Jenny Chan 陳詠欣
May 12, 2014

To catch up with consumers, industry must erase old thinking: IAA World Congress

BEIJING - The consensus at the 43rd annual International Advertising Association World Congress was that the evolution of advertising goes well beyond the impact of 'shiny new technology', requiring companies to innovate and break out of outmoded thinking patterns.

To catch up with consumers, industry must erase old thinking: IAA World Congress

Much has been said about fickle consumers and their media and purchasing habits. Agencies and marketers alike have been forced to change as quickly as they can to cope with changes in consumer behaviour and technology. But have they done enough?

"As a marketer, I was told marketing was all about creating a myth and telling it, about interrupting people's favourite TV shows and diverting their attention with ads; about focusing on above-the-line to build your brand and below-the-line to push for sales," said Bharat Avalani, Unilever's regional IBC director for homecare in Asia, Africa, Middle East & Turkey. "I have to unlearn all that and erase the lines. Today, marketing is no longer about that, it's about the power of content and media that rests with the consumer. Consumers are so busy living their lives that we have to think what role our brand plays in their lives."

The relationship between consumers and technology is changing rapidly: with more content stored in the cloud, with more interaction with content taking place in natural ways like voice or gesture commands, with the change from searching for content to getting something done with it (like booking a ticket).

These trends are making it complicated for brands, said Adam Anger, general manager for Asia Pacific at Microsoft Advertising, who added that technology can enhance the brand experience by making it a multi-sensory one. Anger cited research that found 61 per cent of consumers surveyed are more likely to buy from a brand that allows them to touch and feel, even if only virtually. And in exchange for more optimised brand experiences and improved service, they are interested in sharing their personal data, which they are well aware is a valuable marketing currency for brands, he said.

Essentially, it is not brands that are driving the dynamics of consumer behaviour, said Chris Harrison, APAC chief strategy officer at ZenithOptimedia, but really the marriage between technology and consumers themselves. "Agencies are largely playing catch-up as consumers either adopt or reject new technology. I think the speed at which new ideas are adopted is very, very fast."

Scott Beaumont, managing director of Google Greater China, added that such is the pace of change that it is difficult to anticipate where we may see advertising in five years' time. "We're probably limited by our imagination, restricted due to linear educational methods," he said. "Being constantly connected, consumers may be always distracted, but that creates a glass-half-full situation where there are many opportunities to interact and there are a lot of data on consumer behaviour."

Ben Hughes, global commercial director and deputy CEO of Financial Times, pointed out that it used to be sales and marketing people interpreting data, but now it is data analysts. "We are stepping up," he said.

Yet the term 'big data' drives Beaumont "mad". He wants brands to have confidence in "pearls of data": insights from combining demographic and behaviourial data signals. "It doesn't take much to put two and two together and make data work for you, especially when technology can achieve micro-targeting," he said.

Panel moderator Atifa Silk, brand director of Campaign Asia-Pacific, asked whether the industry gets too caught up in the "shiny new technology". Rob Norman, chief digital officer at WPP, described the "magical quality" of technology like Google Glass and Oculus Rift. Facebook's Mark Zuckerberg is a smart guy who acquired Oculus VR not because he is fascinated by virtual reality, but because he thinks there are generational shifts every 15 years or so in the primary interface between consumers and computing. As the desktop mouse gave way to the mobile swipe, virtual reality will be the "next major space," Norman said.

The magic for a media agency that sits at the intersection of media, technology, data, brands and consumers is to "look at these pieces and how they fit together" and to "determine what are the learning curves and action curves and which bits of the action-curves are most likely to scale, because it only helps so much to say 'Here's a terrific idea that we're going to make money out of', said Norman.

Brands need to make sure that their learning curves are steeper than their action curves, advised Jeffrey Cole, director of the centre for a digital future at USC Annenberg School. "Learn about social media and technology fads, consider how Twitter can kill a film's reputation literally in two hours and the way we laughed at three-kilogram cell phones in the past, but stopped laughing at Google Glass now," Cole said.

The point is to put the consumer at the heart of everything, since agencies want to be seen as real business partners to solve business problems. Clients have been frustrated about the silos that are being created within agency networks, which might lead one to assume that the current agency models do not necessarily serve them as well as they should, Silk said. WPP chief executive Sir Martin Sorrell has acknowledged the need for 'horizontality'—describing efforts to get WPP's 178,000 employees in 100 countries to work together while taking a jibe at Publicis-Omnicom's failed merger, which he called an "ill-considered attempt at consolidation".

Tim Andree, president and CEO of Dentsu Aegis Network, whose acquisition also took about 10 months but did get completed, was more muted in criticising his competitors, but pointed out that an M&A strategy should always follow a thinking pattern of 'What does this allow us to do for our employees and clients?'

"The key is not to buy growth, but to stimulate organic growth," he said. "The strategy for acquiring is to have an acquisition strategy." Dentsu Aegis had a clear plan for who would run the combined network, unlike POG's slated "merger of equals", he said.

According to Norman, in any business, it is "all about the alignment of incentives", whether people work for clients, for their companies or for themselves. Li Ya, chief operating officer of Phoenix New Media, admitted that traditional media outlets are disadvantaged by internet companies which incentivise their staff in Silicon-Valley style with stock options and such, which also fosters a risk-taking culture.

"We try very hard to form our teams to break down P&L structures and communication structures," Norman said. "But you have to recognise that there are many clients who want what they believe to be the best specialists in any given competence in any given market for any given audience. If they have the organisation power, will and desire to lead the integration from their side, that's the alternative".

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