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Advertising Agencies Facing the Digital Revolution NJayr 010510

Advertising Agencies Facing the Digital Revolution NJayr 010510

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Published by: Lex Bradshaw-Zanger on May 05, 2011
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11/15/2012

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1.1. Enhance customization and personalized consumption

The emergence of digital technologies has enabled brands to engage a personalized dialogue

and a concrete relationship with their consumers. Thus, we could observe in the first part of this

project that consumers are increasingly demanding to take a role in the creation of their

products. When consumers are given the opportunity to shape and influence the construction

of their brands, companies develop more chances to increase their customers’ loyalty.

Consumers love their own creations and with the increasing development of digital platforms,

they are demanding to have a word in the creation of the products they will become loyal to.

People want to find their identity through their purchases, and consumption is a massive tool of

identification. According to J. Brewer and F. Trentman (2007, p. 42), “consumption is an act of

discovering and cultivating the shelf.” Therefore, consumers expect from brands that they tell

them which kind of person they are. “Consumers gather around object which define their

identity and become centrepieces of particular routines of sociability,” according to D. Miller &

al. (1998, p. 89). Brands must build on this quest from consumers to find distinction and

difference in the use of their products to enhance customization and personalization.

The development of interactive digital technologies encourages brands to build platforms that

enable people to customize their own products. The idea of customization requires from brands

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that they stop thinking in terms of control and start to open themselves to customers. On this

regard, A.G. Lafley, CEO of Procter & Gamble, quoted in an article from L. Crombie and A.

Simmons (2008), challenges marketers to “stop trying to control their brands and allow

customers to engage with them in creative ways.” Moreover, according to D. Tapscott (2009, p.

79), “the desire is about personalizing and accessorizing, it is more aesthetic than functional.” In

fact, consumers are becoming overused with standardized products and they want products

that are perfectly tailored to their needs.

Companies such as BMW, Converse and Mars have fully embraced the idea of customization

and allow their brands to serve for their consumers’ personal expression. For example,

consumers can draw the exact features, colours, and designs of their Mini Cooper cars and

Converse sneakers. In the case of M&M’s, brides can even serve monogrammed chocolate

candies for their weddings. Nike also pioneers customization since it created its service Nike ID

in 1999. The basic idea of the Nike ID platform is to use technology as a solution to let

consumers customize their own products and experiences.

Customization became one of the key elements of Nike’s strategy that is to shift its perception

from being a sportswear brand to become the enabler of customized and personalized

experience for its consumers. In the blog Buzz Canuck, Nike’s Brand President, Charlie Denson

(2007), explains it in the following words: “customization is a very important part of the way that

consumers interact with anybody or with brands today. We have spent the last 20 years trying

to bundle things, adding value to a purchase or a relationship. And now, it’s almost in reverse,

because you have to unbundle everything if it’s going to become customizable.” Therefore,

Nike’s strategy tends to illustrate the fact that we are leaving an age of controlled and limited

product offering to an age of customization and creative personalization.

The Nike ID platform is the perfect example of brand customization applied to the digital age.

Either on the Nike ID website, on Nike stores, or through Nike ID applications, people can

experience customization in very entertaining ways. Across all these platforms, customers are

given the opportunity to very easily build their own shoes from special sets of colours and

materials. Using the advances in technologies, Nike went further in the interactive experience

and created a mobile service, Nike Photo ID, which enables customers to create their own

customized shoes from pictures of the real world. The service, using MMS technology, identifies

the two dominant colours in a picture, matches them with the ones available from the Nike

Store, and finally generates Nike sneakers inspired from these colours, sending them to the

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user, which can purchase them instantly using a unique Design ID code on the Nike ID website.

See Appendix 2.6.

The power of the case from Nike is that it matches visual technologies, very simple and easy to

use interfaces, with a real customer desire which is to customize their own experiences. Other

examples of brands that created customization platforms include a certain number of luxury

brands, including Zadig & Voltaire, which enables its consumers to customize their own

watches on its interactive website (See Appendix 2.7.), and Longchamp, which offers the

opportunity to its consumers to create their own personalized bags. (See Appendix 2.8.).

The idea of brand customization can also takes much simpler forms. Consumers are looking for

personalization and brands can provide them with additional choices or options to accessorize

their own products. Companies can enhance simple details that will provide a different

experience and develop the feeling of owning truly personalized products. For example, Apple

gives the chance to its consumers to add a personal laser-engraved message at the back of

their iPod for free.

We insisted in the importance of physical and digital experiences in consumers’ choices.

Enhancing customization provides brands with the opportunity to enhance their experience

through interactive or physical platforms. Brands should definitely seek new ways to improve

the customization of their offering and use the opportunities of evolving digital technology to

provide consumers with truly valuable ways to personalize their brand experience.

1.2. Encourage customer innovation and participation

Brands should not only enable consumers to customize and personalize their offering but they

should also open their organization to encourage customer innovation and participation. D.

Tapscott explains in his best-selling book Wikinomics (2006, p. 4) how the “traditional plan and

push mentality is being replaced by an engage and co-create economy.” The collaborative

revolution that D. Tapscott describes impacts companies in much more areas than brand

communications only. It involves changing the way companies do business.

Companies such as P&G and Dell have found that collaboration with customers could be

extremely successful and drive the emergence of powerful innovations. P&G launched a

website dedicated to open-innovation called Connect + Develop, which solicits externally

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developed intellectual property and provides an environment to share knowledge around its

brand. On its website, Procter & Gamble looks for innovation around all areas of the P&G

business, including packaging, design, marketing models, research methods, engineering and

technology. With this platform, P&G uses technology and networks to seek out new ideas for

future product innovations that would both improve its products and services, and benefit the

lives of consumers around the world.

The computing giant Dell recently launched IdeaStorm, an online crowdsourcing platform that

enables consumers to generate ideas about Dell’s products and services. This open platform is

a direct invitation for customers to take ideas into the company, and ultimately challenge the

way Dell does business. Users can post suggestions and recommendations about Dell’s

products and services, and the community of users can vote, so that the most popular ideas

are well visible on the website.

In addition to IdeaStorm, Dell built EmployeeStorm, an internal website, which also enables

employees to share and discuss ideas for Dell’s products, services and business online. These

two platforms have had very successful results for Dell, as IdeaStorm experienced in 2008 more

than 40’000 unique visitors weekly, 8900 ideas submitted and 67’000 comments, while

EmployeeStorm garnered more than 2’700 ideas submitted and 140’000 votes, with

approximately 22 percent of Dell employees visiting the site, according to the agency that built

the two platforms, Cohn Wolfe (2008, see agency website).

Dell and P&G’s examples demonstrate how companies could benefit from the intelligence and

the creative capabilities of their customers. For these two companies, the development of

external collaboration has proven to be a successful path to innovate. Rather than innovating on

their own, these companies have engaged new type of collaborations and models, which

enhance the participation of their consumers. Opening organizations to find new answers for

product development is becoming more relevant in a world where everything is more complex.

Y. Benkler (2006, p. 125), in his book The Wealth of Networks, sums it up extremely well: “the

world is becoming too fast, too complex and too networked for any company to have all the

answers inside.”

Opening the organization is also an ingenious way of predicting and delivering what the market

really needs. In addition, it brings the organization closer to its more passionate and engaged

stakeholders. L. Huston and N. Sakkab (2006) both argue that “connect and develop will

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become the dominant innovation model in the twenty-first century.” They insist on the

decreasing effectiveness of the classical closed innovation model: “for most companies, the

alternative invent-it-ourselves model is a sure path to diminishing returns.” The results of the

Connect + Develop platform for P&G demonstrate the positive effects; according to S. Kuipers

(2009), P&G net profit tripled to $10 billion in 2007, after just a few years of really embracing

open innovation and crowdsourcing.

1.3. Enhance content creation

Brands are given the tools to benefit from the collaboration of people. We noticed how

customers increasingly participate in the customization and personalization of products. People

don’t hesitate in providing ideas and insights to improve brands’ existing products and services,

and as a consequence, brands should also considerate the benefits from customers’ creativity

regarding the creation of content and advertising.

We presented in the first part of this project how the emergence of computing tools and the

access to digital platforms transformed the development of content production and distribution.

The success of the video platform YouTube demonstrates that people are not only attracted by

professional content but also by content generated by amateurs. These conditions present

opportunities for companies that should benefit from the creativity of their consumers.

When the agency Butler, Shine, Stern & Partners pitched Nike’s $10 million Converse account

in 2004, it persuaded Converse executives to outsource the production of their advertising to

their fans. Consumers were rewarded, as the 30 persons whose ads would be selected to play

on TV each would get $10,000, and the brief attracted many fans, which produced massively

great advertising. In addition to providing great quality content for a low cost, Converse’s

external sourcing strategy turn out to be a great way to engage consumers and passionate fans

of the brand. Erick Soderstrom, Converse’s global marketing chief, quoted in an article by D.

Kiley (2005), explained: “our customers tend to be creative, and we’ve given them the biggest

canvas we have to express themselves, our advertising.”

Last year, Doritos decided to encourage its consumers to produce the commercial that would

be aired during the Super Bowl. This decision has been extraordinarily successful for the brand

as it generated many different ideas, and the selected commercial ranked number one in the

USA Today’s Ad Meter panel, which measures the effectiveness of advertising commercials

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during the Super Bowl, while it was competing with advertisements from the best advertising

agencies.

According to E. Bryson & J. Mullman (2009), two journalists from Advertising Age, “Jeff Goodby

and Alex Bogusky had nothing on a cheap crotch joke from two unemployed brothers from

Indiana.” These examples from Converse and Doritos demonstrate that consumers can have

brilliant ideas to express their brands. In addition, enhancing content creation brings precious

results in terms of brand understanding. Heinz, for example, asked its consumers to produce a

commercial for their brand, but the reason was not to spend less money on it but rather to find

out how people really connected with the brand.

The emergence of crowdsourcing can threaten advertising agencies. The costs involved in

these examples are very advantageous for brands. In the case of Doritos, the cost of the TV

commercial was of less than $100. It is legitimate to wonder what justifies spending large

amounts of money on a piece of creation while crowdsourcing advertising can be more effective

and at a lower cost. However, behind any successful commercial, there is a brand. Producing

commercials is easier for brands like Converse and Doritos because these brands are very

recognizable. These brands represent values, experiences, and very concrete moments in

peoples’ mind, which have been possible only thanks to the constant strategic and creative

work of advertising agencies.

Crowdsourcing and consumers’ content creation are opportunities for advertising agencies and

companies to open the creation and the production of some parts of their creative production.

Enhancing consumers’ content creation is also an interesting way to enhance consumers’

engagement and to benefit from their relevant insights.

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