Agencies are branching out. No longer content simply providing creative services to clients, they are placing innovation at the heart of what they do, creating new revenue streams and cultivating environments of creative thinking, with agency staff empowered to take the time and space to develop their own solutions to client problems, using the application of disruptive technology to bring their ideas to life.
Surely one of the most overused terms in the modern marketing industry, innovation is nevertheless a topic that deserves a seat at the table. With agencies under more pressure to deliver in a crowded space, those who cultivate an environment of innovation are reaping rewards – demonstrating an ability to identify a client need and respond to it in the best means possible, by utulising their resources in the best way possible – bringing a new meaning to creative solutions.
Stepping inside the often secretive world of labs, The Drum meets with three agencies in London and New York for whom product innovation has become a key component of their strategy.
Stepping into AMV BBDO’s facilitation lab, home to the company’s creative technologist as well as a host of materials needed to make stuff – a 3D printer, soldering irons, wheels of cables – feels a little like going back to a school product design lab, complete with high stools and a sense of youthful optimism that anything could happen.
‘The Garage’, as it’s affectionately known, is just one component of the company’s strategy for innovation – the physical space enabling the creation of prototypes – bringing to life the ideas created to solve client problems, which could encapsulate everything from data visualisation to everyday consumer gripes.
The XLab, as AMV BBDO calls its product innovation arm, is more than just this quirky room with its WiFi-enabled wellies and other prototypes at various stages of completion.
The ‘X’ stands for experience, the company’s chief technology officer Gregory Roekens tells us. “We often talk about the experience economy and the massive transition that is happening at the moment where we are moving from a service economy to an experience economy – where the value people see is the experience they get from products and services. That, for us, is the new frontier – we aim to create incredible experiences for consumers.”
The model embodies the trend towards agencies creating new revenue streams as makers, rather than simply providing services. The ideas emerging from the lab present new revenue opportunities, not just for clients but for AMV BBDO itself. It’s another way of working, a new dynamic as opposed to the traditional client-agency service relationship.
“Having the leverage to say that [this project] is something we’re talking to a number of different brands about, albeit non competitive ones, is a very different conversation to have with clients,” says AMV BBDO chief executive Ian Pearman.
“We’re quite careful not to disrupt the existing relationship and often we have different people running those conversations to help clients understand that they haven’t already paid for these ideas as part of their contract.”
Clients are always pleasantly surprised by the approach, according to Pearman.
“If nothing else, we get very positive reappraisal from clients who might put us in their advertising box and are very intrigued when we turned up with a product prototype or service concept. There’s no downside to doing it,” he says. “At the very least, clients get a very good impression of the kind of things we’re doing; at best they actually licence our products.”
One of the ways the agency aims to generate new products is through its twice-annual hackathons. These weeklong events pull in ideas from across the company, with the proviso that they must be solving a hypothetical business or consumer problem that could be relevant for some of the agency’s clients.
From an initial raft of around 50 ideas (with staff from any department eligible to submit), five winners are selected to each lead a team through the hack week. “These are made up of multiskilled teams – software engineers, application programmers, industrial designers, makers, producers and strategists,” says Roekens.
“Probably because it’s a product of our agency, a lot of ideas often start with an insight as well, which is very useful. Those people are put together and they have five days to crack it and come up with a prototype.”
At the end of the week, teams must create roadmaps for development and branding to present the idea to agency management using a Dragon’s Den style judging panel. The prize? Not money, but agency time and the space to develop the idea – a well-established approach akin to management policies used by the likes of Google over the years to stimulate creative thinking and develop solutions outside of the day job.
This approach is central to one of the agency’s aims with the hack week – to act as a platform to allow people to develop themselves, with the objective of encouraging staff retention.
Roekens likens it to Tim Berners-Lee being given the space by his boss to develop the world wide web, an act now immortalised in the words scrawled across the top of his scoping document – ‘vague but exciting’.
“Allowing that personal development is very important to us. We feel that it’s highly motivating to try and come up with the next world wide web.”
Pearman says it’s an important focus for the agency as it empowers younger members of staff in particular.
“For us, it’s almost the most important thing about innovation labs – the way it’s open-sourced, inviting anyone to come up with ideas, and the levels of satisfaction that creates, especially within our most junior ranks who are bursting with ideas beyond advertising and love having an outlet. Unleashing their creativity on specific briefs is incredibly effective for retention, and also for attracting top quality new staff.”
Labs naturally require an approach of continuous experimentation and iteration, and Roekens says ideas starting out as a scrawl on a napkin have the potential to become reality.
“You never stop – you’re always prototyping, creating things. Don’t just do one thing and then abandon it. Iterate a lot.”
Part of this process is the creation of a roadmap for development – essential if the prototype is to see the light of day.
One of the ideas to emerge from the agency’s hack weeks, currently in development, is a platform allowing users to broadcast their senses through film by helping them create a story based around the most emotional aspects of the experience – ie when they felt most loved or most thrilled – supported by data generated from the experience.
“When you record film on holiday, for example, the biggest job is to try and edit and create a bit of a story around it, but that’s too much work – you often end up with very long bits of video, which isn’t that thrilling,” says Roekens, explaining that the idea behind the platform initially started with detecting a feeling of love as people visited cities, and evolved to a platform that could be used to capture and bring to life a number of emotional experiences.
Named Sensocast, the platform comprises four different elements – a smartphone app, a wristband which detects emotion through heart rate, a camera and the algorithm that pulls all of the data together in an automatic edited version of a video.
It’s a concept that brings together the trends of self-broadcast and social media sharing, with the increased consumer propensity for experiences. It’s easy to imagine potential tie-ups with any number of travel, auto or FMCG brands looking to tap into the ability to create more engaging user-based content.
The objective of solving a well-trodden consumer problem meanwhile is perhaps best typified by the agency’s prototype for a pair of Wi-Fi-enabled wellies. Designed with a Wi-Fi hotspot and charging dock built in, the boots were created with festivals in mind as they can provide three or four charges for a mobile phone.
The agency is currently in discussion with clients to take the wellies into development, with a particular focus on brands whose target audience includes festival-goers.
The word ‘prototype’ might be enough to make some yawn, but the work R/GA New York’s prototype studio is doing is far from boring.
The team of eight is often working on something new every few weeks, sometimes every few days, spanning industries such as sports, technology and fitness. As the nature of the work is experimental, they’re often forced to keep it top-secret, even from others within the agency, as clients are taking risks with innovations that have never been done before.
The Drum meets with R/GA managing director Marc Maleh as well as Michael ‘Pickles’ Piccuirro and Hana Marie Newman, technical director and senior producer at R/GA’s data visualisation and prototype studio respectively, to discuss the importance of being able to show clients tangible objects instead of just ideas.
Lately, the focus has largely been on hardware and data-driven prototypes, although the studio adapts its approach dependent on industry trends.
“We have this idea that the prototype studio is a prototype, and that we have to be able to change the technologies we’re experts in based on what the industry is doing,” says Maleh.
Going along with the ‘maker’ culture of R/GA, the team is always making an effort to spread its expertise in this space to everyone else at the agency. By giving them the necessary knowledge and tools to create these sorts of prototypes on their own, the studio is then freed up to move on to the next best thing and stay ahead of the curve.
The prototype studio allows R/GA to present its clients with tangible products, even if they aren’t fully fleshed out. According to Maleh, a client is a lot more likely to fund an app they were actually able to experiment with and play around with – even if it’s not fully functional or the design hasn’t been perfected.
“When you’re actually using something that’s working, there’s a switch that’s flipped,” Piccuirro says. “You’re parsing it in a different way and you’re thinking about it in a different way – the requirements that will eventually be needed come out a little sooner.”
The studio recently worked on a prototype for a sports client that was looking to get more people interested in boxing by incorporating analytics and real-time data into matches. To do this, the team installed pressure sensors into boxing gloves that would relay information about the intensity of each punch back to an app in real-time.
“We just bought the gloves but then we wired them up with all these different sensors and made the app they actually connected to,” says Maleh.
From concept to pitch, the process of wiring the gloves and building the app took about six days, and to prove it worked they literally punched the client when they went into the pitch.
The team also came up with other ideas for the app to allow users to track a boxer’s movement, perspiration, and fatigue levels. Although they didn’t build out every feature for the prototype, they designed all as if they were going to.
Newman tells us they decided to make the punching aspect fully functional for the pitch in order to bring the idea to life in the most compelling way. “It makes everything else more vivid,” she says.
Piccuirro adds that it’s not uncommon to go into a pitch with a prototype that either looks polished but doesn’t actually work, or doesn’t look so polished but is up and running.
For example, a few years ago the studio worked on a prototype for Equinox where the company wanted to find a way to broadcast the data a person generates on an exercise bike, like how fast they’re going or what their resistance is, on the walls in front of them.
“In that case the design of what was happening was very simple. It was circles, and the faster you peddle the bigger the circle. The hard part was connecting the bikes to that visualisation,” Piccuirro says.
After a few weeks they were able to build a working prototype where riders could compete head-to-head in a few simple games. Once that was established, they handed it off to the Equinox team at R/GA to complete the final, consumer-facing experience.
An independent agency with its roots in advertising, New York-based Breakfast is now turning its hand to product innovation and prototyping to develop intellectual property.
Commercially, the agency then either licences or sells the IP, or runs with the product itself. It’s a new business model, which founder Andrew Zolty acknowledges is ambitious.
“Our specialty is developing several new, IP-rich pieces of tech every year. That’s like creating a new company every three to four months.
“The challenge is connecting with the variety of brands and businesses interested in picking up that IP after we’ve created it. It’s an interesting experiment at the moment.”
The company focuses on building products that could be leveraged by a variety of brands. Its Instaprint product, a photo booth for Instagram, pulls in and prints hashtagged photos at events. Zolty puts its success down to its exclusivity; it’s only available to rent for high-end events.
In another of the agency’s creations, Instagram photos were projected on a thread screen in real-time as part of a partnership with retail brand Forever 21.
As agencies turn towards making their own products and generating new revenue streams from those products, Zolty believes Breakfast has a creative advantage over competitors.
“If there is anything I have learned over the past few years, it is that agencies are much more creative and diverse than tech companies and startups. An agency is used to thinking about a variety of clients with a diverse set of solutions – they’re working a different part of the brain. It is like a boot camp that most tech startups never go through.
“Where agencies struggle is with how to work it into their business model. It’s not simple, and only worse the larger the company. If they can crack that, and give some internal people some time, then there is great potential.”
Clients are appreciative, according to Zolty, though don’t usually know exactly what they want from this new dynamic.
Words by Katie McQuater and Minda Smiley
This feature also appears in The Drum's relaunch issue, published on 2 September.