I was recently asked some questions about changes afoot in the creative, technology and media space. I provide a written response to specific questions and so thought it was worth sharing here on startup blog. Would love to hear your thoughts and retorts. Steve.
Q1: Who is better positioned for the future – creative agencies or media agencies?
Neither creative nor media agencies are better placed for the future in the new digital world. The reality is it is up for grabs for those who innovate more strongly around it. In reality we’ll probably see the most innovative media and creative shops bubble up to the top. It won’t be one cohort versus another – it’s more a race for the future and the winners will be those who resource around it the best. One of the interesting factors is that both media and creative agencies share the same clients, so the opportunity to win in the space is pretty much equal. Neither has a real advantage over the other. One thing that may occur is that both starting to enter each other’s space. We’ve already seen this in other areas influenced by technology and we need to learn from it: computer companies entering phones (Apple), web companies entering hardware (Google), software / web are entering music. So it is all up for grabs. When any industry goes through a dramatic change – who serves which markets usually changes as well. Who would have thought that Apple would be the world biggest music retailer today back in 1999?
The planning model of media buying and creative development is very quickly converging and moving to much shorter, and sometimes ‘immediate’, timelines. So they can’t live on islands – they either need to collaborate much more closely, or even start doing each others role. Probably the later. The market now demands it.
One thing is for sure, it is an area that we need to invest in the human capital to win in the space – it’s different to the old days in pitching for business, which used to be win the pitch, then gather the resources. Now we need to have the resources on hand, with proof of expertise or we can’t win the pitch.
Q2: How is social community management being handled within the creative agencies?
This is an interesting question. Often we create and curate the community conversation for the brands for which we work. But there is an interesting dilemma, in that managing a community requires and deep understanding of the real issues in the actual business, and the ability to answer information / requests etc in real time. This then creates an imperative on social media management: either the agency needs to be totally entrusted as part of the client’s company (seen as a total team member to speak on their behalf) or it won’t be effective. The old model of creating communications for the brand / company is being challenged because of the ‘real time’ element needed. We are now seeing a change, we (the agency) are ‘teaching’ the client how to operate in the social media environment – so that they can do it themselves. The rules and tools keep changing, so great agencies need to constantly educate their clients how to play in the space, who are often too busy dealing with their business issues to be at the forefront of thinking in this arena. The agency is the thought leader in social / digital thinking and passes that on so that the client can engage the community with the ‘inside information’ that they need. Some of the best examples of this include the use of Twitter accounts by brands which are managed by internal ‘Community Managers’ – which is the fastest growing role in client side marketing departments. In fact, the best examples of social community engagement come from startups. They aren’t scared of their customers and the truth like big companies are. Big companies need to learn from the small and nimble when it comes to new media best practice.
Q3: With regards to security, how will recent attacks against Google, Sony, and Epsilon impact the industry? Is encoding enough or do we have to de-couple data warehouses and the Internet?
This is interesting, because in a pre-digital world security issues are usually isolated geographically. For the first time in history, we see wide reaching implications of security breaches. I think we do need to see more de-coupling of data storage and the internet – but more importantly than that we need governments to speed up the legislation process and take ‘data crime’ more seriously. We need to see evidence in market of governments and global representative bodies taking punitive measures against security breaches and hacking. We also need to see a more serious effort from governments to ensure companies protect user data better.
In some ways this a cultural shift required by governments and business. It’s akin to the challenge faced by woman in the workforce in the 1970′s and racial equality some years before that. We need to redefine how to protect people, privacy and security both culturally and legislatively.
Q4: Innovation is outpacing industry and education. Where will the next generation of marketing professionals come from?
No doubt education is struggling to keep up with the rate of change. We’ve seen Harvard dropouts re-define our future more than once – initially with the desktop computer revolution, and now with the social connection revolution. So it’s clear the system needs revised. The current education system is designed for the industrial era (which is coming to a close). Current students will be competing for jobs that don’t exist yet so it’s very hard to structure education around this. Once thing for sure is that the system needs to change structurally – especially in the later years of education. In a mobile world our children don’t need to remember anything. So education must change from memory to creativity. We’ve outsourced data storage the the microchip and the web. Education needs to be about linking seemingly disparate ideas to create new meaning and commercial solutions, regardless of the industry we work in. Education needs to be less linear, and more like the mashups we see in emerging startups and the technology field. It’s hard to learn from tools like text books which have long lead times – and educators need to redefine the tools of education, like we’ve seen with TED talks, live stream interactive educational sessions – utilising fast tools to educate. We need more cross fertilised thinking across disciplines.
The net result of all this is that I think more marketing professionals will emerge from non traditional communications areas. Like startups, technology, biology and finance.
Q5: As media agencies rush to launch ad exchange platforms and DSPs, what will happen to the traditional agency models of yesterday? What will exchanges do to the digital agency’s bottom line?
One thing for sure is that there will be less wastage than what we have seen in traditional media. Instead of using demographic data to guess who our audience is – we move to actual data so we communicate with our exact audience. Exchanges which help us do this (both from new media, like Google & Facebook, to digital and media agencies) will improve profitability for everyone. If anything it will put an emphasis again on creative and remove the focus and excess expenditure on media as part of the advertising and promotion mix of clients. If clients can use things like DSPs and exchanges to communicate directly with their audience, more money is available for creative development and specific messages. We can move from a macro campaign emphasis to a micro-effort for sub segments and create messages with more meaning.
Q6: Engagement – Once you have identified your target audience what then? What makes your marketing strategies effective and why.
I think the major shift is that once we used to “inform and persuade” – now “converse and solve”. What brands need to do is have an open conversation with their audience, and co-create the solutions with them. Instead of working in the bunker on a new launch, and conducting market research it’s going to be more about crowd sourcing and getting brand enthusiasts to become evangelists and part of the design process. Consumers need to be engaged much earlier in the process – while new services and products and being created – not just at the promotional end. Brands that do this have a higher probability of success in market and will develop advanced brand and loyal brand communities.
Q7: SOLOMO – Have we finally heard enough about Social Media to put in back into the “toolbox of options” where it belongs. Is this really the year of mobile? Will Android kill the traditional handset manufacturer?
It’s more than the year of the mobile, rather the decade of the mobile. Everything is about live information, no matter where we are. We need to remember that every screen we interact with these days is web enabled, wherever we happen to be: in an airport, in a shopping centre, using an Ipad in a restaurant or retail outlet. So it’s all about human movement, and providing real time augmented data wherever we go. By definition, this means that all technology is going mobile – regardless of technology type. It needs to be to react to the user needs regardless of where they are and these needs go beyond their smart phone. Just look at the number of people at airports using iPads, instead of laptops and mobiles.
The other thing with SOMOLO (SOcial, LOcal, MObile) is that we should add ME to the acronym. It should be SOMOLOME. It’s about providing personal data, the ‘me’ – we have to know people’s preference and only serve up data / information / augmentation and options that are relevant. It’s imperative we do this in a permission-based marketing environment. Unless it is personal, it is an interruption, and interruption is not acceptable in a connected economy. Users expect we know exactly what they want – they demand it.
I don’t think Android will kill the traditional handset manufacturer, but it will mean that handset manufacturers need to make a decision on whether or not they want to develop hardware and operating platforms. It’s almost back to the future (like what happened in the personal computer market in the 1980′s) where we will see a splitting of the market into software and hardware producers. Although they’ll be exceptions of people doing both like Apple. It feels a bit like android is the new PC (Microsoft) and apple is the new Apple – quite ironic. The potential 3rd platform is the Windows 7 / Nokia.
One thing for sure, is that change is happening quicker, and often in ways we never saw coming.