These are some of the same challenges the agencies have already been facing when we talk about integrating the ‘digital’ competence, but I feel that ‘social’ is going to have a broader and deeper reach into these organisations and will require more radical change.

Similarly I would recommend reading the follow up to Rei Inamoto’s (@ReiInamoto) article on “Why Ad Agencies Should Act More Like Tech Startups” – Madison Avenue’s Identity Crisis (and Why Silicon Valley Still needs to learn from the Ad Industry) on Fast Company Co Create as he talks about the same issues and how ad agencies need to learn from Silicon Valley, and vice versa, by bringing in the right people and also changing themselves at the same time.

Hat tip to @LeFreddie for the FastCo article.

1. Content Marketing

Content marketing is coming to life, and 2012 will see an understanding an explosion of content strategies for brands, beyond simple blogs they will start to leverage the value in owned media by creating real content for customers to engage with. More than just advertising messages this will be content that brings a brand into a consumers life and makes a difference. Content will be channel neutral and heavily driven by video as barriers to production are now almost nil.

2. Social Design

Coined by our colleagues at Facebook, the integration of social components in almost everything we do will become prevalent in 2012. Whether it is a marketing conversation, a product launch or the way we cook food at home for our kids – everything will be amplified through the social graph.

3. Mobile (& Tablets)

The desktop will loose out as the de facto connection to the web, and this means additional functionality in terms of location/mobility but also different screen real estate for web marketers to work with, and different types of engagement as users are on the move.

4. Big Data & Analytics

Finally, 2012 will see the coming of age of data and analytics in the marketing world – adding more science to the art of communication and forcing marketers to look at ROI. Check out my post on ‘Learning to love big data‘.

This reminds me very much of some of the internal rules at The Richards Group (an advertising agency in Dallas, TX) where I began my career. Here, Stan Richards the owner and founder put down his methods in a book – The Peaceable Kingdom – and beyond the rules against internal emails, employees were also driven to use the stairs (since we don’t talk in the lifts) and to this end he had an enormous stairwell cut into the building, here he would hold his famous ‘stairwell meetings’ where the whole agency could get together and both see and hear him. There were no doors in the agency and very strict controls on the presentation of materials that went out to clients – I distinctly remember one early meeting with Stan looking at a website and he wanted to know why the html text didn’t have proper kerning…

Crazy controls aside, there is in my opinion far too much time wasted on email but worse than that there is a feeling among the younger generation that their job revolves around their Outlook inbox or their Blackberry – at the end of the day if we think our added value comes through email, then we we become postmen (and women) rather than thinking human beings. I wrote a while back about the dying art of the account exec and I think this is the core of the problem in that the real professionalism has been lost in our business.

Maybe if we can’t send emails then this will put some pressure on employees to start thinking again, or maybe they’ll simply be chatting about what they did last night!

Infographic courtesy of Voltier Digital

And this is is just as true in the advertising business as we try and evolve an ageing traditional, TV and print focussed, business model into our 2.0 world. Agency holding companies have created digital exchanges, ad agencies have bought up their BTL counterparts and certain organisations have even attempted to renew their entire staff base by bringing in new digital specialists, but at the end of the day, bringing ‘digital’ into advertising is all a question of business models.

The traditional advertising agency runs on a retainer based model where a client pays a certain amount on a monthly basis for a number of FTEs (full time equivalent), or headcount as it is commonly known. This works because the ad business can involve a great deal of running around, back and forths on work, and projects tend to be large and long in duration. On the flip-side, many digital agencies work on a project based model with fixed costs based on deliverables rather than a structure and this allows them to leverage a number of staff across different elements and drive economies of scale in their resourcing.

What happens when these two models meet is the real challenge for agencies today and runs beyond their day-to-day operations but also into hiring and expanding staff. It is like the meeting of fire and ice, one model must concede and give way to the other.

For ad agencies where a team can be set up in advance and client relationships run for sometimes many years at a time; additional, out of scope work is rarer and maybe account for only 10-15% of the original retainer fees – when digital projects come in, it is very difficult for them to handle as this project based approach means they need to scale up headcount very quickly, and then down again once it is complete.

This rapid scaling up and down means that it is very difficult for a traditional agency to break into ‘digital’ on a small scale without access to a large network of freelancers, or a partner agency willing to work with them. The only approach to date seems to be to acquire or merge a digital agency into it’s parent – but this creates another challenge. When you bring the baby digital agency into the folds of its parent, you start to apply the same financial rules as to how they operate – driving them to a retainer based model and ending up with the same challenges as before.

The fact is that the focus is still on the big ticket items – $500k for the development and production of a tv spot is more interesting than $50k for a online campaign with social media and so management applies resources to deliver on these high value elements, even if clients are asking for more.

Will we ever be able to get out of this vicious circle?

While agencies are still managed by figures – figures are billings in the retainer based model – in a very rigid structure where year on year it is about increasing absolute revenues and maintaining ratios (margin, personnel cost, etc.), they will still focus on the money coming in from the client and this means high value production – like TV. Those agencies that seem to be doing something different tend to be smaller or independent, thus more able to be flexible about how they manage people and plan for the future, scaling up quickly can put a dent in their ratios, but might pay off in the long run.

So when will change come? To go back to Deep Throat, we need to follow the money as this will guide us to where a solution to today’s challenges might be. The change will come when agencies look at new models of remuneration that are based neither on FTE teams or fixed scope deliverables, and this can only come from clients themselves.

A solution might be to look at the outputs and results of what an agency does rather than the inputs; imagine in a remuneration models that measures not the work that is put into different elements but the results for each based on ROI for the brand. It might change things around a little (or a lot), as  a good social media campaign could travel the world and drop the brand’s acquisition costs for a new product dramatically.

In this new world, imagine a business model where an agency is given an objective and a budget – once the objectes are achieve, what they have left at the end of the day they keep. With this sort of approach you might find agencies developing one hell of a social media campaign and leaving the high production TV spot for the traditional guys down the road…

It’s worth thinking about how this could change our business, not M&A, or re-skilling, but Deep Throat’s famous three words, follow the money.

But phygital doesn’t belong to just one agency. Phygital as it sounds is the combination of the physical and digital worlds and it is, IMVHO, the real sign of the coming of age of technology in the marketing world. As we move away from the days of a super full flash website, just because you can, or a mobile or iPad app that doesn’t really do much, but it feels good to talk about it in PR – to the real use of technology, usually alongside a more ‘traditional’ medium, to deliver a really engaging experience, this is we can see marketers who understand what technology can do and how it can work to further their cause.

This morning I was reading this article on Mashable: 10 Brilliant Interactive Billboards which shows some great examples limited to the use of outdoor, but showing how this very static medium is brought to life by interaction either with touchscreens or mobile phones.

Some of these really highlight the fact that a lot of the work that is classed as great communication today goes far beyond delivering a simple message, but it more about utility or entertainment for the consumer – think the Yell touchscreen which actually gives you the local information, rather than simply telling you about it.

So if this is marketing coming of age, why isn’t it happening everywhere? What are the real barriers to the Phygital Revolution?

There aren’t really any technical barriers to these executions; much as it is hard for the man on the screen to believe, technology is far more advanced that what we actually experience in out day-to-day lives; the examples shown here just need the right knowledge and partners to pull them together: A technology provider with a creative software developer and a media company, and bingo you have a real phygital execution.

Again, IMVHO, I think that there are two things blocking this revolution: (1) lack of creativity and (2) functional siloes.

Lack of creativity is not a critisicm of the industry but more a by-product of the speed at which marketing and communication is changing and the limitations of those within it to be constantly learning and working – this is why we tend to go to university/college at the start of our career and then go out into the workplace to put that learning into action. In a marketplace that is changing so rapidly this model no longer works and we need to look at how we can be on a constant learning cycle as well as implementing and evolving on a real-time basis… not easy.

The second point regarding functional siloes is my bête noire, if you read my blog on a regular basis you’ll know that I’m the digital guy inside the advertising business trying to change it from the inside (My Job is about Change – Agitating & Activating) – and you will have read that this has more or less success depending on the day; check out Media + Advertising = Strategy & Execution Success and Digital is not a medium. But I really beleive that the structure and process that exists today both within the communications business and also within marketing departments is a major barrier to being able to come up with and execute these solutions, since there is a turf war going on between those who want to be creative and those who feel that this is their territory and should not be shared. I wrote a while ago about how Marketing Services should have Acquired Advertising, because here was a skillset that truly was media neutral and understood more quickly than other groups the importance of the paid/owned/earned scenario; similarly between agencies there is still a struggle for who gets the cash and so there are mis-aligned objectives (which aren’t always in the interest of the client) meaning that they just can’t play nicely, and finally even within marketing departments there are those responsible for media, others for the brand and finally a whole other group whose responsibility is digital (do they handle the calculators and the new coffee machine too?).

So yes, we are on the cusp of a phygital revolution, we are almost there – the new generation of marketers who accept social, mobile and engagement as part of their everyday will finally be rid of the baggage and be able to think creatively once again. But until then, there are pockets of coolness popping up all over the world.

Some more links to other Phygital executions:

• Adidas virtual shoe wall takes shopping high-tech
• Renault connects Facebook to the AutoRAI with RFID
• Diesel Cam
• Hotel connects Facebook with tech wristbands
• Heineken Bottle Opener

One of my favourite executions is the below from Google Video, in fact it doesn’t use any technology at all, but just some pure creativity that clearly had no limitations.

Hence it is still not uncommon to be presented with very traditional print or outdoor brand ads that deliver a static message with the hopethat it will touch the heartstrings of a particular consumer as they pass by the billboard on their way to work – it’s unfortunate but this approach is becoming less and less effective as the days go by.

There are of course multiple communications challenges beyond the brand brief, touching on promotions or cross-sell and line extensions, but work around the brand itself is still the mainstay of the advertising, marketing and communications businesses and I wanted to build a framework that would allow strategists and creatives to break out of their traditional mould and deliver real success – today success means engaging with a consumer and giving them value or utility not only from the product but also from the advertising message.

So this is content and amplification – hopefully two relatively simple steps that can allow us to cut through the clutter.

Why content?

Firstly, content can mean a great deal, but above all it is more than a simple a message and not relegated to any particular media (truly media neutral) – in fact probably the reverse in that it can be in many different forms, be they audio-visual or text based, even beyond what we term multi-media. Content is also something that a consumer can engage with, it has depth, more so that the ‘storytelling’ that we have been pushing for the last few years – it can in fact almost become part of the product itself.

So when we brief for content we mean just that, how can we create, curate or empower our consumers to create content around a subject or idea that will either directly or indirectly deliver a brand message.

Why amplification?

Secondly amplification is about bringing the media component back into the mix (we removed it by talking about content) and thinking about how our content is delivered to the consumer. But now we need to think about media from a paid-owned-earned perspective and try to balance these different pieces to get the best ROI for our investment – how can we seed the content through traditional paid routes, both online (display, search, etc.) and offline (TV, press, OOH, etc.) to obtain the quick critical mass necessary for connections,  drive people to engage with it on the brand owned properties and then finally have them amplify it into their social graph for best effect? How can we make people want to consume the content, tease them and make it fun, almost like advertising the advertising…

Our objective is after all to get the most number of impressions, GRPs or contacts between the consumer target and our brand message, our content.

It’s not perfect, and by no means a one size fits all brief for any comms challenge, but a first step towards delivering brand communication that is relevant in today’s environment. Try it, change it, feedback.

What is digital strategy? Where does it start and finish? How is this different from business strategy or communications strategy? Invariably, when I start to try and answer these questions, I end up talking about the tasks I cover, or what I deliver, or how a typical day looks – but really this doesn’t get to the heart of the matter, and it usually leaves people looking even more vacant since if they didn’t understand at the start, it doesn’t really help that much to see what the output is.

So as I try to find a better way to explain, here is an interim solution – my job is about change, and really this comes down to two things: I’m an agitator and an activator.

Agitator

When I say that I agitate, I think I probably cover many different meanings of the word. Not only do I try and shake up the work and the projects that I’m involved in, but also the people – trying to make them see things differently, move out of their comfort zones and generally ‘disturb’ them enough to make them understand that the world around us is changing, and we need to change with it (if you look at another Wikipedia definition than the above, this has a very political connotation, but that still says the same thing “a person who actively supports some ideology or movement with speeches and especially actions“). Sometimes this is a painful process, too much change can be hard to take on board, moving into the unknown can create different reactions including fear and aggression, but hopefully the end justifies the means. As I engage with people and projects, the outputs of this part of my work tend to be more organisational and process focussed as we change the way we work and the people we work with.

Activator

On the flip side, I also activate the work that I come into contact with (much like the enzyme approach, binding to the existing and making it evolve), by this I mean that I act as a catalyst to drive the most out of any ideas that we come up, either as teams on specific projects, or as an organisation in terms of how we evolve. This is the core of my work and where I can use my experience and knowledge to make things bigger, better and more exciting – at an agency product level it helps me input in terms of how we should be using technology (much like a creative technologist) and tools (like an experience planner) to deliver the maximum effect for the end consumer; higher up the value chain it means driving the presence of the organisation in social media and newPR, but overall it means getting the best and most out of everything we do.

So when it comes down to it, my role is a change agent, nothing more and nothing less – sometimes I work higher up the value chain and it gets a little fluffy to explain, and sometimes it’s on the front lines, but wherever I input it’s about doing things differently, about changing what we do and how we do it – and above all, about bringing the new digital world into our lives.

Please don’t be agitated with me.

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#UsBlogs week 4 theme: “What we learn from the movies”

To understand what we can learn from the movies, we need to first break down a movie into its constituent elements;

1. An idea – All good stories start with ideas and a movie is no exception, the screenplay is everything.
2. Cast, crew & production – Getting the right skillet on board can help in ways that you couldn’t even start to imagine.
3. Marketing – Finally you need to get the word out, to get those proverbial ‘bums on seats’.
4. Distribution – Sure it starts in the cinema, but after that there is still DVD, TV and all the licensing.

So let’s look at what we can learn from these pieces and how they can help us in our brand, marketing and communications challenges.

1. The idea

There aren’t multiple story types, only different ways of bringing them to life; and this is no different in marketing plans, the key lies in execution, execution, and execution. It’s no longer enough to have a big idea, these are a dime a dozen – but knowing how to use the tools available and bring them to life, this is where success really lies. The combination of an idea and how it is brought to life using media channels and technology is the killer app, this is where brands can pull ahead of the pack and create a real difference.

Sequels too are about how to stretch an idea and give it even more executions – exactly as we sometimes try to take a TV spot and make it into a microsite, well done it can be a success and badly done it is simply brochureware.

Humour is a global currency, crossing languages, cultures and borders, making people laugh is the way to their hearts.

2. Cast, crew and production

This is where we get down to resources and how we execute on the ground – just as in the movies, big budgets don’t equal success – but they can help – it is more about thinking carefully about objectives and target groups. Check out my post on Synchronisation and Convergence to see how it isn’t just about plastering a key visual on every spot of available media.

Similarly, big names can drive sales even without content (most of the time) – Get a cool enough celebrity or an awarded actor and you’ll be sure to have a good opening weekend, but only with a great idea (and execution) and a good back-up team (supporting actor) can you maintain the hype over time.

3. Marketing & PR

The movies press conference circuit is harsh – if you’ve seen Sofia Coppola’s latest movie Somewhere you’ll see just what the actors get dragged through to get the press, and therefore the public, excited before the release.

A teaser really has to tease; making trailers in the movie business is a fine art – giving away enough to hook you, but leaving you frustrated to fill in the gaps (think about The Blair Witch Project). Brands are often uncomfortable about teasers (or even virals) and want to add in their logo, the product visual, the brand message and even the product benefits because they think they’re losing valuable consumer facetime – sometimes less is more.

4. Distribution

Just because the film is out, it doesn’t end there – this is really only the start of something that can be used and reused in multiple ways – creating content is the first step and how that content is leveraged in different ways across multiple platforms, that is where the business model lies.

Those movie guys know their stuff, and have made a business out of it too!

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WEEK 4 ROUNDUP – WHAT WE LEARN FROM THE MOVIES

• Review Your Movie by Kenny Rose. @grit08
• Your Brains On Story by Jennifer Williams. @verilliance
• What Hollywood Has Ben Trying To Tell Us by Freddie Winckler. @lefreddie
• Mark Goes For An Oscar by Mark Robertson. @markosul
• Movies: How They Impact Our Lives by Libby Baker Sweiger. @libbytalks
• Going Beyond 120 Minutes… by Patrick Prothe. @pprothe
• After The Credits Roll, What Lessons From Oscar? by Steve Birkett. @abovethestatic
• Five Start-Up Lessons We Learn From Movies by Mark. @youternmark
• What We Don’t Learn From The Movies by Robert Ortiz. @robertortiz
• Hollywood 101 For Marketers by Lex Bradshaw-Zanger. @lexbz
• Movie Revelations by Kat Caverly. @greetums
• Online Video Success by Heidi Cohen. @heidicohen
• What We Learn From The Godfather by Cary Branscum. @carybranscum
• Can Social Media Predict The Oscars? by Brad Spychalski. @bradspy
• What Toy Story 3 Taught Me About Bullies by Michelle Price. @prosperitygal