Alan Herrick's Opening Speech at SapientNitro iEX 2011

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SapientNitro’s first annual Idea Engineer Exchange (iEX) will be an illuminating and immersive exploration in DigitalEarth. We will uncover how DigitalEarth has driven basic behavioral change. How companies are using it to reinforce their brand promise, create richer experiences and forge deeper relationships with their customers.

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  • Key Message: We ’ve entered a new age of consumerism The changes are profound when studied / witnessed over periods of time Digital with a capital D - The Digitization of business ’, societies, cultures and governments Transition. This is a topic we will spend most of the day exploring in different ways.. Additional Context: As Bill mentioned, we ’ve entered a new age of consumerism. It’s an evolution and revolution that everyone in this room has been witnessing first hand for quite some time. The changes are profound when studied / witnessed over periods of time – the effects of the digitization have impacted business, society, culture and governments We have been witnessing, processing, and adapting to the rapid evolution of the market place. It ’s an unprecedented time that will be studied as much as the Agricultural Revolution, the Industrial Revolution or the Information Age This is both an extension of the Information Age as well as it ’s own transformative S-curve It ’s a period that’s giving consumers unprecedented voice and connection to brands This is a change that ’s is bigger than you think when you are in it, living it… Transition. This is a topic we will spend most of the day exploring in different ways..
  • Key Message: 3 core ideas that are critical to understanding and thriving in this today ’s environment Convergence communications and commerce Brand and delivery matter now more than ever Because of the digitization of everything, brands have to do a lot more heavy lifting than they use to in order to reach people Success is all about collaboration Transition. Let ’s take a look at the ingredients that led us to what’s happening today Additional Context: Because of the digitization of everything, brands have to do a lot more heavy lifting than they use to. The ability to deliver on your brand promise is so technology dependent that today ’ s delivery needs a lot greater care than the 30 second spot. Today I ’ll be sharing with you some of our thinking on 3 core ideas that are critical to understanding and thriving in this new environment Convergence Brand and delivery matter now more than ever Success is all about collaboration Transition. Let ’ s start with Convergence. What many people will tell you is that the impact of technology is a transformation in the way we communicate. That ’s only partially true. Today ’s digital consumer is operating in an environment where communications and commerce are converging. Initially, these two broad activities were sequential at best, now they are interconnected at least, and maybe leading to a different idea – An environment where you are creating demand for your products and services and fulfilling them in the same moment Let ’s take a look at the history…and what’s led us to this point
  • Key Message: Pre- 1994 This world is best described by a series of one way communications A consumer purchasing experience that only loosely connect to those communications or brand building events The siloed nature of sales and marketing channels was reflected in the organizational siloes of the companies that were operating in them. Transition. But in 1994, this began to change… Additional Context: We all remember these days. Prior to 1994 and the rise of the internet, the dividing line between Sales and Marketing were crystal clear. This world is best described by a series of one way communications A consumer purchasing experience that only loosely connect to those communications or brand building events Sales took place primarily in store and Marketing consisted of any combination of tv, print, and radio. The siloed nature of sales and marketing channels was reflected in the organizational siloes of the companies that were operating in them. Transition. But in 1994, this began to change…
  • Key Message: Chapter 1 – 1994 - 2000 Two discrete ideas emerged with the advent of the web – selling online and marketing online Ecommerce emerged , sales hit $40B in ‘ 99 The dawn brought us Amazon, Google and Yahoo It also brought us Webvan, Pest.com and Disney GO Different skills - eCommerce platforms and Digital Marketing efforts required technology skills, largely distinct from traditional marketing and sales organizations Different structure - Commerce was either separated into a new department, or made into a segment of the IT department . The term of the day was Digital Business Creation – New business models and new investment(VC) Transition. The end of this chapter was marked by the .com crash along with the economy Additional Context: Two discrete ideas emerged with the advent of the web – selling online and marketing online Having a web presence and an ecommerce presence was all the rage This was still very much the Wild, Wild West. In an effort to avoid robbing it from its opportunity to innovate, eCommerce was either separated into a new department, or made into a segment of the IT department. eCommerce platforms and Digital Marketing efforts required technology skills, largely distinct from traditional marketing and sales organizations; additionally, new skills were required to understand behaviour patterns of online consumers - more reason to keep it separate – There was a lot of “ who gets it ” , the idea of experience was first discussed Transition. Then around 2000, things start to evolve again..
  • Key Messages: Chapter two 2000- 20007 As internet penetration grows, Bandwidth gets cheaper and Faster – very important enabler Digital becomes a channel for driving sales online and in-store and new models start to emerge. Ecommerce sales hits $163B Digital marketing gets more ROI focused and develops strong advocates that this may be a better approach Social Media emerges – Sapient help an executive event in 2006 focused on Social Media – we had executives that were our clients as well as executives from a company called myspace This chapter brought us Wikipedia, iTunes and Facebook Although digital marketing was influencing in-store, organizationally it was still effective to house it as a separate entity . In this era you might have a digital marketing group in marketing , you might have a direct channel ecomm group run separtle y and you had IT , communicating at some level Transition. Then with the launch of the iPhone and proliferation of mobile devices that followed, the effectiveness of these siloed organizational structures was put under even greater strain Additional Context: As internet penetration grows, digital becomes a channel for driving sales both online and in-store. This thing called social media emerges – we did our first social media event in late 2006 – we had executives from MySpace at the event But digital marketing and eCommerce were still supplementary offerings to Brick & Mortar, remaining organizationally distinct and occurring in a different physical space. Although digital marketing was influencing in-store, organizationally it was still effective to house it as a separate entity within the IT department. At the same time, digital marketing gets more ROI focused and develops strong advocates that this may be a better approach Transition. Then with the launch of the iPhone and proliferation of mobile devices that followed, the effectiveness of these siloed structures was blown to pieces.. Architect
  • Key Messages: Chapter 3 The Iphone really did for the consumer what blackberry did for the corporation – made the smartphone relevant And bandwidth continues to get faster and cheaper Mobile technology spurs an increase in innovation and connectivity . Smartphone use grows by nearly 50% On-the-go experiences that rival an in-home or at-office digital experience Apps that can help us in all aspects of life and being on the go – ways for brands to connect with a rapidly moving consumer Tools in your pocket for and on-the go consumer – this has profound impacts for how brands and consumers connect Social media is amplified – staying in touch and influencing while on the go… Physical and digital worlds start to blur In store experience begins to change as digital comes in-store QR codes inserted into print/magazines Communications and Commerce channels – stores, kiosks, online, on the go, catalog are rethought as we all realize the relationships are complimentary not mutually exclusive We realize that we are interacting with consumers that don ’ t separate the branding, selling and buying experience any more – they see a series of interactions across touch points leading to a preference for a brand Ecomm sales hits $363B We are now living in a world where you are Creating and satisfying demand in the same environment , if not the same moment – massively connected and always on We ’re now seeing companies like: Foursquare, Twitter, Hulu Organizational structures do not reflect this new world, remaining siloed , however collaboration begins, ideas that the customer experience council emerge within some companies or other forms of cross functional constructs – they are overlays and not the primary structure Transition. Creating a compelling brand experience becomes an increasingly valuable tool in connecting brands to consumers, but become even harder to execute
  • Key Messages: To summarize: Convergence has been happing and the seeds were laid long ago Mobile device proliferation has broken down barriers around how, when and where we act, interact, and transact Organizational structures strained This bears profound effects on how we engage with customers. Transition. Let ’s take a look at the relationship of these changes and companies
  • Key Message: I find this helpful when discussing the macro changes that are underwa y TECHNOLOGY is changing the HUMAN EXPERIENC E. We have discussed this - Technological Innovation 2007 Apple launched the iPhone , gaming, tablets, QR codes, mobile wallets and many more The myriad of connected devices creating an almost insatiable market demand for bandwidth . Hyper-connectivity Increased bandwidth meant: Everything that could connect to the internet was connecting to the internet – people , places and things – we are moving to a world where everything is connected and communicating Behavior Hyper-connectivity changed the way we live our lives . It didn ’ t change what we do, but how we do it: our behaviour. Changing when, where, and how we do things : anytime, anywhere, how we make decisions Taking away the constraints of time all together: our digital lives are extensions of our physical lives that are not limited by time or space If we think back to the S-curves Bill mentioned Agricultural revolution anchored time to seasons Industrial revolution created a linear focus on the division of time within the work day, Digital revolution is taking away the constraints of time all together , it ’ s also changing how we thing about the value of a physical space in an always on, always connected and always ready to buy consumer Consumers are now fully embracing the duality of their physical and connected worlds. Experience Brand experience has been fractured across a variety of touch points. The shopping process has shifted from a continuous sequence to a compressed series of moments that may be separated by days or weeks. Window of opportunity to influence went from hours to minutes. This is where the convergence of communications and commerce lives and breathes. Creating consistent and compelling brand experiences matters now more than ever . What this framework tells us about technology The interrelationship of the circles shows technology playing a dual role Key influencer of consumer behavior Critical enabler of your message, your experience, your promise Transition. Understanding the interrelationship of these various factors is the first step in bridging the functional divide that ’s limiting so many companies from realizing their full digital potential.
  • Key Messages: Let ’s expand the convergence idea from Communications and Commerce to look at what’s happening to companies structurally The always on and connect consumer can rapidly cut across Sales, Services, communications and IT To create differentiated brand experiences, functional areas need to 1) identify a common goal , set of values, or proposition to rally around 2) understand how the convergence of things has changed capability needs and operating structures within each function Example: IT Orgs legacy value system from the 1990s and early 2000s that IT departments created the most value (and were most rewarded for) cutting (procurement-oriented approach to IT) underlying capabilities that support it are not sufficient to supporting creating brand experiences In turn, the capability set of even the most advanced marketer is not sufficient to navigate complex technological dynamics needed to deliver Recommendation Members of each functional organization need to re-orient their thinking around the new set expectations, goals and responsibilities for their role. Transition. Let ’s take a look at some of the more cutting edge examples of what the fruits of these collaborations look like.. look like..
  • Key Messages: Key Message. Using insights on changing customer behavior to create a new business model that combines advertising and an ability to make the purchase
  • Key Messages: Key Message. Tr ansforming the orientation of a vending machine from being the end point of a goal-directed experience to a driver of sales and a new touch point in the brand experience
  • Key Messages: Key Message. You are introduced to and consume the brand at the same time. [Emphasis also on technological innovation of inserting live odds into tv commercials. ] -------------------------------- Additional Data: In 2009, we began our relationship with Ladbrokes Ladbrokes is one of the largest betting and gaming companies in the UK. They have over 2,500 retail outlets, which take up to 80% of their £16b+ revenue The remaining 20% comes from the “remote” channel (tele-betting, online and mobile). They manage and trade more money that many commercial banks and hedge funds using the tremendous amounts of data they have to develop competitive trading models. Their business is under threat from two forces. Their customer base is dying off. The typical Ladbrokes customer is over 50 and has been betting with Ladbrokes for a long time. Ladbrokes have not successfully attracted the younger 18 – 30 market to replace the older generation. There are a number of new entrants to the market who seem to understand the young gamer/gambler better. They are taking the lucrative, niche business (e.g. poker) and preventing Ladbrokes from attracting this new audience. We were fortunate to work with a client who was ready to innovate, but realizing that opportunity required pushing the boundaries of how we translated some very “routine” requests. “ Build a trading platform.” Translation: “Help build a better way to trade.” “ Design a mobile app for the world cup.” Translation: “Get them closer to the feeling.” “ Fix bugs in the kiosk, user experience and online…and build a new e-commerce platform” Translation: “ Create a new experience for e-commerce, supporting cross platform betting and gaming” The result was the creation of an integrated digital ecosystem that enabled Ladbrokes to communicate and process trades across multiple digital platforms. Expanding our approach also enable Ladbrokes to create one of the most ground breaking marketing experiences that bridged both traditional and digital capabilities. Let ’s take a look.. and as you’re watching, I want you to pay special attention to the billboard at the end of the spot..[roll video]
  • Key Messages: As you can see, we ’re operating in an environment that’s as exciting as it is daunting. My hope is that the perspectives I shared with you help you frame your own thinking around the experiences you want to create for your customers, understanding So what ’s converging ? Functions inside companies Marketing and technology Creative and technolog y It ’s all led to the convergence of communications and commerce The relationship between brand and delivery matter now more than ever , and Creating compelling brand experiences requires collaboration and an all-out commitment from the business to re-orient the way they think, act, and structure themselves. Transition. With that, I ’d like to introduce our Keynote Speaker, Malcolm Gladwell. .
  • Alan Herrick's Opening Speech at SapientNitro iEX 2011

    1. 2. <ul><li>CONVERGENCE </li></ul><ul><li>BRAND AND BRAND DELIVERY </li></ul><ul><li>COLLABORATION </li></ul>
    2. 3. The Old World BRICK & MORTAR TRADITIONAL MARKETING
    3. 4. The Dawn eCOMMERCE BRICK & MORTAR
    4. 5. Beginnings of Convergence DIGITAL MARKETING eCOMMERCE BRICK & MORTAR
    5. 6. Massively Connected DIGITAL MARKETING eCOMMERCE BRICK & MORTAR
    6. 7. <ul><li>The convergence of communications and commerce </li></ul><ul><li>Always connected, always on – Mobile device proliferation with consumers and bandwidth expansion have broken down barriers around how, when and where we act, interact and transact </li></ul><ul><li>Organizational designs not well equipped to handle connected, always on consumer </li></ul>
    7. 9. 3 Questions <ul><li>What is the role of digital in my strategy? </li></ul><ul><li>What is the future of television in a fully digital world? </li></ul><ul><li>How do I organize to create compelling experiences and drive sales? </li></ul>
    8. 10. SALES SERVICES IT COMMUNICATIONS
    9. 11. Creating and Satisfying Demand in the same Environment: Tesco
    10. 12. Creating and Satisfying Demand in the same Environment: Unilever Share Happy
    11. 13. Creating and Satisfying Demand in the same Environment: Ladbrokes
    12. 14. <ul><li>The convergence of Communications and Commerce is creating opportunities to create differentiated experiences that deliver on brand values </li></ul><ul><li>The idea of Brand and Brand Delivery - the ability to execute a highly connected experience relies on your ability to align a state of the art 
IT capability </li></ul><ul><li>Organizational structures will take time to evolve, success is dependent on cross-functional collaboration </li></ul>
    13. 15. For all videos of presentations, keynotes and panel discussions please visit SapientNitro ’s youtube channel: http://www.youtube.com/user/SapientNitro Thank you.

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