Idea = Emotion x Function

For All Ad Agencies Professional of India

I reproduce for you excerpts from a wonderful article by Rei Inamoto is chief creative officer at AKQA on Fast Company’s website on June 2011 named Why Ad Agencies Should Act More Like Tech Startups. This is more like a post face to one of my previous posts but better articulated on advertising fraternity. Here it goes -

• Agencies need to look beyond storytelling and take their cues from software developers "In order for agencies to stay relevant, they must embrace the Culture of Code.” Some said replace “code” with “technical know-how” and another rather defensively tweeted back “code without ideas is just ones and zeros.” To which, someone else responded “Ideas without executions are just dreams.”

• Not only are technological advances making a massive and fundamental impact on how we as human beings live, but also how those of us in this small industry of advertising work. To the point where the world’s biggest advertising festival dropped the word "advertising" from its name this year. This week, thousands of "advertising" professionals converge on the French Riviera to recognize and celebrate the world’s best work and ideas. As the new name now directly claims, it is celebrating the Culture of Creativity. I’m looking for the ideas that rewrite the formula. The work that validates a festival without the word "advertising" in its name.

• Coincidentally, the work that is likely to win big is called "Write the Future." It ironically validated the old way of advertising: come up with the Big Idea, create a great commercial, and a bunch of executions around it. And I say this with the greatest level of respect because the work made me jealous and it’s absolutely brilliant.  At Cannes as well as other award shows, judges debate about "ideas." What’s the Big Idea? What’s the story (i.e. "Write the Future")? How does it come to life? Are the executions great? Etc, etc.

• Ideas in the context of advertising have been about a communication platform to tell stories about a brand. Stories are a useful way of evoking emotions. When consumers have an emotional reaction, they buy into those stories and are more likely to, well, buy your stuff. The problem is that everyone is telling stories nowadays. Even if you have a good story to tell about your brand, chances are that it’ll get lost. That’s where I believe that the very definition of the "idea" needs to evolve. Telling stories is an important aspect of what we do but that alone is not going to get you much. We have to figure out how to enable stories. Put another way: In the 20th century, copywriters had film scripts hidden in their drawers. In this century, creatives should have product ideas ready to go.

• Creativity no longer belongs to those who have the word "creative" in their title. In fact, many of the creative ideas of the past few years have been coming out of non-creative people. Well, they were always creative -- it’s just that "creatives" thought they weren’t.
  

• A recent example of the "idea" that is both emotional and functional is Heineken Star Player: (full disclosure - it’s AKQA’s work).  What’s important is that it wasn’t the regular copywriter + art director duo who came up with the Idea. It was a combination of a Storyteller and a Software Developer who conceived it.

• The big part of this industry is still relegating technology just as an execution, a production task, and not as a strategic point of view. If we take any cues from thee startups of the last decade, leveraging technology in a simple and creative way will get us closer to capturing the hearts and minds of consumers of the 21st century.

• Thus, the next phase in the Evolution of the Idea in this century is: Idea = Emotion x Function.

Converge'ation: Content - Will the Long Tail wag the Dog?

Converge'ation: Content - Will the Long Tail wag the Dog?

Brand Power and Digital Age

Many profess dooms day for brands with the advent of Digital Media. I do not believe so. The power of Branding is undisputable, and these great brands are there to stay irrespective of the advent of digital era. Brand managers love their brands and will continue to pour in millions to make their brands more powerful both in traditional medias and increasingly more in digital marketing.

There is enough said about branding and its power, when you think adhesive you say Fevicol, instead of refrigerator we call it a Fridge (a brand) … Brands are now more of a proven perception and some of make belief through massive advertising. Each brand promises something, i.e. Surf Excel means clear washing. So would you trust Surf Excel or Jaya Washing Powder to do your laundry?

What is a value of a brand? How do you calculate?

To quote from Greg Sartell’s blog, “What business wouldn’t want simple metrics with which to evaluate return on marketing investment? The fact is that businesses don’t run on metrics, they run on profits and while measuring brand value isn’t straightforward, the value is real nonetheless. Interbrand regularly evaluates financial value for brands and finds that many are worth tens of billions of dollars.”

“So can we evaluate a brand like a direct response ad? This paper from the Marketing Science Institute estimates that “a one-unit change in the Brand Asset Index is associated with a 4% change in the market value of a firm.”  In study after study, brands are shown to be one of the most valuable assets a company can have.”

So, how are Google and Facebook valued at tens of billions of dollars? Are their revenues in billions? No. Brand is intangible yet the main basis to evaluate. Measurability of brand and perception has been a perennial problem faced by brand managers. The answer to this can be what contributes more to the success of a product or service in the market place. However, measurability remains a main question. Under this disguise perhaps Television still rules the roost in India, followed by the print media.

Amazingly, digital media even though is highly measurable is yet to find its place in the sun in the marketing budget mix in India.

I believe ad agencies too do not want to change the status quo unless pushed by the client – the brand managers. The age old TRPs, circulation/readers norms suits the ad agencies fine. I am sorry to say but many ad agency execs do not understand the digital media, the media of ‘today’.

With increased computer penetration, smart phones=internet broadband digital marketing (including mobile marketing) is the future which has arrived.

This is not to say that creativity does not hold good but there were times when TV Serials like Hum Log and some amazing serials ruled, there TRPs were in double figures. Last word of television measurability was TAM, however reliable (unreliable) it was, but the times are changing. With the arrival of new media, brand owners now have choices; media is splitting, so is the media spends and media measurability norms. Brand owners want more accountability of media, better measurability to maximize the bang for their bucks spent better or sure fire ways of methodologies to track media.

Creative is now a part of the whole; media measurability, analytics, addressability … is the new mantra. Various numbers are starting to fly around and the scenario is becoming complicated for some of the ad agency couch potatoes. Whether you agree or not it is fast becoming times of analysis and not just emotions.

It is the age of calculating Return on Investment in ad spends and brand communication programmes. The purist (creative guys/ad agencies) call this a trap, others (brand managers) call it logic or accountability.
Brands in the digital age would have suffered the same issues as the traditional medias but the likes of Google have simplified some of these problems. This is not to say that digital media is the answer to all the marketing communication problems.

But the future is quite clear, with the advent of digital age/media, ‘brands’ will benefit. There will be increase in the well known brands gang due to low cost of selling, 1-2-1 communication with the audience, low cost of acquisition and the resultant high margins. Above all there will be some level playing field in the market, democratization of marketing and brands, medium and small brands will get a better ‘play’ …

But there is a huge challenge for the digital media - it will have to learn how to build brands, not just produce direct response.  And for doing this today’s digital marketers will probably have to learn a lot from the ad giants, time for Piyush Pandey, Balki, Alyque Padamse and their likes to raise their hand.

Content - Will the Long Tail wag the Dog?

This is a rather hackneyed title but relevant all the same.

It was most amused when talking to a senior executive of a TV Channel on monetization of Content, I mentioned the importance of Long Tail and to my utter shock he had a total ‘what are you talking about look’ on his face. Not withstanding the fact that I love dogs, luckily for me the gentleman did not start talking about his dog (if he had one).

So what is a Long Tail?

Diagram on the right,  as described by Chris Anderson

Why is it important for Content Owners and Indian Content Distributors to understand the concept?

Here is the interpretation of Ankit Maheshwari is co-founder and CEO of Instablogs Network.

 Long Tail is about giving Choices to people

·         to have access to huge amounts of content

·         to access it in the way they like

·         to access it anywhere and anytime

·         to access it on any device they want

The advantages are obvious –

·         More customers will get access more content

·         Directly and indirectly benefit the content owner and distributors of content

·         Niche content owners/publishers get access to audience

Take the example of TV Channels in India. Here is how TAM describes it -

It is obvious from this chart that the tail (Choices) is growing longer. Why? Primarily due to increase in distribution capacities that let more amount of content to be made available - Digital TV which has increased the choices for the viewers to watch more channels. 25 years back we had 2 channels, 10 years back we had 25 channels and today we have over 250+ channels dished out to us via Digital TV (DTH, Digital Cable, IPTV). We now have multiple choice of channels in news, GEC, Niche, ….  And there are more coming.

It’s about shifting the power from the Content Owner to the Content Viewer.

However, many don’t know how to do it, some are scared for their IPR violation, this is in spite of the fact that billions of dollars worth of content is pirated every year.

It’s time Content Owners realize is to make piracy unaffordable by distributing content on maximum distribution channel at an affordable price. It’s time Content Owners (who by and large, do not understand technology) adopt newer distribution channels, not only to promote but even commercially distribute their content, e.g. YouTube, NetFlix …

Many believe that the big bucks are in the recent ‘hits’ which has been proveb wrong, the mega bucks are in the ‘niche’.

Netflix has made a good business out of what’s

unprofitable fare in movie theaters and video rental

shops because it can aggregate dispersed audiences

.

Music companies from the west did it in spite of initial resistance and have gained from it, e.g the classic case being music on iPod.

The Film Makers must realize that in the long run none of their movies can make huge losses eventhough the movie might have bombed on the box office if they have caught the Long Tail.

By adopting traditional as well as digital sources of distribution, the content owner generates much more revenues then he has been making with traditional/limited distribution channels.

Considering the film life is worth one or two weeks at the box office, the digital distribution opportunity comes much more in play.

While theatrical release is their main source of income, followed by satellite rights, other digital rights becomes a near perennial source of income for them.

VOD, Mobile and Downloadable Audio & Video is their biggest opportunity. Unfortunately in India we do not have the best of connectivity to do this but times are changing and opportunities are there to be taken.

In the US, approx. 80% revenues of a film comes from Home Entertainment Distribution and 20% from Theatrical release over a period time, is a great point of inspiration for the Content Owners.

It also disapproves of the notion that only new films generate revenue. Given the choice it is observed that viewers would equally prefer watching older films. Ask yourself, wouldn’t you watch a Padosan or a Madhumati or a Gladiator or Roman Holiday or your old episodes of your favorite TV Serial … as and when you want to watch it instead of being on the mercy of the Television broadcasters?

There are also implications of the Long Tail for the Channel Owners as Atul Phadnis has put it well in his blog –

Implications of Long Tails (for TV Channels):

1. Lower TV ratings for even 'Mass' Channels
2. Lesser predictability to new launches
3. Higher failure rates. Rather spectacular crashes for big, mega program launches
4. Targeted marketing is a need for channel/ program marketing
5. Higher Marketing budgets for programs that cut across different segments                      However, the biggest problem of all is -
6. Need for fatter pipeline of content innovations - especially since the failure rate is going up

Implications for the Viewers:

1.      Will make the business case for better, alternative and father pipes to enable easy distribution of content

2.      More ‘niche’ channels

3.      Pay for what you watch scenario – no ala carte’ pricing

4.      Watch, when you want to, where you want to and on the device you want to.

Implications for the Content Owners:

1.      Larger distribution of their content.

2.      As a result content becoming cheaper and more affordable by the viewers.

3.      Piracy will become unaffordable and will be less entertained.

4.      Increased Revenue Streams

The companies at the vanguard of it are showing the way with three big lessons. Call them the new rules for the new entertainment economy.

RULE 1: MAKE EVERYTHING AVAILABLE

RULE 2: CUT THE PRICE IN HALF. NOW LOWER IT.

RULE 3: HELP ME FIND IT

It’s time for Content Owners to be a bit digital savvy. Time to Wag the Tail.

Note: The phrase The Long Tail was first coined by Chris Anderson in a 2004 article in Wired magazine [1] to describe certain business and economic models such as Amazon.com or Netflix. The term long tail is also generally used in statistics, often applied in relation to wealth distributions or vocabulary use. However, we will concentrate on the Long Tail of Indian Content. While writing this post some of Chris’s Long Tail presentation has been referred and quoted only for the sake of clarity.