Three opportunities for agency business in the future

When talking to ad agency CEO’s and MD’s it becomes clear that basically everyone is aware of the challenges in today’s evolving digital world. However only a few seem to have a strategy on how to get their operation into shape for the future. This does not surprise. Among all the new gadgets, new tec stuff, new buzz everywhere and everyday you easily miss the forest for the trees. So in order to develop a solid strategy it might be helpful to gain a better understanding of what determines the communications ecosystem within the digital infrastructure. By realising the overlaying patterns we can spot the opportunities laying in digital service design, conversations management and insights intelligence.

Let's think of the digital world as a connection of billions of IP addresses, forming a kind of a digital infrastructure. An infrastructure we are surrounded by at anytime and where pretty much everything that can be put into 1 and 0 will be able to be sent and received. In former times the sliproad to that data highway was our desktop only. Today the access is almost ubiquitous. Mobile devices, tablets, watches, glasses, terminals, telematics, house technology (i.e. LG Homechat), wearables, fuel bands, tennis rackets, not to mention tooth brushes and pillboxes. More and more devices connect us with this invisible digital infrastructure as it is no longer just communications that can be delivered via this highway.

Digital Service Design

Coherently products and thus brands become channels. Here I love the example of the digital electric meter connected to your digital devices. It helps consumers to be in control of their power consumption and at the same time it helps electricity suppliers offering individual conditions the moment competitors are about to launch their latest ‘price dumping’ campaign. Adding value by such contextual digital services is not a privilege of brands with tangible products. Also insurances, banks etc. can design a rewarding integrated customer experience. While in the good old times of advertising everyone was running for the big creative communication idea, today it is no longer the creative art directors who are boss but a new species called creative technical director. Accordingly digital service design has become the new alchemy. Look at international agencies like Fjord or small but smart ones like FTWK or Think Moto and you`ll see, what’s around the corner.

Conversations Management

What seems to be a low brainer yet hasn’t fully made its way into the minds of agency’s CEOs. With the help of digital we can communicate not only 1:1 but almost instantaneously. So there is no need anymore for cutting messages down to 15” or 30” seconds, keeping them short and simple for the sake of raising unaided brand recognition. We are back to the Mom’n Pop Shops, where retailer and consumer had been talking and chatting as human beings (and with respect to the cluetrain manifesto: in a human voice). Today digital communications means conversations. And basically you don’t want to have a conversation about things you are absolutely not interested in, don’t you? And this is why content marketing or native advertising or call it whatever you want will be the playing-ground in the future and a proper management of these conversations will be key. So this one goes out to all those producers, publishers, editors and journalists: “Prepare ye the way! The last will be the first!”

Insight Intelligence

Having said that all conversation will be in real-time, analysis will shift from long or mid to short and very short term ending up in something we respectfully call big data. However it’s not the amount of data that makes marketers sizzle but the time pressure behind it. So the third focus should be on ‘quick’ data or big insights. Of all the chances this field is one of the most promising. Firstly because it is yet very much unexplored or as a CMO put it: “Big Data is a lot like sex in high school. Everybody talks about it, but nobody does it –or if they do it, they do it very badly.” Secondly I am sure advertising will soon turn into a dark market meaning advertising (or “commercial conversation”) will be banned by consumers from their Epson or Google or whatever glasses for the simple reason that otherwise they’d be blown off by too much information. At least because consumers will wear these glasses all day long thus redefining the meaning of ‘always on’. Another reason for the ban of ‘cookie’-based or behavioural advertising may derive from a severe legal intervention, safeguarding people’s individual data which otherwise would be flailing around the internet completely out of (self-) control. If you think that’s nonsense just remember what governments did when too many fatal car accidents happened. To fasten your vehicles’ seatbelts became mandatory.

So that's why knowing about individual consumer needs in combination with the ability to manage relevant conversations and provide a rewarding integrated customer experience will make the competitive edge for brands.  And hence for agencies if they deliver on either on or even better on all three of these future business opportunities.


Same opinion? Different one? Let me know your thoughts!  I am happy to discuss.


e-shoppermarketing for bread and butter.

Put the focus on benefit delivery, not technology.

The other day I read a very good paper from Syzygy, a digital agency within the WPP network, introducing an interesting categorisation of digital at point-of-sale. These guys make a fine distinction between what they call ART (assistive retailer technology), ACT (assistive consumer technology) and Retailtainment, being the technology to entertain consumers. For each of these technologies they are presenting smashing examples and giving proof of their capability to build meaningful digital POS gadgets frequently used by customers and retailers. Though I pretty much appreciate this approach of classification (the first of its kind coming to my knowledge), even they do lack an answer on FMCG issues like the question of how can digital bring something to ease food grocery shopping missions. However as Syzygy themself points out by saying “Focus on benefit delivery, not technology“, to address customer needs may help to find the killer application that delivers value even in this complex sector. 

Easing the call of duty.

In my last post I have introduced convenience, orientation and inspiration being the main key-drivers of  shopping missions depending on what kind of purchase decision is about to be made (compulsory or activational). Looking at products like eggs, bread, butter and milk etc. we all may agree that this shopper task could be well described by “The Call of Duty”. In short – with respect to crowded supermarkets and other imponderabilities - it is a shopping trip we would be happy to avoid at all. The underlying key-driver here is convenience and technology that addresses the related customer needs would help to make such a shopping trip redundant in the future.
Nevertheless even if we want to spare ourselves this trip somehow these goods have to be selected and brought to our homes. So it is obvious that online-shops and delivery service play a distinctive role. But whoever did register at the e-shops of grocery retailers will have found out already that apart from the physical inconvenience of a shopping trip around the corner during a snowstorm, the efforts and the time-budget needed to place a meaningful order on these websites are nearly the same (I just tried to e-shop yesterday at a retailers' web shop via my tabloid only to find myself back in a real store an hour later due to a horrible user experience).

Ideas into the right direction.

I don’t know about Tesco’s’ web shop but at least they came up with some more intuitive solutions like for example Tesco’s Homeplus Virtual Store in South Korea or its latest Gatwick based digital airport shopping window. What became clear to me is that at least the retailers I have checked in Germany did not fully understand the problem that digital solutions should solve. Their trade off seems to have been the ease of use against longtail, yet with room for improvements. Another good example: The pizza company Red Tomato in Dubai came out with a fridge magnet allowing customers to order with the press of a button. You synch up your order with your smart phone and whenever you're hungry just give that button a press.  I guess with a bit of refurbishment this idea could easily be adopted for buying essential products at retailers. It is the shopping trip for exactly these bread & butter products shoppers want to get rid off. Any other goods that require more cognitive attention, involvement or whatever you want to call it, do not fit into the category of compulsory products, driven by convenience. Shoppers don’t aim at the avoidance of shopping trips for any other goods but these essentials. Digital service solutions that strictly keep that in mind will make a difference (and a fortune).

Disruptive thinking, disruptive models.

To make a real quantum leap in developing digital service solutions that tackle the issues of e-shoppermarketing for FMCG goods (like bread and butter) agencies may not only have to focus on the benefit delivery but to break away with all of our current thinking and – yes Luke Williams- do some disruptive thinking instead. I guess at the end it should also be the retailers themselves that would have to revise their traditional business models and come up with some questions to which the answer might be a real game-changer. So for example why are retailers not giving away their own branded fridges to consumers? Fridges acting like a „alter shopping ego“ while being digitally connected to their next food grocery store thus automatically managing the entire stock up process for this kind of essential (“low-involvement”) goods?



The happy cow standing on the field

Different shopper modes require different digital answers.

The “Omnichannel-Quest”, the “All Channel Experience” or the “U-Channel Retail” - almost every week there is a new article or study regarding the challenges of retail landscape, undergoing major changes driven by digital devices and opportunities. Yet most retailers are still reluctant to invest in the respective organizational change and IT architecture. For good reasons as the intellectual fundament still doesn’t seem to be distinguished enough. Or would you scan a QR code on a piece of butter to experience more about happy cows standing on the field? Would you make your purchase decision dependable on what smashing augmented reality performance it has?

Don’t get me wrong. I am probably one of the biggest supporters of using the digital infrastructure instore and I am more than convinced that –especially with a view to AR- we are just on the verge of something really exciting to come. However I think it doesn’t lead into the right direction if we only assume that “consumers of tomorrow want to complete their purchases when they want and where they want” and therefore ask for an all channel experience as the opportunities of the digital infrastructure instore are not limited to distribution channels only. Neither do I believe that consumers’ digital media savvyness requests advanced digital technologies everywhere and by all means.

From compulsory to activational purchase

I think consumers would use intelligent tools connected to the digital infrastructure depending on the kind of shopper mode they are in (I deliberately have chosen the word shopper mode and not shopper mission). Scaled on a horizontal line these modes would range from “Compulsory Purchases” on the one side to “Activational Purchases” on the other. Compulsory purchases would be those that cover mandatory purchases of either low involvement and/or a low reward level or simply purchases that don’t require too much attention or cognitive effort - referring to what Daniel Kahneman1 calls system one. The opposite pole to compulsory purchases – the activational purchases - would be marked by high involvement, high self-rewarding potential or the need for more attentional activation and thus cognitive effort (system two referring to the author above).

From compulsory to activational purchases
A compulsory purchase would be to pop into a Walmart to get some milk while the purchase of a wedding dress or a new sports car would be a good example for an activational purchase (yes – I have also chosen that one deliberately). The respective shopping modes are different and so are their main key-drivers. Compulsory purchases usually lack any cheerful elements so they are perceived as tasks or duties, which consumers would be happy to avoid at all or at least to be alleviated. The most important key-driver would be convenience along the purchase journey. The question is: How can digital technology help to make those tasks easier? Activational purchases for example would be the purchase of a new car or a wedding dress (yes – I also chose that one deliberately). Orientation and inspiration as the main key-drivers play a significant role. So how could digital devices help to better navigate the different options or what can be the contribution of a digital technology to better visualize a consumers’ very personal story about him and his new convertible.

Though I guess that there are only a few people that put the purchase of a Porsche or a wedding dress next to items like bread, butter, sewing kits or fruits on their shopping list, consumers nevertheless are rarely in one of these modes only. If we would look at their lists for just one shopping trip we certainly would find goods that belong to compulsory purchases and others that are clearly activational purchases. I am sure that a many of those self-rewarding purchases found their way to the compulsory shopping list just to make the shopping trip more enjoyable at all.

Ease & Enrich

Probably there is no chance to cover the respective motivation or shopping modes behind each and every shopping item with digital purchase enhancements. However I think it would be a good start to simply think in “ease” and “enrich” being the two categories of possible technological (digital) support instore. What can digital bring to the party to help consumers working themselves more comfortable through their compulsory shopping lists? What kind of technology would help to finally find the right product if in doubt? And what can help to turn shopping into an exciting event where it is suitable.

But harken! - not the technology determines our behaviour but the interface. Any attempt to make use of the digital infrastructure instore must take into account that technology invented to overcome barriers will not get an obstacle itself. Any app or distribution channel that promises substantial simplification for compulsory purchases won’t find reasonable acceptance if it is too complicated for shoppers to install and/or use. The same applies for features that should enhance the product’s experience at the point of sale. It again has to provide an answer to the consumers’ simple and eternal question: Why should I?


1) Here I refer to „Thinking, Fast and Slow“ by Daniel Kahnman, which I may take the liberty to strongly recommend to be part of any marketing library.