Understanding controlled innovation: Brands decoding innovation through a business lens

Commercial gains are often overlooked for creativity when it comes to innovation but advertisers are wising up to the fact that disruption needs direction to flourish.

Start-ups, accelerators and technology firms are traditionally seen as agents of innovation though brands are now starting to get in on the act too. While disruptive ideas have always been key to a successful business, mounting pressure to do more for less is pushing the likes of Unilever, Mondelez and Telefonica to explore how they can make innovation drive their bottom lines rather than secure column inches.

“Having that business edge gives innovation that direction so that it’s not a morass of ‘lets just try new shit’”, said Alex Jenkins, editor of advertising magazine Contagious. Speaking on a panel at Innovation Social’s Innovation Stories event he added: “The biggest change I’ve seen is that [innovation] seems to have moved from a lot of agency-led initiatives to now being led by the brands.”

And yet despite this shift, marketers still have a way to go before they can truly distinguish innovation from invention. Indeed, a key takeaway from the conference was that a lot of innovation gets talked about but doesn’t necessarily do much to move the business forward.

Agencies are key to fostering this mindset with creative shops like DigitasLBi, AMV BBDO and Karmarama adapting their propositions to better articulate to marketers how innovative ideas can improve the core of their businesses. Gone are the days where a walled-off innovation unit or siloed lab impressed big spending brands. Increasingly, marketers expect their agencies to integrate innovation rather than isolate it.

However, it’s easier said than done and needs creatives to get better at managing expectations between start-ups and brands as well as steering strategies around what’s happening now rather than in the far off future. Consequently, the role of the chief innovation officer or innovation team is changing, taking on a more central position to nurture disruptive commercial ideas across all parts of the agency that could potentially be scaled up rather than remain as a prototype.

“It’s frustrating that we spend a lot of time talking to our clients about things that might not be ready for five or six years and yet aren’t always the best solution for them right now,” said AMV BBDO’s chief innovation officer Jonny Spindler. Speaking on the same panel he added. “It comes back to that commercial point. We need to look at what’s the benefit that you can deliver in the short-term and look at the medium and long-term [innovations] in different ways.”

The shift in attitudes toward innovation has elevated the importance of the likes of The Friday Club and Collider, companies built to help start-ups frame their services in real-world business problems for agencies and brands. “Agencies can be very bad at over promising and perhaps not selling exactly what they’re doing,” said Richard Fearn, director of The Friday Club.

“It’s not because they’re evil. It’s because they have their own businesses to run. It’s about setting expectations better where you engage a start-up or a young company that’s incredibly vulnerable and are cognisance of that and work effectively with them,” he added.

It is a thought not lost on the founder of Innovation Social and managing director of Lost Boys Nadya Powell, who highlighted the lack of proof on whether there was one approach to innovation better than the other. “There are lots of different ways of doing [innovation] but I haven’t seen anything written about whether there was any clear winner,” she added.

Finding an approach that best fits their business is key to marketers taking innovative marketing from start-up to scale-up. Unilever and Telefonica have both outlined how they plan to do this in recent months, making a number of internal changes to crystallise what innovation means to them as they look to pivot their marketing around services and away from advertising.

“Brands are going to need to be much more like personal assistants and pop up when people need them,” said Fearn. “That’s the major shift that’s happening in the communications industry when it comes to innovation.”

A potential barrier to this is the talent drain from creative companies to technology firms many advertisers are fearful could stunt their innovation plans. Contagious’ Jenkins said: “If you look at the FTSE 100 around half of the chief executives used to be chief financial officers. There’s a big focus on keeping costs down as a result and that doesn’t always equate to innovation even if it is business focused. I think that’s going to pull a lot of talent out of the ad industry and force them into other places.”

Despite this, AMV BBDO’s Spindler argued that the tussle for talent was one the advertising agency has long been accustomed to way before the emergence of Google and Facebook. “The creative industry has managed to survive through decades of having agencies and not lot losing talent to film studios or TV networks. But I can’t think of anyone that’s gone to work at Google who has actually worked on product. They’ve kind of all gone to Google to work on commission-based ad sales selling YouTube stars and pre-rolls.”

The advertising industry has been quick to talk up the role of innovation in powering the shift to utility-based marketing but the challenge now is channelling that attention so that they aren’t just paying lip service to disruptive thinking.

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