. Nat and Lol.

3) Two virals from Danny Walsh. Apparently Danny has worked with Robert at two agencies but isn't Jim Kelly.

4) Two virals from a man called Matt Winn. Bonkers.

5) And last Claire Beale's immortal quote about Garry and dogs' bollocks.

SEE ACTUAL ENTRIES BELOW. PLEASE VOTE AT THE BOTTOM OF PAGE.

1) The Campbell Lace Alpha blog.  http://campbelllacealpha.blogspot.com/  

2) These two from Nat and Lol. (Scroll to bottom of page to vote.)

3) These two from Danny Walsh. (Scroll to bottom of page to vote.)

5) And last but not least how could we forget the immortal line from Claire Beale...

"ANYONE WHO KNOWS GARRY LACE KNOWS THAT ASKING HIM NOT TO CHASE NEW BUSINESS IS LIKE ASKING A DOG NOT TO LICK ITS BALLS."

Voting ends Wednesday night. Winners announced Thursday November 5th. 

Adam. It is not my lack of memory. Danny is a pseudonym. But I have my suspicions as to who Danny is. And he is not Jim Kelly! Can't wait till Saturday night at the witching hour to close the competition and complile our final shortlist. Stay tuned.