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Innovation Marketing

5 challenges to consider if innovation is to grow your brand

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By Seb Joseph, News editor

November 14, 2016 | 10 min read

If a marketer is to return real value to their organisation, then innovation is pivotal. Fostering that outlook at a time when companies are under immense pressure to grow is easier said than done so The Drum has pulled together a guide to help overcome those challenges.

Why marketers fear innovation

Rather than rehash the same obstacles that usually come up in an article like this, experts from the industry have been consulted on what they feel are the hardest obstacles to overcome but aren’t always discussed.

From how to scale innovation to understanding the role of agencies in that transition, these issues are no longer be viewed the indifference, hostility and isolation that has stunted previous investments as seen by the emergence of Unilever’s Foundry and John Lewis’ JLabs. It’s why the Institute of Practitioners in Advertising launched an initiative earlier this year to improve tensions between the two, recognising the challenges that come with honouring innovation at a time when many businesses view marketing as a cost centre rather than a route to growth.

The challenge of scaling innovation to make it a worthwhile investment

The challenge of scaling innovation to make it a worthwhile investment

“For Innovation to scale and return real value to an organisation, it has to be more than a pure creative exercise,” explains Lawrence Weber, managing partner for innovation at Karmarama.

“It needs a combination of consultancy, digital and physical product creation skills as well as an openness to different funding models. Very few agencies can do all of those things, so naturally clients are turning to others for help. It’s key though that someone remembers to think about the consumer and that at some point your innovation is going to need those consumers to take notice and pay for it. That way agencies are important in the Innovation process, even if they don’t have full service Innovation skills.”

If that process is to create new routes to market or even new products and services, then marketers and procurement teams need to allow agencies to share in the upside in a meaningful way in return for waiving fee or margin, continued Weber. His counterpart at The Iris Nursery, associate director Matt Ribeiro, agreed with the observation and argued that a perennial aversion to risk on the brand side needs to be overcome or there’s no way innovation will deliver the returns they need it to.

“By definition innovation is about breaking new ground, attempting things that have not been done before using tools and techniques that may not have been developed yet,” Ribeiro adds.

“One of the things we need procurement teams to recognize is that this means outputs may vary, timelines may have to flex and costs have to be ranged. The clients we have the most success with are the ones who have audacious ambition and a healthy appetite for risk.”

The large gap between fact and fiction

creativity

“The Industry is trying it’s best to raise it’s game and continue to retain it’s increasing marginalised place at clients board tables but unfortunately the reality for the vast majority of creative agencies is that they don’t understand the realities of delivering real business change and are not structured in a way to support it,” explains Glyn Britton, chief strategy officer at KBS Albion.

“From when we first opened our doors, 13 years ago, we started from the off working with start ups and have learned through a lot of hard graft, failures and some success stories the key components that are required to give any initiative the best chance to succeed. The key criteria for our most successful work with clients including Vodafone, Camelot, BMW and Compare the Market isn’t about partnerships with incubators or funding related start ups but it is about collaborating in setting a very clear future vision for the brand and business. It revolves around building a small cross disciplinary team made up with people with real experience and a clear mandate from the board to work in an autonomous way and generally avoiding anyone within an organisation with the word ‘Innovation’ in their job title.”

Does the key to unlocking marketing innovation rest beyond the traditional agency model?

innovative ideas

Yes is the answer from Ribeiro. Those brands that push for an alternative approach are “walking the innovation walk” when it comes to ‘lean’ ‘agile’ and ‘start-up’,” he continued. “They’re keen to work more collaboratively”. Recent examples like Coca-Cola’s hybrid agency set-up that roots social media in-house alongside McDonald’s or Malibu’s work with internet of things agency SharpEnd spring to mind when these emerging models are discussed.

“We’d love to see more clients open to new risk and reward models. At the iris Nursery, we are always keen to discuss joint venture models, to ensure both the client and us have skin in the game. When you’re approaching a project with uncertain methodologies and outcomes, I think it can be a good way for both client and agency to show commitment to each other, and the project.

“However, when we start talking about things like shared risk and reward models, it gets lots of nods and murmurs of interest at pitch stage, but when the rubber hits the road they’d still rather pay for time and materials, than invest in a joint venture.”

“The traditional agency model isn’t equipped to deliver true business changing marketing innovation and I would also argue not enough clients also understand what is required either” highlights Britton. We advise our clients that genuine business change takes a minimum of 3 to 5 years and should be focused on some of the most challenging metrics and deliverables’.

Why aren’t there more agencies setting up shop in Silicon Valley?

Apple Watch

It’s no secret that advertisers and management consultants alike have been cosying up to start-ups in San Francisco. So where are the big agency groups? It’s not as simple as it sounds, according to Rose Lewis, the co-founder at Collider, who argued that it isn’t enough to just be there in the valley where it isn’t always close to the client.

There are examples of agencies doing it with venture scouts in the valley, but just having someone in the valley doesn’t promote innovation in the rest of the group,” Lewis continued. “It needs to happen on the ‘shop floor’ at the client facing end. The question is whether agencies have the right skill set to sell what is often big complex tech solutions to their clients.”

Having the right skills could be dependent on whether an agency (or an advertiser) has a venture capitalist in place as is the case at the likes of Coca-Cola and Diageo. While not the only way of bringing in the expertise to cultivate innovation, Iris’ Ribeiro said it is “certainly a good way”.

“At the Iris Nursery, we’re big believers in putting our money where our mouth is,” he continued.

“We invest in start-ups because it helps our credibility with both start-ups and clients. For start-ups, it demonstrates that we’re serious about their business, and aren’t just going to use them to help us win a pitch (believe me, that happens!). And it shows to our clients that we care about the ecosystem, and have a deep understanding of start-ups and start-up culture.”

Should be advertisers be worried about reports that the UK is on the cusp of a mass exodus of innovation post-Brexit?

If you dig beneath the stories of start-ups being enticed to Berlin and Paris, you’ll discover that London is still the easiest place in Europe to start a business and getting funding, according to Karmarama’s Weber. That’s unlikely to change in the short-term he opined, “especially as skilled migrants are also- despite the sabre rattling- unlikely to have their freedom to work restricted”.

The issue then becomes about whether advertisers choose to rein in their commitment to innovation, particularly when it comes to investing in start-ups. While many are still weighing up their options ahead of the Brexit negotiations next year, there are some marketers who already using the Brexit vote as an excuse not to go down the riskier, more innovative route as Iris can attest.

Well, we have had our first client actively cite Brexit for having to constrain their innovation agenda,” revealed Rebeiro. “Hopefully one swallow won’t make a summer, but I think it’d be naïve to think that Brexit won’t have any impact.”

It’s a thought not lost on Lewis, who backs the country’s tech scene to continue to thrive despite the gloom of the Brexit cloud.

“The only fact we can take from Brexit is that we have no idea how it will affect the startup scene, and speculating isn’t going to get us any further,” she said. “What I do believe is that London, and therefore the UK, has key strategic advantages, especially in the marketing and advertising sector. These will remain whether we are in or out of Europe. We own the largest agencies in the world and we’re leaders when it comes to digital advertising and ecommerce.”

Rather than panicking about what may happen, Lewis points out that “our tech powerhouse is already strong and our tax advantages for investors make the UK one of the best places in Europe to set up a business – so I don’t think it will knock the momentum”.

KBS Albion’s Britton also offers are more optimistic view of a post Brexit Britain: “During the recession of 2008, we saw a huge increase in the number of corporate brands looking to invest in different methods of working to help unlock growth. The conditions that a challenging economic climate bring actually support real business change work, it focuses client organisations on the real priorities, encourages lean and experimental approaches and dictates a restrained budgeting approach – all of which help deliver something beyond what an organisation it is current capable of. “

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