Question 10 of 100: Have you created value on your way to the hills?

If you are Swedish, there’s a good chance that as I write you are sitting in your car heading for the hills and your annual winter sports break. If so, consider this. Could it be that your car is worth a little bit more this week, when you and your family squeeze in all your skis, ski boots and dreams of a happy week of sun and snow? According to modern marketing theory it is, because value-in-use means value is created by using the car. It stirs theBANNER_theagencyofthefuture_svmarketing pot.

In our Agency of the Future survey we have tried to understand how CMOs see the future. One aspect I find particularly fascinating is how they think brands will be created in the future.

It seems that just about everyone is convinced that brands will continue to be one of a company’s most important assets. By contrast, there is very little consensus concerning exactly how these brands will be created.

78 percent believe that future brands will be built by co-creation.

One of the concepts we wanted to look more closely at is co-creation. There is no universally accepted definition of co-creation and the border between co-creation and its rival concept, open innovation, is hazy. Despite this lack of clarity, 78 percent of CMOs agree completely or to a great extent that future brands will be “co-created” with their customers. What does this mean?

I am lucky enough to have the fascinating job of developing customer-based business strategies for large corporations. We  use co-creation as the business development process where we invite and involve substantial numbers of people. Anything from thousands of customers and employees who come up with their own ideas, then vote and comment on each other’s, to external experts that have the ability to digitize and create new services and customer experiences.
Gone is the old model where innovation was only for the few.

But co-creation is so much more than creating new ideas. We are moving from a product-oriented world to a service-dominated one, where the focus is on intangible resources, co-creation and relationships. Co-creation is also about creating mutual value and customers being co-producers in the creation of value, as in the example of the trip to the hills.
Gone is the old product-centric model.

How will co-creation affect the agency of the future? If you ask me: A great deal.

I don’t want to get bogged down in communication models, but we all surely agree that the communication model of the future has to be interactive. Today the sender/message/receiver model tends largely to be bi-directional, thanks to the hyperconnected customer. Maybe it has always been like that?

That’s why modern marketing campaigns usually have an element of co-creation in them. In its simplest form, co-creation could be a customer interact with a company by sharing a video on YouTube or by writing a review. A more advanced form could be where a company works alongside its customers to create a new customer experience, such as a new personalized, digital service. Think Nike Fuelband and Nike+.

Perhaps co-creation is the communication model of the future. The boundaries between product/service/advertisement are disappearing and surely the old adage that doing is better than saying still applies. And doing things with your customers is maybe the most effective communication of all.
Gone is the traditional agency. The only question is when?

Have a great winter sports break.

Question 4 of 100: Will customers have access to information about a company’s products and services in real time, regardless of channel?

I am starting to really enjoy these discussions about the agency of the future. One particular topic has started to concern me. There seem to be quite a lot of strong opinions about the ability to change within our industry. One group sees us as “captains that stoically follow the ship into the deep”, whereas another believes that the advertising industry has an “improvise-adapt-overcome” attitude. Whatever, we are going to talk more about this later in this series. Now, going back to today’s question.

82 percent of CMO´s agree strongly or very strongly that customers want to have information about a company’s products and services in real time, regardless of channel.

This is one of the questions that has generated most consensus. That’s what makes it so important. We all recognise the needs of the mobile consumer: on the move, searching round the clock for information, wanting it from anywhere and everywhere. Via a second screen in front of the TV, via a smartphone in the supermarket or integrated into the refrigerator at home.

I think we need to agree that this is fact and this is what we need to focus on?

Important thing is what  we need to do, when it comes to adapting to these new demands? How should agencies and marketing departments reorganize and approach this new marketing? This new marketing that is no longer reliant on campaigns or the campaign mindset?

We are too slow.

It is clear that we need to find new organizational forms. We have to realize that we are too slow. Too slow at understanding consumers’ needs and clients’ problems; too slow at communicating with the customer. So it’s only logical that marketing managers prefer to work from their own departments, where with social media they can generate lightening-speed dialogue between brands and consumers.

Marketing organizations have always run the risk of producing nonsense, when the complexity of a system creates its own version of Chinese Whispers.

Consumer > Client > Planner > Project manager > Creative > Producer

In the worst cases, you can enter whatever need you like into one end of the chain and from the other end you’ll get a solution that is, not only a million miles from the need, but one that also took an eternity to pass through the system. This is not all the fault of agencies. Some of the blame also lies with clients’ reluctance to pay to achieve understanding of the problem. Their reluctance to pay for creativity. But this could easily be changed by introducing new pricing models.

We are too short sighted.

At the same time, we are also much too shortsighted. Too impatient to invest the time needed to create customer experiences built on investment, technology, innovation and a long-term approach. We are beginning to understand that CMOs have a real and significant need for a new way of developing products and services, one that hinges on communication. This will lead to a new type of agency, I can assure you.

We lack the right skills.

Perhaps the biggest challenge is to find the right blend of competence that can mix communication, professionalism, customer value and technology into a successful cocktail. Lots of today’s agencies and marketing departments lack the skills and competence to address the new marketing. The new competence is not exactly easy to find either.

Yes, there’s a lot to do. But I like a challenge.

Important follow-up questions: Have today’s marketing and advertising colleges and universities managed to adapt to the new marketing? Is a new generation of advertising professionals ready to tackle the new marketing about to graduate?

We need to find out. And then to start dealing with it. Any volunteers?


Question 5 of 100: Will brands continue to be one of a business’s most important assets? Let’s look at that next time.



Question 1 of 100: Can advertising agencies successfully adapt their offerings to the digital age? It seems not.

If you place a live frog in cold water and heat it slowly, the frog doesn’t notice what is happening and is boiled alive. Even if this is a myth, I cannot resist using it as a comparison for the advertising industry. 17 percent agree, either strongly or to a large extent, that advertising agencies do successfully adapt their offerings to the digital age. But only two percent agree completely!

I have the pleasure of blogging on the agency of the future. We are in the middle of a period of huge change. This is hardly news. As consumers, we experience it every waking hour. As marketing professionals, we experience it every day at work.

Two interconnected drivers appear to be critical. Thanks to social media and the internet, consumers are both willing and able to acquire essential information on products and services when they themselves actually need it. This reduces the need for advertisements to inform.

The second driver is of course technological change. To give an example of the magnitude of this change, Gartner predicts that the marketing manager will have a larger IT budget than the IT manager by 2017*. This technological progress has already led to wholesale changes in consumer media consumption and inevitable anxiety amongst media companies.

Of course, you know all this. Isn’t it then strange, that when asked, only a tiny proportion of Sweden’s leading marketing managers  think that agencies are successfully adapting their services  to the digital age?

It is clear that there is quite a lot missing. We can start by looking at Gartner’s Digital Marketing Transit Map.

How can a marketing manager possibly deal with the technological tsunami that now affects every aspect of marketing?

OK, let’s try to break down the problem.

Who can untangle this web of spaghetti and then create an IT strategy for the marketing department? Interesting question, I don’t notice many putting their hands up. Definitely not your agency. The question is: will it take a whole new generation of IT architects? IT architects that can both understand the new marketing and build a new IT architecture using profitable and stable cloud-based services? It is not difficult to count these people. Only eight percent agreed completely that they had a functioning IT strategy. It feels like there is work to be done.

How can we fully benefit from new technology? The transit map clearly shows that you need a network of suppliers. You also need the sort of skills and resources not usually found in either marketing departments or agencies.

Could it be that agencies require a new type of technical creator/innovator who can transform new technologies into valuable digital customer experiences? Could it be that the agency needs someone to shoulder the responsibility of creating customer value from all the data now available?

A key question is how do you actually finance this huge transformation? Evidently not without clear profitability assessments and prioritizations. Either the money has to come from the IT budget or, and this is more likely, from the media budget.

One brand that has succeeded is Nike. In 2013, Fast Company magazine awarded them the title of world’s most innovative company. How did they get there? The answer is that when they created new digital services like Nike+ and NikeFuel, their customers were given a totally new customer experience with a new and higher customer value.

I think we ought to try to learn from Stefan Olander, the Swede behind the wonder of Nike. The world’s most creative Swede.

Back to the frog. Back to the agency that struggles to adjust to change. What do they need to take that leap out of the warm water? Maybe it is as simple as the marketing manager needing someone she can trust; someone who is good with technology and at working with change; someone who listens to consumers and understands their needs.

When the internet came crashing into our lives in the 1990s, a lot of agencies played it cool, they stayed off the web. Yes, it’s true! Talk about the sedentary decades… And I’d say there are plenty of agencies out there today that plan on repeating the same mistakes, by refusing to embrace and understand the new technologies.

We have got to get to the root of this problem in our coming workshops. We have to more clearly identify the barriers that prevent today’s agencies from successfully adapting to the digital age.

If you haven’t done it yet, it’s high time you jumped out of that lovely warm water. Come on, jump!

Question 2 of 100:  What attitudes and values do you take with you to work?

We’ll talk about that next time.

Welcome to the blog about The Agency of The Future.

According to the legend, there were in the city of Gordion’s temple a knot sitting on an oxcart and was so complicated that no one was able to solve it. Anyone who managed to untie the knot would become the master of Asia. Alexander the Great was enticed to try but failed. He became so angry that he drew his sword and cut the knot in half and realized at that moment that the problem was solved.

Buying ads,  that sells more products, makes a bigger profit with which you can buy more ads. Those were the days…What marketing needs is a different way of thinking and the energy to turn the game around. Our mission is to create the agency of the future, today.

We work in the  age of the customer. The customer is in power. The social web gives the customer access to perfect information about you and your company. Marketing is shifting from a traditional campaign-centric view of the world to one of continuous customer engagement. The new marketing model is about co-creation, service-dominant logic, ROI-driven, trust, likeability, and tangible results that you can take to the bank. We, the marketers have had no problems if traditional marketing was profitable and created growth. But the reality is different. Who would have ever dreamed that supremacy of network television would ever be challenged? All printed media are fighting for their survival, social media does not deliver and most large brands ignore the potential in their own channels. Everybody can do this analysis. The interesting part is what do to do.

We know that we don´t have  the answers but we do have a curiosity and a relentless strive to co-create a new marketing practice with our customers, your customers and our competitors.
According to legend, there were in the city of Gordion’s temple a knot sitting on an oxcart and was so complicated that no one was able to solve it. Anyone who managed to untie the knot would become the master of Asia. Alexander the Great was enticed to try but failed. He became so angry that he drew his sword and cut  the knot in half and realized at that moment that the problem was solved.

Welcome, Christer Soelberg, CEO