Business Quests in the Information Age

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P&G challenges in interactive and digital marketing

Currently attending a great presentation by P&G's Michel Lambert who is telling us about challenges and achievements in interactive and digital marketing. With an experience of 20 years in marketing 9 of which at pan-European level, a strong background in direct marketing, having gone through the great school called P&G and basically a combination of analytical capability and common sense, he's got a contribution to make.

In fact I was lucky to meet him yesterday and I was impressed with the stuff he told me about how P&G is clearly putting a great emphasis on interactive and digital factors throughout their organization, not only in the field of marketing. He clearly gets the transformative power of information technologies in the field of communication as well as in all the processes of any company that wants to be successful in the coming century. Michel does have a good and no-nonsense grasp of the ways in which organizations need to transforms their structure, practices, approaches, ways of assessing success versus failure, recruiting, building relationships... In fact it's quite impressive. While I prefer to respect a degree of confidentiality, I think the presentation of today reflects very well the state of play at P&G's end and this presentation certainly looked like a call to agencies to finally start offering stuff that make business sense rather than just surfing on the latest online fad and fashion.
Michel has a non nonsense approach: "is my brand prospect and brand customer online? Sure. But what do they actually do there? how can I understand them better?". His take is that the consumer, the person that is potentially a customer, the complex individual should be at the center of every single thought people  have about interactive and digital marketing. Platforms, tools, communities, practices, plugins, widgets... will proliferate and they are not really relevant if one does not understand the consumer.

Here are some of the very interesting things Michel shared with the audience today:

1. understanding the on-line behaviour in fine detail: motivations, participation, influencers, self-expression, context rlevancy, how they search, what are their expectations from search, why are they searching, where are they searching...
2. take a more strategic view on things: define roles and make choices. Here key performance indicators are key of course since they eventually feed back into the formulation and execution of strategy
3. how do you actually build valuable and intense relationships with people: the magic of relationship marketing
4. generate content or leverage existing content?
   • we compete for an audience, for the attention of people. So our competitive set includes media and entertainment
   • calls for production of higher quality of conten
   • why don't I invest in mobile marketing? There is no usable content!"
5. Risk taking
   
   • culture of data and measurement. Gut feeling is not really the core strength of P&G: if an ad does not test well in pre-release it will not be aired. Online things are considerably more difficult and require more risk-taking
   • risk taking needs to be managed in new ways and in particular by doing more iterations and working on shorter cycles (one year is an eternity online)
     
6. Cost of reach is too high right now.
   1. There is no way in the world P&G will invest crazy amounts to go full steam ahead with a pan-European campaign without understanding the ROI and how the campaign fits into a broader five-year strategy
   2. clear directions, reach goals and glide path: it may be possible to achieve results in year one simply because there was nothing before, but results in future years come only at the price of having a disciplined approach, not by throwing good money after bad. Back to basics again.
7. the challenge of mass individuals
   • consumers are in control
   • consumers want proximity and a relationship with the brand
   • segmented advertising vs one-size-fits-all even though offering a relationship on an individual basis is not an option because it costs too much and drives ROI down the drain
   • agencies should support brands in achieving mass customization in the relationship with their consumers and prospective customers
8. the sweet spot of balance between tools and approaches
   • starts with the consumer and drive scale from them, not from tools: e.g. in search and keyword advertising if I don't understand my consumer I end up translating ad keywords on a global basis on various platforms!
9. growing importance of retailers as media
   • retailers are increasingly building relationships with consumers  in particular by exploiting their huge databases and by developing content
   • P&G could develop a relationship with retailers considering them as media, but they need to develop missing capabilities in particular to assess the financial value of each contact
   • out of 25 retailers surveyed only one had proper online capabilities to achieve that. Quite frankly this is a shell-shocking picture! That's some potential business quest for someone in the field and with access to the decision makers of top retailers.
10. the need for constant optimization
    • in traditional media: concept test, develop content, pretest, go on air, wait to get results, plan for next year. The cycle is therefore one year. In the digital world, the cycle is much shorter and analytical skills are in very short supply in-house
    • transform pre-test into post-optimization: a complete shift in the mindset and probably one of the biggest challenges P&G is facing
11. integration
    • how do we integrate different platforms and media? how does the mix work together?
    • understand the relative ROI because the budget will not increase; in fact, it might even decrease. If there are more ways to execute a marketing strategy, then the money must be shifted from somewhere. New media need to prove the case and a better collaboration between online and traditional, between search and influence, between interactive and non-interactive... That's a key challenge

Michel also mentioned education of people inside P&G as being a major area of focus today because marketers need to reassess many of the practices they used to consider as world-class. Furthermore the relative differences between markets makes it necessary to have a decentralized approach and in that respect the world is very far from being as flat as Friedman tends to suggest. The world has changed in a major way.

Discovering Efficient Frontier at Ad:Tech

Got to Ad:Tech this morning. The usual suspects are around, but it's always interesting to keep tabs on how the market is evolving. One interesting surprise though: efficient frontier, an interesting SEM company. It's a company whose founder combined his experience with stock market systems (hence the name derived from modern financial theory) with his knowledge of how search engines work to create a platform helping advertisers optimize their marketing investments online. To them an AdWord is like a stock and the words an advertiser buys are very much like stocks in a portfolio. Thus provided one captures sufficient relevant information from search engines and can put them through an algorithmic process, it is conceivably possible to define the risk / return combination of each word and each possible combination of words, which in turn means that it is possible to define an optimal combination of words to be bought. Extremely interesting in my very humble opinion.   

Done!

Well, I guess it's done in the fullest sense of the word: the scrum master training is over and it's been an exciting couple of days with Jeff Sutherland and great participants. There was theory, there were facts (many) and there was also practice, where I got an opportunity to play with nice fun people like Nicolas and to benefit from the creative ideas of Denis, two team mates in a practice sequence that we blew away. One of the missions was to build a four story house of cards (that's where Denis creative use of post-its came in). Great fun. Here are the pictures.

The team's achievement (OK, the fourth level of the house is minimalistic, but on the other hand that was the description of the requirement in the story point, so why go beyond and take the risk of send everything crumbling down?) with Denis trying to hide behind a bottle of water ;-)

Nicolas, who's given us a great tip to properly achieve estimates: make sure you are absolutely clear about what "done" means... and that makes a world of difference both in terms of quality of estimates and in terms of making the interaction between team members really productive and uplifting:

The team's achievement with Laurent at the right hand side in the background. Laurent works for CRP Henri Tudor, Luxembourg's public research center, which means that Luxembourg had some serious proportion of the audience in this session of scrum master (there were 4 people from Vanksen Group, Laurent and myself - I count at least 50% from Luxembourg given the amount of time I spend there!).

Nope, the world ain't flat Mr Friedman

Some good material presented at Media'08 in Australia. Should it come as a surprise that the concept of a flat world is being challenged from "down under"? This presentation is quite interesting in that it challenges a few stereotypes and generally accepted truths and thus puts in perspective a number of success stories that capture so much of our attention these days. No I am not rambling about Facebook and its ridiculous valuation... at least not too much. Enjoy this good stuff!

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WPP building the next generation agency?

Currently attending a panel with Lance Maerov, the SVP Corporate Development (read M&A) for WPP and Trevor Kaufman, the CEO of Schematic, a company they bought last year as part of their string of nearly a hundred acquisitions and investments in 2007. They're talking about how traditional agencies are acquiring and investing to stay relevant in the years ahead. I have a short excerpt in the video below, but here is a summary of interesting points:

• traditional agencies realized sometime last year that they were quickly becoming less relevant and being challenged by new players. Their response was pretty much that of any incumbent: buy what you can't match. The interesting question is how will they actually address the challenge of truly integrating the acquisitions and achieve a fundamental transformation of the DNA of the traditional agency business;
• topic of building the next generation agency seems to be in the CEO's agenda at WPP, which is a good sign and pretty much what is also happening at Publicis;
• choosing for acquisition targets they went first for companies they had been in touch with for a number of years;
• big focus on BRIC countries and North America;
• the traditional agencies are choosing companies for acquisition based on their size and business potential, looking for good management teams in place because they don't have the skills and resources to take over the management of these companies. In Maerov's words "if an entrepreneur thinks that WPP people will start running his business once the acquisition is done, that's a red flag for us and the deal will not happen";
• areas of interest include behavioral targeting, analytics, interactive capabilities, integration between online and off-line spaces;
• in the video below they mention 24/7 Real Media, another acquisition of WPP in 2007, which they said was interesting because it allowed them to optimize campaigns both online and off-line;
• Maerov said despite the purported slow-down of the economy he sees no sign of budgets being reduced and that WPP will pursue an aggressive strategy of acquisitions, something that is confirmed in this article of the NY Post;
• in the same article they mention a recent acquisition through JWT of 75% of Belgian Tagora, positioned as a dialogue marketing agency, with annual sales of 5.3 m$ (3.6 m€ with gross assets of 2.74 m€ end 2007). Could not find the acquisition price, but I would be interested in getting it...

OnMedia_NewNewAgency
Video sent by alexpapa

 

Direct from AlwaysOn OnMedia NYC 2008

Just got to the OnMedia conference and glad to be here for a new edition meeting friendly faces from previous events. Same posh location and already a couple of very striking facts for the marketing & communication industry or at least stuff I found quite interesting and worth commenting:

• found a flyer of IBM Global Services giving their analysis of the momentous changes this industry is undergoing. My take: if IBM GS is around looking for business the changes could be even greater than we think in the field of media & marketing;
• fact from a KPMG survey of 300 CEOs,executives, VCs and insiders of the industry: 64% of them feel between 26% and 50% of media time and spending is to shift to new media;
• fact from the same survey: 91% feel advertisers have not figured out how social media fits into marketing mix;
• search engine marketing voted most effective form of online advertising by 71% of those surveyed;
• large majority see mobile marketing effort increasing within the next couple of years.

Interesting trends don't you think? Of course as a friend of mine keeps saying surveys can be twisted to convey the desired message, so they have to be taken with a pinch of salt, but nevertheless the field is ripe for some momentous changes, all of which may not necessarily be in favor of Google. For example I doubt AdWords will be successful in its current form in the long run... but that's for another post :-)

Great to be in North America

First of all, I want to share with you something that has nothing to do with the post itself, that is my great excitement at being in North America for a week or so. I just landed and the welcome is really professional and at the same time very warm. Went through New York border controls where there was that smiling police woman who delivered a real piece of wisdom when I greeted her asking how she was: "I'm doing pretty good and trying to enjoy every moment 'cause one never knows when one will close their eyes forever".

Anyway starting next Monday I will be attending the AlwaysOn Media NYC conference, which I expect to be great. I am genuinely impressed with the way this conference business is being managed by Tony Perkins & team.

Le Web 3 - questions

Attending a couple of interesting presentations yesterday I got some pretty good food for thought, which translates in a few questions:

1. in a panel (yes that one was interesting) a guy working for Facebook said they knew for sure the online behavior of their users was similar to their offline behavior. I wonder how they actually know: can they really characterize their audience in terms of behavior?
2. a lawyer who was on the same panel claimed that owners of major sites had to choose whether to protect their users or to abide by the laws and help authorities enforce the legislation citing Yahoo in China as an example. I wonder: has he ever heard anything about civic dissent?
3. somebody mentioned the issue of proprietary corporate content being exposed on social networks and the issue of loss of corporate control over intangible assets such as business networks and networks of customers when somebody working for a company changes jobs. I wonder: how will that affect the relationship between workers and their employers? What does it mean in terms of balance of power and in terms of nature of contracts? Will that actually drive more coherence in the workplace where knowledge workers would be held accountable for their results instead of being accountable for contributing time of presence? What does it mean in terms of how intangible assets should be managed? Is this finally the time of flat and distributed organizations attracting talent through other means than compensation?
4. Evan WIlliams of Twitter gave an account of the power of "less is more" in terms of designing a product and user experience. He said they tried to think about what could be eliminated in terms of product features to create something new. I wonder: how many creators of new stuff, how many entrepreneurs, how many technologists will actually try this?
5. Philippe Stark highlighted the importance of having compelling concepts and made a passionate statement about his ultimate belief that whatever we do is worth doing only if it actually contributes to enhancing the power of love and compassion. He also claims that a product ought to be making a point, a political point, to be the material expression of a statement about the world and what drives it. Strange as it may seem, focusing simply on the concepts of love and compassion one can seriously re-thing and re-imagine probably any business activity and in particular the business of marketing and communications. I wonder: how many people will dare trying this?
6. Hans Rosling highlighted the importance of storytelling in helping the world build a finer and more accurate view of the actual state of the world. He showed how important this is in view of the environmental challenge we face and in particular how ridiculous the claim of developed nations is about the fact that China and India are among the most damaging nations in environmental terms. I wonder: what impact will individual stories and person-to-person experience sharing in the future of business? How can that help business be a force in favor of the environment?
7. how sustainable is the current paradigm of social networks and blogging? What is the real economic value and productivity of effort spent in all the stuff currently being done? Is Facebook really worth billions of dollars?

Le Web 3 - impressions

This year's edition is reasonably well organized although sometimes I felt there is room for improvement in the content delivered by speakers and panelists.

A curse of many such events is that panelists spend more time speaking about themselves than discussing the matter of focus and when they do discuss it ends up being a sort of cacophony of parallel monologues without much actual value...  I wonder whether this is a matter of

• moderation of the panel
• definition of the motivations and objectives of panelists during the selection phase
• structuring of the process itself, which may actually benefit from using tools such as De Bono's hats
• ...