How to run innovation in advertising agencies

Creative Social‘ is a global collective of the world’s most pioneering, interactive creative directors and business owners (the Socials) which I have been part of since 2007. In our latest book Hacker, Maker, Teacher, Thief: Advertising’s Next Generation members of our group outline what it takes to survive the next few years in advertising and creative communication.

Below is one chapter that revolves a round a topic dar to my heart, how to run innovation in advertising agencies. It is called “The Role of Innovation in Agencies”, written by Creative Social co-founder Daniele Fiandaca who I interviewed here for Adverblog.

Role of Innovation Within Advertising

By Daniele Fiandaca

As conundrums go, the one currently occupying adland could be of life-or- death proportion. Defining the role of innovation within advertising is occupying the great and good of the sector, and rightly so because it’s pivotal to future-proofing what we do, and how. It is something many and diverse agencies – including Albion, AMV BBDO, BBH, Billington Cartmell, Digitas LBi, Karmarama, McCann, PHD and VCCP, to name just a few, are currently preoccupied with, not least because all have hired innovation officers over the past three years or so.

In the UK alone, there must be more than 50 agencies that have added into the usual mix a specifically innovation-led title, usually at senior level. It’s an increase that is matching, and arguably trumping, the introduction of such roles within client companies.

So what’s driving this relatively recent fixation?

Surely innovation should be at the heart of advertising and creativity? It was certainly central in the world of digital advertising. In the formative years of digital, which coincided with my first 5 years in the sector, I can’t remember a time when we weren’t innovating. It was core to survival – the industry was moving so fast that you constantly had to find new and better ways of solving problems. And this is probably the reason that most of us who have grown up in digital have found it so difficult to distinguish between creativity and innovation.

Yet there is a distinct and palpable difference, most interestingly summed up by Theodore Levitt, a Professor at Harvard Business School. As he puts it: ‘Creativity is thinking up new things. Innovation is doing new things.’ It’s certainly a simple and clear definition. But like many such demarcations, the reality is far from straightforward, and in the wonderful world of communications we’re now always finding and activating new ways to deliver interesting experiences to our audience.

To get a clearer idea of the factors that have driven the rise of innovation – and why I believe it’s such a key component of what we need to deliver as an industry – we need to look beyond the face value of the here and now. We need to look at the context of the market we now operate in. And never have we been in a market in which change has been so rapid.

As Ray Kurzweil, director of engineering at Google observes: “We’re entering an age of acceleration. The models underlying society at every level, which are largely based on a linear model of change, are going to have to be redefined. Because of the explosive power of exponential growth, the 21st century will be equivalent to 20,000 years of progress at today’s rate of progress; organisations have to be able to redefine themselves at a faster and faster pace.”

It’s that pace of change, combined with the pressure to redefine, which is having significant impact on our clients’ businesses. Put another way, change is now a do-or-die business imperative. If you need proof, consider the fact that an incredible seventy percent of the companies that were on the Fortune 1000 list a mere ten years ago have now vanished – unable to adapt to change.

So businesses need help, especially in navigating the communications landscape. The challenge faced by the specialists – the communications agencies – is that clients aren’t necessarily willing to pay for this help. Alex Jenkins, editor of Contagious Magazine, sums it up nicely when he recalls a client telling him: “I didn’t want to pay for my agencies to experiment and innovate as much as I needed them to.” This clearly presents challenges for agencies, especially in a time when margins are being constantly threatened and the pressure to deliver ongoing fees from clients is just increasing.

This is one of the reasons that the role of innovation has gained currency – it’s a direct response in recognition of the fact that there needs to be time allocated to looking at clients’ businesses in a different way. Anders goes even further in his chapter earlier in the book when he advocates the need for agencies to help clients actually adapt at a business level, rather than just a communications level.

From where I’m sitting, it’s also the biggest challenge we’re facing. Innovation is so wide in its scope it is unclear exactly what we need to be delivering for clients. When I asked my peers for their definition of innovation, the general consensus funnelled down to doing something new to solve a client’s problems. There were some variations including: ‘Innovation to me is about change and transformation’; ‘being brave enough to do something different’; and ‘entrepreneurial response to change’.

But assuming we define innovation as finding new and better ways to solve client’s problems (and it is worth noting that innovation and technology are not synonymous – old media and old products can be used to solve problems in new and better ways), the next step begs the question of which problems? And how? And do we need to limit what we do to clients’ problems?

Eight years ago, BBH set up Zag to create and develop new brands, which it will license or sell to third parties in return for a share of ongoing sales revenues. Other agencies, such as Droga 5, have since dabbled with similar models, while most recently, shops such as Mother and Wieden & Kennedy Portland have launched their own tech accelerators to get closer to the tech community. This is something that is also close to clients’ hearts. Jeremy Bassett, strategy and new ventures director at Unilever recently commented at the launch of the IPA’s Adapt programme that “partnering tech start-ups will be how we pioneer the future of marketing”.

It is here that I would like to provide my view on the opportunity innovation brings to the industry. I concur with Professor Andrew Hargadon, Director of UC Davis Child Institute for Innovation and Entrepreneurship when he comments “Thomas Edison, Henry Ford and, now, their modern counterparts were capable of creating one breakthrough after another because they built innovation strategies around recombining existing technologies rather than inventing new ones.” In a similar way, I believe that by adding a layer of creativity to new and existing communications technologies, namely by innovating, we can help solve client problems.

So what does innovation in advertising actually look like? I had hoped that the introduction of an innovation category at Cannes Lions in 2013 would give us all a steer. It was an exciting recognition of the integral role of innovation in advertising. Now though, I’m wondering whether it ultimately only served to confuse the landscape even further. Rather than celebrate innovation within the advertising space, it awarded innovation within a product design sense in 2013 (e.g. a two-sided phone and a credit card which incorporated a digital display) while 2014 seemed to be more focused around technology rather than innovation (e.g. a kinetic façade and connected signs, tennis rackets and headsets).

At least 2013’s Grand Prix winner by our good friends at Barbarian Group sat perfectly within the comms space – an open source software tool for professional creative coding which provides a platform for developing physical installations, mobile apps, music visualisers, screen-savers and completely new categories of projects. It is a great example of the ad industry not just reacting to, but actually leading tech innovation. And by making it open, the agency is part of the ecosystem, something I touch on later.

Cannes also brought some other great examples of innovation through the Converse Hack a Chuck competition, which we actually ran as Creative Social in 2013, to find interesting ways to hack a Chuck, in turn creating content to launch Converse’s Google+ page. Entries included turning a Chuck into a Wah-Wah pedal, LED Chucks, Chucks with Drone support, Chucks which turn your dance moves into bespoke images and of course, our own entry from Cheil, a skateboard which is unlocked using a pair of Chucks and then monitors your location, distance travelled and your key tricks (using an accelerometer).

Other recent examples include MRY’s collaboration with Spotify to create Placelists, a location based jukebox which allows you to connect with the people you love, through the music you love, in the places you love; IKEA’s Klippbok iPad App by the Monkeys, which essentially brings the flat-pack furniture king’s showroom to your front room; and the Facebook app by Tool that works out who to avoid if you want to stay healthy – or, if you already have the flu, who to blame. And, of course, Pereira O’Dell’s Inside films for Intel and Toshiba that merge social media and movies, and have produced three “social films” so far, including the multi-award winner The Beauty Inside.

Obviously innovation does not necessarily have to be driven by technology; one of my favourite examples of this in 2013 was the Coke cans that you could split into two. Another example I loved (as did Dave Bedwood) was Paddy Power’s hijacking of the Ryder Cup by sky-writing tweets.

Given the round-up above, it’s fair to say that innovation in advertising in its truest and most exciting sense is alive and thriving. So what are the challenges that the advertising industry faces in delivering innovation?

Surveying my peers, more than 60% said that the biggest barrier to success is time and money. Many are lucky in that they have dedicated innovation team members. But even then, most heads of innovation have to grapple with a secondary role that has clear revenue attached.

The fact is the return from innovation is still unproven, mainly because it cannot sometimes be directly charged to the client. In any case, at its most successful, it should have an impact on the whole agency and subsequently, its output.

However I have found that there need to be some core pillars for innovation to be successful:

Determine senior responsibility:

I am not advocating that all agencies have to have a head of innovation, but they need to have someone at board level with responsibility for it so that it fits clearly into the overall business plan (hence being supported by the overall management team). Where agencies do hire someone though, it must be clear that hiring them is not enough – there has to be a commitment from the wider senior team that cultural change is likely to be needed and this change is likely to be perpetual.

Innovation must not operate in a silo: Part of the role of the innovation team has to be to ensure that everyone in the agency has the opportunity to be innovative and that innovation is baked into the overall process. Any briefs tackled should be in collaboration with other members of the team, especially creative and tech. As Alistair Campbell, Creative Director at Guardian Labs comments: “One of the biggest challenges is persuading everyone that it’s their job to innovate. No-one is going to do it for them.” The way agencies achieve this may differ. At Cheil we did this by creating a wider team who have responsibility for innovation and allocating time aside. At DigitasLBi they have a lab within the agency. When they believe there is a big innovation opportunity, they brief the creative technologists from the lab at the start of the process, alongside the creative team and production. Ideation and execution are interdependent.

Strong planning department:

I still find that the best ideas come from matching a human insight with technology to solve a client problem. While a large proportion of those in a senior innovation role actually come from a strategy background, they still need a good team of planners to ensure that they are finding true human insights, which is very different from a proposition. The strength of the Tesco Homeplus subway virtual store, which won the Media Grand Prix at Cannes in 2011, was that it tapped into a cultural human truth. Koreans are the second most hard working nation in the world, and in giving them the opportunity to shop while waiting for the tube, they were given one of the things most precious to them: time.

Provide time for innovation:

We all know Google famously lets its team spend 20 per cent of its time on new things, as does 3M (in case you’re interested, this is how Post-It notes came about). I understand that in an agency environment this can be tough, but the best way to innovate is to provide time to think outside tight deadlines.

Set an R&D budget:

Agencies keep on advocating to clients that they put some budget aside for research and development, so we need to do the same. At Cheil we invested in a 3D printer, Arduino training, and kit and prototypes for new products. Using these technologies helped us sell in the NX Rover campaign to Samsung, where we built a robot to allow people to remotely take amazing photos from their computer from inspiring places around the world, as well as opening up other new opportunities with clients.

Become part of the ecosystem:

Not only do we as individuals need to invest in testing new platforms (in order to swim, you need to get in the water) but you also need to do the same at an agency level. This may mean actually launching your own product, but this might be more with the intention of ‘learning’ to make your product better for clients, as opposed to aiming for the next big money maker. A good example of this is Little Printer from Berg, which Mark Cridge described as “their own probe – put out there as an agency learning tool.

Expand your network:

Tied in with the above is finding new relationships and partnerships to help deliver innovation. A good example of this is Leanmeanfightingmachine’s partnership with Queen Mary University of London. The agency works with Queen Mary’s media and arts technology Ph.D. programme, which has a mission to produce post- graduates who combine world-class technical and creative skills and who have a unique vision of how digital technology transforms creative possibilities and social economies. They sponsor students and get them to tackle briefs and challenges we set them. LivesOn, a product that allows you to tweet from your afterlife, came from this collaboration.

Provide the right culture:

While responsibility might reside with someone senior, for an agency to be truly innovative, it needs to permeate throughout the agency. This can only happen if you have the right culture. Tom Uglow, creative director of Google Labs, describes innovation as a combination of exploration and experimentation, which equates to play, which equals fun. So if you are not having fun, you will never be able to innovate. In addition I believe one of the key challenges for agencies in the next 2-3 years is going to be the ability to constantly adapt to change. This means creating a culture of agility, one in which we are constantly challenging the way we work, sometimes using different processes to solve different problems. This is going to also require a different type of talent which is why at Cheil we focused on hiring what we called ‘curious mutants’;

Deliver clear KPIs:

This is essential. It provides focus as well as determining the parameters of success. These KPIs will be a mixture of revenue, new business, awards, reputation and developing IP.

Irrespective of the above, there is one thing that every agency needs to be truly innovative. And that is a brave client. As PJ Pereira says: “Corporations like to talk themselves out of brilliance.” Fortunately there are quite a few brave clients out there. Hopefully, some will read this book and maybe even pass it on, as perhaps you, dear reader, should too. Because I believe that however you define innovation, offering it to brave clients is going to represent the best opportunity for our industry going-forward. And this will ultimately mean that agencies need to invest in the future (in terms of talent, dedicated time and budget), deliver new structures and processes that make them truly agile, and deliver new services which will help clients adapt to this new future. If we focus on what advertising has historically done well, which is help connect brands to people, then I think the future is bright and innovative.

Purchase the whole book here on Lulu: Hacker, Maker, Teacher, Thief: Advertising’s Next Generation

You can follow Daniele on Twitter @YellIf
You can follow me on Twitter @TBuesing





One response to “How to run innovation in advertising agencies

  1. Pingback: Interview on Innovation with Daniele Fiandaca | Between 0 and 1

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