Search results matching tags 'digital' and '#worldview'

#worldview - deconstructing the silo mentality

2544553 — Wed, 14 Oct 2009 08:38:00 GMT

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.

#worldview - the pace of change

2544553 — Wed, 03 Jun 2009 00:36:00 GMT

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.

#worldview - value exchange

2544553 — Fri, 08 May 2009 08:57:00 GMT

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.

#worldview - technology shift

2544553 — Mon, 04 May 2009 12:41:00 GMT

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.

The #worldview project - an introduction

2544553 — Wed, 29 Apr 2009 11:12:00 GMT

One of the great things about redundancy is that it forces you to open your eyes and see more of the world around you. New opportunities present themselves, and silver linings float in on apparently grey storm clouds.

The opportunity that I now find myself exploring is that of roving global reporter, travelling around the planet to understand the direction in which the marketing and advertising world is heading over the next decade of its evolution.

My project – entitled #worldview – will be focusing on certain key themes, namely: the shift in how consumers interact with brands; the evolution of the creative process; the impact of recessionary forces; the progression of organisational structures; how the big agency networks are adapting to change; and key trends to look out for.

I will be asking searching questions in every city I visit, eliciting perspectives and opinions from some of the most respected voices in the industry, and hope to be able to start painting a picture of the shifting landscape that we find ourselves in.

Having purchased a OneWorld Explorer round-the-world ticket, and had what feels like a hundred jabs, I am ready to set off on my journey. The cities I plan to visit as part of the #worldview project, in addition to New York and London, are Mumbai, Hong Kong, Shanghai, Tokyo, Singapore, Sydney, Auckland, Santiago, Buenos Aires, Lima, Sao Paulo, and Rio de Janeiro.

In addition to blogging on campaignlive.com and brandrepublic.com, you can follow my journey on twitter (@nicka77 or search: #worldview), and on my personal blog (nicka77.wordpress.com), which will be some parts travelogue, some parts anecdotal, some parts work that inspires me, and some parts totally random.

In the spirit of a real-time, open-source ethos, it would be great if people can suggest some questions online or on twitter for me to ask interviewees. Hopefully, by exploring the themes listed above, and by bringing perspectives from a wide variety of industry leaders to the table, I will be able to stimulate some interesting discussions and foster some healthy debates on this forum.

One of the key things I’ll be exploring on this trip is how the combination of technological progression and the recession are impacting different regions in different ways. Are the fundamental changes happening at a local and regional level universal? Or are there significant differences, market-by-market, in terms of the rate and shape of progression, the interdependency of structural and organisational relationships, and in the nature of creativity itself?

Why, for example, is it that we are increasingly seeing exceptional creative output from developing markets like India and Argentina? How are the big network agencies adapting to the socialisation of the internet, and how will they adapt to the semantic web? How are agencies of all sizes managing the increasingly complex nature of value exchanges between brands and consumers? What does the future look like for the big holding groups as the quest for reduced costs and truly integrated thinking leads to question marks over the multi-P&L silo structure that the industry has created for itself?

I’ll be trying to unearth answers to these questions, and many more, and hope that you’ll join me on the journey by engaging in dialogue and debate.

I’m currently in Mumbai, so if there’s anything you want to ask about the industry in India, then do get in touch, and I’ll make sure I pop your questions to those I get to speak to.