The Planning Lab

Risk, creativity and innovation part 2

 

Today I had a meeting with the nice people at PhD, a media agency, to discuss the possibilities of having a more innovative approach for one of our client’s media setups. 

Conclusion: while it is possible to tweak media formats, you’re basically stuck with these if the client has paid for certain number of impressions. In other words, reallocating the media budget towards developing new-to-the-world contact points (such as the Whopper facebook utility) is tough if there are no figures on this (a.k.a. the discussion about impressions vs engagement). 

A company that invests millions in media will simply want a return on it, and what it ultimately comes down to is risk – something that clients hate. 

As long as we don’t have industry-level measuring standards to fuel the risk discussion, traditional bought media will unfortunately be the standard for larger media investments. 

Unless somebody out there has an answer to either the measurement problem or a different approach to risk in marketing management, I don’t see how innovative communications can be anything else than small one-off search-of-excellence projects or nothing-to-lose scenarios such as pro bono work. 

I'd love to hear your thoughts on this. The pursuit continues anyhow...

Previously: Risk, creativity and innovation

Risk, creativity and innovation part 2

 

Today I had a meeting with the nice people at PhD, a media agency, to discuss the possibilities of having a more innovative approach for one of our client’s media setups. 

Conclusion: while it is possible to tweak media formats, you’re basically stuck with these if the client has paid for certain number of impressions. In other words, reallocating the media budget towards developing new-to-the-world contact points (such as the Whopper facebook utility) is tough if there are no figures on this (a.k.a. the discussion about impressions vs engagement). 

A company that invests millions in media will simply want a return on it, and what it ultimately comes down to is risk – something that clients hate. 

As long as we don’t have industry-level measuring standards to fuel the risk discussion, traditional bought media will unfortunately be the standard for larger media investments. 

Unless somebody out there has an answer to either the measurement problem or a different approach to risk in marketing management, I don’t see how innovative communications can be anything else than small one-off search-of-excellence projects or nothing-to-lose scenarios such as pro bono work. 

I'd love to hear your thoughts on this. The pursuit continues anyhow...

Previously: Risk, creativity and innovation

Risk, creativity and innovation

Classic finance theory states that the higher risk you're willing to take, the higher will be the potential return. And although the world of communications doesn't use advanced equations or formulas to calculate risks, the same relationship between creative risk and potential award holds (both in terms of efficiency and profits for the client and in terms of creative awards for the agency).

I believe that this perspective is lacking in most agencies and for most clients, because advertising is often seen as an expense that should be risk-free rather than an investment with a variable return. As a result, clients often choose the safest solution. Agencies that try to convince a client that the more creative solution is the way to go are perceived as pushy and reckless. 

There are of course several ways of mitigating risk (i.e. shifting the curve downwards) through a strong agency brand, research data, planning, experience and other informed choices, but the risk-reward principle in the creative industry remains. Why? Because the creative risk lies in innovation and finding new ways of connecting with people. New ways are by definition unproven and no guarantees for success can be given without lying.

So if we want to stretch higher along the risk curve, we have to ask ourselves several questions: how much risk are we willing to take? What type of clients are we working with and can we expect them to take creative risks? What type of people does the agency hire and why do clients hire us in the first place? Or maybe advertising is just a world of chaos and there's no way of determining anything? If that's the case planning is surely doomed. 

Risk, creativity and innovation

Classic finance theory states that the higher risk you're willing to take, the higher will be the potential return. And although the world of communications doesn't use advanced equations or formulas to calculate risks, the same relationship between creative risk and potential award holds (both in terms of efficiency and profits for the client and in terms of creative awards for the agency).

I believe that this perspective is lacking in most agencies and for most clients, because advertising is often seen as an expense that should be risk-free rather than an investment with a variable return. As a result, clients often choose the safest solution. Agencies that try to convince a client that the more creative solution is the way to go are perceived as pushy and reckless. 

There are of course several ways of mitigating risk (i.e. shifting the curve downwards) through a strong agency brand, research data, planning, experience and other informed choices, but the risk-reward principle in the creative industry remains. Why? Because the creative risk lies in innovation and finding new ways of connecting with people. New ways are by definition unproven and no guarantees for success can be given without lying.

So if we want to stretch higher along the risk curve, we have to ask ourselves several questions: how much risk are we willing to take? What type of clients are we working with and can we expect them to take creative risks? What type of people does the agency hire and why do clients hire us in the first place? Or maybe advertising is just a world of chaos and there's no way of determining anything? If that's the case planning is surely doomed. 

Who should be in control?

Many planners are concerned with effectiveness. But should this be a core issue of the planning department? 

Most people agree that measurement and accountability is important. In the end, advertising is about delivering business results in some way.

The problem then is that the marketing and brand building business is a rather complex system. It’s not simply a matter of correlating advertising to sales (unless you’re entering an effectiveness award). Factors such as branding, product portfolios, design, competitor moves, market/category trends, etc. have to be taken into account to get the full picture. 

It then goes without saying that this is a full-time task that should be owned by the client marketing department – at least if you want to do it by the book. Planners can help in the effectiveness process, but should not own it. 

Who should be in control?

Many planners are concerned with effectiveness. But should this be a core issue of the planning department? 

Most people agree that measurement and accountability is important. In the end, advertising is about delivering business results in some way.

The problem then is that the marketing and brand building business is a rather complex system. It’s not simply a matter of correlating advertising to sales (unless you’re entering an effectiveness award). Factors such as branding, product portfolios, design, competitor moves, market/category trends, etc. have to be taken into account to get the full picture. 

It then goes without saying that this is a full-time task that should be owned by the client marketing department – at least if you want to do it by the book. Planners can help in the effectiveness process, but should not own it. 

The end of creativity is near

In the future, we don't need ad agencies, only brain helmets.

Here's an APG seminar you don't want to miss: on February 20th Anna Bodin and Ebba Horn from media agency PHD (part of Omnicom) will talk about neuroplanning. What is it, and how will it change the way media strategy is designed? Don't know, but it sure sounds creepy.

What: What is neuroplanning?
Where: Reklamförbundet
When: February 20th @ 18.00

APG Sweden

The end of creativity is near

In the future, we don't need ad agencies, only brain helmets.

Here's an APG seminar you don't want to miss: on February 20th Anna Bodin and Ebba Horn from media agency PHD (part of Omnicom) will talk about neuroplanning. What is it, and how will it change the way media strategy is designed? Don't know, but it sure sounds creepy.

What: What is neuroplanning?
Where: Reklamförbundet
When: February 20th @ 18.00

APG Sweden

Brand valuation: visualisation of key issues

Click to enlarge

The Swedish Standards Institute, has formed a group of brand consultants, academics plus legal and accounting specialists to join an international project on developing common guidelines for brand valuation.

The goal is to create common guidelines that are open and comparable valuation processes and results. These will make it easier for companies and stakeholders to measure and understand the underlying factors of brand value.

As I think this in principle is a good idea and also interested in what the implications for the ad industry and my own work is, I've done a little backgrounder on the subject of brand valuation. In what types of business issues is it relevant to value brands? What are the different approaches to valuing brands? How is it done in practice? What are the current problems facing brand valuation as a concept?

I've visualised the approaches, applications, processes and challenges of brand valuation in an issue tree above. This will hopefully give you better overview of the topic.

Download issue tree as PDF

Links
Pressrelease from Swedish Standards Institute
Resumé
Associate professor Micael Dahlén explains

Brand valuation: visualisation of key issues

Click to enlarge

The Swedish Standards Institute, has formed a group of brand consultants, academics plus legal and accounting specialists to join an international project on developing common guidelines for brand valuation.

The goal is to create common guidelines that are open and comparable valuation processes and results. These will make it easier for companies and stakeholders to measure and understand the underlying factors of brand value.

As I think this in principle is a good idea and also interested in what the implications for the ad industry and my own work is, I've done a little backgrounder on the subject of brand valuation. In what types of business issues is it relevant to value brands? What are the different approaches to valuing brands? How is it done in practice? What are the current problems facing brand valuation as a concept?

I've visualised the approaches, applications, processes and challenges of brand valuation in an issue tree above. This will hopefully give you better overview of the topic.

Download issue tree as PDF

Links
Pressrelease from Swedish Standards Institute
Resumé
Associate professor Micael Dahlén explains