Monthly Archives: October 2012

Why Google is Struggling with Mobile?

The future of the business is mobile.

Or so they say. Currently it seems more that future business of companies is ruined by mobile. Zynga has lost 85% of its value, because the mobile adoption has been faster than expected. Facebook has been stumbling with mobile advertising, although its recent mobile ad revenues beat the industry estimates.

Even the traditionally steady high-performer Google has been showing signs of slowing down. The problems have their root cause in mobile: Motorola acquisition has not yet paid off and mobile advertising has driven average click prices down.

Here are five other reasons why Google (like many other companies at the moment) is struggling with the mobile:

1. Status Quo Bias
For years the AdWords has been the hen that lays the golden eggs for Google. As humans, we are more likely to believe that things remain the same and are more likely to select to stay in status quo whenever possible. Every company encounters status quo bias at some point. AdWords are still selling like pancakes, the main difference is that the average click price has dropped for four consecutive quarters in row.
Although no one accuses that Google is not doing mobile innovations and investments, there has apparently not been pressing need for them to roll them out faster.
2. Android Ecosystem does not pay off (expect for Samsung)
According to certain estimates, Google makes about $6.50 through ads on Apple devices, compared with under $2 in Android. Google makes roughly the same amount of profit selling Android ads & apps in year that Apple makes selling iPhones a week. Google has regarded Android ecosystem more of an extension of the advertising. Currently it seems that it only benefits Samsung (and maybe to some extend users).
3. Mobile advertising ecosystem is currently broken.
People are not yet ready to make purchases with mobile. That is likely due to change in the future. Meanwhile, the mobile ads generate less revenue than traditional ads on average. Mobile has been thus far more about duplicating the web experience for Google, than regarding it as a center of the advertising innovations.
4. Consumers are even more unpredictable with mobile
Who would have predicted that texting will become popular? Or that tablets will become hits? Consumers are always fickle and surprising, but especially in mobile. Consumers do not really know (or at least articulate) what they want, but they still act quite fast to get it.
5. Google is not (yet) producing phones
Although Google bought Motorola, there has been a strict separation of church and state between Android and Motorola. Apple and Samsung have proven that the money in mobile lies in hardware. Microsoft has returned to hardware game as well. Facebook will probably enter the competition soon. Can Google stay away from the phone game?

I am sure that Google has certain tricks up on their sleeves regarding the mobile. Until those tricks are revealed, there will be more growing mobile pains ahead.

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iPad Mini and The Future of Mobile

Despite the surprise launch of the next generation iPad and the brouhaha that followed it, the most important launch of the yesterday´s Apple event was still the iPad Mini. According to late Steve Jobs that tablet should never been launched:

“This size isn’t sufficient to create great tablet apps in our opinion”

The point is not that Apple is ruining the grand vision of iPad or dancing on the grave of Steve Jobs. The launch of iPad Mini is just a reflection of the current market situation. People do not necessarily want to have great tablet apps, they just want to read e-books with the tablet. Kindle Fire and Nexus 7 have shown that there is a great demand for smaller tablets which are designed mainly for content consumption (such as text, videos, audio and basic casual games). Judging by the strength of Apple´s content ecosystem (iTunes, iBooks), it is likely that iPad Mini will be successful. The biggest concern is the higher price, but that does not really have stopped Apple buyers before either.

The launch of iPad Mini is a good indicator of where we are moving in the mobile sphere. Here are four predictions what will happen in the near future:

1. Apple will release bigger iPhone.
If (when) iPad mini will be a hit, we are quite likely to see bigger iPhone. The success of Samsung Galaxy S III has proven that the traditional heuristic of “it has to fit the pocket” do not really apply. We have the need to communicate and consume content. For those whose urge for the latter is bigger, would want to use bigger smartphones. And they just put it in bag instead of trouser pockets. Or get bigger trousers.

2. The Tablet+Dock hybrid will be the laptop of the future
There has been flood of new device announcements with Windows 8 OS that are not traditional laptops. Instead they are hybrids, merging tablets and laptops. These devices might not be the future yet, but the thinking behind them will be. It is odd and inconvenient to carry around smartphone, laptop and tablet with you. I would presume that the separate bigger tablet would be the one to go. Smartphone would be the urgent communication vehicle; the separated tablet for mobile content consumption and that powered with the dock would be for work.

3. Mobile is the driving force in technology usage of the consumers
Also with the launch of Windows 8 OS, there has been quite a big surge of touchscreen laptops. The way we use mobile is shaping how we use other devices. Mobile is all the times with us, so we expect the same user experience with other devices. That is also reason why companies are struggling with mobile. They view it as an add-on, when it should be the core of what they are doing.

4. Forget the different devices, it is about integration of screens.
In the near future, we will not talk about mobile, tablets or laptops. We will just have different screens, which are integrated together and serve different purpose. The company who will master this integration most fluently will be the winner of the technology race. We will have screens for home, work and mobile (enabling both work&entertainment) and certain devices that enable us to use these screens. What devices those will be, remains to be seen. One certain consequence will be that there will be renewed interest to TV screens, which have and still are the default home screens for the majority of households.

iPad Mini will not be the last interesting technology launch in the near future. There is still plenty of white space to discover while consumer technology usage is changing. The one who understands the consumer experience and “the integration of screens” most thoroughly will be able to find and conquer that white space.

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Rethinking The Advertising Agency Team Structure

World is changing rapidly around us. Digital revolution has shaken up all the industries. Revolution brings opportunities, but only for those who are willing and able to change within the times.

Amidst all the change, advertising agencies have been surprisingly static in their way of work. The basic advertising team structure has remained pretty much the same in most of the agencies (certain expectation to that rule). Usually core team has just been extended with channel specialists, because core team does not get digital. This has been one of the reasons why advertising agencies have lost their role in current business environment. We have hammers to solve your problems, but those problems have altered from nails to screws.

That is why it is mandatory to rethink the agency teams, to achieve the following goals:

1) To expand agency offering beyond traditional campaigns.
2) To find new business models in addition and to replace traditional retainers and project fees.
3) To create environment, which creates tangible creative products faster and more agile.
4) To enable flexible way of working to reduce over bloated organizations and bureaucracy.

New advertising agency should consist of generalists, who are accompanied with network of designated specialists. As the channel & technology knowledge gets more and more specified, the need to have the big picture is more vital than ever.

All the work is based on consumer insights and everyone has the responsibility to start their work from insights. That is why there are no separate planners.

Everyone also has to come up with ideas. Agency is as creative as its least creative link. The unified mindset is to produce things. Everyone is a producer. You will be judged by the actual stuff you are able to produce. No more room for free-riders.

Also the media knowledge should be in-house. In this day and age, you cannot separate creative work from the actual channels.

CORE CLIENT TEAM

The core of the agency client teams is built around self-guided generalists, who are insight-driven and obsessed about creative output. Ideas are teamwork and have no ownership.

Strategist
Job Description: Dual responsibility on both external & internal strategy:
How we improve our client´s business? How we improve our own business?
From my viewpoint you cannot ever separate strategy from the billings. That is why the business & strategic responsibilities are combined.
Mash-Up: Account director/Planner
Responsibility: Strategy

Presenter
Job Description: To ensure that all the products that are done to the clients are as persuasive as possible. Verbal persuasion is not limited to traditional copywriting, but is extended to all channels and to internal level as well. As the lingua franca of business world is PowerPoint, agencies should be master of that vehicle as well. Good ideas have been ruined with bad presentations. That is unacceptable.
Mash-up: Copywriter/Screenwriter/Planner/
Responsibility: Persuasion

Visualist
Job description: To ensure that all the products that are done to the client are aesthetically as beautiful as they can be. As the world is getting more and more visual, this role is increasingly more important. If you do not look good, you do not exist. Or at least, lack the quality.
Mash-up: Art Director/Film Director/Planner
Responsibility: Beauty
As you can see, these two roles are closest to traditional copy/ad-couple. There are two reasons to that. Fist, I find that pairing still the most effective unit in agencies. In majority of cases, two heads are better than. Secondly, I believe that we still need visual & verbal thinkers, although on more broad term. Usually they are two separate persons, but with certain individuals these roles can be merged.

Consumer Experience Designer

Job Description: To map out consumer journeys and find the most effective places to interact, help and to affect the consumer. As you cannot sugarcoat bad customer experience with flashy marketing communications, the customer experience should be in core of all the client teams.
Mash-up: Digital/Engagement/Media Planner
Responsibility: Consumer Experience

Creative Producer
Job Description: To ensure that the actual products will be produced. Leading the specialist network. Heading the prototyping in the agency. Creative producer is the catalyst of the new agency and the main change agent in moving to the age of experiment.
Mash-Up: Creative/Producer
Responsibility: Creative products & prototypes

Client

Yes, you read right. Client should be an important team member. In order to reinvent agency model, we should also shift our working methods more towards collaboration instead of traditional buyer-subcontractor-model. To disrupt the usual brief-creative brief-creative execution-production-cycle, we should collaborate on earlier phase. Advertising agencies should strive to be the best advisers the client can have. That requires ability to tackle problems, which cannot be put on a single brief.It is also important to look beyond just challenges, agency should be also spotting opportunities on a constant notice. From my experience, with best client relationships this works and comes also quite naturally.

EXTENDED TEAM
The generalist core team is helped by a group of specialists. These are used on case-by-case-basis and majority of them are not necessarily on the agency´s payroll. There are also certain agency-wide specialist roles, which are helping all the agency. These roles are following:

Creative Social Anthropologist
Job Description: Creative anthropologist gives unfiltered view of human behavior for the core team and keeps the whole company up-to-date with emerging audience trends. Heads the consumer research that is based on actual human behavior. Works in close cooperation with data miner.
Responsibility: Human behavior

Data Miner
Job Description: Data miner finds human patterns in big data. Helps core team and especially consumer experience designer to find ways to improve client´s business. With creative social anthropologist is creating the trend studies for the whole agency.
Responsibility: Mastering the Big Data

Creative Technologist

Job Description: Creative technologist role is two-folded. When working with core team, she helps to solve client´s business problems with technology. The other role is educational. Creative technologist keeps the whole agency up-to-date with the technologic change. These technologies are also actively tested within the agency.
Responsibility: Technologic change

Creative Lawyer/Creative Financial Personnel
This might be sound far-fetched, but if we really want to find new revenue sources in agencies, this will be mandatory. We have to expand the creativity to traditionally “boring” functions as well. And when I am talking about creative financial, that does not mean Enron or anything like that. Instead of traditional cost-cutters or salespeople, these people are seeking creative ways to improve company´s bottom line with new billing and contract models. Certain examples of these which have been already tested are revenue-share models, leasing IP-rights and creating own properties. There is plenty of room for improvement in this category.
Responsibility: Find new business models and revenue sources. Improve the agency processes.

This new team model is not that science fiction, when you think it closely. When evaluating these roles, I have already met people with these capabilities in different agencies I have worked for. The problem has been that many of them have been struggling with the old-school legacy team structures. The capabilities are already there, now it is time to unleash those capabilities, maybe throw some dead weight from the way and to radically rethink the agency team structure. Because if we will not do it, we might as well be extinct.

What is your view on agency team restructuring?

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Everyone Should Be a Producer

We used to live in the age of ideas, but we have already moved to the next phase:

The Age of Experiment.

It used to be about “what”. After the digital revolution we have to stress the importance of “how”. You cannot really separate the actual production from the actual idea. You cannot have real creativity in digital without the understanding and working knowledge of the actual channels. There are million ways to kill a great idea, nearly as many ways to save good one as well.

By the time you spend on polishing that perfect idea, someone else has already done ten imperfect tests. And actually reached the perfection that way. We have to do prototypes, demos and test runs to find the perfect idea. Ideas without the actual experiments are worthless. The difference between companies will be in the agility to come up with actual working executions as fast as possible. Produce something real or die.

There will neither be separation of the “thinkers” and “doers” anymore. If you want to succeed, you have to be both. Strategy will be more and more shaped with the actions and actual outcomes, not with non-productive marathon meetings discussing some incomprehensible PowerPoint presentation. Forget the “high-level” thinking or “low-level” doing. There will be just one level: the working level.

Everyone should be producer.

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Treat Innovation like Investment

Think about measuring innovation as you would an investment portfolio, where you are concerned with the total return rather than individual stocks, bonds, or mutual funds.

The key is not to measure each project individually and then declare victory or defeat, but to measure total investment over a period of time compared to total output.

This pools high- and low-risk projects and encourages people to take canny chances.

– A.G. Lafley (former CEO of Procter & Gamble)

Source: Grant McCracken: Culturematic

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Anatomy of An Insight: #firstworldproblems

And somewhere around the world
Someone would love to have my first world problems
Kill the moon and turn out the sun
Lock your door and load your gun
Free at last now the time has come to choose

-Matthew Good Band: Omissions of Omen

I am not huge fan of advertising for charity organizations. The work tends to be either scam or too preachy for its own good. What is usually lacking in creative idea, is compensated in shock value. That is why it was refreshing to see this:

Insight: In developed countries, our (first world) problems are quite trivial compared to (real) problems in developing countries.
#firstworldproblems

Behavior: Although the insight in the campaign is quite simple truism, it is the behavior of the brand what makes it stand out. #firstworldproblems was popular meme and DDB found a great way to hi-jack that meme to benefit WaterIsLife. Tweets about #firstworldproblems are ironic and at least meant to be tongue-in-cheek. With this campaign, you are forced to think at least for a while about real world problems while you are cracking jokes about your iPhone´s lousy battery. Of course it induces guilt, but isn´t that the main emotion you actually want to raise when doing advertising for charity organization?

It is tricky for brand to take advantage of existing memes. You have to know the meme upside down and then also bring new meaning to it. What was parody was turned to something serious. With this campaign, that was done perfectly. Zigging when everyone else is zagging.

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Why Would You Pay for Your Facebook Status Updates?

Facebook piloted the promoted post –format already last spring and now rolled out the feature in US in the beginning of this month. Basically it allows normal Facebook user to get more exposure for her post when paying money for it.

Sounds great from the Facebook standpoint. They are in desperate need for new ways to monetize the vast user base. The initial cost for rolling out this advertising format is probably quite low. And it might be hit. Judging from the reality tv shows, there are lots of celebrity-seeking self-promoters around wanting the attention at any cost. On Facebook product site for the Promoted posts, there is linfo about practicalities of the function. One crucial piece of information is however missing:

Why would anyone want do that?

The example Facebook uses is engagement announcement. But I find it hard to believe why anyone would pay for that? If you really have to make sure that people now that you are engaged, there other communication vehicles to ensure that message goes through. Also the virality of those announcements is already high and it is likely that you get hundreds of likes and comments for announcements like that naturally. How many likes will it take that you are satisfied? Of course the situation might change if Facebook decreases the reach of non-paid status updates. That has already happened with brand pages.

There seems to be only one inevitable result from this. Your newsfeed gets bombarded with marketing messages. The promoted post function seems suitable for only small-business owners, politicians, bloggers, company spammers commmunity managers, event organizers, social media con artists consultants and other narcissistic egoists. For those people, the promoted post will probably be good addition to advertising toolkit among other Facebook advertising solutions.

What will it do for the user experience?

There will be municipal election this weekend in Finland. Thus I have avoided checking my newsfeed lately because I just cannot bear all that election advertising from all “Facebook friends”. The newsfeed is almost unreadable. Especially because I do not currently live in Helsinki and I am not even eligible to vote. How worse the situation will be when these annoying self-promoters can pay for more wider reach for their propaganda?

Or maybe this is just clever marketing and the next product Facebook announces is: Unpromoted Post. By paying certain fee, you free yourself from those self-marketing promoted posts.Facebook Premium, without ads?

Someone might pay for that as well.

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Building a Successful Failing Company

Each year over 30,000 consumer products are launched. 95% of them fail.
The failure rate of TV shows is about the same 95%.
75% of advertising campaigns are failure.
(Probably the real rate 95%, but the years of crafting those Effie entries probably helped to shape that number down)

The conclusion is clear. We are doomed to fail. Or actually we have planned ourselves to failure.

Companies, who do not tolerate small failures, end up doing big ones. Perversely companies are obsessed of micromanaging the staff and punishing for minor mishaps, but eventually end up messing up themselves big time. There is too much strategy & planning, not enough doing (ironically coming from planner). The trick is to fail often and fast to avoid the big failures and to ensure big wins. Actually it is not about failing, but just doing things.

Four ways to encourage doing actual things and failing fast in your workplace:

1. Taking ownership of the ideas and making it a habit
The problem with the companies is not the lack of ideas. Not even good ones. The problem is that there is a lack of ownership of the ideas. Throwing ideas is worthless, planting and cultivating them priceless. That is why Orange idclic works. You do not just throw an idea around. You get the opportunity and responsibility to build that idea.

I remember time selling digital ideas, when clients only wanted TV ads. We always presented those ideas, even though client had not asked for them. First they were irritated, then amused, then interested and finally buying them.

Selling idea is about creativity, vision & perseverance. Mostly the latter.

If you make the habit of producing five presentable ideas to improve your business (or your client´s business) every month, you have presented 60 good ideas by the end of year. I recommend changing the client or the team, if you have not sold any of them.

2. Something Concrete/Month: Test & research with real audience
If after numerous focus groups, strategy workshops and numerous alternations to body copy you still end up messing the project, what is the real risk of just trying stuff out? Also company, which gets its Facebook status updates approved by ten different managers, cannot really be agile innovator.

Your website and social media channels give great opportunity to test things with real people before you commit millions of dollars behind certain idea. When you commit to test one of those ideas every month, you have done 12 prototypes a year. On a worst case you have 12 small failures. On the best case you have done couple of breakthrough successes.

3. Reaction fund: Show me the money to show that you care

World does not spin around your strategy. Your strategy spins around the world. And that world is changing rapidly.

“Ability is little account without opportunity”
-Napoleon Bonaparte

Every company should have reaction fund to react to current events. Something relevant happens in the real world, which opens the opportunity for your company. When the opportunity rises you should have budget to react to it. Whether you produce event, application, flashmob, social movement does not matter, reaction and taking the action is the key. The designated budget is also a proof that your company is serious about that agile innovation.

4. Skunk works Exchange program: Spreading the change to whole company

Big change starts with small movements. That is why it is crucial to start with task force, skunk works or lab, with progressive individuals who are hungry to change the company.

The challenge is to spread their impact to whole company. If people in skunk works are the only ones doing the cool stuff, it helps quite little the struggling company around. Thus every member of that skunk works should be member for only limited time. When revolutionizing the company for appropriate time in that small unit, they would be located all over the company in different units. This works also other way around, task forces giving new meaning to bored employees. Think of it as a work exchange, where you do not move geographically but mentally.

The future is uncertain and the failure is unavoidable. It is how we seize the opportunities and try out new things, which determines our success.

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39.045 KM: The New High for Advertising

“Sometimes you have to go up really high to understand how small you are.”

Felix Baumgartner not only made the world´s highest parachute jump. And he not only did the record height manned balloon flight or had the greatest free fall velocity.

He is also the future of advertising. Or actually, Red Bull is.

Red Bull made the jump possible with their Stratos-project. Stratos is a textbook example of the new marketing gathering them millions worth of free publicity. When you only have your brand as the differentiator from the competition, you have to change the traditional rulebook. Also if the marketing is pretty much your only cost item, should you do something that stands out with all that money?

Why you should jump from 39 km to succeed in advertising in 2012?

From advertisements to acts.
Once upon a time, there used to be brand films. These long (at least longer than regular tv-spots) films were on top of every advertising creative wish list, because they let you capture the brand essence and flex your creative muscles. Some relics still mourn for the brand films.

The world´s highest parachute jump is the brand film of the next generation.

We cannot get back to the times of the brand film and the one-sided broadcasting era. If we, the advertising industry, cannot make the shift to do acts instead of ads, we will vanish. And deservedly so.

Many marketing managers and advertising executives throw the term “lifestyle brand” around too carelessly. Whether it is mobile phone, toothpaste, ice cream, jeans, hemorrhoid creams, you name it. The brutal truth is that the majority of brands are just products, which have merely functional value to audience. There are less truly inspirational brands than brand managers in the world. Red Bull is a lifestyle brand, build around extreme experiences. Can you really say that your brand is lifestyle brand compared to Red Bull?

The role of traditional advertising is totally miniscule for Red Bull. Judging from their cartoon TV ads, traditional advertising might even be counterproductive for their success. They have build their brand by events, strategic sponsorships and great content produced from those two. This content is mainly distributed digitally.

Before the death-defying jump, there was also a double-win on Sunday for Red Bull F1 team. Red Bull does not just stamp their logo to everywhere to fulfill their sponsorship duties. They use sponsorship as a strategic marketing weapon.

Great brand is media.
The key to successful content marketing is not producing content. The key is to produce interesting content. If your brand wants to really be part of your audience lives and be that “lifestyle” brand, you have to create content which is up to par (or as in Stratos, even over) with every other content your target audience consumes. Being OK in “advertising standards” is not enough, because people could not care a less whether you are brand or not. There is no handicap league for advertisers.

If you go visit Red Bull website, their content about extreme sports and music beats many major media sites. If you build a media, it takes longevity and it requires quality. You have to have clear picture about what your brand represents and act upon it. The parachute jump was totally on Red Bull brand. If your brand aspires to be media, you cannot only be content agregator and rely only on your partners. You have to be an active content creator as well.

Digital is natural part of the winner brands.

When you understand your target audience, the digital executions are not the challenge. You do not need social media expert to tell that you should broadcast the jump in YouTube. Or that you should have hashtag dedicated the event. Great brands master digital presence efforlessly, because they understand their audience.

Digital is air, you either breathe or die.

You might not be able to fund the world´s highest parachute jump. It might not be the right for our brand either. You should still find ways to become truly part of the lifestyle of your audience, instead of just being an interrupting nuisance for them.

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