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Babelfish Articles Oct 2016-Mar 2017 21-3-17
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Articles #15 Redux
Oct 2016 - Mar 2017
Curated by Brian Crotty
In a world where it is increasingly difficult to keep up, let alone stay ahead, I am sharing a
collection of meaty articles that passed my screens over the last 6 months. I have divided into
6 topics - The first articles in each section are important reading for those who can´t afford to
tread water.
WTF is a Babelfish?
The Hitchhiker's Guide to the Galaxy is a BBC comedy science fiction series created by
Douglas Adams. In the show, The Babel fish is small, yellow, leech-like creature. It feeds on
brain wave energy, absorbing all unconscious frequencies and if you stick one in your ear,
you can instantly understand anything said to you in any form of language. It is a
universal translator that neatly crosses the language divide between any species...especially
useful when meeting alien cultures! The play off being decoding Digital and Traditional
marketing strategy language – so we all are empowered to collaborate and integrate our
strategies.
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Summary
AGENCY BUSINESS MODEL / RISKS ............................................. 4
Why Creative Agencies Need to Think Like Consultants in 2017 ............... 4
The agency of the future is not an agency ................................. 5
Who Will Control Future Of Marketing When It Becomes Digital And Data-Driven?
.......................................................................... 7
What You'll Need to Build the Agency of the Future......................... 8
GroupM Builds A House For Tech And Data Expertise, Taps Xaxis CEO Gleason . 10
PwC bulks up as ad agencies face onslaught from professional services giants
......................................................................... 11
Ad Agencies Are Building Out Their Own Consultancies to Better Compete for
Digital Dollars.......................................................... 12
Fear and loathing: Are international media pitches spiralling out of control?
......................................................................... 14
Accenture challenges media-buying agencies ............................... 18
BUSINESS / MARKETING STRATEGY ............................................ 19
The Importance Of Pre-Tail In The Shopping Journey........................ 19
The new battleground for marketing-led growth............................. 19
After Election Surprise, Marketers Rethink How to Study Consumers ......... 24
TRENDS & INNOVATION ...................................................... 25
How The Blockchain Will Secure Your Online Identity....................... 25
Five trends the next generation of CMOs need to master.................... 27
Blockchain ripples media waters .......................................... 29
7 Takeaways From Davos 2017 .............................................. 30
Where’s the line? Theme parks aiming to eliminate them.................... 33
Digital trends: how 2016 will inform 2017 ................................ 36
A Guide To The $13.4 Billion Biodesign Industry........................... 39
WTF is Digital Product ................................................... 44
CONNECTION PLANNING / TRENDS ............................................. 54
Respect the Format: Stop Chopping Up Spots to Make 'New' Content .......... 54
The 15- And 30-Second Ad Spots Aren’t Going Anywhere...................... 55
Google Ran Secret Video Ad Experiments and Here's What It Found ........... 56
Consumers need benefits to share data .................................... 57
People aren’t comfortable using virtual assistants like Siri and Alexa in
public................................................................... 58
The 3 Cs Of 2017: Content, Commerce, And Customer Experience .............. 59
BBDO video rewind finds need for better mobile optimization............... 60
Shame is Transforming TV as we Know It ................................... 63
Moment marketing is where the magic is ................................... 64
Using the Five Senses to Connect With Consumers During the Holiday Season . 65
Brain bombs for your strategy comms ...................................... 67
DATA CAPTURE, ORGANISATION, VISUALISATION AND PROJECTION.................. 68
The heartbeat of modern marketing: Data activation and personalization .... 68
Google’s DeepMind makes AI program that can learn like a human ............ 71
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What Google’s Removal Of Third-Party Pixels On YouTube Means For Marketers 74
New U.K. Surveillance Law Will Have Worldwide Implications................ 77
Podcast: Annalect's Erin Matts Says Data-Driven Creative Is The Next Big
Prize.................................................................... 78
Top 10 Hot Artificial Intelligence (AI) Technologies...................... 78
Building an Insights Engine .............................................. 80
How to deliver consumer insight .......................................... 89
How Cadreon’s Arun Kumar Connects The Dots Between Walled Gardens ......... 93
PERSONAL / PROFESSIONAL GROWTH ........................................... 94
Here’s Why I Don’t Bring a Laptop to Meetings............................. 94
After work, is what determines your future! Spend one hour per day doing
these 5 things and your life will cange forever!.......................... 95
14 Simple Expectations Great Employees Have of Their Boss................. 98
7 body language tricks that are hard to master but will pay off forever .. 100
The Biggest Secret to Success: Spend at Least 10 Hours a Week Just Thinking
........................................................................ 102
10 Lies You Need to Stop Telling Yourself Immediately.................... 104
10 Things Smart People Won’t Say ........................................ 105
Being a Good Boss is Incredibly Easy, and Incredibly Hard................ 107
The one question you should always ask when investing.................... 112
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AGENCY BUSINESS MODEL / RISKS
Why Creative Agencies Need to Think Like Consultants in 2017
By Penry Price. Published on January 11, 2017.
While consultants are adding creative services, agency giants such as Omnicom are expanding
their offerings as well. Credit: Scott Eells/Bloomberg
As marketing becomes increasingly driven by data and technology, ad agencies are having to
compete for business against a newfound rival: consulting firms like Accenture and Deloitte. While
this tension has been brewing for a few years, it's now reaching fever pitch. Deloitte has acquired
a dozen creative agencies, while Accenture Digital last year was named the largest and fastest-
growing digital agency network. Ad agencies need to respond; what was once a pending threat to
their business model is now very real. Look no further than Del Monte Food's hiring of Epsilon, a
data-based consultancy, as its U.S. agency of record to see how consultancies are giving
traditional agencies a run for their money.
CMOs now understand that a data-led strategy -- not creative alone -- is driving top-line growth.
Data enables companies to discover customer insights and innovate products accordingly. It's also
key to creating an outstanding customer experience that is both individualized and scalable.
Converging business models
The businesses models of consulting and creative agencies are converging. While consultants,
who have deep background in business strategy and enterprise technology, are adding creative
agencies to their arsenal of solutions, large ad agencies are expanding their offerings too.
Omnicom, for example, created Hearts & Science, an integrated digital agency that uses
technology to scale customer relationships. Since its formation this year, it has acquired Proctor &
Gamble and AT&T as customers. Agency networks like Publicis Groupe and WPP have also been
rolling out their own consulting shops for some time, which can open the door to additional
creative revenue and wider margins. Agencies that don't have in-house consulting will need to
show that they understand business strategy and the role of technology in marketing to keep pace
with consulting firms. Creativity will continue to be essential to marketing success, but it's just a
part of the solution businesses need, not the solution.
Embracing a data-driven approach
Data is a key tool for consultants, and it needs to become one for creative strategists too. In the
days of one-size-fits-all marketing, CMOs simply asked, "What's the best way to boost sales?"
Raising awareness of the product was typically the answer, and the best tactic was a creative
advertising campaign.
But brand awareness is not enough today; you need to also create a great customer experience.
Marketers have realized this and are now using data to see what entices customers and what
doesn't. For agencies, this means embracing the data-driven approach consultants have long
championed. Agencies need to provide not only the right product messaging, but also the right
marketing tools to drive that message -- and measure the results. That's why Razorfish, a division
of Publicis Groupe, partnered with Adobe to build its own digital marketing platform.
Investing in technical talent
Agencies have an opportunity to diversify their offerings, but they need to overcome several
challenges. Talent acquisition continues to be a main hurdle. Agencies don't have the money to
hire the personnel to dive into digital and data because resources are tied up in the infrastructure
that served the era when TV was still dominant. Although TV still captures over 40% of agency
budgets, many agencies were set up for much more and this is limiting how quickly they can
respond.
As ad spend continues to shift from TV to digital, agencies will need to hire software engineers,
designers and analysts that can quickly build tools and drive the customer experience their clients
are looking for. This will be especially tricky for publicly traded agencies, who can't easily sell off
outdated business units to develop new ones. This TV focus, combined with agencies' personnel-
heavy approach to client service, limits their ability to invest in new channels and tools they can
offer customers.
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The year 2017 will be a turning point for agencies. Those that aren't singularly focused on
technology to scale the customer experience may find themselves up for review. Given their
expertise in business strategy, consultants have been more successful in acquiring creative talent
and companies than vice versa. But agencies have an opportunity to reinvent themselves, and
doing so could open up new lines of business. For this to happen, they need to think more like
consultants and offer a wide array of technical solutions. That way, they can ward off the
consulting firms encroaching on their turf.
The agency of the future is not an agency
Published on February 2, 2017
Strategist at Freelance
“No structure, even an artificial one, enjoys the process of entropy. It is the ultimate fate of
everything, and everything resists it.” ― Philip K. Dick
In an industry where your capital walks in and out of the door each day, the value you can bring a
client all comes down to talent.
How can any one company house the talent required to deliver the optimal solution for each
business challenge? Briefs are already calling for teams consisting of an infinitely diverse list of
specialties. No agency can provide that.
Between the Devil and The Deep Blue Sea
If the agency outsources, increasing proportions of its budgets are siphoned out of the company to
accommodate for this. Over time, this eats away at their margins and they miss their aggressive
growth targets. If they try and keep the budget in-house, they are either making do with the talent
they have, or they bring talent on to the payroll who may not be needed on a regular basis. Who
can tell when change is so fast and random?
Entropy doesn’t lend itself to standardisation.
In my previous post, I suggested that new models will emerge that are distributed and nodal in
nature. The one that excites me the most is a co-operative model of distributed and autonomous
specialist networks.
Not only does this model better reflect and adjust to the digital networks we communicate with, but
there is an incredible potential for a new level of autonomy and mutual prosperity.
But what does this look like? And how do you deliver the talent that is needed each and every
time?
The Hollywood Model
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Hollywood provides some reference. Specifically, Ocean’s Eleven and the approach George
Clooney takes when he lands a backer for the ultimate casino heist. His solution calls for a crack
team of specialists including con men, an explosives expert, a hacker, a pickpocket, and even an
acrobat.
As an approach to business (rather than casino heists), this is known as the Hollywood Model.
Film studios have been using it for years. They keep a core staff at studio HQ and then engage
partners and crew with the specific skills required to best execute the film.
If you’ve ever been on a TVC shoot, you’ve seen the model in action. The different teams on the
shoot may or may not have worked together before, but they all have their role and are specialists
at it. With the right coordination, everyone knows how to work with each other and what to do to
get the job done and done right. All at once and in parallel.
To translate this to the wider agency function would require a formalisation of the many informal
professional connections out there into bounded networks of digital, business, creator and
communications professionals.
There are agencies such as Victors and Spoils that have experimented with crowdsourcing. co: is
doing great things with its collective and collaborative approach. But there is potential to go
beyond this and the confines of an actual agency and into independent networks.
These networks would coalesce into flexible project teams to cooperate on specific projects.
Combining skills and resources, they would then disband once the project is complete.
Teams could even convene to pitch for retainer style accounts, so the client knows they are
receiving a purpose-built team and solution for their business problem.
Future Of Work
Current technologies (such as Slack, Trello, G-Suite, Dropbox, Xero and myriad other cloud-based
SaaS tools) and share spaces distribute these cooperative principals even further, minimising
overheads.
All you need is a laptop with an internet connection, your skills and these services and your
business can be profitable, within a week.
Instead of a renovated inner-city warehouse with ping-pong table and bar, you can work from your
sunroom at home with your dog at your feet.
Given the need to commute daily is no longer required, you can move up the coast and surf every
morning and evening without taking on a crippling Sydney mortgage. Only venturing into the city a
day or two a week for workshops and meetings.
If working from home isn’t your thing, there are new and affordable share space offices cropping
up all over the city, like Fishburners, WeWork and Work Club. Here you can work alongside other
start-ups and creative professionals collaborating and cross-pollinating ideas and opportunities.
Due to the structure of this model, there is no margin; no-one gets the cream. Each specialist in
the network receives value. Especially the client.
Alternative marketplace
There is the potential to create an alternative marketplace. One that will allow specialist experts to
apply their skills and talents to projects they want to work on.
A market that provides unprecedented freedom and prosperity. Where three (or even two) days
work nets you in the vicinity of a full week’s pay at an agency (while still charging the client much
less than any agency would). And you won’t be pulling unpaid overtime and weekend work.
You could use that spare time to take yoga classes, learn a new language, spend more time with
your kids, give your skills to love jobs or pro bono clients, surf, or simply take more projects on to
earn more bank. It is entirely up to you.
A new ‘agency of the future.’
We are at the crossroads.
Either technology slams us headlong into a future, where as knowledge workers we are just cogs
in a machine. A machine playing a zero sum game of productivity for holding company profits and
share prices.
Or even worse:
“Being an Uber driver moonlighting as Taskrabbit moonlighting as doggy-masseuse to your
nearest branch of the Kardashian Dynasty” Umair Haque
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Or we can herald in a new era of digital humanism. As Douglas Rushkoff evangelises, we can re-
set the operating system so there is the opportunity for collaboration, co-creation, connection and
the preconditions for mutual prosperity.
It’s re-directing the promise of the digital economy away from exponential automation and
corporate profits, to making it about human potential. Having it work for us, rather than us for it. To
have these incredible technologies augment human autonomy rather than replace it.
If you are good at what you do and you’re future focussed, you are no doubt being head hunted for
a big new role. Don’t take it. Take the leap and bust out on your own. Your skills will be in demand
and you will be able to pay the bills. You can freelance while you’re building your brand and
network.
If you’re an indy doing great work for excellent clients, don’t sell to the global consultancies or
holding companies. Don’t take on the golden handcuffs and watch all that equity you built up be
destroyed by the growth juggernaut.
Small is beautiful. You don’t need scale to take on bigger, more interesting projects. Connect with
other like-minded indies and specialists to go up against the incumbents and win the good stuff
with a whole new approach. And you still get to do what you love to do, the way you love to do it.
We will never have this chance again to create a gig economy worth getting excited about. An
alternative market is emerging. A future of work that fosters genuine agency for its participants —
 and a whole new take on the agency of the future.
Who Will ControlFuture Of MarketingWhen It Becomes DigitalAnd Data-
Driven?
by Dave Morgan, Featured Contributor
Software has been transforming and disrupting advertising for decades, certainly ever since our
industry’s technology pioneers like media legend and longtime Group M leader Irwin Gotlieb
began writing software to automate media planning and buying in the 1960s.
However, for anyone who thought that advertising’s path to a digitized and data-driven future
would be a predictable and straight line, it has certainly not met those expectations, particularly in
light of the industry’s recent tumult around measurement, environment and control of ad tech.
Advertisers and agencies, concerned about the accuracy of digital publishers’ proprietary
measurements, have intensified their pressure on large digital marketing players like Facebook
and Google to submit to third-party measurements and audits. Brands and agencies fear too
much “grading of one’s own homework” by the large, data-driven marketing platforms.
Just this week, we’ve seen several of the world’s largest advertisers -- AT&T, Verizon and J&J --
suspend large portions of their ad spend on Google’s YouTube until their concerns over ads
appearing within inappropriate content can be satisfied. Media agency Havas helped kick off this
row by pulling YouTube spend for its clients in the U.K.
All of this parallels – and is related to – a development in the world of advertising technology that’s
several years old. We’ve watched the technology backbone of digital advertising — ad-tech
companies — continue their roller-coaster evolution from serving ad networks, brokers and
exchanges to becoming proprietary targeting and optimization platforms. Wall Street might not like
these companies -- just look at ad-tech stock prices -- but telecommunications companies do,
eager to add value to their subscription and ad businesses to offset the declining profit margins of
their commoditized teleco pipes. So, too, for enterprise technology companies like Adobe,
Salesforce, Oracle and Neustar, who see ad-tech platforms as doorways into finally automating
marketing at the enterprise level.
To understand the recent disputes between marketers and digital media suppliers, I would
recommend you understand what’s happening in ad tech, and why. Basically, I wouldn’t take the
rising issues of measurement transparency and content suitability on face value alone. Yes, those
issues are certainly worthy of the attention they are getting.
However, there is a much bigger issue that is also playing out. What we are watching are just
skirmishes in a long-term battle for control over the future of advertising, marketing and demand
generation.
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The wrestling over measurement, environment and technology is all about who will get paid when
companies need help acquiring customers. To marketers and agencies, the large digital marketing
platforms are “walled garden” oligopolies, which are getting stronger by the day. Marketers work
with those companies because they are very efficient, delivering scale and results that they can’t
find elsewhere. As you would expect, marketers want more competition among these suppliers.
They don’t like being so dependent on these platforms.
Marketers would prefer to have their own predictive marketing platforms, helping them collect and
activate their own proprietary data. Enterprise technology companies want that future as well.
They want to be the ones to sell and provision those tech platforms, integrating and packaging
them with all of the other systems they sell into the enterprise, from CRM to call center
management to finance and sales force automation. Quite naturally, they worry that it will be
easier for Google and Facebook to add their own CRM and related systems than it will be for them
to replicate Google and Facebook’s digital marketing system.
Agencies? They just want to keep themselves in the middle. Whether as consultants, media
brokers, system integrators or owners of syndicated data, agencies just want to stay relevant and
find ways to reverse their declining margins.
How are all these competing agendas likely to play out? I don’t have a crystal ball, but one thing is
certain: We will see more and more mergers and acquisitions all across the industry. Verizon
bought AOL and is buying Yahoo. AT&T is buying Time Warner. Most of the data-management
platforms have been scooped up. Big marketers will start buying ad-tech companies, just as they
have acquired delivery and logistics companies in the past. Agencies will buy tech and data, if they
can afford it.
We haven't yet seen anyone match the scale of WPP's acquisition of 24/7 Real Media and TNS,
but certainly the big marketing service players need to get into the proprietary tech and data
business, or find themselves on the outside looking in.
What You'llNeed to Build the Agency of the Future
By Bryan Wiener. Published on September 23, 2016.
In 2010, the CEO of an upstart digital agency was asked by the IAB to predict the future of
advertising agencies and how they needed to adapt if they wanted to be around 10 years from
now. Rather than give a eulogy, the thesis of that talk was that we were on the cusp of the golden
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age of advertising and that agencies could and should play a critical role in helping brands
transform their marketing.
Well flash forward six years, and I'm reprising this talk at IAB Mixx during Advertising Week. Then
as now, there was deep pessimism about the future of agencies and a clear implication that
agency survival was an open question. Then as now, in spite of things being far from perfect, I am
very bullish on the opportunity and need for agencies to play an essential leadership role in the
future of marketing.
There is both peril and promise for everyone in this industry whether agencies, media owners or
brands. In the last six years, consumer behavior has continued to change exponentially, to the
point where two of the most dominant platforms -- Instagram and Snapchat -- didn't even exist
when I first visited this topic. And yet the infrastructure at most clients and agencies still feels
heavily analog. Marketing, as a profession, is in real trouble if we keep letting consumers lap us.
We are all competing with anyone and everyone. In addition to challenges, this chaos and
disruption breeds opportunity. Competitors -- whether client, agency or media owner -- don't have
a manual any more than you do. Agencies can help brands win in this environment of chaos -- if
the right ones are chosen, and managed well.
While there will undoubtedly be more than one model for success, a lead agency of the future
must have at least these three core areas of expertise:
Storytelling that earns attention
The internet was supposed to be the death of brand advertising by bringing all the world's
information to everyone's fingertips in nanoseconds. The opposite has actually turned out to be the
case. We are flooded by so much information that our brains are fried, and we are craving an
emotional connection to not only the products and services we consume but also the companies
that make them. The new challenge is to create an emotional connection with consumers in a
digitally led, on-demand environment.
Agencies needs to be experts in both ascending and descending storytelling in order to connect to
audiences on different platforms in different mood states. Ascending storytelling has its traditional
story arc with the climax coming near the end of what has typically been a 30-second spot.
But in a thumb-scrolling medium, brands have seconds to earn attention or be swiped away. So
flowy narratives simply can't get the job done in areas like social, or mobile-first media. This is
where descending storytelling comes in, by ripping a page from a journalist's notebook. They tell
you the essential information in the headline and the lead paragraph and they have seconds to
convince you to continue reading the rest of the article. And whether you do or not, you have at
least gotten the general point of the story. This approach to storytelling must be part of a creative's
arsenal as well.
Data-driven approach
Big data might be the most over-used word in our jargon filled industry. Agencies need to be
skilled at uncovering some game-changing insight and then use that insight to create programs
using near real-time data. In other words, this can't be survey data from two years ago. This
capability also needs to be core across the entire agency -- not just the realm of media and search
-- and not outsourced.
Digitally led but not digitally limited
It's time for a few industry buzzwords to be retired. For example, the antiquated distinctions of
digital vs. traditional agencies and the artificial and counter-productive boundaries between paid,
earned and owned. The agency of the future must be able to do strategic planning and
measurement cross-platform with a channel agnostic business model. The work is just better
when we act this way. Operationally, agencies need to have the ability to create different bundles
of services based on client needs rather than what services we have to sell.
This is not something that can be wallpapered over by making splashy hires or placing a new
agency brand name on a collection of individuals put in a room together for a pitch. It's a
transformation of the entire company inside and out, top to bottom.
This does require some planning in pencil. Consumer behavior will change, platforms will rise and
fall and marketing capabilities will emerge as mission critical from nowhere. Annual planning
cycles and long term deals are inadvisable.
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For these three reasons (and probably a few more), clients should be on the lookout for agencies
that are bringing these thoughts and actions, and for agencies whose vision does not get in the
way of the client's vision. But before entering into a relationship, it's critical for marketers to look in
the mirror to unlock the most success.
There is a saying in the business that clients over the long run "get the work they deserve." Smart
marketers greatly increase their chances of breakthrough work through co-creation of their agency
ecosystem, clarified roles and responsibilities and selection of agencies that are adaptable enough
to lead and succeed in a constantly evolving world.
The future will be messy but bright for the winner and deadly for the losers. Marketers and
agencies that adjust their models in partnership will drive tremendous value for their organizations
and drive the future of marketing through the chaos.
Bryan Wiener is executive chairman of advertising agency 360i.
GroupM Builds A House For Tech And Data Expertise,TapsXaxis CEO
Gleason
by Ryan Joe // Tuesday, November 29th, 2016 – 8:00 am
mplatformWPP-owned GroupM said Tuesday it will centralize its tech and data expertise
worldwide into a unit called [m]Platform. The division will be helmed by Xaxis CEO Brian Gleason
with key executives drawn from Xaxis and across GroupM.
“The collective mission of [m]Platform revolves around technology, data and expertise,” Gleason
told AdExchanger. “The mission is how to take each of those elements and put them together to
provide addressability and accountability across all media.” And by “all media,” Gleason means
everything from search to linear TV.
[m]Platform’s components include the [m]Core audience platform, which Gleason said is not a
data management platform (DMP) and which will, in fact, work with other DMPs. [m]Core is
designed to combine data across CRM systems and online channels to build a “privacy-compliant
consumer identifier” called [m]ID.
“You tie in different events and behaviors, you have different demographics, you can add location,
purchase data, and it’ll link with other WPP assets – whether from Wunderman, Kantar or others,”
Gleason explained. It also takes into account 650 data sources and data from 50 exchanges.
[m]ID fuels the entire [m]Platform system as it enables the 360-degree customer view advertisers
are vying for, Gleason said, and it connects the other elements that constitute [m]Platform.
Those other components include a media-planning and workflow management tool, an analytics
application that combines online and offline campaign data for attribution and optimization and a
reporting tool that plunks all that data into a dashboard.
Gleason added that [m]Platform has an open architecture so it’s compatible with other marketing
tech stacks.
The details come two weeks after GroupM said it would split itself into distinct Media Investment
and Platform Solutions divisions.
DNA From Xaxis, But A Different Business Model
Xaxis’ influence on [m]Platform is palpable. In addition to Gleason, Xaxis alumni will fill three key
roles. Nicolle Pangis will join as global COO, Bob Hammond will come on as its CTO and Lucas
Mentasti will become its LatAm president. And, of course, GroupM's North America CEO, Brian
Lesser, previously founded and ran Xaxis as CEO.
Xaxis’ tech development staff will also move into the new unit, and will have GroupM [m]Platform
titles. Picture a Venn diagram with [m]Platform and GroupM, and Xaxis is the overlap.
Naturally, [m]Platform incorporates some of Xaxis’ tech. Those technologies – like DMP Turbine
and first-party data capture mechanism Xanadu – will be available to clients that don’t buy media
through Xaxis.
But the new structure is not simply a case of remaking GroupM in Xaxis' image. For one thing,
[m]Platform, described by GroupM as a tech/data shop, doesn’t adopt Xaxis’ business model or its
use of undisclosed media costs.
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“It’s not a profit center,” Gleason said. “[m]Platform is a tool set.” The language describing
[m]Platform’s role in GroupM, however, is similar to that describing Xaxis: GroupM agencies will
have access to its tech, but won’t be compelled to use it.
“If they feel we provide the best tools in the marketplace, they should use us,” Gleason said. “If
there are better tools than what we have to offer, they should offer that to their clients.”
And [m]Platform's C-suite is not just a landing pad for Xaxis talent. MediaCom North America CEO
Phil Cowdell will be North American president. (Last week’s announcement that he’d head up
GroupM’s Platform Services division was just a placeholder.) And Connect CTO Jack Smith will be
[m]Platform’s chief strategy officer.
Indeed, [m]Platform is way bigger than Xaxis. It will have 5,000 employees and will completely
absorb GroupM Connect and GroupM Data and Analytics. (GroupM Connect was set up last year
to house all real-time ad buying across search, mobile social and programmatic. Its sudden
assimilation may reflect the pressure holding companies face to continually respond to data-driven
changes in advertising.)
Xaxis will live on, continuing to develop technology and buy and sell media. Several of its
technology and business components – like AI decision engine Copilot, native ad platform plista,
mobile performance marketing platform Light Reaction and ecom media seller Triad – will remain
squarely under the Xaxis umbrella.
WPP hasn’t announced Xaxis succession plans yet, though it won’t replace Gleason’s global CEO
role. It will instead appoint a global president reporting to Gleason.
While Gleason is banking on [m]Platform being live by early next year, the development road map
will continue. His team is still working on a universal dashboard tool designed to provide that 360-
degree view and an insights tool that can plan campaigns from search to linear TV.
By the end of 2017, he hopes to have rolled out [m]Platform globally to all the markets where
GroupM participates, and across all its media-buying agencies.
“[m]Platform is a significant move because we’re empowering the agency with the best of
everything,” Gleason said. “You take our data science team, engineers, the technologies we’re
building and [m]ID at the scale we can provide, and you’ll have a huge impact."
PwC bulks up as ad agencies face onslaughtfrom professionalservices
giants
PwC will create a six-person advisory panel to work with Russel Howcroft. Pat Scala
Mar 12 2017 by Edmund Tadros
Global advertising and marketing firms are being forced to defend their turf as consulting firms
look to steal clients, with PwC bringing in more high-profile marketing talent in a focused play
aimed at chief marketing officers.
PwC will announce this week that it has created a six-person advisory panel to work with former
Network Ten executive Russel Howcroft in its newly created CMO Advisory service.
In addition to four PwC partners, the firm's CMO advisory panel will include the CEO of industry
body the Australian Association of National Advertisers Sunita Gloster and Foxtel's managing
director of customer and retail Mark Buckman.
The move comes as professional service firms ranging from technology consultants Accenture,
rival big four advisory firms Deloitte, EY and KPMG, and even strategy houses Bain and The
Boston Consulting Group all make moves aimed at using their digital and data skills to win
customer, marketing and brand strategy work away from incumbents in the advertising industry.
The remit of PwC's new business is more narrow, and specifically aimed at helping CMOs crunch
the numbers to use their existing marketing budget more effectively and to justify growing their
budgets.
"Clients [say], we need to spend more [on marketing], can you help us construct the arguments, so
we can spend more," Mr Howcroft told The Australian Financial Review.
"We believe there is a need in the market. It is very difficult for CMOs to know where to point their
money."
Agency buying spree
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The move on the advertising and marketing industry mirrors a similar convergence in the strategy
consulting space, and has seen Accenture lead the pack on an agency buying spree.
One of the most prominent examples so far has been Accenture's £50 million ($80.9 million)
purchase of one of the UK's largest independent advertising agencies Karmarama last year.
Rival firms all believe that CMO advisory is a sub-set of their existing consultancy work and vary
only in the scale of their ambition.
Accenture has said it wants to do any type of work currently done by an advertising agency,
whereas Deloitte, EY and KPMG say they are mainly focused on conducting customer, marketing
and brand strategy work when it is part of larger performance improvement programs and
business transformation projects.
Meanwhile, strategy firms, such as Bain and The Boston Consulting Group, have long held
marketing-related technology or established digital outfits, and see customer or marketing strategy
work as a part of their natural remit.
PwC's surprise hire of Mr Howcroft saw the man, well known for his appearances on TV show The
Gruen Transfer, become the firm's first chief creative officer.
"There is such a thing as return on creativity. There is a commercial return on the basis of doing
things in a creative way," he said.
Advertising agencies, meanwhile, say they are prepared for the onslaught, believing they are
nimble enough to outmanoeuvre the traditionally staid professional services firms.
Creativity
Chief strategy officer at advertising agency Clemenger BBDO Al Crawford said consultancies were
experienced in the data-driven side of adland but less so in the creative side.
"The big question is where will the consultancies stop, in the end?" he said. "They are good at the
automatic side of things, but what about the creative? That is what makes consumers want to buy
into a brand, the emotional side of it. Do the consultancies want to go there?"
Mr Crawford said the Clemenger group already had its new rivals covered on the technical side,
and carried out work across the marketing and branding process. He added that every agency in
the sprawling group also had a dedicated strategy department.
"Our purpose is to provide the most compelling commercial content, no matter what the
distribution channel," he said.
"We have gnarly analytics and CRM capabilities and will do everything from econometric
modelling and propensity to purchase stuff. For example we run a lot of the CRM capabilities for
Telstra."
Chief data scientist at advertising firm WPP AUNZ Rob Pardini, meanwhile, said advertising
specialists needed to take their powerful new foes seriously. However he believed they were well
equipped to not only defend, but also attack professional services firms in their traditional areas of
strength.
He said that through subsidiaries like Kantar Vermeer, AKQA, VML and 1 Kent Street, WPP had a
proven track record of providing high-level strategic advisory services.
"What's happened is the boundaries have massively blurred between consultancies and agencies.
The consultancies with their advisory are overlapping with the agencies ... They are another
powerful potential competitor," Mr Pardini said.
"All too often in the past, strategic work by consultants has failed to translate into changes to
marketing operations and execution. Knowing is only half the solution. Execution is the other half,
and that's where WPP AUNZ excels, because we can deliver both."
See Wednesday's accounting & consulting page for how Accenture, Bain, BCG, Deloitte, EY and
KPMG want to transform adworld.
Ad Agencies Are Building Out Their Own Consultanciesto Better Compete for
Digital Dollars
Traditional shops are fighting back
By David Gianatasio
Traditional ad agencies are adjusting to the new normal.
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As consulting and IT firms continue to acquire agencies and add marketing services, traditional
advertising companies have begun to fight back by launching practices to provide business-
transformation counsel to help clients more effectively compete for customer dollars in the digital
age.
“Marketers are keen to remain innovative and future-focused, so having consulting solutions
available helps to ensure they’re always one step ahead of disruption stemming from technology
and consumer change,” says Richard Hartell, global president of transformation at Publicis Media.
The media arm of the Paris-based holding company is taking a two-pronged approach. Its $3.7-
billion acquisition of Sapient in 2014 added digital design and related services to the fold. Two
years later, Publicis Media launched its global business transformation practice. As an example of
tangible value, Hartell points to the group’s new “Predictor” study, an analysis of how AI, evolving
payment methods and seamless shopping will impact banking, cars, consumer electronics and
other sectors in the next five years. He also cites work for an undisclosed client that involved “an
in-depth audience insights project with a panel of over 200 participants.”
"Helping clients transform is core to what we do, not a new experiment."
-Saneel Radia, global head of business transformation, R/GA
As a result, the client “was better able to understand granular behaviors of millennial consumers
within specific sites and across different devices,” he says. “This led the client to invest in new
digital channels and change their content strategy for paid social activity.”
Though digging deeper into client budgets sounds alluring, experts caution agencies to proceed
with care and cultivate a clear understanding of the craft, along with the vision to integrate new
disciplines across the enterprise.
“Thinking about consulting as merely another service offering seems a bit opportunistic,” says Lee
Maicon, chief strategy officer at 360i, where he leads a dedicated 50-person practice. Maicon
joined the Dentsu-owned agency in 2010. “That same year,” he says, “we began counseling
brands on how to organize and prepare for social media, and that has evolved into broader
consulting on marketing design.”
At IPG-owned R/GA, Saneel Radia—one of Adweek’s Young Influentials for 2016—leads a
similar-size practice, which grew out of the shop’s work with Nike+, and launched as a dedicated
unit five years ago. Currently, the team is working with Campbell Soup to identify emerging
consumer shopping behaviors and recommend steps the marketer should take to more effectively
meet the challenges of an evolving global landscape.
"Great agencies have played a large role in the evolution of brands’ business for decades, and
that should not be discounted."
-Lee Maicon, chief strategy officer at 360i
Such an undertaking “isn’t just communications,” he says. “It’s a shift in how you think about data,
a shift in how you go to market, a shift in essentially your business model. At its core, your entire
value proposition is to help C-suite clients innovate.”
Though agencies have made strides in the consultancy arena, some experts believe the ad
business isn’t putting any real pressure on the global giants just yet.
For example, industry adviser Avi Dan dismisses most agency initiatives focused on business
transformation as “usually just a couple of people [on staff] to give the impression that they are
‘beyond advertising.’ I think the so-called trend will continue because agencies are hungry for
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added revenue. But these services are bottom feeders—they are not competing with McKinsey or
Accenture and will disappear as soon as the agency goes through cuts.”
360i’s Maicon views developments differently. “Traditional consultants are valuable thanks to the
myriad analytical frameworks they bring to the table, but tend to have a superficial relationship to
the transformative power of creativity to shape client’s businesses, as they lack hands-on
experience in this respect,” he says. “Great agencies have played a large role in the evolution of
brands’ business for decades, and that should not be discounted. Plus, we move more quickly and
cost-efficiently than traditional consultants.”
Radia adds, “I believe helping clients transform is core to what we do, not a new experiment.
What’s changed are the tools, rigor, consistency and ambition with which we do it.”
Fear and loathing: Are internationalmedia pitches spiralling outof control?
15-3-17 by ALEX BROWNSELL
A lack of preparation from brands is combining with a sense of exceptionalism from agencies to
make the process of pitching for media accounts more difficult. Alex Brownsell reports.
“Brutal,” “charmless,” and “soul-destroying” – these are just three of the unfavourable descriptions
used by industry sources to sum up Volkswagen Group’s global review of its $3bn media
arrangements, which concluded last year. A review which, by all accounts, was by no means the
most challenging of recent times.
The pitch, eventually won by Omnicom Media Group’s PHD, was certainly epic in its scale: the
client demanded that participating agencies attend 80 meetings across three continents, over a
17-month period. And, while certainly one of the largest global media pitches of recent times, its
enormity and complexity is symptomatic of clients’ desire to work agencies harder.
Some of this up-scaling is inevitable, of course. No longer are media agencies simply being asked
to prove planning prowess, buying muscle and international coverage – although all three remain
important factors. However, brands now also require a host of other capabilities, from technology
and data services, to broader consulting and business transformation.
Furthermore, last year’s ANA report into media rebates in the US has injected a sense of
suspicion over contracts, remuneration and the transparency of agency revenue models. While the
situation has not descended into open hostilities, it has contributed to a growing sense of friction in
the pitching process.
NOT FOR THE FAINT-HEARTED
Pitching has always been an art for a particular type of personality – and certainly not for the faint-
hearted.
Bill Merrick joined the industry over 30 years ago, subsequently experiencing life on both sides of
the fence, as worldwide managing director at Ogilvy & Mather and marketing director for Compaq
Computer. Now as UK and EMEA managing director of consultancy TrinityP3, Merrick recalls his
“horror” at the conduct of marketers and agencies during pitches.
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“It takes youth and enthusiasm to want to work on [pitches] in the agencies, and the greed of the
owners to want to win them,” he says. “And, to be honest, I haven’t really seen a fundamental
change in all that time.”
“No longer is it good enough to be able to mount a sharp-looking presentation in London or New
York and think, ‘That’ll do’”
PHD Worldwide executive vice president Hilary Jeffrey, who played a leading role in the network’s
successful VW pitch, agrees that new business has always been a testing discipline, and one
determined by the quirks and complexities of the brands themselves. She recalls a Nike review
called soon after the Millennium, which – even in those pre-mobile and social days – was as
“extensive, thorough and detailed” as contemporary pitches.
According to Jeffrey, all major media pitches of modern times have incorporated five consistent
strands: savings delivery, strategic excellence, tools and technology, contractual compliance and
chemistry. Those five areas have “always mattered”, she says, even if the proof of competency in
data and technology have become more prominent in the past few years.
However, the most significant change of late has been the “explosion” in scale, admits Jeffrey: “No
longer is it good enough to be able to mount a sharp-looking presentation in London or New York
and think, ‘That’ll do.’ The expectation is that you will go through meetings in several continents
and cover 50-plus topics.
“You need armies of people. It’s equivalent to the effort required to run the business.”
VW Group: global pitch demanded 80 meetings across three continents, over a 17-month period
THREE TYPES OF PITCHES
International pitches today fall into three general areas, says MEC’s global head of business
development, Hamish Davies.
Many brands continue to search for a general, full-service planning and buying partner, while
increasing numbers of pitches count as full-service planning and buying ‘plus’, with added digital
business transformation consultancy services. A third, and rapidly growing, category is seeing
clients “compartmentalise” briefs into six or seven “lots”, with agencies able to pitch for the entire
business, or select particular areas of expertise.
Furthermore, most pitches can be divided into two over-arching categories: those looking for a
reduction in media costs, and those seeking improvements to marketing processes. “It’s quite
obvious when you pick up a brief, whether it’s a cost-driven thing, or trying to do things better,”
adds Davies.
The choice of pitch consultant – much complained about, even if agencies tacitly acknowledge
their usefulness in professionalising reviews – is also telling. The sight of Ebiquity’s name on an
RFI is a tell-tale sign than the advertiser is looking to strip out costs; in comparison, companies like
ID Comms and MediaSense specialise in more transformative pitches. No one consultancy, says
an agency executive, is “particularly good at both”.
Then comes the most dreaded part of the pitch for many: never-ending RFI data entry. New
business teams spend days, weeks and weekends filling out interminably long questionnaires and
spreadsheets, demands which unanimously raise the hackles of agency staff, and are almost
certainly ignored by clients once completed.
“I would advise clients to take a long, hard look at what they really want out of a partner, and then
work with a good consultant to focus on the bits they really want,” says Davies. “Why not just ask
the stuff that is mission-critical to moving your business forward? Focus is good.”
POOR PITCH PLANNING
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Once the RFIs have been returned, and the pitch is in full swing, expectations of a swift and
disciplined process are often dashed by poor organisation on the part of the client.
The introduction of procurement departments has, by and large, helped to ensure suppliers are
found in an orderly fashion, but chaos is a troublingly common companion in the pitch process.
The primary issue, says TrinityP3’s Merrick, is that too many marketers are looking to swap
agencies for the “wrong reasons”. Once the pitch begins, many swiftly realise they must readjust
the process, he claims: “Figure out what your business plan is, make sure it is properly written
down, make sure the plan is agreed by all component sections of the C-suite, that the commitment
to expenditure and resource is there. Then, and only then, when you have the problem properly
stated, go out and talk to agencies and ask for help in solving them.”
“Who is going to make that decision? You have to agree that right at the beginning. If you try to do
it at the end, then it becomes entirely subjective”
The varying degrees of media expertise within client organisations can also impact the chances of
a successful and smooth pitch.
Some large-scale international advertisers – the likes of Unilever and Procter & Gamble – are
seasoned pitchers, doing so every two or three years, with in-house oversight from scores of ex-
agency employees. Others, including VW, according to sources, are hampered by a “surprising”
lack of deep media knowledge.
It can cause calamitous consequences. Tom Denford, chief strategy officer at ID Comms, says his
business is too often called in to rescue a pitch mid-way through a process, after the advertiser
has encountered internal and external obstacles, often in the form of dozens of business heads
demanding a say in the decision-making.
Johnson & Johnson’s vast global media pitch in 2015, won by IPG Mediabrands’ dedicated J3
unit, was an example of precisely such chaotic pitch planning, claims one source. The client “had
not foreseen the outcomes” of the review, causing it to almost “unravel” further down the line,
according to one agency new business expert.
More than anything else, says Denford, advertisers must leave enough time for preparation: “Multi-
national pitches typically include loads of internal stakeholders across many geographies. They
spend so long trying to align everybody that they run out of time, and simply have to go to market,
and the pitch ends up being a disaster.
“Who is going to make that decision? You have to agree that right at the beginning. If you try to do
it at the end, then it becomes entirely subjective, and subject to political, external pressure.”
Agency new business teams must enter hundreds of spreadsheet cells on RFI documents
‘LESS BULLSHIT, MORE FACT’
If advertisers are guilty of under-preparing for pitches, then agencies stand accused of lacking the
skills increasingly required to take part.
Sean Limbrey, formerly global procurement director in marketing at Bacardi-Martini, and now a
marketing transformation consultant at Flock Associates, argues that international media reviews
have taken on a more rigorous, business-focused guise.
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The terminology used in conversations with distribution and IT partners is entering the advertising
lexicon, he says – demands such as quarterly reviews, auditability and multi-functional steering
committees.
“Rather than being all about great ideas, the client audience has changed to be multi-functional
teams – people from finance and so on – and these people are used to seeing business
processes. It demands clearer transparency on what the hell is going on. What are we spending
our hundreds of millions of dollars on?” says Limbrey.
“Agencies are frightened because they don’t know how they are going to be able to build
governance processes for the new way of working. Less smoke and mirrors, less bullshit, more
fact. That is what they are being asked to deliver, and that makes them very nervous.”
In any debate about media reviews, last year’s report by the US Association of National
Advertisers is rarely far from the conversation. The findings appeared to confirm long-held fears by
marketers that agencies were not always acting in their clients’ best interests, and this has added
a layer of suspicion to the pitching process.
Limbrey claims that recent account reviews have taken place as a result of “divorce moments”,
with “empowered” clients choosing to end relationships. “A whole load of marriages have gone
wrong,” he adds.
ID Comms’ Denford agrees that, post-ANA report, many advertisers have realised they agreed to
“crappy” contracts with agency partners, and have used pitches to “readdress the balance” in their
favour.
“It’s just common sense. If you are a client, and you are talking to three or four agencies, there will
be a point on that timeline where you get this optimum negotiating leverage, with keen agencies
[still engaged in the pitch]. That is the point at which you want to secure terms, when you still have
competitive tension,” he says.
Agencies have a duty, admits PHD’s Jeffrey, to ensure that CMOs and media directors are clear
on how they run their businesses: “Giving enough focus on clients’ understanding and
transparency on how all money is made and bills are paid, I think that has become a topic that 10
years ago didn’t get enough attention.
“There was an assumption clients understood what we were telling them, and, of course, they
didn’t. So there is an onus to ensure they understand what we are saying. We don’t want to do
anything illegal. I think it is fair to say clients didn’t understand this stuff, and now they do.”
GETTING TO KNOW YOU, BETTER
Yet, and despite the obvious challenges, as a means of matching needy clients with expert media
support, the pitch is unlikely to be replaced any time soon.
Some minor changes should be made to secure short-term improvements, not least mid-pitch
client-agency workshop days, where the most relevant personnel from both sides – rather than
executive-heavy pitch teams – can work together to solve problems, and explore the potential of a
longer-term relationship.
The answer for a less turbulent future may also lie in the growing trend for the more
“compartmentalised” pitches, as described by MEC’s Davies.
MasterCard’s $250m global media review, concluded in 2014 and won by Dentsu Aegis Network’s
Carat, was an example of such a focused brief. Participating agencies were set a strategic
challenge, rather than a broader demand for media cost savings or technological assistance. It
resulted in a “relatively simple” pitch process, according to one source.
“If it is a cost-cutting exercise, because they have promised shareholders they will cut costs, make
that front and centre of what you are asking agencies”
A new industry opportunity is opening up, says Flock’s Limbrey, to help brands to clarify what
exactly they need – before calling a pitch. Consultancies are jumping into the space, but agencies
– with their accumulative decades of experiences and breadth of tools – could also assist clients in
the assessment process.
ID Comms’ Denford is an ardent supporter of what he describes as the “fragmentation” of pitch
scope, with “more progressive” clients examining areas including planning, buying, strategy, data
mobile and retail in isolation, rather than appointing a single agency network to handle the
business end-to-end.
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It is a scenario which excites some agency executives, even if it may not be welcomed by the
agency holding groups, which have long encouraged advertisers to ever-greater levels of
consolidation.
“The business itself is getting more complex. Because we are stretching what we offer as an
agency, client briefs are stretching as well,” says Davies. “Media can start shaping business in a
more fundamental way. I see it as quite exciting. Is it more work? Certainly. But the opportunities
are wider as a result.”
Fundamentally, a greater dose of clarity and honesty will be needed to cure international media
reviews from their existing ills.
PHD’s Jeffrey sums it up from the agency perspective: “We need absolute clarity on what they
want to achieve from it, and not being shy about stating it. If it is a cost-cutting exercise, because
they have promised shareholders they will cut costs, make that front and centre of what you are
asking agencies.
“Don’t wrap it up in all the other sophisticated questions to make it look like you are a smart
marketer.”
If clients are to secure the agencies of their dreams – essentially businesses with the functionality
of a German automotive production line, imbued with world class creative processes – then this
change of approach cannot come soon enough.
Accenture challengesmedia-buying agencies
16 March 2017
LONDON: Accenture, the global professional services firm, is working on helping its clients set up
their own in-house, digital media-buying capabilities in a move that will be seen as a threat to
media agencies.
The company's digital arm, Accenture Interactive, is already in talks with clients and the initiative
follows well-publicised concerns about programmatic trading, transparency and fraud in the digital
supply chain.
Joy Bhattacharya, Accenture Interactive's UK and Ireland Managing Director, revealed the plan at
a breakfast briefing organised by Campaign, which reported him saying that there had been "a lot"
of discussions with clients.
"We are having certain discussions with our clients" about "how can we set up in-house trading
desks" for them, he said. "My view would be that's the way you can drive [a] complete level of
transparency."
There has been a growing trend in recent years for management consultancies to buy up
specialist agencies in a bid to help their clients deliver an end-to-end customer experience from
product delivery through to execution.
Accenture Interactive, for example, has acquired ten agencies in the fields of digital, design, user
experience and creative services, including Karmarama, one of the UK's largest independent ad
agencies.
Bhattacharya told attendees at the Campaign event that Accenture Interactive isn't planning on
getting involved in media-buying itself, but is keen to manage every other aspect of the media and
marketing process for its clients.
"That's a space we think our clients should own," he said, in reference to media-buying. "We would
like to help our clients build that capability in-house and drive complete transparency in that
process … We'll set it up for them, we’ll help our clients man it and whatever that is required."
However, some industry observers believe it is just a matter of time before the major professional
services firms start to consider moving into media-buying themselves.
Julie Langley, a partner at Results International, an M&A and fundraising advisory firm, told
Adweek that Accenture's acquisition of Karmarama – and Deloitte's takeover of Heat – showed
they are "serious about going after creative".
"Then, quite logically, we should ask ourselves whether they would make the move into media
buying," she said. "Advertising spend represents a $500bn market annually, and that's a big pie to
go after. I'd be surprised if consultancies don't have it in their sights in some shape or form."
Data sourced from Campaign, Adweek; additional content by Warc staff
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BUSINESS/ MARKETING STRATEGY
The ImportanceOf Pre-TailIn The ShoppingJourney
By Josh Ginsberg, Columnist Monday, Aug. 29, 2016
Pre-tail seems to be one of the new buzzwords thrown around the CPG category. But what does it
really mean, and should we be taking it seriously?
Pre-tail refers to the entire journey of the shopper before they reach the point of purchase. Product
research, browsing social channels, building shopping lists, and organizing coupons and rewards
all fall into the pre-tail category.
Various often-quoted studies by Point-of-Purchase Advertising International and The Marketing
Science Institute have said that between 60 and 70% of purchase decisions are made at retail.
Regardless of the exact number, that means at least 30 to 40% of consumers have made their
decisions before they ever walk into a store, which is hardly insignificant.
One would have a hard time arguing that the 30-40% number has not grown with more digital
resources and connectivity than ever before. It is clear that to reach today’s shopper, CPGs must
connect with consumers in a meaningful way before they walk into a brick and mortar.
What are the best ways to get on the shopping list before consumers shop?
Show value by providing a utility
Shoppers are exposed to thousands of brand messages a day and, according to Media Dynamics,
take note of about 150. Instead of yelling at your target shopper with an intrusive message, offer
advice or tools to make their routine easier. These might include recipes, beauty tips, life hacks, or
complete occasion-specific shopping lists, depending on your category. Give them a reason to
interact with your brand early and often, so you’re top of mind while they’re preparing and when
they are ready to purchase.
Go where they are already shopping
Invest in relevant content destinations, commerce-focused social channels, and blogging
environments focused on digital shopping. According to eMarketer, 93% of Pinterest visitors are
seeking ideas for what to buy. Tip: Think of Pinterest as a more organized and curated Google
with a focus on saving content for later.
Offer incentives for trial and loyalty
Focus on driving trial from new households with light offers and rewards to entice purchase.
Instead of pushing out the same paper and digital coupons to the same audiences, try some
variation. Use A/B testing to measure and optimize what is working best for you. Mix in a solid
rotation of receipt verification, retailer loyalty programs and rebates.
Create pre-launch buzz
If you’re introducing a new product, take steps to build excitement and anticipation before it’s
available for sale. Create engaging content offering a sneak peak of the product, invite customers
to sign up to get the product early or receive special offers. Implement influencer marketing by
getting the product into the hands of trusted, third party sources to test and review the product,
sharing their thoughts and recommendations with your target audience.
To return to our original question, yes, pre-tail should be taken seriously, and it’s worth putting real
strategy and budget behind. Not only do the tactics above help sell your product once, they build
brand equity and loyalty, bringing costumers back for repeat purchases in the future.
The new battlegroundfor marketing-led growth
By David Court, Dave Elzinga, Bo Finneman, and Jesko Perrey
The new battleground for marketing-led growth
In the digital age, consumers are always shopping around. New research shows that hooking
them early is the strongest path to growth.
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The CEO of a branded apparel company was troubled and began putting some tough questions to
the marketing department. The company had spent substantially on promotions and loyalty-
rewards programs to drive much-needed growth based on studies showing that targeting current
consumers with marketing investments offered the highest return. Yet sales results were
disappointing, and an alarming number of customers were drifting away after their initial
purchases. They were often going to a rival with a different marketing approach, one that deployed
social media to lure shoppers to its website, where—even the chief marketing officer had to
admit—creative interactions were attracting new consumers to consider the rival’s brand.
If you’re the CEO of, say, a consumer-products company—or one in banking, travel, autos, or
other categories where it’s easy for your consumers to compare products—you may be finding
yourself similarly perplexed, and with reason. Powerful new currents are disrupting established
patterns of behavior. And consumers, including those you may have thought loyal, are considering
someone else’s offerings more often than you realize. With top-line growth at the top of every
CEO’s agenda, cracking the code of consumer behavior is more critical than ever.
Since 2009, McKinsey has studied the emergence of consumer decision journeys (CDJs)—the
often irregular paths consumers take as they move from brand awareness through to purchase
and loyalty—as a critical lever to driving top-line growth (Exhibit 1). Like the apparel company
described above, many have responded to nonlinear consumer behavior by doubling down on
customer-retention and loyalty programs. Selling more to consumers who are already buying
seems a dependable, low-risk, and potentially quick way to boost sales growth. Recent research
shows a 26 percent increase in loyalty-program memberships between 2013 and 2015.
Evidence has begun emerging, however, that consumer bonds with many brands is
simultaneously slipping, with active engagement in those same loyalty programs falling by two
percentage points and 58 percent of loyalty members not using the programs for which they are
signed up. We see such data as an important signal that new technologies and greater choice are
changing how consumers are thinking and acting across their consumer journeys. As one
executive puts it, “In the digital world, your consumers can’t help but shop around.” The past few
years have seen exponential growth in tools that have made researching and purchasing products
online vastly easier. An explosion of mobile shopping apps that showcase options, simplify pricing,
compare product specifications, and facilitate peer reviews is making it possible to size up brands
effortlessly. In addition, social media lets consumers know exactly what their friends are buying
and what they like and don’t like about those purchases. The sheer weight of all this encourages
even your best consumers to shop around and changes paradigms that marketers have counted
on for years.
To better understand the magnitude of change in consumer behavior, we turned to our CDJ
database, which now covers more than 125,000 consumers, shopping for more than 350 brands.
The numbers tell a startling story. Of the 30 categories we researched, only 3 were loyalty driven,
with consumers predominantly making the same brand choices from one purchase to the next
rather than shopping around. In the other 27 categories, consumers exhibited strong shopping
tendencies
The elusiveness of loyalty suggests marketers need to place more emphasis on the moments
when consumers are initially considering which products or services to buy. They’ll need a fine-
tuned understanding of who those increasingly fickle consumers are, what triggers them to shop,
and how best to enter what’s known as the initial consideration set. And of course, once a brand is
in a consumer’s consideration set, marketers will still need to fend off competitors as they attempt
to dislodge it during a round of active evaluation, thus increasing the odds of converting shoppers
at the moment of purchase.
Would you like to learn more about our Marketing & Sales Practice?Visit our Branding page
Your new ‘shop-around’ consumers
We sought further to understand the extent to which shopping led to either a repurchase or,
alternatively, a switch to another brand. Within the 27 categories where shopping around was
dominant, we divided consumers into three groups based on what the data said about their buying
behavior. Loyalists were those who remained faithful to the last brand they purchased without
considering other choices. Vulnerable repurchasers gave in to the urge to shop around and
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considered other brands at least briefly, but ended up returning to the fold. Switchers took the next
step and purchased another brand.
What surprised us was not only how ephemeral loyalty is, but also how often consumers switched
brands once they decided to shop. In the categories where we examined purchase behavior, only
13 percent of consumers were loyalists. A full 87 percent of consumers, in other words, were
shopping around. A portion of this group—the vulnerable repurchasers, who represented 29
percent of all consumers studied—ultimately didn’t change brands. But the remainder, comprising
58 percent of our sample, became switchers. Incumbent brands held their own just 42 percent of
the time (Exhibit 3).
Digging deeper, we discovered just how vital it is to be included in the set of brands that first come
to a consumer’s mind when he or she is triggered to make a purchase decision. These brands in
the initial consideration set were more than two times as likely to be purchased as were brands
considered only later in the decision journey. (Downstream consideration might take place, for
example, when a buyer performs a more thorough comparison of products using online tools or
evaluates products like televisions in a retail store.) Overall, 69 percent of the brands purchased
by consumers who switched brands were part of their initial consideration set when they started
shopping.
We’re not suggesting that marketers ignore other parts of the consumer decision journey.
Providing quality and service, or rewarding your most loyal customers during the postpurchase
experience, remains important. After all, as we have noted, 42 percent of purchases are still made
by consumers who return to their incumbent brand and are responsive to repurchasing incentives.
But investing too much of your marketing dollars in loyalty is risky when today’s shop-around
environment means it’s easy to lose consumers faster than you add new ones. Instead,
companies that hope to move the growth needle need more focus on innovative programs for the
87 percent of consumers out there who are likely to look beyond their current brand.
The link between initial consideration and growth
In a world where most categories are shopping driven, consideration and growth should be
strongly correlated—and they are. We used our survey data to identify how frequently a consumer
put a given brand in his or her initial consideration set versus other brands in the category. We
then divided that consideration measure by the brand’s market share and multiplied it by 100.
This metric, which we call the customer growth indicator (CGI), takes into account the
consideration a brand is able to command, as well as the fact that as a brand’s share grows,
greater consideration is needed to keep up the pace of growth.
For most categories in our research, CGI explains a full 60 to 80 percent of the variation in sales
growth from one purchase to the next (Exhibit 4). The tight linkage between CGI and growth
underscores the importance of initial consideration to a company’s brand strategy and suggests
the new metric should be a useful benchmark for assessing brand health.
In fact, we would suggest that companies augment current metrics to include the CGI as a way to
better understand their potential growth relative to competitors. Today’s recommendation metrics
are a valuable means of understanding whether marketing programs are delivering loyalty and
customer satisfaction, but research has found they can explain only 20–60 percent of variations in
growth.
Further evidence for the rising importance of engaging shoppers early came when we tested the
relationship between growth and total consideration, which includes those brands considered at
the initial shopping trigger point, as well as those added throughout the full shopping process. We
found that initial consideration, isolated as a factor, is generally much better than total
consideration at explaining the variance in near term (within one year) growth. That explanatory
power confirms the need for marketers to win attention for their brands at the very beginning of a
shopper’s journey.1
Marketing to increase consideration
Earning initial consideration goes well beyond getting shoppers to be aware of your brand name.
They also need to have a clear enough sense of its unique benefits and value to include it among
products they plan to evaluate as they begin their journey toward a purchase. While traditionally,
this would have prompted companies to increase spending on television advertising, today many
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Page 22
additional avenues are open to drive shoppers to brands. We’ll focus here on three proactive
moves companies can take to boost initial consideration, drawing some lessons from companies
that have category-leading CGIs.
Resegment the consumers you don’t target
Loyalty-based marketing doubles down on a narrow selection of high-value consumers and then
spends on incentives to retain them. By contrast, marketing geared to growing initial consideration
will exploit a more diverse and wider set of consumer segments, many with limited or perhaps
even no experience with the brand. The name of the game is expanding your window for growth
potential, which is likely to demand quite different approaches for shoppers who have and have
not previously engaged with the brand.
Consider first consumers who have had a positive experience with the brand in the past but have
stopped buying. These “lapsed” customers may hold high potential: our research shows the most
important touchpoint for driving initial consideration is previous interaction with a brand, even if the
interaction happened several years before. So marketers need to look hard at the reasons behind
consumers’ “no repurchase” decisions. In some cases, a better offer may have stolen away a
lapsed customer; in others, lifestyles or habits have changed. Some consumers may never have
connected emotionally to your brand. The task of rekindling initial consideration is likely to look
quite different across consumer groups like these.
For consumers who have had no experience with the brand, the underlying issues can be even
more complex. The consumers in question may not understand the brand, often have never
considered it, and sometimes even harbor feelings that the entire category just isn’t for them. Take
vacation cruises, which some consumers reject out of hand because of preconceived notions
about the cost or nature of the cruising experience. Disney, though, has built on its well-known
brand in entertainment to expand into the vacation-cruise category. With a sharp focus on creating
unique experiences, Disney has attracted consumers who ordinarily would not have considered a
cruise vacation. Disney led its category in our CGI measure and has experienced above-average
growth compared to other cruise providers.
Rebalance marketing budgets, giving more weight to what counts most
While the importance of consideration is hardly a new concept, the need to elevate initial
consideration requires new focus. The basic playbook for driving more of it is straightforward:
deemphasize lower returning marketing investments, many of which may ignore initial
consideration, and spend more to encourage it.
Prune spending on closing the sale and loyalty. Although many marketers emphasize sales
incentives and rewards for loyalty, such initiatives are poor at driving consideration and also can
run into diminishing returns. Airlines, for instance, have been cutting back their loyalty programs
and raising the requirements to achieve elite status for several years because the programs, while
effective, simply became too expensive. Many consumer marketers including packaged-goods,
automotive, and financial-services companies are also taking a deeper look at the true return on
spending from short-term sales incentives and finding significant opportunities to reduce spending.
Actions like these that shift budgets away from lower-productivity spending are critical since they
free up resources for initiatives that drive initial consideration among promising segments. For
example, during the recession that started in 2008, rather than just follow the usual auto-industry
playbook by trying to stop the bleeding with short-term sales incentives, Hyundai used an
innovative marketing campaign to build consideration. It promised to take back cars from
customers who had lost their jobs to drive up consideration among consumers financially unsettled
by the recession. Hyundai had an impressive CGI score, and it also was one of the very few auto
companies to grow at a time when the industry was widely losing ground—a signal of the
importance of initial consideration not only in up markets, but also in tough environments.
Encourage consideration. With funding freed up, you need to begin expanding initial consideration
across two horizons of marketing engagement. First, you’ll need new ways of boosting broad
awareness of your products, services, and brand—likely using major media or social channels—
that give consumers a reason for learning more about your brand. Second, you’ll need an
innovative approach for translating traffic beyond simple awareness to real brand consideration,
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Page 23
often on your website, where there’s an opportunity to convey a fuller picture of the brand’s value
through creative interactions.
Cosmetics firm L’Oreal and financial-services player Charles Schwab suggest how this can be
done. Both used social media and display ads to drive a wide cross section of consumers to their
websites, where they offered them user-friendly tools that encouraged brand interactions. For
L’Oreal, it was teaching consumers the right way to apply makeup; for Charles Schwab, it was a
tool to help learn the basics of financial planning. Gilt Groupe, the online luxury-goods site, took a
different approach. It used broad-reach banners ads, each of which highlighted very low prices for
designer brands. Once the consumer followed the link to the website, he or she learned of the
brand’s innovative business model and value proposition—an inside track on great deals. The goal
in each case has been to use the broad reach of social and digital channels to highlight a unique
offer that persuades consumers to learn more about the brand, thereby building consideration.
Build a pipeline of innovative product, service, and brand news
Creating more innovative and exciting products or variations can grow consideration organically.
News about a brand often is a powerful trigger for new consumers to add it to their initial
consideration set. It also keeps current customers engaged. While the news must of course be
relevant, it can range from announcements about new products or features to messages that
position products creatively to new types of consumers who don’t have the brand in their
consideration set. Credit-card marketers, for instance, often design new product offerings that spur
current and new consumers to reevaluate preferences. For example, Bank of America’s
BankAmericard Better Balance Rewards credit card, Capital One’s Quicksilver card, Citi’s Double
Cash card, and the Discover It card have all promoted innovations that increase the likelihood of
consideration by rewarding consumers for card usage in new and differentiated ways.
The CGI leaders in our database have a tradition of building buzz with brand news as part of an
integrated plan. Consider Apple, which earns high CGI scores and has outgrown competitors by
offering product innovation and a differentiated consumer experience. It has long used product
news on innovations to stoke the interest of shoppers who then place the brand in their initial
consideration set.
Every company we know is sweating out efforts to increase revenue from their brands. Earning a
spot in consumer’ highly valuable initial consideration sets has never been more crucial. Measures
like the initial consideration index can help companies understand how their brands stack up
against those of competitors while offering a way to track progress as they encourage consumers
to consider their brands first.
None of this, of course, diminishes the need for a well-orchestrated program across the consumer
decision journey, including staying in the mix during active evaluation, converting sales at the
moment of purchase, and ensuring loyalty and retention. Yet in a world where market noise will
inevitably increase, initial consideration has emerged as marketing’s most critical battleground.
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Page 24
After Election Surprise,MarketersRethink How to Study Consumers
Signs were piled up in a Hillary Clinton campaign office in Columbia, S.C., before that state’s
primary. For marketers, the results of the presidential election threw into question “the rules of
market research,” traditionally rooted in surveys, interviews and discussions with focus groups in
controlled settings.
TRAVIS DOVE FOR THE NEW YORK TIMES By SAPNA MAHESHWARI NOVEMBER 14, 2016
The presidential race was not far from the minds of executives from America’s biggest brands and
advertising agencies last month in Orlando, Fla., at the annual conference held by the Association
of National Advertisers. The industry leaders had traveled from cities like New York, Chicago and
San Francisco, and any political conversation seemed to be premised on the assumption that
Hillary Clinton would win.
There was some talk about how to best market to Donald J. Trump’s supporters after Nov. 8 and
debate about what a potential Trump media organization might look like. Many were aghast that
the race was close at all, criticizing aspects of Mrs. Clinton’s branding and messaging for holding
her back in what they thought should have a no-brainer for voters.
So when Mr. Trump won the election last week, an industry that prides itself on always knowing
what motivates and excites the American public was in a state of shock. Marketers now find
themselves asking serious questions about how they study consumers, use data and quantify the
value of facts — questions about the fundamental nature of their business.
Advertisers, like many others, “may have found ourselves in bubbles of our own making,” said
Rishad Tobaccowala, chief strategist for the Publicis Groupe.
Sarah Hofstetter, the chief executive of the digital agency 360i, said the disconnect between Mr.
Trump’s win and the predictions from polls and forecasters threw into question “the rules of market
research,” traditionally rooted in surveys, interviews and discussions with focus groups in
controlled settings.
That information should now be supplemented with “social listening” on Twitter, Reddit and other
parts of the internet, and behavioral data including what people are searching for online, said Ms.
Hofstetter, whose agency has worked with brands like Oscar Mayer and Toyota.
“It’s a wake-up call,” she said. “One data set is not going to give you the full picture, because with
people, what people say is not always what they think or what they do, whether intentional or not.”
At the same time, advertisers are prepared for a new period of second-guessing any customer
data, whether it has been gathered internally or supplied by the brands they work with. Some of
Babelfish Articles Oct 2016-Mar 2017 21-3-17
Page 25
that is rooted in recognizing the one-sided nature of the world they experienced on Facebook and
Twitter during the election.
“In a world of social and filtered media, we are not getting enough signals that we might be wrong,”
Mr. Tobaccowala said. “All marketers must actually look for evidence and actually search out why
they may not be right.”
Rob Schwartz, chief executive of TBWAChiatDay New York, said: “There’s going to be scrutiny
on data and a big demand from clients saying, ‘Yes, there’s data, and what do we really know?
Who’s been to Kansas to understand what they’re consuming in Kansas, and is it the same in
Nebraska? And don’t just Google it.’”
Some marketers have been left wondering if facts and reason matter less than they expected — a
counterintuitive discovery in the age of information.
Wendy Clark, the chief executive of DDB North America and a former Coca-Cola marketing
executive, said the election showed “facts are somewhat negotiable.” Ms. Clark spent some time
working with Mrs. Clinton’s campaign last year, a rumor confirmed last month when an email she
wrote about the importance of Mrs. Clinton’s logo was disclosed by WikiLeaks.
“Facts are sort of, ‘I might take them or I might not,’” she said. “They’re certainly discretionary now,
so there is that notion as a marketer and advertiser of understanding we live in a postfactual
democracy.”
Mr. Tobaccowala remarked that “emotion brings people out, reason probably doesn’t.”
“You had a candidate who was more experienced and probably had a résumé better than anyone
to be president of the United States defeated by a candidate with a résumé who is least likely to
be president of the United States,” he said. “One spoke to reason and the other spoke to emotion.”
Mr. Schwartz said he saw that reflected in how Mr. Trump was able to fashion himself as the
protagonist of a David and Goliath story, appealing to those looking for an “outsider” to “fix the
system,” he said. It was akin to what Bernie Sanders offered voters, he said.
“The story of ‘I’m taking on big government’ was more compelling at this point in history than the
story of, ‘I’m going to keep this thing going and make it incrementally better’ and the story of
experience,” he said. “Sometimes the story of experience can be really soothing for people and
really be the thing that captures people’s imaginations. The Bernie narrative and the Trump
narrative is the same.”
Some see a broader lesson in the rejection of experience by the electorate. Richard Edelman, the
chief executive of the public relations company Edelman, said Mr. Trump’s use of Twitter — which
he often used to forcefully attack Mrs. Clinton and the news media — and reduced reliance on
traditional TV ads showed the power of “peer-to-peer” communication.
“The more effective messaging might be from the mass population as opposed to using celebrities
and using media and academics,” he said.
Ms. Clark said on Thursday that she was eager for people to “lean back into being Americans,”
especially after “the level of dialogue that took place,” a reference to the often ugly nature of the
campaign. She anticipates more ads highlighting values like the importance of diversity as the
nation works to find common ground.
“Brands can shape culture, so I think in that sense brands have a responsibility to represent their
values and talk about them,” Ms. Clark said. “And if you’re an inclusive brand — there’s nothing
more democratic to me than inclusion.”
TRENDS & INNOVATION
How The Blockchain Will Secure YourOnline Identity
Jonathan Chester , CONTRIBUTOR Digital Identity
Have you ever been the victim of identity theft? It is an ugly experience. Calling up credit card
companies to change all your cards and dispute charges. Resetting passwords to all of your
applications. Always worrying whether someone may call up your cell phone provider with your
leaked information to commit a SIM porting hack, meaning they would have access to all of your
Babelfish Articles Oct 2016-Mar 2017 21-3-17
Page 26
text messages. Once someone has access to your texts this is the gateway to getting into many
online services, even if you were being diligent and using two factor authentication.
We increasingly rely on the internet for communicating with friends or family (e.g. Yahoo hack),
staying in contact with professional associates (e.g. Linkedin hack), banking (e.g. JPMorgan
hack), and even confirming credit card purchases for face to face transactions (e.g. Oracle hack).
Our user names, passwords, and personal information are being stored on centralized corporate
servers, many of which remain ripe for the picking, despite the attention on this class of problems
over the last several years. Once your personally identifying information genie is loose, it’s
extraordinarily difficult to put it back in the bottle.
Ideally the only risk you should have when it comes to managing your digital identity is whether or
not your personal systems have been compromised, instead of worrying about every corporation
you’ve ever dealt with in the past. In the offline world, you update your proof of identity every few
years, receiving a drivers license, ID card, or maybe a passport if you travel internationally. When
you go to a club, they check your age on your ID. When purchasing an Amtrak ticket you prove
who you are. You are authenticated and the person who checked your ID immediately forgets your
details.
If a malicious party wanted to compromise your ID, they can not do that by going to a club you
patronized a year ago, as the security guards have long forgotten the information on your ID.
Instead, the malicious agent would need to find you personally out of 7 billion people in the world,
steal your ID from your wallet, or steal enough other information on you to obtain a fake license.
So how do we get from an insecure, centralized information model to a decentralized
authentication model like how we interact in the real world? The answer is a combination of
cryptographic hashing and blockchain technology.
I recently met with Vinny Lingham who is trying to bring the offline model of identity management
into the online world with his company Civic. Civic is a digital identity platform that leverages
Bitcoin’s public blockchain, the very same one that my company, Bitwage, uses to deliver payroll
faster and cheaper to international and remote workers.
Before describing how Civic works, the concept of the cryptographic hash requires a little
explanation for people who don’t work in the IT security or cryptocurrency fields. There are a
variety of hash methods out there, each of which takes variable amounts of data and produces a
small fixed length set of numbers. If you had all of the text for War and Peace, you could apply the
SHA256 hash algorithm and it would return a 64 digit fixed length set of numbers called a
hexadecimal signature. If you changed a single letter in any one of the nearly 600,000 words in
that novel, a new hash would be utterly dissimilar from the original. However, the same set of
characters will always produce the same signature and it is nearly impossible to determine the
original set of characters from the signature. This makes cryptographic hashing a very powerful
tool for services to ensure you know a set of information without the services knowing the actual
information.
How does Civic work? A user signs up to the Civic app, which collects various identifying
information for them. All of that is passed through to either a government agency or a third party
identification verification service depending on the country. Once verified, Civic takes a
cryptographic hash of all the information, inserts the hash into the public blockchain, and then
erases the personal data from their servers. Then when you want to authenticate to use another
service, you share whatever information they ask of you and they can send the information
through Civic’s special sauce algorithm to check it against the hash on the blockchain. Once
authenticated, the service using Civic no longer needs to store your information for identification or
authentication purposes.
While Civic can confirm your identity, because of cryptographic hashing, they don’t actually hold
your identifying information, and that is amazingly powerful. If Civic or any of the companies using
Civic for authentication face an intrusion, all you personal data is safe, since it was never stored
anywhere other than on your device.
Civic’s use of the blockchain takes this one step further. Imagine if Civic itself were compromised
in a similar fashion to what happened to Yahoo. If they were centralized, an intruder could use the
Babelfish Articles Oct 2016-Mar 2017 21-3-17
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hashed information to log into other services relying on the same hashed information for
authentication.
By leveraging a public blockchain, Civic is able to decentralize the hashed information and offer
interoperability. Companies that want to identify or authenticate users can do so without ever
needing the information to pass through Civic’s servers. These companies will just need to
download Civic’s software tools so that they are able to connect individual personal information to
hashes inserted into the blockchain. Now, not only does your personal information never leave
your device, but your hashed data is not centralized anywhere either.
The collecting, hashing, and then discarding of all but the hashes of your personal data permits a
globally distributed digital system to behave in a very similar fashion to the plastic ID card in your
wallet. As long as you can keep your personal devices secure nobody has your ID or personal
information, but you can prove yourself when and where you need to do so.
What about trying to build this infrastructure on top of a permissioned blockchain? Unlike private
blockchains, you can actually find live commercial applications running on top of public blockchain
infrastructures. This is because, unlike private blockchains, anyone is able to innovate on top of
secure public blockchain infrastructure, which significantly lowers the barrier for innovation while
enabling more interoperability between the services on that same blockchain.
This is not to say that permissioned blockchains have no role in the realm of digital identities. I’ve
talked to other startups that are working in this area and the enterprises they are working with are
concerned there may be exposure in using a public blockchain that no one has envisioned yet.
More intriguing than their security concerns are the expanded scope of vision; Civic is focused on
humans, but AI will need identity services soon enough. Make sure to check out my next article
covering these exciting developments.
Five trends the next generationof CMOs need to master
February 17, 2017 by Shiv Gupta and John Marshall
When was the last time you paid attention to, let alone acted on, a marketing message? You’re not
alone. Cord cutting, ad blocking, second-screen multitasking and an average attention span of
eight seconds — now shorter than that of a goldfish — means that being heard isn’t just difficult, it
will soon be close to impossible.
To stay relevant will require moving from renting attention to building loyalty. Yet there is internal
competition to own loyalty. Nearly a quarter of the Fortune 100 now have a chief customer officer.
Chief marketing officers have a clear choice: drive the loyalty agenda across the enterprise or risk
becoming a tactical messaging team pushed below the executive level.
According to MediaPost‘s OMMA, ad recall is just 20 percent of what it was three decades ago.
But even when that message is recalled, it’s not trusted. Edelman’s 2016 Trust Barometer shows
that only 53 percent of people trust what they hear from business. Media is equally distrusted at 49
Modern Marketing Requires Data-Driven Strategies
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  • 1. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 1 Articles #15 Redux Oct 2016 - Mar 2017 Curated by Brian Crotty In a world where it is increasingly difficult to keep up, let alone stay ahead, I am sharing a collection of meaty articles that passed my screens over the last 6 months. I have divided into 6 topics - The first articles in each section are important reading for those who can´t afford to tread water. WTF is a Babelfish? The Hitchhiker's Guide to the Galaxy is a BBC comedy science fiction series created by Douglas Adams. In the show, The Babel fish is small, yellow, leech-like creature. It feeds on brain wave energy, absorbing all unconscious frequencies and if you stick one in your ear, you can instantly understand anything said to you in any form of language. It is a universal translator that neatly crosses the language divide between any species...especially useful when meeting alien cultures! The play off being decoding Digital and Traditional marketing strategy language – so we all are empowered to collaborate and integrate our strategies.
  • 2. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 2 Summary AGENCY BUSINESS MODEL / RISKS ............................................. 4 Why Creative Agencies Need to Think Like Consultants in 2017 ............... 4 The agency of the future is not an agency ................................. 5 Who Will Control Future Of Marketing When It Becomes Digital And Data-Driven? .......................................................................... 7 What You'll Need to Build the Agency of the Future......................... 8 GroupM Builds A House For Tech And Data Expertise, Taps Xaxis CEO Gleason . 10 PwC bulks up as ad agencies face onslaught from professional services giants ......................................................................... 11 Ad Agencies Are Building Out Their Own Consultancies to Better Compete for Digital Dollars.......................................................... 12 Fear and loathing: Are international media pitches spiralling out of control? ......................................................................... 14 Accenture challenges media-buying agencies ............................... 18 BUSINESS / MARKETING STRATEGY ............................................ 19 The Importance Of Pre-Tail In The Shopping Journey........................ 19 The new battleground for marketing-led growth............................. 19 After Election Surprise, Marketers Rethink How to Study Consumers ......... 24 TRENDS & INNOVATION ...................................................... 25 How The Blockchain Will Secure Your Online Identity....................... 25 Five trends the next generation of CMOs need to master.................... 27 Blockchain ripples media waters .......................................... 29 7 Takeaways From Davos 2017 .............................................. 30 Where’s the line? Theme parks aiming to eliminate them.................... 33 Digital trends: how 2016 will inform 2017 ................................ 36 A Guide To The $13.4 Billion Biodesign Industry........................... 39 WTF is Digital Product ................................................... 44 CONNECTION PLANNING / TRENDS ............................................. 54 Respect the Format: Stop Chopping Up Spots to Make 'New' Content .......... 54 The 15- And 30-Second Ad Spots Aren’t Going Anywhere...................... 55 Google Ran Secret Video Ad Experiments and Here's What It Found ........... 56 Consumers need benefits to share data .................................... 57 People aren’t comfortable using virtual assistants like Siri and Alexa in public................................................................... 58 The 3 Cs Of 2017: Content, Commerce, And Customer Experience .............. 59 BBDO video rewind finds need for better mobile optimization............... 60 Shame is Transforming TV as we Know It ................................... 63 Moment marketing is where the magic is ................................... 64 Using the Five Senses to Connect With Consumers During the Holiday Season . 65 Brain bombs for your strategy comms ...................................... 67 DATA CAPTURE, ORGANISATION, VISUALISATION AND PROJECTION.................. 68 The heartbeat of modern marketing: Data activation and personalization .... 68 Google’s DeepMind makes AI program that can learn like a human ............ 71
  • 3. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 3 What Google’s Removal Of Third-Party Pixels On YouTube Means For Marketers 74 New U.K. Surveillance Law Will Have Worldwide Implications................ 77 Podcast: Annalect's Erin Matts Says Data-Driven Creative Is The Next Big Prize.................................................................... 78 Top 10 Hot Artificial Intelligence (AI) Technologies...................... 78 Building an Insights Engine .............................................. 80 How to deliver consumer insight .......................................... 89 How Cadreon’s Arun Kumar Connects The Dots Between Walled Gardens ......... 93 PERSONAL / PROFESSIONAL GROWTH ........................................... 94 Here’s Why I Don’t Bring a Laptop to Meetings............................. 94 After work, is what determines your future! Spend one hour per day doing these 5 things and your life will cange forever!.......................... 95 14 Simple Expectations Great Employees Have of Their Boss................. 98 7 body language tricks that are hard to master but will pay off forever .. 100 The Biggest Secret to Success: Spend at Least 10 Hours a Week Just Thinking ........................................................................ 102 10 Lies You Need to Stop Telling Yourself Immediately.................... 104 10 Things Smart People Won’t Say ........................................ 105 Being a Good Boss is Incredibly Easy, and Incredibly Hard................ 107 The one question you should always ask when investing.................... 112
  • 4. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 4 AGENCY BUSINESS MODEL / RISKS Why Creative Agencies Need to Think Like Consultants in 2017 By Penry Price. Published on January 11, 2017. While consultants are adding creative services, agency giants such as Omnicom are expanding their offerings as well. Credit: Scott Eells/Bloomberg As marketing becomes increasingly driven by data and technology, ad agencies are having to compete for business against a newfound rival: consulting firms like Accenture and Deloitte. While this tension has been brewing for a few years, it's now reaching fever pitch. Deloitte has acquired a dozen creative agencies, while Accenture Digital last year was named the largest and fastest- growing digital agency network. Ad agencies need to respond; what was once a pending threat to their business model is now very real. Look no further than Del Monte Food's hiring of Epsilon, a data-based consultancy, as its U.S. agency of record to see how consultancies are giving traditional agencies a run for their money. CMOs now understand that a data-led strategy -- not creative alone -- is driving top-line growth. Data enables companies to discover customer insights and innovate products accordingly. It's also key to creating an outstanding customer experience that is both individualized and scalable. Converging business models The businesses models of consulting and creative agencies are converging. While consultants, who have deep background in business strategy and enterprise technology, are adding creative agencies to their arsenal of solutions, large ad agencies are expanding their offerings too. Omnicom, for example, created Hearts & Science, an integrated digital agency that uses technology to scale customer relationships. Since its formation this year, it has acquired Proctor & Gamble and AT&T as customers. Agency networks like Publicis Groupe and WPP have also been rolling out their own consulting shops for some time, which can open the door to additional creative revenue and wider margins. Agencies that don't have in-house consulting will need to show that they understand business strategy and the role of technology in marketing to keep pace with consulting firms. Creativity will continue to be essential to marketing success, but it's just a part of the solution businesses need, not the solution. Embracing a data-driven approach Data is a key tool for consultants, and it needs to become one for creative strategists too. In the days of one-size-fits-all marketing, CMOs simply asked, "What's the best way to boost sales?" Raising awareness of the product was typically the answer, and the best tactic was a creative advertising campaign. But brand awareness is not enough today; you need to also create a great customer experience. Marketers have realized this and are now using data to see what entices customers and what doesn't. For agencies, this means embracing the data-driven approach consultants have long championed. Agencies need to provide not only the right product messaging, but also the right marketing tools to drive that message -- and measure the results. That's why Razorfish, a division of Publicis Groupe, partnered with Adobe to build its own digital marketing platform. Investing in technical talent Agencies have an opportunity to diversify their offerings, but they need to overcome several challenges. Talent acquisition continues to be a main hurdle. Agencies don't have the money to hire the personnel to dive into digital and data because resources are tied up in the infrastructure that served the era when TV was still dominant. Although TV still captures over 40% of agency budgets, many agencies were set up for much more and this is limiting how quickly they can respond. As ad spend continues to shift from TV to digital, agencies will need to hire software engineers, designers and analysts that can quickly build tools and drive the customer experience their clients are looking for. This will be especially tricky for publicly traded agencies, who can't easily sell off outdated business units to develop new ones. This TV focus, combined with agencies' personnel- heavy approach to client service, limits their ability to invest in new channels and tools they can offer customers.
  • 5. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 5 The year 2017 will be a turning point for agencies. Those that aren't singularly focused on technology to scale the customer experience may find themselves up for review. Given their expertise in business strategy, consultants have been more successful in acquiring creative talent and companies than vice versa. But agencies have an opportunity to reinvent themselves, and doing so could open up new lines of business. For this to happen, they need to think more like consultants and offer a wide array of technical solutions. That way, they can ward off the consulting firms encroaching on their turf. The agency of the future is not an agency Published on February 2, 2017 Strategist at Freelance “No structure, even an artificial one, enjoys the process of entropy. It is the ultimate fate of everything, and everything resists it.” ― Philip K. Dick In an industry where your capital walks in and out of the door each day, the value you can bring a client all comes down to talent. How can any one company house the talent required to deliver the optimal solution for each business challenge? Briefs are already calling for teams consisting of an infinitely diverse list of specialties. No agency can provide that. Between the Devil and The Deep Blue Sea If the agency outsources, increasing proportions of its budgets are siphoned out of the company to accommodate for this. Over time, this eats away at their margins and they miss their aggressive growth targets. If they try and keep the budget in-house, they are either making do with the talent they have, or they bring talent on to the payroll who may not be needed on a regular basis. Who can tell when change is so fast and random? Entropy doesn’t lend itself to standardisation. In my previous post, I suggested that new models will emerge that are distributed and nodal in nature. The one that excites me the most is a co-operative model of distributed and autonomous specialist networks. Not only does this model better reflect and adjust to the digital networks we communicate with, but there is an incredible potential for a new level of autonomy and mutual prosperity. But what does this look like? And how do you deliver the talent that is needed each and every time? The Hollywood Model
  • 6. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 6 Hollywood provides some reference. Specifically, Ocean’s Eleven and the approach George Clooney takes when he lands a backer for the ultimate casino heist. His solution calls for a crack team of specialists including con men, an explosives expert, a hacker, a pickpocket, and even an acrobat. As an approach to business (rather than casino heists), this is known as the Hollywood Model. Film studios have been using it for years. They keep a core staff at studio HQ and then engage partners and crew with the specific skills required to best execute the film. If you’ve ever been on a TVC shoot, you’ve seen the model in action. The different teams on the shoot may or may not have worked together before, but they all have their role and are specialists at it. With the right coordination, everyone knows how to work with each other and what to do to get the job done and done right. All at once and in parallel. To translate this to the wider agency function would require a formalisation of the many informal professional connections out there into bounded networks of digital, business, creator and communications professionals. There are agencies such as Victors and Spoils that have experimented with crowdsourcing. co: is doing great things with its collective and collaborative approach. But there is potential to go beyond this and the confines of an actual agency and into independent networks. These networks would coalesce into flexible project teams to cooperate on specific projects. Combining skills and resources, they would then disband once the project is complete. Teams could even convene to pitch for retainer style accounts, so the client knows they are receiving a purpose-built team and solution for their business problem. Future Of Work Current technologies (such as Slack, Trello, G-Suite, Dropbox, Xero and myriad other cloud-based SaaS tools) and share spaces distribute these cooperative principals even further, minimising overheads. All you need is a laptop with an internet connection, your skills and these services and your business can be profitable, within a week. Instead of a renovated inner-city warehouse with ping-pong table and bar, you can work from your sunroom at home with your dog at your feet. Given the need to commute daily is no longer required, you can move up the coast and surf every morning and evening without taking on a crippling Sydney mortgage. Only venturing into the city a day or two a week for workshops and meetings. If working from home isn’t your thing, there are new and affordable share space offices cropping up all over the city, like Fishburners, WeWork and Work Club. Here you can work alongside other start-ups and creative professionals collaborating and cross-pollinating ideas and opportunities. Due to the structure of this model, there is no margin; no-one gets the cream. Each specialist in the network receives value. Especially the client. Alternative marketplace There is the potential to create an alternative marketplace. One that will allow specialist experts to apply their skills and talents to projects they want to work on. A market that provides unprecedented freedom and prosperity. Where three (or even two) days work nets you in the vicinity of a full week’s pay at an agency (while still charging the client much less than any agency would). And you won’t be pulling unpaid overtime and weekend work. You could use that spare time to take yoga classes, learn a new language, spend more time with your kids, give your skills to love jobs or pro bono clients, surf, or simply take more projects on to earn more bank. It is entirely up to you. A new ‘agency of the future.’ We are at the crossroads. Either technology slams us headlong into a future, where as knowledge workers we are just cogs in a machine. A machine playing a zero sum game of productivity for holding company profits and share prices. Or even worse: “Being an Uber driver moonlighting as Taskrabbit moonlighting as doggy-masseuse to your nearest branch of the Kardashian Dynasty” Umair Haque
  • 7. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 7 Or we can herald in a new era of digital humanism. As Douglas Rushkoff evangelises, we can re- set the operating system so there is the opportunity for collaboration, co-creation, connection and the preconditions for mutual prosperity. It’s re-directing the promise of the digital economy away from exponential automation and corporate profits, to making it about human potential. Having it work for us, rather than us for it. To have these incredible technologies augment human autonomy rather than replace it. If you are good at what you do and you’re future focussed, you are no doubt being head hunted for a big new role. Don’t take it. Take the leap and bust out on your own. Your skills will be in demand and you will be able to pay the bills. You can freelance while you’re building your brand and network. If you’re an indy doing great work for excellent clients, don’t sell to the global consultancies or holding companies. Don’t take on the golden handcuffs and watch all that equity you built up be destroyed by the growth juggernaut. Small is beautiful. You don’t need scale to take on bigger, more interesting projects. Connect with other like-minded indies and specialists to go up against the incumbents and win the good stuff with a whole new approach. And you still get to do what you love to do, the way you love to do it. We will never have this chance again to create a gig economy worth getting excited about. An alternative market is emerging. A future of work that fosters genuine agency for its participants —  and a whole new take on the agency of the future. Who Will ControlFuture Of MarketingWhen It Becomes DigitalAnd Data- Driven? by Dave Morgan, Featured Contributor Software has been transforming and disrupting advertising for decades, certainly ever since our industry’s technology pioneers like media legend and longtime Group M leader Irwin Gotlieb began writing software to automate media planning and buying in the 1960s. However, for anyone who thought that advertising’s path to a digitized and data-driven future would be a predictable and straight line, it has certainly not met those expectations, particularly in light of the industry’s recent tumult around measurement, environment and control of ad tech. Advertisers and agencies, concerned about the accuracy of digital publishers’ proprietary measurements, have intensified their pressure on large digital marketing players like Facebook and Google to submit to third-party measurements and audits. Brands and agencies fear too much “grading of one’s own homework” by the large, data-driven marketing platforms. Just this week, we’ve seen several of the world’s largest advertisers -- AT&T, Verizon and J&J -- suspend large portions of their ad spend on Google’s YouTube until their concerns over ads appearing within inappropriate content can be satisfied. Media agency Havas helped kick off this row by pulling YouTube spend for its clients in the U.K. All of this parallels – and is related to – a development in the world of advertising technology that’s several years old. We’ve watched the technology backbone of digital advertising — ad-tech companies — continue their roller-coaster evolution from serving ad networks, brokers and exchanges to becoming proprietary targeting and optimization platforms. Wall Street might not like these companies -- just look at ad-tech stock prices -- but telecommunications companies do, eager to add value to their subscription and ad businesses to offset the declining profit margins of their commoditized teleco pipes. So, too, for enterprise technology companies like Adobe, Salesforce, Oracle and Neustar, who see ad-tech platforms as doorways into finally automating marketing at the enterprise level. To understand the recent disputes between marketers and digital media suppliers, I would recommend you understand what’s happening in ad tech, and why. Basically, I wouldn’t take the rising issues of measurement transparency and content suitability on face value alone. Yes, those issues are certainly worthy of the attention they are getting. However, there is a much bigger issue that is also playing out. What we are watching are just skirmishes in a long-term battle for control over the future of advertising, marketing and demand generation.
  • 8. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 8 The wrestling over measurement, environment and technology is all about who will get paid when companies need help acquiring customers. To marketers and agencies, the large digital marketing platforms are “walled garden” oligopolies, which are getting stronger by the day. Marketers work with those companies because they are very efficient, delivering scale and results that they can’t find elsewhere. As you would expect, marketers want more competition among these suppliers. They don’t like being so dependent on these platforms. Marketers would prefer to have their own predictive marketing platforms, helping them collect and activate their own proprietary data. Enterprise technology companies want that future as well. They want to be the ones to sell and provision those tech platforms, integrating and packaging them with all of the other systems they sell into the enterprise, from CRM to call center management to finance and sales force automation. Quite naturally, they worry that it will be easier for Google and Facebook to add their own CRM and related systems than it will be for them to replicate Google and Facebook’s digital marketing system. Agencies? They just want to keep themselves in the middle. Whether as consultants, media brokers, system integrators or owners of syndicated data, agencies just want to stay relevant and find ways to reverse their declining margins. How are all these competing agendas likely to play out? I don’t have a crystal ball, but one thing is certain: We will see more and more mergers and acquisitions all across the industry. Verizon bought AOL and is buying Yahoo. AT&T is buying Time Warner. Most of the data-management platforms have been scooped up. Big marketers will start buying ad-tech companies, just as they have acquired delivery and logistics companies in the past. Agencies will buy tech and data, if they can afford it. We haven't yet seen anyone match the scale of WPP's acquisition of 24/7 Real Media and TNS, but certainly the big marketing service players need to get into the proprietary tech and data business, or find themselves on the outside looking in. What You'llNeed to Build the Agency of the Future By Bryan Wiener. Published on September 23, 2016. In 2010, the CEO of an upstart digital agency was asked by the IAB to predict the future of advertising agencies and how they needed to adapt if they wanted to be around 10 years from now. Rather than give a eulogy, the thesis of that talk was that we were on the cusp of the golden
  • 9. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 9 age of advertising and that agencies could and should play a critical role in helping brands transform their marketing. Well flash forward six years, and I'm reprising this talk at IAB Mixx during Advertising Week. Then as now, there was deep pessimism about the future of agencies and a clear implication that agency survival was an open question. Then as now, in spite of things being far from perfect, I am very bullish on the opportunity and need for agencies to play an essential leadership role in the future of marketing. There is both peril and promise for everyone in this industry whether agencies, media owners or brands. In the last six years, consumer behavior has continued to change exponentially, to the point where two of the most dominant platforms -- Instagram and Snapchat -- didn't even exist when I first visited this topic. And yet the infrastructure at most clients and agencies still feels heavily analog. Marketing, as a profession, is in real trouble if we keep letting consumers lap us. We are all competing with anyone and everyone. In addition to challenges, this chaos and disruption breeds opportunity. Competitors -- whether client, agency or media owner -- don't have a manual any more than you do. Agencies can help brands win in this environment of chaos -- if the right ones are chosen, and managed well. While there will undoubtedly be more than one model for success, a lead agency of the future must have at least these three core areas of expertise: Storytelling that earns attention The internet was supposed to be the death of brand advertising by bringing all the world's information to everyone's fingertips in nanoseconds. The opposite has actually turned out to be the case. We are flooded by so much information that our brains are fried, and we are craving an emotional connection to not only the products and services we consume but also the companies that make them. The new challenge is to create an emotional connection with consumers in a digitally led, on-demand environment. Agencies needs to be experts in both ascending and descending storytelling in order to connect to audiences on different platforms in different mood states. Ascending storytelling has its traditional story arc with the climax coming near the end of what has typically been a 30-second spot. But in a thumb-scrolling medium, brands have seconds to earn attention or be swiped away. So flowy narratives simply can't get the job done in areas like social, or mobile-first media. This is where descending storytelling comes in, by ripping a page from a journalist's notebook. They tell you the essential information in the headline and the lead paragraph and they have seconds to convince you to continue reading the rest of the article. And whether you do or not, you have at least gotten the general point of the story. This approach to storytelling must be part of a creative's arsenal as well. Data-driven approach Big data might be the most over-used word in our jargon filled industry. Agencies need to be skilled at uncovering some game-changing insight and then use that insight to create programs using near real-time data. In other words, this can't be survey data from two years ago. This capability also needs to be core across the entire agency -- not just the realm of media and search -- and not outsourced. Digitally led but not digitally limited It's time for a few industry buzzwords to be retired. For example, the antiquated distinctions of digital vs. traditional agencies and the artificial and counter-productive boundaries between paid, earned and owned. The agency of the future must be able to do strategic planning and measurement cross-platform with a channel agnostic business model. The work is just better when we act this way. Operationally, agencies need to have the ability to create different bundles of services based on client needs rather than what services we have to sell. This is not something that can be wallpapered over by making splashy hires or placing a new agency brand name on a collection of individuals put in a room together for a pitch. It's a transformation of the entire company inside and out, top to bottom. This does require some planning in pencil. Consumer behavior will change, platforms will rise and fall and marketing capabilities will emerge as mission critical from nowhere. Annual planning cycles and long term deals are inadvisable.
  • 10. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 10 For these three reasons (and probably a few more), clients should be on the lookout for agencies that are bringing these thoughts and actions, and for agencies whose vision does not get in the way of the client's vision. But before entering into a relationship, it's critical for marketers to look in the mirror to unlock the most success. There is a saying in the business that clients over the long run "get the work they deserve." Smart marketers greatly increase their chances of breakthrough work through co-creation of their agency ecosystem, clarified roles and responsibilities and selection of agencies that are adaptable enough to lead and succeed in a constantly evolving world. The future will be messy but bright for the winner and deadly for the losers. Marketers and agencies that adjust their models in partnership will drive tremendous value for their organizations and drive the future of marketing through the chaos. Bryan Wiener is executive chairman of advertising agency 360i. GroupM Builds A House For Tech And Data Expertise,TapsXaxis CEO Gleason by Ryan Joe // Tuesday, November 29th, 2016 – 8:00 am mplatformWPP-owned GroupM said Tuesday it will centralize its tech and data expertise worldwide into a unit called [m]Platform. The division will be helmed by Xaxis CEO Brian Gleason with key executives drawn from Xaxis and across GroupM. “The collective mission of [m]Platform revolves around technology, data and expertise,” Gleason told AdExchanger. “The mission is how to take each of those elements and put them together to provide addressability and accountability across all media.” And by “all media,” Gleason means everything from search to linear TV. [m]Platform’s components include the [m]Core audience platform, which Gleason said is not a data management platform (DMP) and which will, in fact, work with other DMPs. [m]Core is designed to combine data across CRM systems and online channels to build a “privacy-compliant consumer identifier” called [m]ID. “You tie in different events and behaviors, you have different demographics, you can add location, purchase data, and it’ll link with other WPP assets – whether from Wunderman, Kantar or others,” Gleason explained. It also takes into account 650 data sources and data from 50 exchanges. [m]ID fuels the entire [m]Platform system as it enables the 360-degree customer view advertisers are vying for, Gleason said, and it connects the other elements that constitute [m]Platform. Those other components include a media-planning and workflow management tool, an analytics application that combines online and offline campaign data for attribution and optimization and a reporting tool that plunks all that data into a dashboard. Gleason added that [m]Platform has an open architecture so it’s compatible with other marketing tech stacks. The details come two weeks after GroupM said it would split itself into distinct Media Investment and Platform Solutions divisions. DNA From Xaxis, But A Different Business Model Xaxis’ influence on [m]Platform is palpable. In addition to Gleason, Xaxis alumni will fill three key roles. Nicolle Pangis will join as global COO, Bob Hammond will come on as its CTO and Lucas Mentasti will become its LatAm president. And, of course, GroupM's North America CEO, Brian Lesser, previously founded and ran Xaxis as CEO. Xaxis’ tech development staff will also move into the new unit, and will have GroupM [m]Platform titles. Picture a Venn diagram with [m]Platform and GroupM, and Xaxis is the overlap. Naturally, [m]Platform incorporates some of Xaxis’ tech. Those technologies – like DMP Turbine and first-party data capture mechanism Xanadu – will be available to clients that don’t buy media through Xaxis. But the new structure is not simply a case of remaking GroupM in Xaxis' image. For one thing, [m]Platform, described by GroupM as a tech/data shop, doesn’t adopt Xaxis’ business model or its use of undisclosed media costs.
  • 11. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 11 “It’s not a profit center,” Gleason said. “[m]Platform is a tool set.” The language describing [m]Platform’s role in GroupM, however, is similar to that describing Xaxis: GroupM agencies will have access to its tech, but won’t be compelled to use it. “If they feel we provide the best tools in the marketplace, they should use us,” Gleason said. “If there are better tools than what we have to offer, they should offer that to their clients.” And [m]Platform's C-suite is not just a landing pad for Xaxis talent. MediaCom North America CEO Phil Cowdell will be North American president. (Last week’s announcement that he’d head up GroupM’s Platform Services division was just a placeholder.) And Connect CTO Jack Smith will be [m]Platform’s chief strategy officer. Indeed, [m]Platform is way bigger than Xaxis. It will have 5,000 employees and will completely absorb GroupM Connect and GroupM Data and Analytics. (GroupM Connect was set up last year to house all real-time ad buying across search, mobile social and programmatic. Its sudden assimilation may reflect the pressure holding companies face to continually respond to data-driven changes in advertising.) Xaxis will live on, continuing to develop technology and buy and sell media. Several of its technology and business components – like AI decision engine Copilot, native ad platform plista, mobile performance marketing platform Light Reaction and ecom media seller Triad – will remain squarely under the Xaxis umbrella. WPP hasn’t announced Xaxis succession plans yet, though it won’t replace Gleason’s global CEO role. It will instead appoint a global president reporting to Gleason. While Gleason is banking on [m]Platform being live by early next year, the development road map will continue. His team is still working on a universal dashboard tool designed to provide that 360- degree view and an insights tool that can plan campaigns from search to linear TV. By the end of 2017, he hopes to have rolled out [m]Platform globally to all the markets where GroupM participates, and across all its media-buying agencies. “[m]Platform is a significant move because we’re empowering the agency with the best of everything,” Gleason said. “You take our data science team, engineers, the technologies we’re building and [m]ID at the scale we can provide, and you’ll have a huge impact." PwC bulks up as ad agencies face onslaughtfrom professionalservices giants PwC will create a six-person advisory panel to work with Russel Howcroft. Pat Scala Mar 12 2017 by Edmund Tadros Global advertising and marketing firms are being forced to defend their turf as consulting firms look to steal clients, with PwC bringing in more high-profile marketing talent in a focused play aimed at chief marketing officers. PwC will announce this week that it has created a six-person advisory panel to work with former Network Ten executive Russel Howcroft in its newly created CMO Advisory service. In addition to four PwC partners, the firm's CMO advisory panel will include the CEO of industry body the Australian Association of National Advertisers Sunita Gloster and Foxtel's managing director of customer and retail Mark Buckman. The move comes as professional service firms ranging from technology consultants Accenture, rival big four advisory firms Deloitte, EY and KPMG, and even strategy houses Bain and The Boston Consulting Group all make moves aimed at using their digital and data skills to win customer, marketing and brand strategy work away from incumbents in the advertising industry. The remit of PwC's new business is more narrow, and specifically aimed at helping CMOs crunch the numbers to use their existing marketing budget more effectively and to justify growing their budgets. "Clients [say], we need to spend more [on marketing], can you help us construct the arguments, so we can spend more," Mr Howcroft told The Australian Financial Review. "We believe there is a need in the market. It is very difficult for CMOs to know where to point their money." Agency buying spree
  • 12. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 12 The move on the advertising and marketing industry mirrors a similar convergence in the strategy consulting space, and has seen Accenture lead the pack on an agency buying spree. One of the most prominent examples so far has been Accenture's £50 million ($80.9 million) purchase of one of the UK's largest independent advertising agencies Karmarama last year. Rival firms all believe that CMO advisory is a sub-set of their existing consultancy work and vary only in the scale of their ambition. Accenture has said it wants to do any type of work currently done by an advertising agency, whereas Deloitte, EY and KPMG say they are mainly focused on conducting customer, marketing and brand strategy work when it is part of larger performance improvement programs and business transformation projects. Meanwhile, strategy firms, such as Bain and The Boston Consulting Group, have long held marketing-related technology or established digital outfits, and see customer or marketing strategy work as a part of their natural remit. PwC's surprise hire of Mr Howcroft saw the man, well known for his appearances on TV show The Gruen Transfer, become the firm's first chief creative officer. "There is such a thing as return on creativity. There is a commercial return on the basis of doing things in a creative way," he said. Advertising agencies, meanwhile, say they are prepared for the onslaught, believing they are nimble enough to outmanoeuvre the traditionally staid professional services firms. Creativity Chief strategy officer at advertising agency Clemenger BBDO Al Crawford said consultancies were experienced in the data-driven side of adland but less so in the creative side. "The big question is where will the consultancies stop, in the end?" he said. "They are good at the automatic side of things, but what about the creative? That is what makes consumers want to buy into a brand, the emotional side of it. Do the consultancies want to go there?" Mr Crawford said the Clemenger group already had its new rivals covered on the technical side, and carried out work across the marketing and branding process. He added that every agency in the sprawling group also had a dedicated strategy department. "Our purpose is to provide the most compelling commercial content, no matter what the distribution channel," he said. "We have gnarly analytics and CRM capabilities and will do everything from econometric modelling and propensity to purchase stuff. For example we run a lot of the CRM capabilities for Telstra." Chief data scientist at advertising firm WPP AUNZ Rob Pardini, meanwhile, said advertising specialists needed to take their powerful new foes seriously. However he believed they were well equipped to not only defend, but also attack professional services firms in their traditional areas of strength. He said that through subsidiaries like Kantar Vermeer, AKQA, VML and 1 Kent Street, WPP had a proven track record of providing high-level strategic advisory services. "What's happened is the boundaries have massively blurred between consultancies and agencies. The consultancies with their advisory are overlapping with the agencies ... They are another powerful potential competitor," Mr Pardini said. "All too often in the past, strategic work by consultants has failed to translate into changes to marketing operations and execution. Knowing is only half the solution. Execution is the other half, and that's where WPP AUNZ excels, because we can deliver both." See Wednesday's accounting & consulting page for how Accenture, Bain, BCG, Deloitte, EY and KPMG want to transform adworld. Ad Agencies Are Building Out Their Own Consultanciesto Better Compete for Digital Dollars Traditional shops are fighting back By David Gianatasio Traditional ad agencies are adjusting to the new normal.
  • 13. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 13 As consulting and IT firms continue to acquire agencies and add marketing services, traditional advertising companies have begun to fight back by launching practices to provide business- transformation counsel to help clients more effectively compete for customer dollars in the digital age. “Marketers are keen to remain innovative and future-focused, so having consulting solutions available helps to ensure they’re always one step ahead of disruption stemming from technology and consumer change,” says Richard Hartell, global president of transformation at Publicis Media. The media arm of the Paris-based holding company is taking a two-pronged approach. Its $3.7- billion acquisition of Sapient in 2014 added digital design and related services to the fold. Two years later, Publicis Media launched its global business transformation practice. As an example of tangible value, Hartell points to the group’s new “Predictor” study, an analysis of how AI, evolving payment methods and seamless shopping will impact banking, cars, consumer electronics and other sectors in the next five years. He also cites work for an undisclosed client that involved “an in-depth audience insights project with a panel of over 200 participants.” "Helping clients transform is core to what we do, not a new experiment." -Saneel Radia, global head of business transformation, R/GA As a result, the client “was better able to understand granular behaviors of millennial consumers within specific sites and across different devices,” he says. “This led the client to invest in new digital channels and change their content strategy for paid social activity.” Though digging deeper into client budgets sounds alluring, experts caution agencies to proceed with care and cultivate a clear understanding of the craft, along with the vision to integrate new disciplines across the enterprise. “Thinking about consulting as merely another service offering seems a bit opportunistic,” says Lee Maicon, chief strategy officer at 360i, where he leads a dedicated 50-person practice. Maicon joined the Dentsu-owned agency in 2010. “That same year,” he says, “we began counseling brands on how to organize and prepare for social media, and that has evolved into broader consulting on marketing design.” At IPG-owned R/GA, Saneel Radia—one of Adweek’s Young Influentials for 2016—leads a similar-size practice, which grew out of the shop’s work with Nike+, and launched as a dedicated unit five years ago. Currently, the team is working with Campbell Soup to identify emerging consumer shopping behaviors and recommend steps the marketer should take to more effectively meet the challenges of an evolving global landscape. "Great agencies have played a large role in the evolution of brands’ business for decades, and that should not be discounted." -Lee Maicon, chief strategy officer at 360i Such an undertaking “isn’t just communications,” he says. “It’s a shift in how you think about data, a shift in how you go to market, a shift in essentially your business model. At its core, your entire value proposition is to help C-suite clients innovate.” Though agencies have made strides in the consultancy arena, some experts believe the ad business isn’t putting any real pressure on the global giants just yet. For example, industry adviser Avi Dan dismisses most agency initiatives focused on business transformation as “usually just a couple of people [on staff] to give the impression that they are ‘beyond advertising.’ I think the so-called trend will continue because agencies are hungry for
  • 14. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 14 added revenue. But these services are bottom feeders—they are not competing with McKinsey or Accenture and will disappear as soon as the agency goes through cuts.” 360i’s Maicon views developments differently. “Traditional consultants are valuable thanks to the myriad analytical frameworks they bring to the table, but tend to have a superficial relationship to the transformative power of creativity to shape client’s businesses, as they lack hands-on experience in this respect,” he says. “Great agencies have played a large role in the evolution of brands’ business for decades, and that should not be discounted. Plus, we move more quickly and cost-efficiently than traditional consultants.” Radia adds, “I believe helping clients transform is core to what we do, not a new experiment. What’s changed are the tools, rigor, consistency and ambition with which we do it.” Fear and loathing: Are internationalmedia pitches spiralling outof control? 15-3-17 by ALEX BROWNSELL A lack of preparation from brands is combining with a sense of exceptionalism from agencies to make the process of pitching for media accounts more difficult. Alex Brownsell reports. “Brutal,” “charmless,” and “soul-destroying” – these are just three of the unfavourable descriptions used by industry sources to sum up Volkswagen Group’s global review of its $3bn media arrangements, which concluded last year. A review which, by all accounts, was by no means the most challenging of recent times. The pitch, eventually won by Omnicom Media Group’s PHD, was certainly epic in its scale: the client demanded that participating agencies attend 80 meetings across three continents, over a 17-month period. And, while certainly one of the largest global media pitches of recent times, its enormity and complexity is symptomatic of clients’ desire to work agencies harder. Some of this up-scaling is inevitable, of course. No longer are media agencies simply being asked to prove planning prowess, buying muscle and international coverage – although all three remain important factors. However, brands now also require a host of other capabilities, from technology and data services, to broader consulting and business transformation. Furthermore, last year’s ANA report into media rebates in the US has injected a sense of suspicion over contracts, remuneration and the transparency of agency revenue models. While the situation has not descended into open hostilities, it has contributed to a growing sense of friction in the pitching process. NOT FOR THE FAINT-HEARTED Pitching has always been an art for a particular type of personality – and certainly not for the faint- hearted. Bill Merrick joined the industry over 30 years ago, subsequently experiencing life on both sides of the fence, as worldwide managing director at Ogilvy & Mather and marketing director for Compaq Computer. Now as UK and EMEA managing director of consultancy TrinityP3, Merrick recalls his “horror” at the conduct of marketers and agencies during pitches.
  • 15. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 15 “It takes youth and enthusiasm to want to work on [pitches] in the agencies, and the greed of the owners to want to win them,” he says. “And, to be honest, I haven’t really seen a fundamental change in all that time.” “No longer is it good enough to be able to mount a sharp-looking presentation in London or New York and think, ‘That’ll do’” PHD Worldwide executive vice president Hilary Jeffrey, who played a leading role in the network’s successful VW pitch, agrees that new business has always been a testing discipline, and one determined by the quirks and complexities of the brands themselves. She recalls a Nike review called soon after the Millennium, which – even in those pre-mobile and social days – was as “extensive, thorough and detailed” as contemporary pitches. According to Jeffrey, all major media pitches of modern times have incorporated five consistent strands: savings delivery, strategic excellence, tools and technology, contractual compliance and chemistry. Those five areas have “always mattered”, she says, even if the proof of competency in data and technology have become more prominent in the past few years. However, the most significant change of late has been the “explosion” in scale, admits Jeffrey: “No longer is it good enough to be able to mount a sharp-looking presentation in London or New York and think, ‘That’ll do.’ The expectation is that you will go through meetings in several continents and cover 50-plus topics. “You need armies of people. It’s equivalent to the effort required to run the business.” VW Group: global pitch demanded 80 meetings across three continents, over a 17-month period THREE TYPES OF PITCHES International pitches today fall into three general areas, says MEC’s global head of business development, Hamish Davies. Many brands continue to search for a general, full-service planning and buying partner, while increasing numbers of pitches count as full-service planning and buying ‘plus’, with added digital business transformation consultancy services. A third, and rapidly growing, category is seeing clients “compartmentalise” briefs into six or seven “lots”, with agencies able to pitch for the entire business, or select particular areas of expertise. Furthermore, most pitches can be divided into two over-arching categories: those looking for a reduction in media costs, and those seeking improvements to marketing processes. “It’s quite obvious when you pick up a brief, whether it’s a cost-driven thing, or trying to do things better,” adds Davies. The choice of pitch consultant – much complained about, even if agencies tacitly acknowledge their usefulness in professionalising reviews – is also telling. The sight of Ebiquity’s name on an RFI is a tell-tale sign than the advertiser is looking to strip out costs; in comparison, companies like ID Comms and MediaSense specialise in more transformative pitches. No one consultancy, says an agency executive, is “particularly good at both”. Then comes the most dreaded part of the pitch for many: never-ending RFI data entry. New business teams spend days, weeks and weekends filling out interminably long questionnaires and spreadsheets, demands which unanimously raise the hackles of agency staff, and are almost certainly ignored by clients once completed. “I would advise clients to take a long, hard look at what they really want out of a partner, and then work with a good consultant to focus on the bits they really want,” says Davies. “Why not just ask the stuff that is mission-critical to moving your business forward? Focus is good.” POOR PITCH PLANNING
  • 16. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 16 Once the RFIs have been returned, and the pitch is in full swing, expectations of a swift and disciplined process are often dashed by poor organisation on the part of the client. The introduction of procurement departments has, by and large, helped to ensure suppliers are found in an orderly fashion, but chaos is a troublingly common companion in the pitch process. The primary issue, says TrinityP3’s Merrick, is that too many marketers are looking to swap agencies for the “wrong reasons”. Once the pitch begins, many swiftly realise they must readjust the process, he claims: “Figure out what your business plan is, make sure it is properly written down, make sure the plan is agreed by all component sections of the C-suite, that the commitment to expenditure and resource is there. Then, and only then, when you have the problem properly stated, go out and talk to agencies and ask for help in solving them.” “Who is going to make that decision? You have to agree that right at the beginning. If you try to do it at the end, then it becomes entirely subjective” The varying degrees of media expertise within client organisations can also impact the chances of a successful and smooth pitch. Some large-scale international advertisers – the likes of Unilever and Procter & Gamble – are seasoned pitchers, doing so every two or three years, with in-house oversight from scores of ex- agency employees. Others, including VW, according to sources, are hampered by a “surprising” lack of deep media knowledge. It can cause calamitous consequences. Tom Denford, chief strategy officer at ID Comms, says his business is too often called in to rescue a pitch mid-way through a process, after the advertiser has encountered internal and external obstacles, often in the form of dozens of business heads demanding a say in the decision-making. Johnson & Johnson’s vast global media pitch in 2015, won by IPG Mediabrands’ dedicated J3 unit, was an example of precisely such chaotic pitch planning, claims one source. The client “had not foreseen the outcomes” of the review, causing it to almost “unravel” further down the line, according to one agency new business expert. More than anything else, says Denford, advertisers must leave enough time for preparation: “Multi- national pitches typically include loads of internal stakeholders across many geographies. They spend so long trying to align everybody that they run out of time, and simply have to go to market, and the pitch ends up being a disaster. “Who is going to make that decision? You have to agree that right at the beginning. If you try to do it at the end, then it becomes entirely subjective, and subject to political, external pressure.” Agency new business teams must enter hundreds of spreadsheet cells on RFI documents ‘LESS BULLSHIT, MORE FACT’ If advertisers are guilty of under-preparing for pitches, then agencies stand accused of lacking the skills increasingly required to take part. Sean Limbrey, formerly global procurement director in marketing at Bacardi-Martini, and now a marketing transformation consultant at Flock Associates, argues that international media reviews have taken on a more rigorous, business-focused guise.
  • 17. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 17 The terminology used in conversations with distribution and IT partners is entering the advertising lexicon, he says – demands such as quarterly reviews, auditability and multi-functional steering committees. “Rather than being all about great ideas, the client audience has changed to be multi-functional teams – people from finance and so on – and these people are used to seeing business processes. It demands clearer transparency on what the hell is going on. What are we spending our hundreds of millions of dollars on?” says Limbrey. “Agencies are frightened because they don’t know how they are going to be able to build governance processes for the new way of working. Less smoke and mirrors, less bullshit, more fact. That is what they are being asked to deliver, and that makes them very nervous.” In any debate about media reviews, last year’s report by the US Association of National Advertisers is rarely far from the conversation. The findings appeared to confirm long-held fears by marketers that agencies were not always acting in their clients’ best interests, and this has added a layer of suspicion to the pitching process. Limbrey claims that recent account reviews have taken place as a result of “divorce moments”, with “empowered” clients choosing to end relationships. “A whole load of marriages have gone wrong,” he adds. ID Comms’ Denford agrees that, post-ANA report, many advertisers have realised they agreed to “crappy” contracts with agency partners, and have used pitches to “readdress the balance” in their favour. “It’s just common sense. If you are a client, and you are talking to three or four agencies, there will be a point on that timeline where you get this optimum negotiating leverage, with keen agencies [still engaged in the pitch]. That is the point at which you want to secure terms, when you still have competitive tension,” he says. Agencies have a duty, admits PHD’s Jeffrey, to ensure that CMOs and media directors are clear on how they run their businesses: “Giving enough focus on clients’ understanding and transparency on how all money is made and bills are paid, I think that has become a topic that 10 years ago didn’t get enough attention. “There was an assumption clients understood what we were telling them, and, of course, they didn’t. So there is an onus to ensure they understand what we are saying. We don’t want to do anything illegal. I think it is fair to say clients didn’t understand this stuff, and now they do.” GETTING TO KNOW YOU, BETTER Yet, and despite the obvious challenges, as a means of matching needy clients with expert media support, the pitch is unlikely to be replaced any time soon. Some minor changes should be made to secure short-term improvements, not least mid-pitch client-agency workshop days, where the most relevant personnel from both sides – rather than executive-heavy pitch teams – can work together to solve problems, and explore the potential of a longer-term relationship. The answer for a less turbulent future may also lie in the growing trend for the more “compartmentalised” pitches, as described by MEC’s Davies. MasterCard’s $250m global media review, concluded in 2014 and won by Dentsu Aegis Network’s Carat, was an example of such a focused brief. Participating agencies were set a strategic challenge, rather than a broader demand for media cost savings or technological assistance. It resulted in a “relatively simple” pitch process, according to one source. “If it is a cost-cutting exercise, because they have promised shareholders they will cut costs, make that front and centre of what you are asking agencies” A new industry opportunity is opening up, says Flock’s Limbrey, to help brands to clarify what exactly they need – before calling a pitch. Consultancies are jumping into the space, but agencies – with their accumulative decades of experiences and breadth of tools – could also assist clients in the assessment process. ID Comms’ Denford is an ardent supporter of what he describes as the “fragmentation” of pitch scope, with “more progressive” clients examining areas including planning, buying, strategy, data mobile and retail in isolation, rather than appointing a single agency network to handle the business end-to-end.
  • 18. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 18 It is a scenario which excites some agency executives, even if it may not be welcomed by the agency holding groups, which have long encouraged advertisers to ever-greater levels of consolidation. “The business itself is getting more complex. Because we are stretching what we offer as an agency, client briefs are stretching as well,” says Davies. “Media can start shaping business in a more fundamental way. I see it as quite exciting. Is it more work? Certainly. But the opportunities are wider as a result.” Fundamentally, a greater dose of clarity and honesty will be needed to cure international media reviews from their existing ills. PHD’s Jeffrey sums it up from the agency perspective: “We need absolute clarity on what they want to achieve from it, and not being shy about stating it. If it is a cost-cutting exercise, because they have promised shareholders they will cut costs, make that front and centre of what you are asking agencies. “Don’t wrap it up in all the other sophisticated questions to make it look like you are a smart marketer.” If clients are to secure the agencies of their dreams – essentially businesses with the functionality of a German automotive production line, imbued with world class creative processes – then this change of approach cannot come soon enough. Accenture challengesmedia-buying agencies 16 March 2017 LONDON: Accenture, the global professional services firm, is working on helping its clients set up their own in-house, digital media-buying capabilities in a move that will be seen as a threat to media agencies. The company's digital arm, Accenture Interactive, is already in talks with clients and the initiative follows well-publicised concerns about programmatic trading, transparency and fraud in the digital supply chain. Joy Bhattacharya, Accenture Interactive's UK and Ireland Managing Director, revealed the plan at a breakfast briefing organised by Campaign, which reported him saying that there had been "a lot" of discussions with clients. "We are having certain discussions with our clients" about "how can we set up in-house trading desks" for them, he said. "My view would be that's the way you can drive [a] complete level of transparency." There has been a growing trend in recent years for management consultancies to buy up specialist agencies in a bid to help their clients deliver an end-to-end customer experience from product delivery through to execution. Accenture Interactive, for example, has acquired ten agencies in the fields of digital, design, user experience and creative services, including Karmarama, one of the UK's largest independent ad agencies. Bhattacharya told attendees at the Campaign event that Accenture Interactive isn't planning on getting involved in media-buying itself, but is keen to manage every other aspect of the media and marketing process for its clients. "That's a space we think our clients should own," he said, in reference to media-buying. "We would like to help our clients build that capability in-house and drive complete transparency in that process … We'll set it up for them, we’ll help our clients man it and whatever that is required." However, some industry observers believe it is just a matter of time before the major professional services firms start to consider moving into media-buying themselves. Julie Langley, a partner at Results International, an M&A and fundraising advisory firm, told Adweek that Accenture's acquisition of Karmarama – and Deloitte's takeover of Heat – showed they are "serious about going after creative". "Then, quite logically, we should ask ourselves whether they would make the move into media buying," she said. "Advertising spend represents a $500bn market annually, and that's a big pie to go after. I'd be surprised if consultancies don't have it in their sights in some shape or form." Data sourced from Campaign, Adweek; additional content by Warc staff
  • 19. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 19 BUSINESS/ MARKETING STRATEGY The ImportanceOf Pre-TailIn The ShoppingJourney By Josh Ginsberg, Columnist Monday, Aug. 29, 2016 Pre-tail seems to be one of the new buzzwords thrown around the CPG category. But what does it really mean, and should we be taking it seriously? Pre-tail refers to the entire journey of the shopper before they reach the point of purchase. Product research, browsing social channels, building shopping lists, and organizing coupons and rewards all fall into the pre-tail category. Various often-quoted studies by Point-of-Purchase Advertising International and The Marketing Science Institute have said that between 60 and 70% of purchase decisions are made at retail. Regardless of the exact number, that means at least 30 to 40% of consumers have made their decisions before they ever walk into a store, which is hardly insignificant. One would have a hard time arguing that the 30-40% number has not grown with more digital resources and connectivity than ever before. It is clear that to reach today’s shopper, CPGs must connect with consumers in a meaningful way before they walk into a brick and mortar. What are the best ways to get on the shopping list before consumers shop? Show value by providing a utility Shoppers are exposed to thousands of brand messages a day and, according to Media Dynamics, take note of about 150. Instead of yelling at your target shopper with an intrusive message, offer advice or tools to make their routine easier. These might include recipes, beauty tips, life hacks, or complete occasion-specific shopping lists, depending on your category. Give them a reason to interact with your brand early and often, so you’re top of mind while they’re preparing and when they are ready to purchase. Go where they are already shopping Invest in relevant content destinations, commerce-focused social channels, and blogging environments focused on digital shopping. According to eMarketer, 93% of Pinterest visitors are seeking ideas for what to buy. Tip: Think of Pinterest as a more organized and curated Google with a focus on saving content for later. Offer incentives for trial and loyalty Focus on driving trial from new households with light offers and rewards to entice purchase. Instead of pushing out the same paper and digital coupons to the same audiences, try some variation. Use A/B testing to measure and optimize what is working best for you. Mix in a solid rotation of receipt verification, retailer loyalty programs and rebates. Create pre-launch buzz If you’re introducing a new product, take steps to build excitement and anticipation before it’s available for sale. Create engaging content offering a sneak peak of the product, invite customers to sign up to get the product early or receive special offers. Implement influencer marketing by getting the product into the hands of trusted, third party sources to test and review the product, sharing their thoughts and recommendations with your target audience. To return to our original question, yes, pre-tail should be taken seriously, and it’s worth putting real strategy and budget behind. Not only do the tactics above help sell your product once, they build brand equity and loyalty, bringing costumers back for repeat purchases in the future. The new battlegroundfor marketing-led growth By David Court, Dave Elzinga, Bo Finneman, and Jesko Perrey The new battleground for marketing-led growth In the digital age, consumers are always shopping around. New research shows that hooking them early is the strongest path to growth.
  • 20. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 20 The CEO of a branded apparel company was troubled and began putting some tough questions to the marketing department. The company had spent substantially on promotions and loyalty- rewards programs to drive much-needed growth based on studies showing that targeting current consumers with marketing investments offered the highest return. Yet sales results were disappointing, and an alarming number of customers were drifting away after their initial purchases. They were often going to a rival with a different marketing approach, one that deployed social media to lure shoppers to its website, where—even the chief marketing officer had to admit—creative interactions were attracting new consumers to consider the rival’s brand. If you’re the CEO of, say, a consumer-products company—or one in banking, travel, autos, or other categories where it’s easy for your consumers to compare products—you may be finding yourself similarly perplexed, and with reason. Powerful new currents are disrupting established patterns of behavior. And consumers, including those you may have thought loyal, are considering someone else’s offerings more often than you realize. With top-line growth at the top of every CEO’s agenda, cracking the code of consumer behavior is more critical than ever. Since 2009, McKinsey has studied the emergence of consumer decision journeys (CDJs)—the often irregular paths consumers take as they move from brand awareness through to purchase and loyalty—as a critical lever to driving top-line growth (Exhibit 1). Like the apparel company described above, many have responded to nonlinear consumer behavior by doubling down on customer-retention and loyalty programs. Selling more to consumers who are already buying seems a dependable, low-risk, and potentially quick way to boost sales growth. Recent research shows a 26 percent increase in loyalty-program memberships between 2013 and 2015. Evidence has begun emerging, however, that consumer bonds with many brands is simultaneously slipping, with active engagement in those same loyalty programs falling by two percentage points and 58 percent of loyalty members not using the programs for which they are signed up. We see such data as an important signal that new technologies and greater choice are changing how consumers are thinking and acting across their consumer journeys. As one executive puts it, “In the digital world, your consumers can’t help but shop around.” The past few years have seen exponential growth in tools that have made researching and purchasing products online vastly easier. An explosion of mobile shopping apps that showcase options, simplify pricing, compare product specifications, and facilitate peer reviews is making it possible to size up brands effortlessly. In addition, social media lets consumers know exactly what their friends are buying and what they like and don’t like about those purchases. The sheer weight of all this encourages even your best consumers to shop around and changes paradigms that marketers have counted on for years. To better understand the magnitude of change in consumer behavior, we turned to our CDJ database, which now covers more than 125,000 consumers, shopping for more than 350 brands. The numbers tell a startling story. Of the 30 categories we researched, only 3 were loyalty driven, with consumers predominantly making the same brand choices from one purchase to the next rather than shopping around. In the other 27 categories, consumers exhibited strong shopping tendencies The elusiveness of loyalty suggests marketers need to place more emphasis on the moments when consumers are initially considering which products or services to buy. They’ll need a fine- tuned understanding of who those increasingly fickle consumers are, what triggers them to shop, and how best to enter what’s known as the initial consideration set. And of course, once a brand is in a consumer’s consideration set, marketers will still need to fend off competitors as they attempt to dislodge it during a round of active evaluation, thus increasing the odds of converting shoppers at the moment of purchase. Would you like to learn more about our Marketing & Sales Practice?Visit our Branding page Your new ‘shop-around’ consumers We sought further to understand the extent to which shopping led to either a repurchase or, alternatively, a switch to another brand. Within the 27 categories where shopping around was dominant, we divided consumers into three groups based on what the data said about their buying behavior. Loyalists were those who remained faithful to the last brand they purchased without considering other choices. Vulnerable repurchasers gave in to the urge to shop around and
  • 21. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 21 considered other brands at least briefly, but ended up returning to the fold. Switchers took the next step and purchased another brand. What surprised us was not only how ephemeral loyalty is, but also how often consumers switched brands once they decided to shop. In the categories where we examined purchase behavior, only 13 percent of consumers were loyalists. A full 87 percent of consumers, in other words, were shopping around. A portion of this group—the vulnerable repurchasers, who represented 29 percent of all consumers studied—ultimately didn’t change brands. But the remainder, comprising 58 percent of our sample, became switchers. Incumbent brands held their own just 42 percent of the time (Exhibit 3). Digging deeper, we discovered just how vital it is to be included in the set of brands that first come to a consumer’s mind when he or she is triggered to make a purchase decision. These brands in the initial consideration set were more than two times as likely to be purchased as were brands considered only later in the decision journey. (Downstream consideration might take place, for example, when a buyer performs a more thorough comparison of products using online tools or evaluates products like televisions in a retail store.) Overall, 69 percent of the brands purchased by consumers who switched brands were part of their initial consideration set when they started shopping. We’re not suggesting that marketers ignore other parts of the consumer decision journey. Providing quality and service, or rewarding your most loyal customers during the postpurchase experience, remains important. After all, as we have noted, 42 percent of purchases are still made by consumers who return to their incumbent brand and are responsive to repurchasing incentives. But investing too much of your marketing dollars in loyalty is risky when today’s shop-around environment means it’s easy to lose consumers faster than you add new ones. Instead, companies that hope to move the growth needle need more focus on innovative programs for the 87 percent of consumers out there who are likely to look beyond their current brand. The link between initial consideration and growth In a world where most categories are shopping driven, consideration and growth should be strongly correlated—and they are. We used our survey data to identify how frequently a consumer put a given brand in his or her initial consideration set versus other brands in the category. We then divided that consideration measure by the brand’s market share and multiplied it by 100. This metric, which we call the customer growth indicator (CGI), takes into account the consideration a brand is able to command, as well as the fact that as a brand’s share grows, greater consideration is needed to keep up the pace of growth. For most categories in our research, CGI explains a full 60 to 80 percent of the variation in sales growth from one purchase to the next (Exhibit 4). The tight linkage between CGI and growth underscores the importance of initial consideration to a company’s brand strategy and suggests the new metric should be a useful benchmark for assessing brand health. In fact, we would suggest that companies augment current metrics to include the CGI as a way to better understand their potential growth relative to competitors. Today’s recommendation metrics are a valuable means of understanding whether marketing programs are delivering loyalty and customer satisfaction, but research has found they can explain only 20–60 percent of variations in growth. Further evidence for the rising importance of engaging shoppers early came when we tested the relationship between growth and total consideration, which includes those brands considered at the initial shopping trigger point, as well as those added throughout the full shopping process. We found that initial consideration, isolated as a factor, is generally much better than total consideration at explaining the variance in near term (within one year) growth. That explanatory power confirms the need for marketers to win attention for their brands at the very beginning of a shopper’s journey.1 Marketing to increase consideration Earning initial consideration goes well beyond getting shoppers to be aware of your brand name. They also need to have a clear enough sense of its unique benefits and value to include it among products they plan to evaluate as they begin their journey toward a purchase. While traditionally, this would have prompted companies to increase spending on television advertising, today many
  • 22. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 22 additional avenues are open to drive shoppers to brands. We’ll focus here on three proactive moves companies can take to boost initial consideration, drawing some lessons from companies that have category-leading CGIs. Resegment the consumers you don’t target Loyalty-based marketing doubles down on a narrow selection of high-value consumers and then spends on incentives to retain them. By contrast, marketing geared to growing initial consideration will exploit a more diverse and wider set of consumer segments, many with limited or perhaps even no experience with the brand. The name of the game is expanding your window for growth potential, which is likely to demand quite different approaches for shoppers who have and have not previously engaged with the brand. Consider first consumers who have had a positive experience with the brand in the past but have stopped buying. These “lapsed” customers may hold high potential: our research shows the most important touchpoint for driving initial consideration is previous interaction with a brand, even if the interaction happened several years before. So marketers need to look hard at the reasons behind consumers’ “no repurchase” decisions. In some cases, a better offer may have stolen away a lapsed customer; in others, lifestyles or habits have changed. Some consumers may never have connected emotionally to your brand. The task of rekindling initial consideration is likely to look quite different across consumer groups like these. For consumers who have had no experience with the brand, the underlying issues can be even more complex. The consumers in question may not understand the brand, often have never considered it, and sometimes even harbor feelings that the entire category just isn’t for them. Take vacation cruises, which some consumers reject out of hand because of preconceived notions about the cost or nature of the cruising experience. Disney, though, has built on its well-known brand in entertainment to expand into the vacation-cruise category. With a sharp focus on creating unique experiences, Disney has attracted consumers who ordinarily would not have considered a cruise vacation. Disney led its category in our CGI measure and has experienced above-average growth compared to other cruise providers. Rebalance marketing budgets, giving more weight to what counts most While the importance of consideration is hardly a new concept, the need to elevate initial consideration requires new focus. The basic playbook for driving more of it is straightforward: deemphasize lower returning marketing investments, many of which may ignore initial consideration, and spend more to encourage it. Prune spending on closing the sale and loyalty. Although many marketers emphasize sales incentives and rewards for loyalty, such initiatives are poor at driving consideration and also can run into diminishing returns. Airlines, for instance, have been cutting back their loyalty programs and raising the requirements to achieve elite status for several years because the programs, while effective, simply became too expensive. Many consumer marketers including packaged-goods, automotive, and financial-services companies are also taking a deeper look at the true return on spending from short-term sales incentives and finding significant opportunities to reduce spending. Actions like these that shift budgets away from lower-productivity spending are critical since they free up resources for initiatives that drive initial consideration among promising segments. For example, during the recession that started in 2008, rather than just follow the usual auto-industry playbook by trying to stop the bleeding with short-term sales incentives, Hyundai used an innovative marketing campaign to build consideration. It promised to take back cars from customers who had lost their jobs to drive up consideration among consumers financially unsettled by the recession. Hyundai had an impressive CGI score, and it also was one of the very few auto companies to grow at a time when the industry was widely losing ground—a signal of the importance of initial consideration not only in up markets, but also in tough environments. Encourage consideration. With funding freed up, you need to begin expanding initial consideration across two horizons of marketing engagement. First, you’ll need new ways of boosting broad awareness of your products, services, and brand—likely using major media or social channels— that give consumers a reason for learning more about your brand. Second, you’ll need an innovative approach for translating traffic beyond simple awareness to real brand consideration,
  • 23. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 23 often on your website, where there’s an opportunity to convey a fuller picture of the brand’s value through creative interactions. Cosmetics firm L’Oreal and financial-services player Charles Schwab suggest how this can be done. Both used social media and display ads to drive a wide cross section of consumers to their websites, where they offered them user-friendly tools that encouraged brand interactions. For L’Oreal, it was teaching consumers the right way to apply makeup; for Charles Schwab, it was a tool to help learn the basics of financial planning. Gilt Groupe, the online luxury-goods site, took a different approach. It used broad-reach banners ads, each of which highlighted very low prices for designer brands. Once the consumer followed the link to the website, he or she learned of the brand’s innovative business model and value proposition—an inside track on great deals. The goal in each case has been to use the broad reach of social and digital channels to highlight a unique offer that persuades consumers to learn more about the brand, thereby building consideration. Build a pipeline of innovative product, service, and brand news Creating more innovative and exciting products or variations can grow consideration organically. News about a brand often is a powerful trigger for new consumers to add it to their initial consideration set. It also keeps current customers engaged. While the news must of course be relevant, it can range from announcements about new products or features to messages that position products creatively to new types of consumers who don’t have the brand in their consideration set. Credit-card marketers, for instance, often design new product offerings that spur current and new consumers to reevaluate preferences. For example, Bank of America’s BankAmericard Better Balance Rewards credit card, Capital One’s Quicksilver card, Citi’s Double Cash card, and the Discover It card have all promoted innovations that increase the likelihood of consideration by rewarding consumers for card usage in new and differentiated ways. The CGI leaders in our database have a tradition of building buzz with brand news as part of an integrated plan. Consider Apple, which earns high CGI scores and has outgrown competitors by offering product innovation and a differentiated consumer experience. It has long used product news on innovations to stoke the interest of shoppers who then place the brand in their initial consideration set. Every company we know is sweating out efforts to increase revenue from their brands. Earning a spot in consumer’ highly valuable initial consideration sets has never been more crucial. Measures like the initial consideration index can help companies understand how their brands stack up against those of competitors while offering a way to track progress as they encourage consumers to consider their brands first. None of this, of course, diminishes the need for a well-orchestrated program across the consumer decision journey, including staying in the mix during active evaluation, converting sales at the moment of purchase, and ensuring loyalty and retention. Yet in a world where market noise will inevitably increase, initial consideration has emerged as marketing’s most critical battleground.
  • 24. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 24 After Election Surprise,MarketersRethink How to Study Consumers Signs were piled up in a Hillary Clinton campaign office in Columbia, S.C., before that state’s primary. For marketers, the results of the presidential election threw into question “the rules of market research,” traditionally rooted in surveys, interviews and discussions with focus groups in controlled settings. TRAVIS DOVE FOR THE NEW YORK TIMES By SAPNA MAHESHWARI NOVEMBER 14, 2016 The presidential race was not far from the minds of executives from America’s biggest brands and advertising agencies last month in Orlando, Fla., at the annual conference held by the Association of National Advertisers. The industry leaders had traveled from cities like New York, Chicago and San Francisco, and any political conversation seemed to be premised on the assumption that Hillary Clinton would win. There was some talk about how to best market to Donald J. Trump’s supporters after Nov. 8 and debate about what a potential Trump media organization might look like. Many were aghast that the race was close at all, criticizing aspects of Mrs. Clinton’s branding and messaging for holding her back in what they thought should have a no-brainer for voters. So when Mr. Trump won the election last week, an industry that prides itself on always knowing what motivates and excites the American public was in a state of shock. Marketers now find themselves asking serious questions about how they study consumers, use data and quantify the value of facts — questions about the fundamental nature of their business. Advertisers, like many others, “may have found ourselves in bubbles of our own making,” said Rishad Tobaccowala, chief strategist for the Publicis Groupe. Sarah Hofstetter, the chief executive of the digital agency 360i, said the disconnect between Mr. Trump’s win and the predictions from polls and forecasters threw into question “the rules of market research,” traditionally rooted in surveys, interviews and discussions with focus groups in controlled settings. That information should now be supplemented with “social listening” on Twitter, Reddit and other parts of the internet, and behavioral data including what people are searching for online, said Ms. Hofstetter, whose agency has worked with brands like Oscar Mayer and Toyota. “It’s a wake-up call,” she said. “One data set is not going to give you the full picture, because with people, what people say is not always what they think or what they do, whether intentional or not.” At the same time, advertisers are prepared for a new period of second-guessing any customer data, whether it has been gathered internally or supplied by the brands they work with. Some of
  • 25. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 25 that is rooted in recognizing the one-sided nature of the world they experienced on Facebook and Twitter during the election. “In a world of social and filtered media, we are not getting enough signals that we might be wrong,” Mr. Tobaccowala said. “All marketers must actually look for evidence and actually search out why they may not be right.” Rob Schwartz, chief executive of TBWAChiatDay New York, said: “There’s going to be scrutiny on data and a big demand from clients saying, ‘Yes, there’s data, and what do we really know? Who’s been to Kansas to understand what they’re consuming in Kansas, and is it the same in Nebraska? And don’t just Google it.’” Some marketers have been left wondering if facts and reason matter less than they expected — a counterintuitive discovery in the age of information. Wendy Clark, the chief executive of DDB North America and a former Coca-Cola marketing executive, said the election showed “facts are somewhat negotiable.” Ms. Clark spent some time working with Mrs. Clinton’s campaign last year, a rumor confirmed last month when an email she wrote about the importance of Mrs. Clinton’s logo was disclosed by WikiLeaks. “Facts are sort of, ‘I might take them or I might not,’” she said. “They’re certainly discretionary now, so there is that notion as a marketer and advertiser of understanding we live in a postfactual democracy.” Mr. Tobaccowala remarked that “emotion brings people out, reason probably doesn’t.” “You had a candidate who was more experienced and probably had a résumé better than anyone to be president of the United States defeated by a candidate with a résumé who is least likely to be president of the United States,” he said. “One spoke to reason and the other spoke to emotion.” Mr. Schwartz said he saw that reflected in how Mr. Trump was able to fashion himself as the protagonist of a David and Goliath story, appealing to those looking for an “outsider” to “fix the system,” he said. It was akin to what Bernie Sanders offered voters, he said. “The story of ‘I’m taking on big government’ was more compelling at this point in history than the story of, ‘I’m going to keep this thing going and make it incrementally better’ and the story of experience,” he said. “Sometimes the story of experience can be really soothing for people and really be the thing that captures people’s imaginations. The Bernie narrative and the Trump narrative is the same.” Some see a broader lesson in the rejection of experience by the electorate. Richard Edelman, the chief executive of the public relations company Edelman, said Mr. Trump’s use of Twitter — which he often used to forcefully attack Mrs. Clinton and the news media — and reduced reliance on traditional TV ads showed the power of “peer-to-peer” communication. “The more effective messaging might be from the mass population as opposed to using celebrities and using media and academics,” he said. Ms. Clark said on Thursday that she was eager for people to “lean back into being Americans,” especially after “the level of dialogue that took place,” a reference to the often ugly nature of the campaign. She anticipates more ads highlighting values like the importance of diversity as the nation works to find common ground. “Brands can shape culture, so I think in that sense brands have a responsibility to represent their values and talk about them,” Ms. Clark said. “And if you’re an inclusive brand — there’s nothing more democratic to me than inclusion.” TRENDS & INNOVATION How The Blockchain Will Secure YourOnline Identity Jonathan Chester , CONTRIBUTOR Digital Identity Have you ever been the victim of identity theft? It is an ugly experience. Calling up credit card companies to change all your cards and dispute charges. Resetting passwords to all of your applications. Always worrying whether someone may call up your cell phone provider with your leaked information to commit a SIM porting hack, meaning they would have access to all of your
  • 26. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 26 text messages. Once someone has access to your texts this is the gateway to getting into many online services, even if you were being diligent and using two factor authentication. We increasingly rely on the internet for communicating with friends or family (e.g. Yahoo hack), staying in contact with professional associates (e.g. Linkedin hack), banking (e.g. JPMorgan hack), and even confirming credit card purchases for face to face transactions (e.g. Oracle hack). Our user names, passwords, and personal information are being stored on centralized corporate servers, many of which remain ripe for the picking, despite the attention on this class of problems over the last several years. Once your personally identifying information genie is loose, it’s extraordinarily difficult to put it back in the bottle. Ideally the only risk you should have when it comes to managing your digital identity is whether or not your personal systems have been compromised, instead of worrying about every corporation you’ve ever dealt with in the past. In the offline world, you update your proof of identity every few years, receiving a drivers license, ID card, or maybe a passport if you travel internationally. When you go to a club, they check your age on your ID. When purchasing an Amtrak ticket you prove who you are. You are authenticated and the person who checked your ID immediately forgets your details. If a malicious party wanted to compromise your ID, they can not do that by going to a club you patronized a year ago, as the security guards have long forgotten the information on your ID. Instead, the malicious agent would need to find you personally out of 7 billion people in the world, steal your ID from your wallet, or steal enough other information on you to obtain a fake license. So how do we get from an insecure, centralized information model to a decentralized authentication model like how we interact in the real world? The answer is a combination of cryptographic hashing and blockchain technology. I recently met with Vinny Lingham who is trying to bring the offline model of identity management into the online world with his company Civic. Civic is a digital identity platform that leverages Bitcoin’s public blockchain, the very same one that my company, Bitwage, uses to deliver payroll faster and cheaper to international and remote workers. Before describing how Civic works, the concept of the cryptographic hash requires a little explanation for people who don’t work in the IT security or cryptocurrency fields. There are a variety of hash methods out there, each of which takes variable amounts of data and produces a small fixed length set of numbers. If you had all of the text for War and Peace, you could apply the SHA256 hash algorithm and it would return a 64 digit fixed length set of numbers called a hexadecimal signature. If you changed a single letter in any one of the nearly 600,000 words in that novel, a new hash would be utterly dissimilar from the original. However, the same set of characters will always produce the same signature and it is nearly impossible to determine the original set of characters from the signature. This makes cryptographic hashing a very powerful tool for services to ensure you know a set of information without the services knowing the actual information. How does Civic work? A user signs up to the Civic app, which collects various identifying information for them. All of that is passed through to either a government agency or a third party identification verification service depending on the country. Once verified, Civic takes a cryptographic hash of all the information, inserts the hash into the public blockchain, and then erases the personal data from their servers. Then when you want to authenticate to use another service, you share whatever information they ask of you and they can send the information through Civic’s special sauce algorithm to check it against the hash on the blockchain. Once authenticated, the service using Civic no longer needs to store your information for identification or authentication purposes. While Civic can confirm your identity, because of cryptographic hashing, they don’t actually hold your identifying information, and that is amazingly powerful. If Civic or any of the companies using Civic for authentication face an intrusion, all you personal data is safe, since it was never stored anywhere other than on your device. Civic’s use of the blockchain takes this one step further. Imagine if Civic itself were compromised in a similar fashion to what happened to Yahoo. If they were centralized, an intruder could use the
  • 27. Babelfish Articles Oct 2016-Mar 2017 21-3-17 Page 27 hashed information to log into other services relying on the same hashed information for authentication. By leveraging a public blockchain, Civic is able to decentralize the hashed information and offer interoperability. Companies that want to identify or authenticate users can do so without ever needing the information to pass through Civic’s servers. These companies will just need to download Civic’s software tools so that they are able to connect individual personal information to hashes inserted into the blockchain. Now, not only does your personal information never leave your device, but your hashed data is not centralized anywhere either. The collecting, hashing, and then discarding of all but the hashes of your personal data permits a globally distributed digital system to behave in a very similar fashion to the plastic ID card in your wallet. As long as you can keep your personal devices secure nobody has your ID or personal information, but you can prove yourself when and where you need to do so. What about trying to build this infrastructure on top of a permissioned blockchain? Unlike private blockchains, you can actually find live commercial applications running on top of public blockchain infrastructures. This is because, unlike private blockchains, anyone is able to innovate on top of secure public blockchain infrastructure, which significantly lowers the barrier for innovation while enabling more interoperability between the services on that same blockchain. This is not to say that permissioned blockchains have no role in the realm of digital identities. I’ve talked to other startups that are working in this area and the enterprises they are working with are concerned there may be exposure in using a public blockchain that no one has envisioned yet. More intriguing than their security concerns are the expanded scope of vision; Civic is focused on humans, but AI will need identity services soon enough. Make sure to check out my next article covering these exciting developments. Five trends the next generationof CMOs need to master February 17, 2017 by Shiv Gupta and John Marshall When was the last time you paid attention to, let alone acted on, a marketing message? You’re not alone. Cord cutting, ad blocking, second-screen multitasking and an average attention span of eight seconds — now shorter than that of a goldfish — means that being heard isn’t just difficult, it will soon be close to impossible. To stay relevant will require moving from renting attention to building loyalty. Yet there is internal competition to own loyalty. Nearly a quarter of the Fortune 100 now have a chief customer officer. Chief marketing officers have a clear choice: drive the loyalty agenda across the enterprise or risk becoming a tactical messaging team pushed below the executive level. According to MediaPost‘s OMMA, ad recall is just 20 percent of what it was three decades ago. But even when that message is recalled, it’s not trusted. Edelman’s 2016 Trust Barometer shows that only 53 percent of people trust what they hear from business. Media is equally distrusted at 49