Kitcatt Nohr Digitas

Let me start by getting something straight. One of my colleagues put it to me that this IPA trip was arguably “a jolly” for agency leaders in California. I refuted the accusation then and I will again today. There was nothing arguable about it. It was a jolly. In fact jolly was not the word, it was incredible.

It was variously inspiring, exhilarating and exhausting. Several of us were also working on pitches back at base – starting up our laptops at ridiculous times of day and night to do bits of work. But the rest of the time was spent in the company of 16 wonderful people and 18 incredible companies.

Hyperbole over, let me try to capture some of what we learnt.

I have framed this in terms of a developing consensus – a consensus that emerged very clearly in California. And one that unites some of the most successful and fastest-growing businesses in the world. After a whirlwind tour of 18 such companies in four days, some clear themes emerged.  I have picked six.

Vision

The first was vision. Specifically, the importance of a company vision which transcends the every day and points towards a higher purpose. It also transcends the immediate capabilities of the product – to provide an enduring goal.

For Facebook it’s the creation of “the largest living map of living connections”. Think about it: “The largest living map of living connections”. It’s an epic goal, and rich too. And amongst other things explains why Facebook are spending time studying the science of influence. How do we use our peer groups to help us filter the vast amounts of information we are assailed with on a daily basis? How many groups are we typically members of anyway and what influence do they have on the way we make decisions?

When your mission is “the largest living map of human connections” it naturally leads to asking these big questions. And as marketers we very much need the answers to questions like this.

For Twitter, it’s “instantly connecting people everywhere to what is most meaningful to them”. For AirBnB, the service which allows users to rent each other’s apartments, it’s the sense that “a world of sharing is a better one”.

That’s also a big idea. And one which seems to be catching on in California, as we see a rash of resource sharing services: people renting out each other’s apartments, cars, even prams and lawnmowers. And of course lending each other money. Is this phenomenon a short-term response to recessionary pressures, giving people a much needed extra source of revenue? Or is it a genuinely game-changing play, where individuals now compete with companies in the rental market? Which means not just B2C marketing but C2C. I guess time will tell – but this phenomenon of collaborative consumption as its fashionably called – hints at another trend which was evident in California - and that’s a move from ownership to rental. Its evidenced in everything from car rentals to movie downloads to cloud computing. Maybe we don’t need to own things any more. Or certainly not everything.

‘One of us’  

Alongside this clarity of vision was a distinct culture and a clear definition of what it is to be “one of us”.

Each one of the cultures we experienced, particularly in Silicon Valley, is of course different, but distinct, and characterised variously by ambition, restlessness, contrarianism and being “always in beta”. In other words, always trying to improve, refine, innovate.

In many instances, these cultures manifested themselves in workplaces which are three dimensional representations of the brand. Google’s campus in Mountain View with its outdoor spaces, colour, sense of fun and exploration. Zynga’s office with its interactive light-tunnel through which all visitors walk, its room dedicated to life drawing and its bars and restaurants (free food is a recurring theme). IDEO’s cafe, all glass and wood, with a toy workshop hovering above on a mezzanine which made you want to play. IDEO had no dogs, but plenty of the other offices did, under desks and wandering the halls.

Arguably agencies have always understood the relationship between architecture and creative culture – or certainly the better ones - but it’s clear that creative cultures are not confined to creative agencies. A theme to which I will return later.

Moving on…

The walls are crumbling down

Let me share some figures with you. There are some 800 million people on Facebook, 130 million business people on LinkedIn, five billion searches a day on Google, a billion tweets every four days, 230 million people are gaming via Zynga,  if Farmville were a country it’d be the 5th largest in the world, a zettabyte of information is being created every year (that’s a million million gigabytes to you and me), there are five billion mobile users worldwide. 85% of the world’s population is covered by a wireless signal  (which is greater than the reach of the electric grid). You get a sense of a world in which we will be increasingly connected, at all times, to whatever we want: games, content, commerce, conversation. The barriers to collaboration, consumption and creativity are crumbling.  And as they fall, the opportunities for trade increase. If I tell you Warner Bros are now renting out films directly via Facebook you might get the idea. If I tell you LinkedIn is becoming an important source and distributor of business news, having as it does a global audience of business professionals, you might get it.  If I tell you that users of Farmville raised millions of dollars whilst gaming via microdonations, you’d get that too.

Let me share an even bigger idea with you. Chinese protectionist laws prohibit foreign companies from importing more than 20 films a year into the country. That’s 20 films in total, shared between dozens of studios and producers. Undeterred, Disney have observed that with only one child per family, the whole family unit (parents, grandparents etc etc) are entirely dependent on the professional success of that single child to support the family. And Disney have been smart enough to realise the importance of English as a key to educational and professional progress. So what have they done? Disney are getting their brand in front of Chinese families by opening language schools – using their narrative and film making skills to make the educational experience a rich one.  If you thought in the UK that Tesco selling petrol and banking was category busting, you ain’t seen nothing yet.

The data revolution

What happens when you preside, as Google does, over 5 billion searches a day? And of course its not just Google we are talking about, but granular access to huge volume of customer interactions typifies many of these next generation media companies. What we are witnessing is a data revolution. As consumers interact with social platforms, games, information and each other, they are revealing information about their preferences and behaviours like never before. Effortlessly. And in volumes unimaginable only a decade ago. And this is not just opening up opportunities for the digital pureplays like Facebook – which learn more about their users by the second – but also for traditional media brands. Warner Bros, Twentieth Century Fox and Disney now know their customers in ways never possible before. I mentioned moments ago that Warners are renting out their movies on Facebook. Historically they would have had no idea other than through audience research as to who was watching their films in movie theatres. Now, they’re using sites like ebay to monitor what movies are being pirated, and then using Manufacturing on Demand technology to manufacture those films and selling them directly using channels like Facebook. Whether legacy businesses like Warners are well placed to exploit this, or are too far behind the curve of new generation companies like Amazon and Love Film to do anything other than push more of their films to their customers is something we will have to wait to find out. Disney on the other hand have used a fairly primitive source of data – youtube - to do something even more imaginative than renting out movies on Facebook. Meet DJ Pogo (play) a 16 year old kid who likes making mash ups of Disney Films. Only a few short years ago Disney, who make Chinese protectionism look mild, would have closed him down. Now, they’re giving him access to hi-res content to make even better mash-ups. Why? Because his latest Alice in Wonderland mash up has 7.6m views and is introducing Alice to a new audience.

Always in BETA

Penultimately, innovation. The same sound bites echoed through the corridors wherever we went. “If you don’t fail you’re not trying hard enough”, “test, test, test”, “hack days”, “launch and learn”,  “always in beta”, “launch ad learn”. As hip as some of this sounds, as natural as it might be to creative people, its also quite counter-cultural. Failure is a taboo in the UK. In California it’s a badge of honour.

This was brought home to me when I revealed at a drinks reception that I was one of the founders of the first digital music download company in the UK, the person I was speaking to said. “I heard of that”. And then asked “did it collapse when itunes came along?”. “Yes, I said”. “That’s so cool… brands like yours were part of that whole music revolution”. Not the kind of response you’d get in the UK.

And the soundbites I referred to above “test, test, test”, “hack days” etc are supported by a whole load of rituals and practices.  The practice at Google of giving people 20% of their time to come up with innovative ideas (15,000 last year) is perhaps the most remarkable. And there were some wonderfully innovative ways of approaching the topic. Top of the list was Albert Savoia, Google’s technology director, with his approach to prototyping. Or rather, Pretendo-typing, which he calls “Preto-typing”.

Albert’s thesis is this: most new ideas fail, it’s a fact of life. So don’t ask people’s opinions in focus groups of how they might respond to a new product. And certainly never spend millions developing prototypes that have a high chance of falling on their faces. Instead, develop proxies. Cheaply and quickly. And collect real data, not opinions. Want to write a book? Create a fake door. In other words buy a Google Adwords campaign and see if people click on it. Collect their email addresses. And if you have enough, you have a ready made database of prospects. Have a retail idea? Set up a stall in a car park and see if people pre-order. Have an idea for a PDA? Make a model out of wood and ask people to carry it around with them for a few days. Then once you know the concept can work, spend money on building it. Bonkers, but genius. Before I leave this topic I will end with Albert’s mantra: now beats later, simple beats complex, commitment beats committees, data beats opinions.

Boiling the frog

There were numerous instances on the trip, when I turned to Marc Giusti of Leo Burnett’s, and saw myself staring back. Not because we are both incredibly handsome middle aged men with receding hairlines. But because we recognised in various companies we visited a huge threat to traditional advertising and advertising agencies. In Campaign last week Marc referred to this as “boiling the frog”.

What exactly is this threat? Simply expressed it’s the threat of being left behind. Some of the emerging companies in California have scale that is eye-watering, they have access to unimaginably rich levels of customer data, they have the ability to integrate systems, some of them own boutique businesses in the areas of apps and social media. Others have off-shore production facilities. They have speed, agility and inventiveness. They have transparent and ROI oriented payment models. And they don’t necessarily need traditional creative agencies to deliver much of this. One example for you? Zynga can integrate your client’s brand into their games, weaving it straight into the narrative in ways which enjoy high user acceptance and likeability, replacing traditional advertising formats.

That of course is the glass is half empty view of what we saw. The glass is half full view says clients will always need the creativity we bring, the depth of expertise we have in communications, the solutions and media neutrality we can provide and the talent we can access. But let’s not take it for granted – or our frogs will be boiled. Advertising needs to reinvent itself just like every other industry.

Before I leave the subject of the advertising industry, I have one further note of reassurance. How many of you have had issues with your IT when doing a presentation? Well, the wonderfully reassuring thing about going to the heart of Silicon Valley, right into the boardrooms of these great tech companies, is that loads of them struggled with their Powerpoint presentations too. It is truly a global phenomenon.

This is the speech delivered by Marc Nohr at the IPA 44 Club event hosted at Microsoft in January 2012. An abridged version was reproduced in Management Today in December 2011.