This was one of the best sessions I attended @sxsw 2014: @tceb62 @joi on the future of making

This was amongst the best sessions I attended at SXSW this year; the video’s just been released – Joi Ito and Tim Brown on the Future of Making.

Some highlights relevant to this talk that I spoke about at the SXSW-themed IPA 44 Club event earlier this week:

The very definition of a product has changed with the evolution of technology. I’m a big fan of the work coming out of the MIT Media Lab, where they are actively challenging what it means to make. The interesting thing about wearable sensors, which the Affective Computing group at MIT is looking at, is not only how these sensors can understand our emotions but the insight we can get into human behaviour, which the group is using to design better experiences. For example, brands can design how to set up the right motivation scenarios because people always have to decide what to pick (if your competitors’ product’s aren’t there then they have no reference point and behave differently).  The Mediated Matter group is looking at 3D printing with objects of varying density – and 4D printing too. These materials can help us avoid wasting resources when we 3D print objects that are not of uniform density. The Self Assembly Group is looking at industrial applications of materials that literally build themselves when the right amount of energy and pressure is applied. Bioengineering was in fact repeatedly referred to as the future: Joi Ito said it would be as ubiquitous soon as the internet is today, it is growing as an industry at 6 times the rate of Moore’s Law – so one to watch. IDEO is also working with MIT to translate this work into simple concepts that are easier to grasp so I encourage you to take a look at their site Made in the Future.

One of the issues of the Industrial Revolution was that it was hard to design through making – you couldn’t really design while at a factory, where products were churned out. But that’s changing. The ability to contribute to design changes with the materials used: MIT sends students to Shenzhen to make things right there in the factory, A/B testing hardware live!

With every product that you make and sell, you are adding to culture. Think about that as marketers and as agencies.

Did you know that it is illegal for Tesla to sell their cars in New Jersey? (via @newyorker)

James Surowiecki in the New Yorker makes it clear, using the case of Tesla in New Jersey, that government regulation can kill innovation and investment even before it’s had a chance to start. I find it fascinating that for Tesla to sell without going through a car dealer (a la Apple), is effectively illegal in 48 states of the US. Completely bewildering – but then as the article also points out, when the costs are too diffuse, the party that stands to gain the most wins – and in this case it’s the dealers.

Tesla, since it’s starting from scratch, has no existing dealers, and so in theory it isn’t encroaching on anyone’s turf. But auto dealers around the country have still been lobbying state governments to force the company to change its ways. Dealers like the existing system, and they don’t want other automakers to get any ideas. Fiona Scott Morton, an economics professor at Yale who has written extensively on car dealers, told me, “There isn’t a rational argument for why a new company should have to use dealers. It’s just dealers trying to protect their profits.”

Excellent report by @altimetergroup’s @charleneli @briansolis @jaimy_marie on digital transformation in business

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I’ve just read a really useful report on why and how some of the best companies in the world are transforming themselves digitally. Authored by the Altimeter Group, it’s a fascinating look at how redesigning around the digital customer experience is giving a number of brands a competitive advantage, based on interviews with many top executives. A customer experience oriented in digital is important because of the shift in consumer behaviour, more than merely the prevalence of devices.

I had a number of thoughts as I read the report that I wanted to explore.

First, their definition of digital transformation as the outcome of ‘businesses seeking to adapt to this onslaught of disruptive technologies affecting customer and employee behaviour’ (emphasis mine).

A lot of companies talk about marketing innovation in a vacuum. I haven’t heard clients often say that they are embarking on an internal transformation as much as they are their external marketing processes (I wrote about this not too long ago). The best clients however are doing just that. Where earlier digital sat in a separate silo, it is now being brought into the communications or marketing team as a founding principle. That’s how it should be. Agency-side, planners and strategists need to evolve into digital strategists if they aren’t already because they should be thinking about the ‘end-to-end customer journey’ and the customer doesn’t see channels, they see a brand. A quotable quote:

‘Companies must re-prioritise their investments in traditional media in light of the evolving customer journey. We found that businesses often bolt on mobile, social and digital functionality to an aging online/offline infrastructure that is counter-intuitive to customer behaviour.’

Further, as the report says, ‘strategists with broader digital experience are needed to align technology and business strategies across departments and teams’ (emphasis mine). Strategists need to think digitally because their businesses are changing – not just because the market is.

Second, the importance of many small experiments even as a much larger transformational platform is being worked on. Sephora and P&G are mentioned in the article as a couple of brands that are re-doing their entire CRM platforms to better tie together marketing, e-commerce, customer service and internal communications. But equally the small experiments are important. Mondelez had the Oreo 3D-printing machine and a WeChat vending machine in SXSW but lots of people missed the point. Bonin Bough, their VP of Global Media and Consumer Engagement is trying to create a cultural change in the business as much as he is trying to engage in a media experiment. Believe me you cannot underestimate the importance of the former. The Altimeter report also mentions Pete Blackshaw, Nestle’s Global Head of Digital and Social as doing a similar thing. This sentence summed it up best for me:

‘as such technology investments are expressions of experimentation.’

Third, the importance of strengthening the CMO/CIO link. At Adweek a couple of weeks ago, I was at a panel that had 5 CMOs who all said that if they wanted to achieve business goals quicker, they needed to be in sync with IT, finance and procurement. It actually applies across the business but is especially true when marketing and IT don’t work together. Even assuming marketing does want to do something interesting, IT probably has a mandate that includes blocking certain social media sites or installing certain apps at work, for example, and bingo, marketing innovation runs aground. Or marketing may want to enter into a partnership that requires some budget to be shifted around, and you need the finance director to be on your side. None of this can be achieved when the customer experience isn’t at the centre of the business and when the entire team isn’t working together. The report echoed this: ‘when individual agendas conflict with the company agenda, theirs wins out every time.’ Sephora is getting through this really well; IT apparently participates in every marketing meeting to understand goals and objectives to provide ‘realistic solutions, timelines and costs.’ That’s the kind of brand I’d like to work for.

Fourth, the importance of change agents. I felt vindicated to read that from all the interviews Altimeter did, in very few cases did change happen from the top down. In most cases, they said, a change agent rises to the challenge. That change agent, usually a strategist, ‘makes the case and creates a sense of urgency to gain executive sponsorship and support’ and crucially articulates the vision and its value to customers and employees. It’s something I try to do in my role and I’m sure a lot of others out there will recognise this too.

(As a side note, I loved the emphasis on employees throughout the report as part of the process rather than passive bystanders).

The last bit I wanted to pick out from the report is how brands like Starbucks recognise the importance of intrapreneurship (again something I’ve gone on about in the past). I saw Greg Gunn, VP of Business Development at Hootsuite, speak at SXSW this year about the importance of allowing employees to hack your product to give you an advantage (think Google’s 20% project) so that you can cannibalize your business yourself instead of allowing competitors to. From an agency POV I agree it’s very difficult when you have multiple teams working on separate client businesses but you need a cross-functional team plugging away at how to become market leaders too – and that’s even more important for brands. At PHD we are trying to do exactly this.

Anyhow, enough from me. Go and download the report here.

Things I learnt from @advertisingweek #AWEurope

Last week I popped in to a few sessions at Advertising Week Europe. Key themes:

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The master and the tool: A panel of well-known female editors and publishers spoke about how we need to learn to live in harmony with technology without depending on it too much. The Huffington Post’s servers apparently went down during Hurricane Sandy, so they shifted all of their content to Facebook, Twitter and Rebelmouse and they were able to continue posting as if the site was still up. The interesting thing is that because of the social interaction, they got record traffic when the site was back up again. Brands need to think about building communities and not just content and commerce in today’s times. Commercial ends will be served very well by building communities of interest.

Think global always: This was from an Industry Index panel with a Senior Manager working on Growth Companies at PWC and the Chief Data Officer of Mediabrands. The internet has erased almost every boundary, especially for startups and ideas. When a startup launches in a specific market, they need to be thinking internationally from day one because sooner rather than later, if they want to grow, they will need to expand beyond their home market and will need to learn about things like tax implications, automating media plans across markets with similar technology maturity levels, patent trolls and so on.

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Defining value: One of the panels I went to had 5 agency founders who’d all sold their companies chatting about what makes a good acquisition and a good sale. A key point that stuck in my mind was the importance of always adding value to the business to increase its appeal as a brand. This can be done in different ways: clients, employees, the work itself to name a few. Value was also referred to in emotional terms: when the founders sold they sold at an amount they were emotionally comfortable with, which differs for different founders even within the same agency. As with any purchase, the panel also suggested avoiding haggling too much because it takes away from the whole process. They also spoke about having someone keep an eye on the work throughout, because during a sale there are so many things to pay attention to that often the work suffers (inadvertently potentially bringing down the value in some cases). And finally, they spoke about value in terms of partnership and teamwork and suggested getting the best people on board with them during the sale such that they benefit as well. Good karma etc.

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The wisdom of the crowds and identifying patterns: Probably my favourite talk (apart from the PHD one of course!) was the one by Oxford University mathematician Marcus du Sautoy (he has a site built in Flash though, oops!). He drew a parallel between mathematicians as pattern searchers, the basic building block of algorithms.  He showed us sets of numbers and asked us to identify what the pattern was; some were easy enough, like the Fibonacci series, others had no way of being identified as a set unless you really knew the information beforehand: the winning numbers in the Euromillions on September 28 for example. He made the point that people always tend to think in terms of themselves and their universe as opposed to generalised information – they get too close to the content and can’t identify patterns because of their emotional investment in some cases. He also mentioned some really interesting experiments, notably the dead ox experiment by Francis Galton in 1906, which proved that the wisdom of the crowds was actually much closer to the actual answer than one would have thought. However, he said, the wisdom of the crowds only works when the problem in question has been carefully thought about; it’s the reason some projects on Kickstarter are successful incredibly quickly and others struggle. I thought that was very interesting.

The modern CMO’s challenges: Being agency side, I was keen to know what some very senior marketers from a range of brands thought of the challenge of marketing today (William Hill, Pernod Ricard, Britvic, RSA). The first topic of discussion was how the role of the CMO and the Chief Information Officer need to be linked together almost as partners. Technology is such a huge part of marketing that it can’t sit separately anymore. They also spoke about the importance of marketers spending time with technology companies; Diageo took the entire board to Silicon Valley to meet startups there and understand how they were working with many brands.

The relationship of the agency and the client was also discussed in no uncertain terms. In many cases it is a partnership of non-equals which is not at all ideal. Clients want people who work on their accounts to live and breathe the brand and many agencies just put their junior people on it, not that that’s a problem per se but in some cases there are those who don’t really have any affiliation for the brand whatsoever. Interesting anecdote from the William Hill CMO who asked the agency whether the team working on his account betted, and none of them did, chowing a clear lack of interest and therefore likely understanding, of his business. The panel spoke about revenue targets being as much a part of the agency’s KPI’s as the CMO’s could make a difference and make them have more skin in the game, which I thought was interesting – because I don’t think that that’s a popular model in the business yet though it should be. The importance of constantly bringing new ideas to the table was discussed – CMOs might reject them but it has the potential to push the overall brand thinking higher up.

Content marketing took a solid knock as the CMOs said that providing a service to the customer is the key role of marketing and unless content serves that goal, ultimately helping to sell product, it is pointless.

The power of the network was a topic that I haven’t heard too many people at the top talk about. The Marketing Academy was recommended for its role in getting marketers together as it rarely happens in a social situation (two of the people on the panel had gone through the programme). The panel said they need to hang out more together so they learn from each other on an ongoing basis. (On a side note, it’s why we started Ada’s List, to help women get a peer group and network they wouldn’t otherwise have access to).

Someone asked a great question at the end: what the panel’s biggest mistake was. I have always found that the best leaders give really illuminating answers to that question. But at the event that  turned more into a list of things they value (still useful!). In no specific order, these were:

-          The importance of curiosity and always asking what makes your business work as this will change with time and technology

-          The relationship between marketing and procurement – the latter will always be driving costs down but if you have a good relationship with them they will understand why you need to spend on talent for example

-          The importance of diversity for creativity, both gender and ethnic diversity, so that the brand stays in sync with the needs of different people and not just a homogenous set.

I think I picked a good set of sessions to attend overall. Lots of things to think about.

Technology. Media. Stuff.

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