Innovate to survive… and thrive

Our experts offer their views on innovation, strategies to innovate, the future and highlight some of the innovations that have caught their eyes recently (with video links).

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Innovation at a relentless pace

The rapid rise of new platforms has resulted in media companies around the globe investing heavily in innovation as they seek to survive and thrive in the new normal – where anyone can produce ‘creative content’.

With the continued rapid pace of change, industry experts insist digital innovation is not likely to slow down any time soon. To the contrary.

Mike Burgess is a director of creative solutions ad agency Beattie McGuinness Bungay (BMB) and co-founder of The Tablet Business. He says: “Innovation never stops – and the pace of digital innovation is not going to slow. But I think the companies that will be successful in the future will not necessarily be the ones that do things ‘first’. Instead, it will be the companies that incorporate consumer trends into what they do.

“We’re already seeing this in the advertising industry,” he adds. “Traditionally, advertising has been obsessed with novelty. But while being the first to have a Shazam tag in your ad is great for winning a few awards, it’s not actually what consumers care about. Modern day innovation is about considering the relevance to your audience and the benefit to your business – and getting on board if it’s appropriate.”

Rebecca Lieb, Altimeter Group's digital advertising and media analyst, who spoke on innovation at Digital Innovators' Summit in 2013, agrees there will be little change to the pace of innovation.

“It is not going to relent,” she says. “That’s because the opportunities being created by technology and by investment are continuing. In the US, this is the first year that consumers have spent more time on digital channels than with broadcast television. It’s also the first time they have spent more time with mobile devices than with laptop computers. Those are two seismic changes.

“In terms of publishing right now, some of the innovations that I’m seeing are going to be very uncomfortable and disruptive not just to publishers, but to the whole eco system of the media – publishers, advertising agencies, brands, technology vendors and social platforms which, to a large extent, are actually causing much of the disruption.”

Strategies to innovate

Media organisations appear to be adopting one of two clear innovation strategies: investing in innovation labs and dedicated innovation teams, or acquiring businesses with the skills to help them innovate.

Noa Gafni, head of communications at the World Economic Forum’s Global Shapers team and former head of social media at Hearst Magazines, says we are entering an interesting period for acquisitions in particular.

“In media, acquisitions are driven by a number of factors. Facebook's acquisition of Instagram, for example, was an audience acquisition but also an attempt to stay relevant. Yahoo acquired Tumblr to show it is moving in a new direction and to acquire a younger audience,” she adds.

“I certainly think the need to innovate and evolve will lead to more of this type of activity. Google is famous for defensive acquisition - buying businesses to shut them down. I think that will continue but it will also look to acquire some interesting companies. I think Amazon is going to do a lot more. It will be interesting to see how it positions itself now it has acquired the Washington Post, an online content brand. And of course, we will see how Yahoo responds to that.”

Nokia is a business that has already innovated in response to customer demand. The company began as a manufacturer of rubber boots before becoming a mobile phone manufacturer and, subsequently, moving into content creation. It’s head of content and entertainment for Europe, Dave Castell, says the company invests a great deal in fuelling innovation.

“Innovation runs right through the heart of this business, particularly in terms of technology and platforms, he says. “We have a Nokia incubator fund, which runs from Finland, and around four or five programmes across the company aimed at innovation and driving the business forward.

“We have done acquisition too and, with the acquisition of our smart devices business by Microsoft recently, we have now also been acquired for that purpose. There’s a lot of fish eating other fish.”

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Tomorrow’s world

So what will be digital innovators’ areas of focus in the coming 12 months? Rebecca Lieb believes the key focus will be on further media convergence – the coming together of paid, owned and earned media to create innovative new content solutions.

“Media convergence will accelerate,” she says. “I think native advertising – where owned content meets paid media – will really drive innovation.”

This trend, she adds, will likely cause further disruption in the market, as the lines between different industry players are merged.

“This raises the question of who is responsible for native advertising,” she says. “Is it something publishers do for brands? If so, does that dis-intermediate agencies? PR agencies are now good at doing content but haven’t done media buying at all. Advertising agencies have been good at short-burst campaigns, but not so much at genuine content. And native executions for social platforms can be really technology specific – so native advertising will be a real game changer.”

Recent research by the Online Publishers Association supports this argument. It revealed that 73 per cent of online publishers say they are already offering native advertising, while 17 per cent say they are considering be offering it by the year’s end.

Noa Gafni says innovation will come from companies attempting to get to grips with continuing changes around content channels.

“We have a situation whereby the millennials are no longer as attached to their email, for example, and students are having to be reminded by their professors to check their emails. That has major implications for content delivery.

“We’ll see a lot more innovation around platforms such as Vine and Twitter, and more around video. In addition, there will be a great deal of innovation around the use of big data.

“We've come to associate big data with credit card companies and government organisations trying to filter out our behaviour patterns, but our audiences also appreciate things that are more personalised,” she adds. “More firms will try to get a grasp of how data can help them innovate and that will create an opportunity for agencies that have experience of using data and understanding audience groups.”

That view is shared in the FIPP World Digital Media Factbook 2013-14, which states: “New technologies are allowing media companies to understand trends embedded in enormous databases in order to gain customer insights and make decisions about content development.”

BMB’s Mike Burgess agrees: “Major businesses in other sectors are using big data to get close to and better understand the desires of their customers. As content producers and advertisers, we must do the same. As audiences become weary of disruptive advertising, I would be interested to see how an editorial or publishing business would tailor the mix of content it delivers if it could harness the type of data other sectors make great use of. If you can do that, you can increase relevance and therefore effectiveness. That, for me, is where innovation will lie over the coming year or two.”

Watch: Our experts share innovative content and campaigns that have caught their eye recently

Mike Burgess: The Meat Pack shoe store in Guatemala launched a promotion whereby consumers entering rival stores were identified by GPS and sent a mobile app alert informing them of a discount if they instead went along to Meat Pack. The discount started at 99% and reduced 1% per second. 600 competitors were enticed to Meat Pack in one week. Watch: Meat Pack Hi-Jack Promotion

Noa Gafni: The Guardian newspaper’s alternative take on the Three Little Pigs story showed the pace with which a story can change, the value of always-on media and the power of social debate. Watch: The Guardian’s Three Little Pigs ad

Dave Castell: Red Bull’s space jump sponsorship was “the perfect brand fit” for the company with the slogan “Red Bull gives you wings”, according to Dave. As well as sponsoring the jump, the company created a website of content. View the Red Bull Stratos website

Rebecca Lieb: “The innovations catching my eye are those where the digital space has created unexpected change,” says Rebecca. “The Occupy Movement, for example, which was born out of social networking to campaign against capitalism, is launching a credit card. Imagine the irony.” View the Occupy website here.

Quotes

“Modern day innovation is about considering the relevance to your audience and the benefit to your business – and getting on board if it’s appropriate.”
- Mike Burgess, Director, Beattie McGuinness Bungay.

“Media convergence will accelerate,” she says. “I think native advertising – where owned content meets paid media – will really drive innovation.”
- Rebecca Lieb, Altimeter Group's digital advertising and media analyst.

“We’ll see a lot more innovation around platforms such as Vine and Twitter, and more around video. In addition, there will be a great deal of innovation around the use of big data.”
- Noa Gafni, head of communications at the World Economic Forum’s Global Shapers team and former head of social media at Hearst Magazines.