Google “the future of advertising” and you’ll likely get a plethora of articles on the death of the AOR (or why the AOR model will never die), ad-blocking, cord cutting, the rise of crowdsourcing content, ego killed the advertising star/creative director, or how traditional agencies have reconciled (on paper at least) with crowdsourced content providers and other programmatic / content-at-scale platforms - among other things. Private conversations with ex-agency types who have jumped the fence and come over to the client/brand side (and current agency friends in confidence) have all told me a similar story: the brand advertising model is changing (fast) and not all big box agencies (or clients) are ready/willing to embrace the change...to their own demise.
As I wrote in my last post, from the client/brand perspective, external macro & micro factors are applying unrelenting pressure on P&Ls, forcing brands to heavily scrutinize advertising budgets while concurrently increasing share of voice, content, and reach across a multitude of platforms in real time (i.e. mobile, always on, immediate, targeted). This brand-advertising disruption often puts clients and advertisers at odds. And like all disruptions, the us versus them relationship has to go through the familiar phases of denial, denigration, distinction, and then finally partnership. Some forward-thinking agencies embrace the disruptions and are making adjustments, partnering with crowdsourcing platforms and more “agile” (probably the most over-used word in 2015) vendors to develop creative, content, and commercialization tactics at scale. From the client/brand side we similarly have to challenge ourselves to embrace higher degrees of risk and uncertainty; challenge ourselves to build flexible frameworks where experimentation is institutionalized, measured, and financially supported in the quarterly marketing & business planning process.
Institutionalization not Bureaucratization
If you believe that execution is the only strategy/innovation consumers see then I proffer that only through iterative experimentation can you illuminate consumers' desires in real time. But how does a CPG brand institutionalize media/advertising experimentation in an industry that does not explicitly place a value on experimentation? A symbiotic industry where upfronts, risk avoidance and predictable quarterly earnings growth are paramount? A measured approach toward systematic experimentation, I believe, is the key. We measure innovation with metrics like Return on Investment and Return on Innovation; is there now a need for Return on Experimentation (RoEX)?
There’s plenty of case studies on how higher levels of empowerment lead to higher levels of employee engagement. I’m suggesting that a measure like RoEX can similarly lead to higher levels of engagement while also providing a repeatable, measurable rubric for downsizing risk into quick-turn snackable experiments. No need to eat the brand-disruption-risk-elephant in one bite.
“Inspiration without allocation is meaningless” - B. Bonin Bough
The good news is that some large scale traditional companies are investing in start up Labs, Incubators, Innovation Centers, and Foundries within their company walls with the goal of experimenting outside their internal processes to unlock value and deliver breakthrough “digital” or “shopper” innovation. There’s even a whole crop of players that specialize in developing brand accelerator programs within traditional CPG companies; promote intrapreneurism if you will.
The challenge then is how do these internal accelerator / incubators not fall prey to the same old corporate bureaucratization that led to their development in the first place? How does the work of the internal accelerator link back to the day-to-day grind of selling cases? Said differently, how can experimentation be institutionalized on a daily basis versus being the sole proprietorship of these accelerators / incubators? As a recovered corporate financial analyst, I can tell you that unless it’s built into the annual / quarterly business planning cycle, experimentation doesn’t get noticed or prioritized.
Net, whether through an internal incubator or through quarterly marketing planning (ideally both), regular, snackable (read “fast”), and funded experiments are the key; RoEX can be the measure of success.
Next: The changing nature of a CPG brand.
With the advent of all the car technology: self parking, snooze driving, etc. I think what car manufacturers should focus on next is driving metrics. Generate a daily report (resets to “new driving period” after 5-6 hrs of non-activity) that shows how often I changed lanes or turned without a turn signal, how many times I downshifted, calculate my average in-city mileage speed, etc. Give me a report card on my driving so I can improve my personal driving performance and my car’s performance. Also, if I so choose, I could send my report to the insurance companies on a monthly basis (or quarterly basis) to actually “prove” I’m a safe driver and pay less. [Side note: I wonder, how do the insurance companies calculate safe driver discounts? Just because you're not directly involved in an accident doesn't prove you're a safe driver or that you didn't cause any accidents. Also, I’m not sure why metrics like “home owner” qualify drivers for discounts; there has to be a correlation between reckless home buyers (think recent housing bubble history) and reckless drivers right?]
Anyway, the other reason I suggest this is simply because I was intensely pissed yesterday because I counted no less than five different drivers yesterday that made turns without their turn signal. So yes, my necessity is the mother of this invention.
(Update: it appears Progressive launched just a device!)
So, what else?
During my brief stint as an adjunct professor many years ago, I recall that half of my students had dreams of one day starting their own business. One of my favorite parts of the teaching night was when I presented a random idea and asked the students to put on the brainstorm lens - "what else could you do with this...". Most of the time we would end up in the realm of the zany. Sometimes, however, we would actually land on something achievable and plant the seed. This is an homage to ideas - zany or otherwise.