Enough with the ‘Innovation’: just try being better

Nic HodgesIn this guest post, Nic Hodges argues brands are looking for innovation in the wrong place, and as result risk being outclassed by start-ups. 

70/20/10. If you’re to believe the hype of every digital marketing conference these days, these three numbers are the saviour of every brand. Just spend 20% on moderately interesting work, and 10% on “innovation”, and watch those sales skyrocket. Agencies are loving it – finally the freedom to pitch those disruptive bottom drawer ideas and put all those Creative Technologists to use. But is this approach working? Is it right? Or are we all missing the point?

Every brand rightfully now sees innovation as a key to future success. Almost every client has an “innovation fund” (but very few have ever used it). Everybody wants to create the next Nike+. The only problem is that nobody seems to be doing it.

In almost every category there’s no shortage of innovative and disruptive ideas. The problem is that they’re not coming from agencies, or their clients.

The Dollar Shave Club in FMCG, Shoes of Prey and Warby Parker in retail, Uber in transport, The Pebble Watch in technology, Spotify in entertainment, and Project Glass. These are just a handful of the new ideas that have brands reaching desperately for the innovation lever.

These ideas aren’t being created by the brands leading the category. They’re being created by startups that have no legacy in these categories. And that’s precisely why they’re succeeding. These businesses aren’t investing 10% into disruptive thinking. They’re investing 100%.

These ideas couldn’t have been made by traditional players in each category. The Pebble Watch couldn’t have come from Omega. Project Glass couldn’t have come from Oakley. Spotify couldn’t have come from the record labels (and the trail of failed streaming services launched by the labels is testament to that).

It’s easy to look at where these ideas are coming from, and attempt to replicate the “startup attitude” that has allowed them to happen. “Agencies should be acting like startups” must be one of the most common ad-blog lines going around in 2012. “We should be starting accelerators and incubators and creating game-changing new products for our clients. Stuff the advertising!”

This misses the point entirely. Being a startup isn’t the reason these ideas are succeeding. Being aware of, and adapting to the real world is the reason these ideas are succeeding.

And this is where agencies are going wrong. As soon as they get the innovation green light from clients, they try to act like a startup.The green light should instead be seen as an opportunity to act like an old agency in a new world, that has new rules. And one of the most fundamental new rules agencies need to understand, is what’s happened to demand.

Creating demand in the old world was simple – buy a bunch of TARPs, a few right hand pages, shout loud enough with a catchy jingle and be front of mind when a consumer gets to the shelf. Only the big brands had the scale of production, distribution, and marketing to compete in this world. They created the demand, and they reaped the rewards.

A quick look at Kickstarter will show you why, and how, that world is changing. Demand is now created upfront – before millions of dollars are invested in R&D and manufacturing and focus groups. The best ideas succeed, and every idea has a (relatively) equal shot.

Demand in the new world is created through amazing products and amazing service – and real people and real customers talking about that amazingness. These disruptive brands create demand by creating products people want. Experiences people love. They don’t rely on shouting louder. They just rely on being real, and being good.

And here’s where both advertisers and agencies seem to be getting it wrong. The agency world still revolves around pushing out messages that are anything but real, for clients and products that are anything but good. Making 10% of those messages more ‘innovative’ doesn’t solve the core problem. And increasingly, legacy brands will find themselves under attack by new players.

These new players will create good things. They will create real things. Things that people actually want. And people will talk about these brands in a real way. And they will disrupt traditional brands quicker than you can say ‘innovation fund’.

Nic Hodges is head of innovation & technology at media agency Mediacom. 

Comments


  1. Anonymous
    10 Jan 13
    11:56 am

  2. Can I get an ‘amen’.

  3. Linda
    10 Jan 13
    1:03 pm

  4. Amen.

  5. Anonymous
    10 Jan 13
    1:10 pm

  6. Awesome article Nic!

  7. Well said
    10 Jan 13
    1:16 pm

  8. I couldn’t agree more. The latest Vic bitter work is the perfect example of just doing what’s right and doing it well. No fancy stuff. And guess what, it’s refreshing.

  9. Disrupt this...
    10 Jan 13
    1:20 pm

  10. Very true Nic you are on the money I believe. There are two other factors I see in agencies these days that also repel innovation and that is lack of technology talent and the agency bottom line. If you’re a C level or MD in an agency group then you are only going to tow-the-line and report forecast revenue targets to shareholders to keep your job. They don’t have the balls to back 10%+ innovation just yet unfortunately, (looking at you STW).

  11. Janelle
    10 Jan 13
    1:27 pm

  12. Brilliant. Time to share.

  13. jeanette_kc
    10 Jan 13
    1:36 pm

  14. ‘Amen’.

    Third-last paragraph does it for me, Nic. Great read.

  15. Riley
    10 Jan 13
    3:38 pm

  16. Fantastic article Ben. Couldn’t agree more.

  17. Hmmmm
    10 Jan 13
    8:05 pm

  18. Perhaps the most obvious and dullest article of 2013 and it’s only January.

    How’s medicon’s innovation going? What in your article has you or your agency put into practice?

    I love the enthusiasm but the article says little.

  19. Marek
    10 Jan 13
    9:09 pm

  20. Great thoughts here.

    Your final point to ‘pushing messages’ could be seen as a bit unfair. Pushing messages that not real isn’t how to do great advertising. Strong comms are where you focus on a product truth, and then talk about or demonstrate that in an interesting way.

    You’re very right. Being best can a position to take. But then you need to innovatively communicate that so that people will take notice and change their behavior.
    Kickstarter is a great example. After years of stock-standard pitch videos, projects started getting innovative with their films. And then more people heard about it and took notice and were influenced to back the project.
    So what will happen if and when the $1 dollar shaving club film format becomes standard? Will Kickstarter pitch films need to innovate again how they communicate?

  21. Love it...but
    11 Jan 13
    9:50 am

  22. Great article Nic. Totally agree with all of the above.

    It’s just a shame you work in a media agency, where 80% of the resource is still structured to buy media space and ‘push out ads’.

    To your point, is having a ‘Innovation Department’ in a media agency adhering to the 70/20/10 rules you’ve just slammed marketers on? How is your brand any different?

    Get out and practice what you preach.

  23. Nic Hodges
    11 Jan 13
    10:13 am

  24. Thanks everyone.

    There’s a brilliant piece by Jules Ehrhardt on MobileInc this morning that pulls far less punches than I have here.
    http://www.mobileinc.co.uk/201.....cessfully/

  25. Nic Hodges
    11 Jan 13
    10:19 am

  26. Also @Love it – MediaCom is not a B2C brand.

    I’m talking above about the disruption of mainstream consumer-facing brands (which make up the majority of client advertising spend in this market) by startups that can achieve scale fast through brilliant products and communications that are developed iteratively and usually through agile methodology.

    I’d love to expand on the innovation projects and process we have at MediaCom, but that’s for another post.

  27. eaon
    11 Jan 13
    1:41 pm

  28. In agencies Innovation is often interpreted as being wholly concerned with the application of new technology or something else digital (sic), this is where they often fall over.
    Or they fail to pursue innovation at the right time.
    The best time to be pushing innovation is when bread and butter work is successful but sadly that’s often the time when there is least appetite, in my experience, anyway.
    I broadly agree with your standpoint but would defend a minimum 10% rule – as applied high risk ‘pilots’ of any flavour – hilt for any business.

  29. An opinion
    11 Jan 13
    3:29 pm

  30. The only point you miss is that most of the bread and butter time that agencies are here for is to push messages from established brands that are all about maintaining and growing market share and making bigger profits for their shareholders (rightly or wrongly).
    Many of these brands only care about innovation and the resulting better product/customer experience if it helps fill the bucket and maintain the status quo. They have mature products and markets and playing ahead of the curve is seen as a nice to have not a must have in terms of investment, hence the 10% not the 100% focus.
    So the desire to drive innovative strategies, cutting edge creative and disruptive ideas is a desire held ultimately by the agencies themselves and those working within them, not by the clients. It’s a way for frustrated entrepreneurs to avoid taking the plunge, ditching the agency job and truly doing it for themselves to feel better about their chosen path.
    Clients want results and rightly so, but bottom line results that don’t inherently involve risk, after all the marketing director always has an eye on the next rung on the corporate ladder. Better to maintain the steady ship than to veer off course into unchartered territory for better or for worse.
    Noble position Nic but not sure if it’s a true reflection of the reality.

  31. Craig Barber
    11 Jan 13
    8:55 pm

  32. Absolutely fantastic article. Finally someone has nailed this battle between startups v agencies… Articulated beautifully. Well done.

  33. Mark
    11 Jan 13
    11:03 pm

  34. early contender for best opinion piece of 2013
    nice article and spot on

  35. DanMonheit
    12 Jan 13
    7:28 pm

  36. +1

  37. K
    14 Jan 13
    12:54 pm

  38. @An opinion +1

    Unfortunately, most marketing managers / brand managers aren’t interested in innovation. At the moment especially, they’re interested in not looking silly, and not rocking the boat. Sad but true.

  39. Tom
    15 Jan 13
    12:27 pm

  40. Great post.

    There’s a wonderful bit in the new Nassim Taleb book “Anti-Fragile” about innovation. It focuses on how most people with the word “innovation” in their job title, most professors of innovation, and most innovation consultants have never innovated anything. All theory, no praxis, and as Taleb says: “… a theory is a very dangerous thing to have”.

    Indeed, he goes further to suggest that innovation is almost impossible for large, process-oriented companies (like most of our clients) to achieve.

    If we’re looking at how to do more innovative advertising, that’s one thing. We can do that. And helping clients to do what they already do, better and more seamlessly, that another thing we can achieve. But neither are true innovation, in the strictest sense.

    So I violently concur w. Mr Hodges: Help our clients do better marketing, help them do what they already do, better and better; and help them identify innovative companies they could partner with or acquire. But please let’s stop pretending we can do innovation for our clients (all of whom require our advertising help because they’re mature businesses)… because true innovation comes from the fringes, the tinkerers, the loonies, etc.

  41. Jay Morgan
    19 Jan 13
    11:52 am

  42. @An opinion – I know what you’re saying but let’s all be very candid and honest – every traditional marketing campaign with an ‘ad’ and buys traditional media is 100% risk. It’s just we’ve all become very comfortable with the status quo we’ve forgotten just how risky traditional is.
    Thanks for a great article Nic and thanks for coming back into the conversation after writing it too.

  43. Serial Entrepreneur
    22 Jan 13
    4:25 pm

  44. Great article Nic,
    Advertising strategy differs from product or business and distribution strategy. This perhaps is not the realm of the traditional ad agency at this juncture.
    Maybe rightly agencies are just relegated to sending out the clever message, but I’d like to see them change there proposition. Accenture and McKinseys pick up this very well paid work and still do it conservatively.

    For me I’ve been boutique agency side as a digital producer and consulted directly to some leading brands on their digital strategy. I’ve had 3 startups/companies with 2 successful exits.

    With an MBA and real startup miles, I find it a struggle to get a digital producer gig back in an agency of late. Do they really want some perspective and strategy or a guy to churn out some pretty web pages and banners???

    To quote John Mayer’s song, I guess I”m….”waitin for the world to change”.
    As Nic mentions, the world has changed and neither corporates or agencies are really in this new game. Aussie companies anyway.

    Best and thanks for the article Nic. Hope to see a followup article.

  45. @Nic
    29 Jan 13
    1:57 pm

  46. Good reading, but fairly obvious and theoretical. That’s why so many people overwhelmingly agreed. My only question to you (Nic) is…Are you really working for the right company to execute your insights and beliefs? Looking forward to your next article