W1 Insight

A rising economy floats all boats, on the other hand our economy is set to grow at around only 2%, unemployment is increasing and our national debt is over £4.8 trillion, once public sector pension liabilities are included, according to the Institute of Economic Affairs. That’s four times the total annual economic output of the UK and represents £78,000 of debt for every person in the country. To thrive in this market we have to do something different, we have to innovate to stand out from the crowd. We have to recognise that we are not returning to the good-old-days of growth but to a whole new environment where we’ll use new tools and channels. New opportunities will arise and clients needs are changing to meet new consumer attitudes, values and preferences.

During and after every recession, depression or ‘panic’, as they used to be called, in the past one hundred years, new business models, products and service have emerged. It will be the same this time around as well. Procter and Gamble was formed in the 1837 panic and Edison merged his businesses to form General Electric (GE) in the 1873 recession. Motorola launched the very first car radio in 1930 right at the lowest point of the great depression. Fortune launched at the same time, a new format – the magazine -priced at the equivalent of $13 today, recognising that people’s interest in business had been piqued because of the crash.

Google only emerged as a global player as a result of the 2000 recession (mostly US centric) as ad-dollars went online for the first time. After every major recession leading players fall away and new entrants emerge. Now is the time to innovate and launch new products and services utilising new channels and approaches to consumers and partnering to speed access to markets for your clients.

You will have been tracking the dramatic switch to online advertising and all things technological these past few years. The forecast fast pace of change from TV, radio and print advertising to online advertising is being outstripped by the actual pace of change. Whilst these traditional advertising platforms decline the take-up online can’t keep pace with demand. Today there’s a £30 billion lag worldwide in take-up of online advertising.

The UK internet economy is estimated to be worth £100 billion, it’s growing at 10 percent per annum and is 60 percent driven by consumption. The amount of time adults spent online has grown by 65 percent in the past three years and nearly two thirds of people in the UK bought online in the past year according to an October study by the Boston Consulting Group. The tipping point is here where our preference is fast switching online where we are rewarded with instant access to information, entertainment and purchasing opportunities.

Following a decline last year, the UK Entertainment & Media (E&M) market will grow by nearly 4% per annum from 2009 to 2014, twice the expected economic growth rate for the UK and powered, in part, by widespread internet access, an advertising recovery, and the explosion of mobile. UK E&M industry revenues look set to rise by 20 percent in five years and hit £35 billion by 2014.

Our high streets are being transformed from  sales showrooms to service points -  places where people can enjoy a real experience, service and human interaction. We’re seeing the death of the high street insurance broker and travel agency and the rise of the spa, health, wellness and beauty salon.

What’s changing in your organisation at this pace of change to meet these new opportunities?

The past power-brokers of consumer influence where the channel owners, the TV companies, newspapers and magazine publishers. Today the consumer is in the driving seat and access to them is both fragmented  and influenced by individuals they respect.

We’ve spoken about changing  business models and the rise of the digital world in previous articles in this series so here we are concentrating on what’s driving innovation. Everyone understand that we are at a point of massive change in the industry but are we behaving in a way that recognises this?

Today the leading indicators of successful firms engaging with the internet will be their ability to partner to develop innovative products and services, quickly and also their ability to develop their own intellectual property (ip).

So what’s driving the internet revolution?1.  More Connected – Real-time, 24×7,mobile and in the palm of your hand.
2.  More Affordable – Wi-Fi nearly ubiquitous in many developed markets, 3G tiered pricing falling and becoming more accessible.
3.  Faster technology – Near-zero lag at start-up, powerful search, faster connection, quick payment.
4.  Easier to Use – User Interface revolution plus location awareness amplifies usefulness.
5.  Fun to Use – Social and gaming along with reward-driven marketing.
6.  Access Nearly Everything – Music, video, documents and anything in ‘the cloud’.

So how might consumers engage with this new technology led world? Here are four scenarios to help understand their potential changing behaviours:

1.  Always on – A world where consumers are always connected to multiple streams of content and remain open to new sources of information and entertainment. They communicate openly with others . They expect brands to tailor their messages to their time and place and understand their context and demonstrate relevance to their situation.

2.  Me and my friends – ‘I’ll rely on those I trust’ to guide me through the mass of content on the internet. Brands will need to find these networkers and influence them, beyond the viral model and towards creating positive advocates in order to overcome these people’s increasing indifference to media messages.

3.  Pic-n-Mix – These people want up-to-date, accurate and timely access to information and entertainment and they don’t mind if it’s media developed or created by individuals. Brands will have to be accurate and timely with providing content to these people.

4.  Selective – These people want to filter out and reduce their exposure to ‘noise’ on the internet, and that will include brand messaging. Get on the wrong side of these people and you’re outside the bubble looking in. Brands will need to have strong feedback mechanisms in place to hear from these people before they shut your messaging out – forever.

Agency’s are finding new ways to connect with their markets using digital channels and tools. Video conferencing, digital streaming and game playing, particularly to mobile handsets, are leading us into new ways to connect with consumers. In the near future immersive virtual worlds that deliver rich sensations, emotion and experiences will create whole new opportunities for the industry to connect with consumers.

A team of scientists is working on a device that incorporates eye tracking to influence the content presented to the viewer. Without having to use any other devices to enter instructions, the wearer can display new content, scroll through a menu or shift picture elements simply by moving their eyes or fixing on certain points in the image. This is a next-level personalisation of content. The user can influence what’s shown simply by looking at it.

These sorts of technology will come out at regular intervals in every year to come. The trick will be to be aware of them as early as possible and think about who you might partner with and what business model you might adopt to exploit the technology when it goes mainstream. New technologies are being taken up at exponentially faster speeds than ever before and there simply isn’t going to be time to be a me-too and jump on the bandwagon when you’re sure it’s a firm trend.

For example: insight: By 2012 95% of online content will be video.

The Photographer

A photographer assigned to produce a portrait for a magazine, for example, could easily produce a short sound-bite video of the portrait subject to accompany the story online. Using a camera like the video-enabled Canon 5D, there would be no need to use additional equipment.

insight: By 2012 95% of sound and video media content will be distributed via the Internet.Winning the war in new media

insight: 19m of 26m UK households are Internet connected and 25m people are members of Facebook.Traditionally, the army employs high profile direct response TV ad campaigns but for its latest recruitment drive is embarking on its first ever digital only campaign.

They are embarking on a big social media push to encourage “high quality” candidates, graduates especially, to its Royal Military Academy Sandhurst in 2011. The aim is to find 750 recruits to next year’s programme, which begins in May.

The crux of the concept is to have existing soldiers communicate with potential graduates, answering any questions or concerns they may have about the rigorous processes involved in army training. The army already has a policy of only ever using real soldiers in its TV ads – a policy that it is to stick as it moves increasingly into the online space.

The payback:

The Army Jobs Facebook page, started around nine months ago, has over 40,000 followers to date and represents an active community. Potential candidates have plenty of questions they want answered – a quick scan of the message board reveals anything from ‘how do I get an application form’ to ‘I suffer from hay fever, will this affect my application?’ – with dozens of these questions answered daily.

Travel City Direct ‘Florida Baby’ digital campaign

All TCD’s brand positioning is around price and value, making it difficult to gain press coverage for TCD beyond late deals/special offers.  They needed to increase coverage for the brand in 2010/11, but there were few major press stories to use as a hook.

Research of online forums revealed many questions from parents taking young children to Florida, but no resource to answer their concerns.  Questions ranged from very specific, ‘Can you buy SMA on I-Drive?’ to general ‘Is Florida fun with a baby?’.

Seven ‘Florida Baby’ films were created and hosted online. Following launch, articles appeared in News of the World, Sunday Mirror, and The Sun.  The story was featured on over 200 websites including Yahoo.com, aol.com, and fathers’ website, FQ.  LBC radio talked about it, Mummy bloggers tweeted it, Simon Calder blogged about it, and it was discussed in forums NetMums, Trip Advisor and Answers.com.

The payback:

To end November, after only two months, the press coverage recorded an Advertising Value Equivalent (AVE) of £156, 000.  The Sun’s forthcoming article will add £48,000.  The project is ongoing and coverage continues to run.  The Florida Baby films have recorded 7000 video upload views, and there have been 490 YouTube channel views, 3,500 unique site visitors and 85 posts on the forum from 45 members.

Success will be assessed by a combination of ROI using AVE figures (currently standing at 7:1 after only two months), site visitors (exceeding targets), and brand tracking results.

So how can you adapt to engage with these changing technologies and communications channels?

The winners will be those that can see how the rapidly changing technologies, we’ve discussed in previous articles in this series, can be exploited to help their clients engage with consumers in ways that consumers find compelling. It’s very unlikely that the business models, technologies, skills, experiences and sales pitch that worked in the past decade will have any traction in the coming decade.

In an entrepreneurial industry you would think finding people who are positively energized by all this change would be straightforward. However, many people, who may even be highly creative, are not necessarily well adapted to change, and may even resist it. Find your entrepreneurs, connect them and allow them to help the organisation make sense of all this change. They are uniquely positioned to understand your vision and culture and be aware of your current capabilities and clients needs. Having done this now set about getting the insights you need to these people so they can help you monetise change as it arrives.
We can let you have an electronic Indicator, that takes five minutes to complete, that surfaces the entrepreneurs in your organisation. Just ask us for the ‘Next’ indicator.

Who are our entrepreneurs?

What partnerships are we developing to create new products and services?

How much are we actually changing to take advantage of all this change?