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rgaupdates-blog · 7 years ago

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Ad Age spoke to Bob Greenberg and Chloe Gottlieb about how R/GA is well positioned to take on the future of advertising.

Two thousand eighteen is the new 1859, says Michael Kassan, MediaLink chairman and CEO.

It was, of course, in 1859 that Charles Dickens wrote "A Tale of Two Cities," which kicks off with one of the all-time great first sentences: "It was the best of the times, it was the worst of times." The same year, Charles Darwin authored "On the Origin of Species," which introduced the concept behind "survival of the fittest."

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That Dickensian sentiment, combined with Darwin's great theory, resonates deeply with Kassan. Technology, data, consumer demands, talent, financial pressures—marketers' needs are changing rapidly. The big question: What will agencies have to do to stay ahead of this incessantly shifting industry? And what does the agency of tomorrow look like, anyway?

"Nobody has a crystal ball and nobody can say the agency of the future will be this way or that way," says Kassan. "But what we can say is that there has to be a true willingness for the agency of the future to be more adaptive and reflective of clients' needs. Only the ones who can adapt will survive."

Experts do agree that agencies will have to meet a number of incoming trends and challenges, from figuring out data and fighting for top talent to keeping up with consultancies and more.

Data reigns supreme

"It's the age of the customer, so what we have to look at is what customers will be doing, and then translate that into brands and then into what their partners will be doing," says Brigitte Majewski, VP and research director for Forrester.

One of the recurring themes right now is around how customer data will keep transforming marketing. "Brands will need data strategy and the right technology to allow them to analyze data, and that's where agencies come in," says Majewski.

A lot of the more traditional agencies don't rely on data since they're so focused on creative, and that won't work anymore, she adds. The future will be about marrying creativity with data, which means agencies will have to make sure they have staff on board that can dissect data in creative ways.

Andrew Essex, co-founder and former vice chairman and CEO of Droga5, who is now consulting, says that agencies will lose if they try to compete in the data space with tech giants like Facebook and Google. "The pendulum has to swing back to human ingenuity, like storytelling and ideas, which is where tech companies fall off," he says.

This doesn't mean that agencies shouldn't be fluent in data, but they should look to collaborate with, not go up against, tech giants in this space.

Big ideas

The global brand strategies—read, consulting services—and creative that agencies deliver for clients will also have to be stronger than ever, according to Matt Ryan, CEO of Roth Ryan Hayes, who believes that marketers will bring more functions in-house in the next three to five years.

Transactional capabilities, like programmatic, SEM and SEO, and simple data gathering, can easily be shifted in-house to give marketers more control and drive efficiencies. This means that agencies will have to work hard to recruit talent, says Ryan. For example, top creatives would likely prefer to use their expertise at an agency with a variety of clients in a major city than at one brand based in a smaller market. However, marketers are typically known to pay better and are sometimes seen as more modern and savvy. Several creatives who jumped ship for the likes of Apple or Google have also said they felt they were selling ideas more than creating things at their agencies.

"Let [marketers] bring in the commoditized stuff and then agencies can go back to bringing big ideas. Marketers want that big thinking and they're willing to pay for it," says Nancy Hill, former 4A's president and CEO, who recently created the consultancy Media Sherpas, aimed at helping agencies navigate the changing landscape.

Size will matter

At a time when many brands keep reducing fees and cutting back on agency rosters, it doesn't always seem like they're willing to cough up the dough.

Gene Grabowski, a partner at crisis communications firm KGlobal, says that clients don't want to pay for unnecessary overhead anymore or talent they don't need, which gives a leg up to smaller, independent agencies and freelancers. The smaller shops have cut out a lot of the fat that clients don't want to pay for and they can make their own decisions since they're not beholden to a parent company.

Larger agencies, Grabowksi adds, are trying to keep costs down for clients by going through mergers, such as Cohn & Wolfe and Burson-Marsteller, or creating a one-stop-shop offering like Publicis' Power of One model.

Majewski believes that niche agencies will eventually fade out and the shops that can do nearly everything under one roof will succeed. "Agencies will have to break down fragmentation because it hurts brands, and silos create communications challenges," she says.

One thing seems certain: Midsize shops that lack the advantages of either small or large agencies may suffer the most.

Consultancies: Get used to them

That's where the consultancies, like Deloitte and Accenture, may have an in. They may not have figured out the creative execution part of advertising for clients yet, but they already have established consulting relationships with marketers. With the data and rapport in place, "it's only a matter of time" before they crack the branding and creative aspects, says Majewski.

"The consulting firms will absolutely play a big role in advertising in the future," she says. "They are making a play for this space and they have the cash to do it. They're here to stay."

Essex thinks that agencies will continue to try to creep into the consulting space, but he doesn't think it's wise. "They'll lose their differentiation in trying to provide those other services," he says. "I believe in doing two or three things really well, rather than four things averagely."

Return on outcomes

Kassan says that CMOs are zeroing in on consumer data and that data has to be actionable and fuel powerful stories, "or it's just noise."

From a compensation standpoint, he says that CMOs are rethinking agency KPIs and compensation around performance. "They will pay for innovation, but that innovation has to deliver ROI," says Kassan. "The math around FTEs [full-time employees] will have to be more precise. The conversations can't focus on bodies; they need to focus on outcomes."

One of the issues with performance-based models is that the outcome can sometimes be out of an agency's or marketer's control. If a factory burns down and the compensation was based on the sale of those products, then the agency won't get paid, says Ryan. Even though it's still a risk, he says, if an agency agrees to a reduced flat fee with a bonus structure, at least it gets paid something regardless of the results.

Ryan also believes that more marketers will use "variable-pricing relationships" in the next few years, where one agency is retained for capabilities like consumer insights and strategy, but then projects are put into review. The retained agency, Ryan says, would also be put in the running for the projects, giving it a chance to make more money and showcase other skill sets.

Jump into the void

Some of the "obvious" areas that agencies should concentrate on to make sure they're ready for the future include AI and voice, says Hill. "It's important for agencies to figure this out because clients cannot possibly keep up with it."

Bitcoin technology and cannabis are two industries that are worth looking into, Hill says. The good news for agencies that jump on the bandwagon is they will gather insights along the way and probably fail a few times too, but it's worth it to "test and spend some money to learn," she says.

Diversity and inclusion, however, won't be an option for agencies of the future, says Hill—it will be "table stakes." Young generations don't talk about people as being black or white or gay or straight. "It's not part of their lexicon," she says, adding that they see everything transparently and they won't let the industry get away with "gray areas" in marketing or employment around diversity.

The bottom line is that there is not one "right" model because marketers' challenges and the technology landscape will keep changing. But if Essex had to bet, he says he'd put his money on creative excellence being the keystone for agencies of the future.

1859 all over again

It's not just Dickens and Darwin who are giving us that old 1859 déjà vu. On June 30 of that year, Charles Blondin crossed Niagara Falls on a tightrope. He may have been the first, but it certainly feels like there will be some perilous pirouetting in the months and years to come.

#Adage #agency #innovation #advertising #r/ga

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rgaupdates-blog · 8 years ago

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Design is in everything we do, everything we look at...

Richard Ting, EVP, Global Chief Experience Officer, R/GA

Take a look around. Where are you reading this? How is the environment laid out? How many objects can you point to? Are any of those objects connected? How many instances of design can you identify?

If you set out on a quest to find a universal definition for design, you’re going to fail before you start. But creatives at R/GA all agree: The goal of design is the simplification of form and function, whether a pair of sneakers, a mobile app, an office environment, a smartwatch, an ad campaign, or even a business. Rich Ting, EVP, Global Chief Experience Officer, R/GA, unpacks this further.

“Design is in everything we do, everything we look at,” Ting says. “There is a subset of the world that when you ask, What does design mean to you? people immediately think of how things look. In some cases, if someone has a graphic design background, they may say, ‘Design is all about creating a visual representation of something.’ If you ask an interior designer, they look at design as how a physical space comes to life.”

As you read this article, take a look around. Where are you reading this? How is the environment laid out? How many objects can you point to? Are any of those objects connected? How many instances of design can you identify?

When Ting joined R/GA in 2001 as a freelance experience designer, he worked on the first Nike pitch. “Websites were still very popular, and we were building these separate Flash websites for all these different categories at Nike,” he says. “By 2006 or 2007, mobile was starting to become a thing. Things have moved far beyond that today.”

Take mobile games, for instance. Before the smartphone, they had simple 2-D interfaces that required a click of a physical button to trigger a move, like Snake, the addictive classic from Nokia. A year ago, the world chased virtual Pokémon characters around neighborhoods in real life, thanks to the AR technology embedded in today’s smartphones. Now the daytime game show has been retooled for digital natives with HQ, a real-time trivia app that broadcasts at 9 p.m. Eastern daily and also at 3 p.m. on weekdays, for a shot to win a slice of a to-be-unveiled purse by answering 12 questions correctly in under 10 seconds each. Get one question wrong, and you’re eliminated.

The first time I played HQ, I didn’t understand the hype. It was a low-tech, not-very-pretty-to-look-at mobile game for eager trivia fans—presumably young millennials and Gen Zers, all of whom have plenty of time on their hands to give their phones their undivided attention. (I was out after question 3.)

Fast forward a few weeks. It was 3 p.m, and the office felt extra chatty. I looked around and noticed several pockets of people huddled together. At first glance, I assumed they were having a meeting, but they were huddled around phones and the app’s music and fake cheers could be heard at just above a whisper. Others at the table I was sitting at also noticed these small groups and jokingly suggested we team up to get more heads in the game—and increase our chances of getting closer to the prize money.

It was as if the game had grown overnight. And it did. On December 11, 2017, HQ had 3,300 concurrent players. At the time of this writing, HQ recently had reached 1 million players for a single game. The app is still low tech on the front end, but beyond the screen, this operation was pretty complex.

Co-founder and CEO Rus Yusupov didn’t just design a mobile trivia game that has amassed a following harkening back to The Price Is Right or Jeopardy! in the 1990s. He has created a whole new habit for today’s connected consumer. Every day, you can drop what you’re doing and join “HQties” on a quest to win prize money ranging anywhere from $1,000 to $18,000 per game, the latter of which was the case for New Year’s Eve.

Yes, even habits can be designed. Consumers, increasingly enabled by connected devices in their pockets, homes, and vehicles, are unlocking all sorts of new opportunities with which brands can engage them. The driving force: data.

Every time you pin, like, google, swipe right or left, or summon Alexa or Siri, you are giving off cues, preferences, and little nuggets of personal insight that inform what these platforms present to you.

“Data is adding a dynamic life to products and services,” Ting says. “When you open a mobile app as a designer, you should know the types of data that the app would be able to acquire. Based off the data signals that the app sees, the experience should be able to dynamically adapt and dynamically generate.

“If you’re a retailer, for example,” he continues, “and a shopper opens up your e-commerce or m-commerce app, based off the data signals that you see about your consumers, the content, the offers, the deals, and the experiences should all be customized and personalized to them.”

Taken at face value, data is not part of a creative’s tool kit. But it is informing the way designers now work, as well as what they make. Mike Rigby, VP, Executive Creative Director, Consulting, R/GA, describes just how complex the work of a designer has become.

“My first project as a professional designer was to design part of the brand guidelines for a bank,” Rigby says. “We designed the uniform, the logo, etc. On one of the most recent projects I worked on, we designed a new mobile bank. We designed how the setting up and accessing of accounts would work, how transferring money works, how the brand interacts with the customer. It’s easy to underestimate how much of a profound shift that is.”

That “profound shift” is about design’s prevalence in today’s connected world. Marketers can no longer spray the same message across multiple channels. Brands must now think about how their messages will live across a multitude of consumer touch points, everything from the screens of their smartphones to the connected devices that are in their homes.

Brands must be everywhere and nowhere at the same time. Their products must blend seamlessly into daily life, to become a natural extension of consumers’ already-ingrained behaviors.

“We’re going from solid state interfaces, such as buttons and dials, to software interfaces, gestural interfaces, voice and conversational interfaces,” says Nick Law, Vice Chairman, Global Chief Creative Officer, R/GA. “So the tools of the craft are the same: color, scale, texture, shape, dimension. But if I’m on the brand team here and designing a corporate identity, at some point I have to think about how that identity will have to live in one of these new interfaces. I’m more cognizant of that today than I would have been in the past. It’s why we design teams the way we do at R/GA: A brand designer might work with someone who designs interfaces.”

“Design needs to become more of a team sport,” Ting says. “If a visual designer is put on a team to create an AI-based service, he or she will need to either upskill or find the right partners.”

***

In 2014, when Amazon introduced the first generation Echo smart speakers featuring an artificially intelligent virtual assistant named Alexa, the Internet of Things was still an unrecognizable phrase known only to tech journalists and Silicon Valley entrepreneurs. Today, while the IoT is still nascent, connected devices such as the Echo have become increasingly present in US homes. As of last September, Amazon sold an estimated 15 million Echo devices since its launch, while Google sold 5 million Home devices, as reported by Fortune.

Both devices connect their respective brands to users. The Echo is an extension of the Amazon commerce ecosystem, which comprises online shopping, brick-and-mortar storefronts, and content such as music and movies. Google Home connects users to the search giant’s many digital services, such as Maps, Calendar, and Search, as well as offerings from third-party apps. Amazon and Google have designed an intricate web of connected products and services around individual users, a feat many companies hope to replicate one day. As Ting puts it, creating these types of ecosystems is the holy grail for brands today.

“Once brands develop one or two products and services that add value to their consumers’ lives, they can start to develop a holistic picture of what their consumers want...”

Richard Ting, EVP, Global Chief Experience Officer, R/GA

But, he warns, ecosystems are not built overnight. Many brands—facing disruption from new direct-to-consumer, digital-native players—still struggle with creating at least one product or service that adds value to their consumers. Therefore, designing things that matter is more important than ever.

“Brands need to have a deeper connection with their consumers and reclaim their relationship with consumers from the third-party retailers who currently own it,” Ting says. “Once brands develop one or two products and services that add value to their consumers’ lives, they can start to develop a holistic picture of what their consumers want, what they’re interested in, how they’re engaging with the brand. All of that data will lead to better experiences down the line.”

To start creating the right products and services, Ting suggests walking every viable idea through these five lenses: Will this new thing drive business? Does it solve a user need, and is it even technologically feasible? What is your brand differentiator? How does this product or service uniquely fit within the brand? Will it fit well with today’s culture?

While there is an increased emphasis on experience design with these new technologies and interfaces, the resulting implications are now starting to be revealed across disciplines.

“Experience designers play a big role, but we’re just one ingredient,” Ting says. “There has to be technologists, visual designers, brand people, consultants—all these people need to be at the table.”

#experience #design #technology #r/ga #richard ting

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