Talk on innovation at PHD’s Marketing Academy day

Last week, I presented to the current batch of Marketing Academy scholars as part of a day-long session we hold for them every year; this was our third year participating in the programme. They are a group of experienced mid-level managers and entrepreneurs and this particular group seemed very bright indeed.

I spoke about a few brands who are particularly innovative and how they’ve been staying ahead of the game in a crowded market. Some examples are old, some more recent; but overall I think it went down well as an indication of the kinds of things they should be thinking about as brand managers.

My presentation is below, with notes.

PHD marketing academy talk on innovation from Anjali Ramachandran

We know that an overwhelming array of media choices exists when it comes to executing on a brand strategy. What are some of the issues to consider as we play in a media landscape that is simultaneously diverse in terms of the use of technologies and devices as it is converged, in terms of access to the same content across multiple platforms? And how are brands across different industries innovating to try and keep themselves ahead of the game?

I’d like to start with a story. A story that is about a brand understanding the playing field they were operating in.

The publishing industry is at a crossroads, as we all know. Brick and mortar stores are facing closure more rapidly due to the threat posed by one single company: Amazon. With their distribution network, consumer data and large-scale access to customers, Amazon can undercut any bookstore chain, forget independents. But there’s one brand that decided to take them on, and is in fact succeeding. J.K.Rowling, with Pottermore, the digital world of Harry Potter. For the first time since the series began in 1997, official ebook versions of all seven titles in the Potter series are being sold. But instead of buying the ebooks through Amazon, customers are taken to Pottermore to complete the purchase, with content seamlessly delivered to their Kindle. It is the first time Amazon has been known to allow a third party to “own” that customer relationship, while also allowing that content to be delivered to its device. Amazon gets something like an affiliates’ fee from this transaction, much less than it would expect to receive selling an ebook through normal conditions.

The reason Amazon is allowing Pottermore to get away with this is because it simply cannot afford not to abide by Pottermore’s terms because of the sales hit they would incur. And the reason Pottermore decided to do this is because they wanted to keep the customer front and centre; if you buy an Amazon Kindle version of an ebook, you are locked into the device thanks to digital rights management. Pottermore allows you to buy their ebooks to use it on any device – the Kobo, Barnes & Noble Nook, iPad, Kindle, whatever.

So Pottermore won this battle, by understanding the technology they were up against, and keeping their audience’s interests first. That was their competitive advantage, no one had tried that yet – and they succeeded brilliantly. But they could afford to do it because they were so big – most other publishers aren’t so lucky.

So what do you do if you’re a small, scrappy brand? A challenger brand? PHD collaborated with the challenger brand consultancy Eat Big Fish recently to map out characteristics that were typical of challenger brands, in ‘Overthrow’. I wanted to showcase a small US brand that used the technology they had at your disposal – in this case, simply YouTube, to get heard and generate demand by being entertaining, useful, educational – then leveraged that awareness to then get into large-scale distribution in Walmart.

Apply a lean and agile philosophy within your organisation. Eric Ries is one of the key people behind the lean startup movement and the author of a book by the same name. The lean principles originated as a framework for startups to operate with, to attain success, but they can be applied to any industry and any size of organisation. As this FastCompany article say

Intuit, the firm behind accountancy software like QuickBooks, organizes multi-day “lean start-ins”, that gather “intrapreneurs” together from across the company to teach them how to apply rapid experimentation to create new products, services, and business models.

In 2010, Kraft created a new category in the US with the launch of Mio, a flavour enhancer for water. In 2011, a year later, it hit $100 million in sales. The team that did this was pulled together from across the company, committed to work on this project full-time, and reported directly to the beverage unit business head to cut out red-tape. If you can explain ‘why this (what gap does the product fill), why now (timing) why here (how can your company get a competitive advantage by getting involved in this), and why me (team members will think it is rewarding for them), you can achieve business success by being innovative. It’s not easy though, as the VP of Innovation at Kraft, Barry Calpino, says.

Make use of the skills and resources of people who have the expertise you don’t.

A lot of companies these days are partnering with or working with startups in different ways, for their mutual benefit. Startups bring a pair of new eyes to your business, not to mention different skills and following on from the lean principles I just mentioned, they are set up to work in an agile way, a useful thing if your organisation is particularly big.

PepsiCo 10 is now in version 2.0, and working with startups in Brazil and India. It is a digital incubator programme that will match startups in the Entertainment, Mobile, Retail and Sustainability verticals with brands in those spaces, so clearly brands in their portfolio like Doritos, Gatorade, Quaker and Walkers stand to benefit from startup knowledge.

Mondelez International, which was formed when Kraft Foods split into two a few months ago and a client of ours, is working on Mobile Futures, another startup programme that will pair brand teams with startups to create mobile ventures in 90 days.

And Telefonica Digital, of which O2 is a part, has multiple venture capital and incubator programmes like Wayra or Amerigo in Latin America, and Telefonica Ventures.

It doesn’t have to be an incubator programme of course. Perhaps you can use the technology that startups bring with them to power your brand – so white label it. Percolate is a technology platform that identifies a brand’s interest graph, or content that will complement the brand, as they go about creating content. And let’s face it any brand with a social presence is creating content today. Percolate powers GE, Reuters, Samsung, Mastercard and Nokia, amongst others.

Solve a problem for your audience.

Startups are often created to solve a problem, but brands have a much bigger role in society today when it comes to solving problems. There is a much larger expectation than before that brands should give something back to society.

Unilever has a very clear sustainability goal now, and it’s beyond the realm of CSR. Their Sustainable Living Plan influences business decisions, such as what kind of suppliers they want to use, and what kind of shareholders they want to attract. A couple of weeks ago they launched the Domestos Toilet Academy in Vietnam which will train people in how to run local toilets by educating them about hygiene. In India, they have built a water purification system which is going to expand to other countries in South and South-East Asia, and earlier this year they also ran a 24-hour Sustainable Living Lab, an open dialogue online with academics, NGOs and Unilever executives.

Play at the intersection of analog and digital

In a world that is consumed by tech and media, there are products and media that leverage the best of the digital world in an analog frame that are growing in number thanks to technologies like the Arduino, a prototyping platform that allows you to build interactive objects.

Centrica, the parent company of British Gas, has a stake in AlertMe, a device which allows people to monitor their home from the cloud, specifically the energy consumed, and even automate it so you can control it remotely.

The Little Printer from BERG allows you to connect to the web to print out your friends’ Foursquare check-ins, your Google Calendar for the day, or the headlines from the Guardian, amongst other things.

Good Night Lamp is a set of connected lamps that helps you to stay in touch with family and friends. You give one to your mum in Scotland and keep one at home, and when you switch yours on or off, hers does too. It’s going to launch at CES in Vegas in February, and a few years from now I won’t be surprised if it pops up in Ikea!

It could also be as simple as leveraging technology in existing media formats. Plan UK had a bus shelter this year that recognised whether you were male or female before displaying its campaign message, which was about the education of girl children in the developing world. In New York, pet company Beneful took over a subway station and encouraged people to play with digital puppies by throwing a ball at it. This idea is also behind the Sesame Street Workshop, which is working with Microsoft Kinect to bring interactivity to the show – a kid throws something at the screen and sees something happening on Sesame Street.

Posted by Anjali Ramachandran, Head of Innovation

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One comment

  1. Pingback: My talk to @merlinthementor scholars last week | One Size Fits One

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