Contagious Is Ten

Social Change / xxx Contagious is ten. Welcome... 14 28 31 47

THE CONTAGIOUS DECADE SMALL BUT PERFECTLY FORMED 06 A Primer 40 Little brands, big thinkers Log off, lean in and pore over Katrina Dodd’s attempt In each of our past 20 issues, Contagious has at imposing neatly alphabetised order on the chaos of celebrated seven small companies hoping to change the Contagious zeitgeist. the world. We take a look at some of our favourites – and add a few more to the ranks. WELCOME TO CONTAGIOUS X 14 Brands for the next decade STRENGTH STUDY / Publishing Application instructions for this special dose of the 47 By Chloe Markowicz magazine. Side effects may include broad inspiration, Landscape Brands evolve from being publicists brand bravery and a healthy dose of disdain for the to publishers status quo. Brand Spotlight Red Bull Opinion Tyler Brûlé, editor in chief, Monocle STRENGTH STUDY / Disruption 19 By Emily Hare STRENGTH STUDY / Data Landscape How can brands make disruption work 57 By Chris Barth while protecting themselves against challengers? Landscape The fine art of surfacing signal from noise Brand Spotlight Tesla Brand Spotlight IBM Opinion Jonathan Mildenhall, CMO, Airbnb Opinion Vikram Somaya, general manager of WeatherFX, The Weather Company 28 CUT OUT AND KEEP A brief history of (Contagious) time / FEATURE / The technology boneyard The ten commandments 66 Explosive digital development has its casualties. Will A crunched-down illustration of the major tech, social Sansom considers those that became cautionary tales. and business developments on one side and Contagious’ non-denominational lessons to live by on the other. ANALYSIS / The case study cash-in Hang it proudly. 68 Contagious corners the hypothetical market by backing our case study-featured brands. By Raakhi Chotai. 31 STRENGTH STUDY / Purpose By Lucy Aitken 69 INSIDER IDEAS Landscape What’s meaningful is magnetic, Sex, drugs & Twitter and great brands understand their calling Will Sansom charts how the collision of celebrity life Brand Spotlight Chipotle and digital media is reshaping popular culture. Opinion Paul Polman, CEO, Unilever 2 / 3

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STRENGTH STUDY / Design STRENGTH STUDY / Collaboration 77 By Ed White 119 By Georgia Malden Landscape From decoration to business imperative Landscape Better together? Partnerships characterise Brand Spotlight Apple today’s high-achieving brand landscape Opinion Sue Siddall, partner, IDEO Brand Spotlight LEGO Opinion Blake Mycoskie, founder and chief shoe-giver, TOMS WHAT WE GOT WRONG 86 To err is Contagious? STRENGTH STUDY / Culture Our role as a handy instruction manual for the future isn’t 129 By Dan Southern as easy as we make it look, ok? But we’re big enough to Landscape Company culture galvanises employees admit a few of our mistakes… and delights customers Brand Spotlight Etsy 89 STRENGTH STUDY / Experimentation Opinion Dave Gray, author and consultant By Alex Jenkins Landscape Test, measure and learn in FEATURE / Job title safari a rapidly-changing environment 138 As the marketing industry evolves, so does the taxonomy Brand Spotlight Google of its strange and exotic creatures. Opinion Sir Martin Sorrell, founder and chief executive officer, WPP INDEX 140 The brands, companies and people showcased STRENGTH STUDY / Services in this special issue of Contagious. 99 By Patrick Jeffrey Landscape Service design thinking has radically reimagined marketing in the digital age Brand Spotlight Uber CONTAGIOUS X Opinion Russell Davies and Louise Downe, director of strategy and service designer at INSERT Government Digital Service NEWS 109 STRENGTH STUDY / Empowerment Contagious brand ideas By Arwa Mahdawi From selfless selfies to innovative uses of Instagram Landscape The tool-makers shall inherit the earth Brand Spotlight Safaricom WILDFIRE Opinion Ethan Zuckerman, director, Stories plucked from the pop culture ether MIT Center for Civic Media AI employees, smart cities and invisibility cloaks Editorial / Ten Years Of Contagious 4 / 5

Te n Years of Contagous Paul Kemp-Robertson & Gee Thomson Contagious founders

Contagious was born on the back of a beer mat in a Chelsea pub in Infrastructure has always provided the catalytic stepping stones 2004. It was a time of ferment in the marketing industry. Mobile was for change. The 20th century was defined by mass media and beginning to get smart, social media was primed to explode and people’s motors. For our generation, the internet and mobile have been relationships with brands were becoming a whole lot more interactive. the new enablers. The next bridge, machine intelligence, is of New media and behaviours meant the audience had run ahead of the an entirely different magnitude and one that Contagious is looking advertiser, so we figured that the communications industry needed a forward to charting. fresh guidance system to make sense of the immediate future. Technology, in the shape of websites, search engines, navigational Hence Contagious. We wanted to create a platform to explore alterna- aids and smartphones, already augments our intelligence. Those who are tive advertising ideas, assess the impact of emerging technologies and better able to deploy such resources are already on a superior plane of champion a greater sense of purpose for brands. Having been part of the interaction with the modern world than those rare souls still tied to pencil marketing industry for 15 years we both believed the age of broadcast and paper. The second wave of machine intelligence will be even more and monologue could be displaced by an era in which brands provide seismic, impacting on sectors far beyond marketing communications people with tools, services and experiences, and use their creative and and wider pop culture. financial muscle to effect meaningful social change in the wider world. Artificial Intelligence, in all its various forms – from data manipulation This feeling is encapsulated in our name. Contagiousness is in the and decision-making, to virtual assistants, sentient robots and connected stuff that people choose to care about and feel compelled to share. It’s devices – has the potential to transform every aspect of society: from a spirit and a mindset that reaches beyond siloed disciplines, fusing education, employment, health and leisure, to energy, transport, man- creativity and marketing, technology, design and behaviour. ufacturing, banking and the future of governance. The key landmarks and turning points of the past ten years are sketched For all the technological and creative wonder that Contagious loves into our Contagious Timeline on page 32 . This magazine has witnessed to celebrate, there’s no denying that the world has a legacy of ills to the business world’s most tumultuous and exhilarating epoch. The dom- contend with: the environment, wealth inequality, resource depletion, inant giants – Alibaba, Amazon, Apple, Google, Facebook and Twitter and conflict being an immediate few. – have mashed into the trends and movements that have unfolded since It’s up to those with ideas, the next Brins and Musks, the thinkers, the 2004: social media, apps, crowdsourcing, the sharing economy, data innovators and the inventors, to make themselves heard – and sooner explosion, wearable technology and corporate transparency. rather than later. Let’s hope that somewhere, somehow, those urgent But dramatic as this change has been, Contagious will always be advances, those ground-breaking ideas that will define the next ten about the immediate future – what we refer to as the ‘first light of dawn’. years, are already finding form on some sweaty 3D printer in a bustling Not for us the crystal ball-gazing of those Delphic trend forecasters. lab, on a battered laptop in a student bedsit or even on a gleaming Mac We have always been focused on a very practical future for marketers, perched on the desk of a Contagious subscriber. given root by advances that exist right now, today. When this new dawn comes, Contagious will be watching… To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Social Change / A-Z The Contagous Decade: a Primer The past ten years have been a glorious mash-up: evolution and revolution in equal measure, a clumsy but exhilarating waltz into our unevenly distributed, platform-agnostic and relentlessly accelerating futures. Before we sally forth into a fitter, faster Unknown, a little orientation seems in order: log off, lean in and pore over our attempt to impose neatly alphabetised order on the chaos of the Contagious zeitgeist By Katrina Dodd

B is for Broadband, benevolent bearer of bandwidth, the better to support the binge-viewing of Breaking Bad. As a basic component of our communication infrastructure, broadband penetration has delivered benefits above and beyond our basic old-school telecoms needs. Described as a fourth utility after water, heating and electricity, in 2009 the World Bank put it thus: ‘Broadband is not just an infrastructure. It is a A is for Apple. The transformation of Apple from technology also-ran general-purpose technology that to the world’s most valuable brand has been a defining obsession can fundamentally restructure across ten years of Contagious. In so many ways the antithesis of open an economy.’ That was true even ‘for everyone’ internet culture, the company and its superbly polished before 2008 became the year of works have established a set of standards for user experience that have bravado-and-bullshit-fuelled bank- fundamentally altered our expectations of, and relationship with computing balls-ups, but possibly even ers. Bestowing a sense of agency and mastery over our gadgets even more necessary in its aftermath. while edging us further away from a true understanding of how stuff The letter B has also brought us works, the Cupertino corporation has handed us the keys to an expertly BYOD (Bring Your Own Device), an enabled world of communication, community and commerce. A world alternative to clunking, employer- that reflects our new normal: where A is also for Always on, for Apps issued tech; Bitcoin, an alternative

and Algorithms and APIs. A world that can incubate the Arab Spring to clunking, centralised currency; YCN Walker, / Alex Illustrations and Anonymous. A world with Amazon and Alibaba in the ascendancy. Beacons, a nascent alternative And then, of course, there is Android. While Apple’s iOS-running mobile to clunking, irrelevant marketing; devices rule the high end of the market, in less than a decade Android And BuzzFeed, an alternative to has become the people’s choice, the de facto operating system du clunking, text-heavy news and monde. But even with 85% of smartphones shipped this year running entertainment (see ‘23 ways listi- Google’s software, the race to run the world is still a long way from being cles will improve your life’, below*). over. A is also for alliteration: brace yourselves for B… *This article does not exist. 6 / 7

C is for Cats. Pictures of cats. Cat memes. Cat videos. Really, though, the rise of cats is simply the cute, furry face of the rise of Content in all its guises. The creation, curation, circula- tion and consumption of material and messages is booming as the tools of production and channels D is for Disruption. Or should E is for the era-defining of distribution become ever more that be Disintermediation? Or Economy, dragged down as accessible. Simultaneously, how- maybe even Democratisation? The banking revealed itself to be ever, attention is a resource in combination of Digital technology not so much a system as a sink- effective decline, no matter how and hot and cold running Data is hole, caving in under exponential diligent our multi-screen multi- driving the re-imagination of entire entropy and its own preposter- tasking becomes. Coming up with business categories, with music ous lack of substance. It’s for content that can compete on merit and publishing the canaries in the Ecosystems, slick, self-serving, against everything else out there is coal mine for other established habit-forming, loyalty-locking exactly as hard as it sounds, and businesses trying to weather the walled gardens of blissfully con- the brands that are doing it well revolution. Distribution is also up sistent UX. It’s for Empower- are few and far between. for grabs: if your product can be ment, especially in the rapidly Ten years ago, the ‘C-word’ was broken down into zeros and ones, emerging nations (more MINT, Convergence; at the beginning of there’s the internet. For everything less BRIC) leapfrogging estab- Contagious it was hypothetical, else there’s Drones and Driverless lished tech infrastructure and a talking point. Now we’re living cars. But top dog among the Ds is cutting straight to the chase with it: untold functionality and utility Design, the discipline and rigour mobile. E is for Experience, a is telescoped into devices that that’s informing the ongoing over- new preoccupation throughout are seldom beyond arm’s reach, haul of our world and the organisa- this industry and beyond. For and the evolution of consumer tions and objects in it. Design has Experimentation because we can, electronics continues to be fasci- become more holistic, a strategic and, more prosaically, for Email, nating. Somehow, though, we don’t as well as an aesthetic factor and an era-defining communications seem to have any fewer gadgets: increasingly an open and inclusive epidemic that even the Emoji has the ‘Peak Stuff’ story of late 2011 process too. yet to eclipse. may have been a false dawn. Peak cats? Nowhere near. Special mention to the Crowd: some kind of ‘Many Hands Make F is obviously for Facebook, not so much the social network of choice Light Work’ award seems appro- as an internet-age equivalent of the phone directory: most of us are in it, priate, although more for contri- and if you’re not, it’s a bit of a statement. Undeniably useful (as sounding butions to art and science than board, stalking apparatus, as authentication/universal login), Facebook to marketing. You shall all receive has attained a degree of ubiquity that is now its best defence against one millionth of one percent of one rival platforms. Wherever it happens, though, our online flocking together hand clapping. And the gong for is fuelling the uncanny acceleration we feel across so many aspects storage is metaphorically awarded of our lives. The simmering culture of Fear, the Filter-bubbles and the to the Cloud, even if, as the Daily Fan culture: everything from Fifty Shades’ flights of fan-fic fantasy to the Mail recently clarified, it is ‘not an mainstreaming of Festivals feels connected to our increased exposure actual cloud’. to, well, everything. Social Change / A-Z

I is for Image Explosion. If you’re more Instagram than Internet of Things, this is for you. At the end G is for Google, not only the front door to the internet, but also a com- of last year, Yahoo! estimated pany of global consequence with an ambitious tendency to reach for that 880 billion photos would be the stars (OK, the moon) and fingers in dozens of different digital pies. taken in 2014, 123 for every man, But G is also for also for Games of every conceivable stripe. Against woman and child on the planet. a thoroughly dispiriting backdrop of Globalisation, the GFC, and the Self-contained cameras are fewer growing Gap between rich and poor, the huddled masses have been and further between, but combine keeping their spirits up with regular doses of racy fantasy epic Game of smartphones and social platforms Thrones, the most-pirated TV show ever (see also Torrenting). Gaming in with an exponential rise in storage all its guises has also become ever-more pervasive, an under-acknowl- capacity, and Lo! a new visual edged fact thrown into relief with the release of Grand Theft Auto V, language is born, and anyone can which earned $1bn in three days flat, faster than any other entertainment speak it. Expertise is not the point: product, ever. We also have gaming to thank for the gift that is Gesture- the ability to shoot and share some- control: what started with the Nintendo Wii quickly opened up a whole thing important, or interesting or new world with Kinect, now sensitive enough to track players’ heartbeats pertinent is. The upshot is that pic- through the pulsing of their skin. But as sophisticated as Gaming has tures have not only helped to define become, we’re still suckers for animated GIFs. and document the past few years, they’ve developed (retro-pun!) into a kind of social currency and visual shorthand that fuels and fosters communication on all levels.

J is for Justin, Jay-Z, Jobs, a series of names of varying significance. Justin Bieber gets a shout for becoming one of our first, and most unavoidable YouTube stars, inspiring a surge in sales of hair products for young men; Jay-Z gets a shout for sound-tracking the zeitgeist and for a preternatural H is for Hype Cycle, Gartner’s handy graphic tool for mapping the understanding of branding that’s maturity, adoption and social application of specific technologies. So allowed him not only to embody we know, for example, that Haptics (aka tactile feedback technology) authenticity, but to confer it on a are currently climbing the Slope of Enlightenment, while Head-mounted roll-call of brands – Reebok, HP, displays are sliding into the Trough of Disillusionment. Fun, isn’t it? What Budweiser, Heineken, Jaguar, if we could measure the ebb and flow of contemporary life in the same Samsung – without denting his way? Harry Styles: Peak of Inflated Expectations. Hipsters: Trough. In own apparently bottomless appeal; reality our non-tech hype is measured in Hashtags: at one end of the and of course, there is – was human-endeavour spectrum the Higgs boson discovery got the world – Jobs, Steve Jobs, visionary, talking about physics, topping the trending list on Twitter on July 4, 2012; game-changer and a whole other at the other, Hacking has made the top ten with depressing regularity. kind of icon. 8 / 9

K is for Knowledge, and the changing relationship we have with it. Access to information is a transformative thing. Samuel Johnson said: ‘Knowledge is of two kinds. We know a subject ourselves or we know where we can find information upon it.’ He was talking libraries, but the effect of the internet has upped the ante by another order of magnitude: a whole generation, when confronted M is for Mobile. It’s so obvious we with a gap in comprehension or shouldn’t even have to say it. Every savoir-faire, reflexively knows they year as far back as we can remem- can Just Fucking Google It. Or pick ber has been The Year of Mobile, up a Kindle. For those who don’t and yet it never quite seemed to automatically turn to the internet, be true. Can we stop now? It’s a pitying digital native is usually just how we do stuff. It’s becoming on hand with an eye-roll and a a Meme, but more in the original smartphone to help them out. Richard Dawkins sense than the From Kimye to Kahneman, from ‘I can haz cheezburger’ sense. K-pop to Kale, it is getting easier to Our collective consciousness is know stuff. But it is getting harder gradually optimising for mobile. It to explain to your kids why school may take another Moonshot to get and homework still matters. us beyond that...

N is for Netflix, feeding our need L is for Learning. The acquisition for the next movie, the next episode of knowledge and skills is a long and the next season with all-you- way from being irrelevant, in fact can-eat dedication to our appetite it’s booming as people around the for more of that thing that we love. world sign up in their millions for Thank you Netflix. It’s easy to for- tutorials, classes and qualifications get that in return we’re feeding of every conceivable type. The Netflix the data it thrives on, from increasing availability of MOOCs, which it can deduce how better or massively open online courses, to serve – hell, even to create – is offering unlimited participation more of what we crave. There are and open access to some of the other Ns to consider: the impact most respected educators and of the Network Effect; the rise of academic institutions in the world. Nationalism; the self-conscious The power of learning has not been ordinariness of Normcore; the lost on brands and business, and not-quite-there-yetness of NFC; the proliferation of Labs in recent And Thaler and Sunstein’s Nudge years is no coincidence. Test and theory, subtly engineering choice Learn, Lean in, think global act architecture to alter behaviour, to Local and love thy LGBTI neigh- wit: ‘Nudges are not mandates. bours: that’s how it gets better. Putting fruit at eye level counts as (Also, read things that are longer a nudge. Banning junk food does than a Listicle.) not.’ Which brings us to O. Social Change / A-Z

P is for Privacy. A lot has happened over the past ten years, but as blithely as we adopt, early or otherwise, the shiny gadgets and devices of the new millennium, we are still easily creeped-out when confronted with the tales they tell on us. Banner ads for stuff that we’ve looked at – or already bought! – follow us around the internet. We’re routinely asked to sign away our data in language that obscures rather than clarifies the reasons why that should be necessary. Research by GfK found that 80% of consumers surveyed wanted more regulation to protect their data privacy and less than 40% trust marketers with their personal data. That’s bad enough in the smartphone era, but the more connected our daily lives become (and Cisco predicts the Internet of Things will see 50 billion objects hooked up to the internet by 2020), the more necessary clear and reasonable communication becomes. Why is this not a ‘Purpose’ issue for more brands? Stay tuned.

Q is for QR codes. The optimistically named Quick Response Code has been both a blessing and a curse. Its success in Asia has failed to herald its embrace in Western markets where it continues to be the weakest link O is for Obesity. The World Health Organisation defines obesity as ‘excessive fat in many a marketing campaign. accumulation that may impair health’, a condition signified by a Body Mass Index Let’s move on. Quantified Self. The of more than 30. According to the American Medical Association, two thirds of the proliferation of sensors, data and US population is overweight, with 36% of adults clinically obese. In the UK and the devices and software to gather China, a quarter of all adults are obese; in Russia the figure is 23%; Brazil 15%. and process a relentless stream The epidemic claims the lives of 2.8 million adults per year, making it the fifth most of information has gifted us the common cause of death globally. The Trust for America’s Health and the Robert ability to be self-obsessed aware Wood Johnson Foundation have predicted that more than half of the US could be in mind-boggling detail. QS might obese by 2030, costing $66bn in treatment and at least $500bn in lost economic seem, well, selfish, but really it’s the productivity. Gulp. Or should that be OMG? We have less depressing Os: On-demand beginning of quantified everything. (see also Netflix), Open Source, O.Ba.Ma. Occupy. Oversharing. Damn, we were Yes, it is profound and amazing, doing so well… Wait: OK Go! ‘OK Glass...’ Gah. just spare us the details, okay? 10 /11

U is for User, as in User-friendly and User experience, but also in the wider sense as in You, the consumer, now enthroned at the centre of the business universe thanks to quotes like this from Jeff Bezos: ‘Above all else align with customers: win when they win, win only when they win.’ It’s worked for Uber, the ride-sharing under- dog-turned-undisputed-champion of transit disruption. In startup culture, every new venture wants to be the Uber of something, but if we had to stand shoulder to shoulder with one U-related service provider it would be Kenya-based Ushahidi Inc. The non-profit has grown from crisis-mapping to providing open-source tools and software, focusing on innovation and problem-solving on a social scale. Genuinely Upworthy.

R is for… Reprise! (to the tune S is for… (keep it going...) of We Didn’t Start the Fire) Selfies, sharing, screens, space, Rise of the extreme right, Snowden renewables, real-time Storytelling, Stuxnet, Re-views, rolling news, reality TV Silicon Valley Re-cession, Raspberry Pi, riots, Second Life, streaming, robots, Shenzhen, Soylent Rockefellers switch from oil to Same-sex marriage, cleaner energy sustainabili-ty We didn’t start the fire… We didn’t start the fire…

V is for video, because although software may indeed be eating the world, the world is too busy T is for TED, and for TED Talks, a theatrical, time-limited watching videos to really give a format for spreading ideas with impact – a bit like WikiHow, damn. Omnicom recently advised but slightly less practical. Twitter performs a similar its clients to shift as much as idea-and-information dissemination function, but with greater 25% of their TV budgets to online economy and a lot more Trolling. Ideas don’t have to be video, and this year eMarketer good to spread, though: Tea Party, take a bow. They also predicted that spending on online don’t have to be obvious: who’d have thought Twitch.tv, the video advertising will overtake internet equivalent of sports TV for gamers, would become TV ad spend as early as 2018. a thing (acquired for $970m by Amazon, beating Google to From six-second Vines to the the deal)? Ideas don’t have to rely on Touchscreens: feature latest ubiquitous viral, Video has phones are transforming lives across the developing world. eclipsed Voice-control, Virtual And they don’t have to be the brainchild of billionaire Tesla Reality, Vampires and the curiously founder Elon Musk, but it sure does help. For content, of disturbing rise of Vaping and Vice. course, we have Torrenting. It is a Very. Big. Deal. Social Change / xxx

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Y is for YouTube From ‘Yes ...Because Z is for Zombies. we can,’ to YOLO, nothing has AMC’s premiere season five of The captured or embodied the spirit Walking Dead broke cable records of the Contagious decade quite with 17.3 million viewers tuning in like YouTube. Now all the world for a fix of gore, violence and life-or- really is a stage, with no subject undeath struggle. If YouTube brings too big, no camera work too shaky, us face to face with the world at no moment too trivial to record its most human, the flipside is our and share. And this epic and unsated appetite for tales of the yet curiously personal platform Zombie apocalypse. has created a new generation of The subject of TED talks and players: avidly followed stars of TV shows, novels and Guardian the small glowing screen, racking think-pieces, zombies are variously up subscribers in the millions, described as a response to the Welcome to the home stretch… even if information wants to be viewcounts in the billions and rise of atheism (novelist Stephen W is for Wearables, because free, we’re not totally convinced the kind of revenue that make Marche), a metaphor for consumer- frankly, what could possibly com- that it should always get its way. their parents feel okay about how ism, and ‘always double, a symbol pete? Not the wane of Windows. But everyone loves Wearables, much time they’re spending in their of failure and success, slavery Not even the wonder of wifi. Not right? Whether that’s true now is bedroom. and rebellion’ (Professor Sarah the diligently updated wisdom of not really the point: whether it’s Felix ‘PewDiePie’ Kjellberg is Juliet Lauro). In other words, an Jimmy Wales’ Wikipedia, because true in the next ten years is way currently the master of this oddball endlessly versatile metaphor for we take it for granted and laugh at more important. Apple’s famed universe: a passion for providing the overwhelming churn of unset- it when it’s wrong, even though it is capacity to create new markets first-person commentary on his tling cultural circumstances and a marvel of endeavour and collabo- means a lot is riding on the suc- video-game exploits has parlayed possibilities that define our lives ration. And not Wikileaks because cess of its Watch. into 30 million channel subscrib- now – and an entirely appropriate ers, a total viewcount in excess of response to an era of change like 6 billion, and income north of $4m no other. per annum. A player par excellence. We live in interesting times. YouTube is both the greatest and Every day might feel like the end of most terrifying show on Earth. the world as we know it, but mostly Good thing we like to be scared… we feel fine. Ten more years!

X is for... Cut us some slack: X is tricky, we’re tired, and all we could think of was The X Factor and the XPRIZE (which really is spelt like that, we checked). One is a pitiless singing contest that humiliates the desperate for easy LOLs; the other is ‘a highly leveraged, incentivised prize competition that pushes the limits of what’s possible to change the world for the better’. The best thing is, we don’t have to choose, we live in a world where these things can happily co-exist. So. Our final desperate stab at X is a rallying cry to bearers of the XX chromosome: women. If there is one thing that’s even less evenly distributed than the future, it’s equality of opportunity, rights and respect for women. Over the past ten years at Contagious we’ve witnessed a steady building of efforts to redress the balance in all kinds of ways, some branded (Coca-Cola 5 by 20), some not (Slutwalks). All chipping away at a big, but fixable problem. Welcome To Contagious X / Brands For The Next Decade

Brands for the next decade Application instructions for this special dose of the magazine. Side effects may include broad inspiration, brand bravery and a healthy amount of disdain for the status quo By Emily Hare and Nick Parish

We conceived Contagious X – a celebration of from the Arab Spring to Zombies (page 6), and a Contagious’ tenth anniversary – as both a state- review of how digital-first fame and the dawn of ment of the decade’s influence and a roadmap micro-celebrity has evolved post-Bieber (page 69). to building brands for the 21st century. In this special edition of the magazine, we’ve set out to Changing fortunes crystallise our thinking over that period and lay As well as harking back to brands that out a vision for the future. we’ve featured on their way up, we’ve We’ve tried to bring the benefit of ten years decided to look at some of the flops that we’ve of knowledge to bear on every bit of this issue. championed in What We Got Wrong on page This is graphically portrayed in a timeline of the 86. If dead tech’s really your thing, have a read most significant changes of the past decade, and of Will Sansom’s Technology Boneyard on lexically communicated in a set of non-denom- page 66, complete with comments from Benedict inational Commandments, both of which make Evans, partner at San Francisco VC firm up our fold-out centre spread. We’ve got an A-Z, Andreessen Horowitz. 14 / 15

For every Kodak, Blockbuster or Lehman Brothers, there’s a new company waiting in the wings. Small But Perfectly Formed (SBPF), our long-running feature that showcases impressive startups, has moved from community-powered businesses through app developments to carefully crafted niche products that have been crowdfunded on Kickstarter. In this issue, we turned to the founders of three of our most successful SBPF companies – Raspberry Pi, GoldieBlox and BRCK – and asked them to recommend some new blood: companies that they think are about to break through to the mainstream. Check out their selec- tions on page 40. Business and creative success We’ve had to restrain ourselves from snorting in horror when presented with certain business cards, so we’ve taken the chance to pull together some of the most offensive job titles we’ve come across and then imagine how these increasingly outrageous superlatives might manifest themselves in the future. Take a Job Title Safari on page 138. We reflect back on just how successful the brands we’ve featured as case studies have been over the past decade by creating a theoretical stock portfolio and tracking their performance in the market. Our Case Study Cash In on page 68, though sadly virtual, showed how the brands we’ve written about over the years have (generally) had impressive business success alongside smart, creative marketing. We suspect a link. Overall, our index outperformed the control portfolio by 17%. Now, where are those Bitcoins? (Having said that, if we had bought one Bitcoin for 80 cents when we first mentioned them on Contagious I/O in April 2011, and been lucky enough to sell at their peak in November 2013, we’d have turned our loose change into $1,124.) Welcome to Contagious X / Brands For The Next Decade

Purpose Disruption

Publishing Experimentation

Play to win we’ve seen brands using to their advantage? We Let’s not forget the main event. decided on Disruption, Purpose, Publishing, Contagious has always been valued for its case Data, Design, Experimentation, Services, studies, but for this special edition we decided to Empowerment, Collaboration and Culture. mix things up and focus instead on what qualities Each strength is divided into three parts: brands need to exhibit to succeed in this day and Landscape, Brand Spotlight and Opinion. The age. To that end, we’ve selected ten key brand Landscape section discusses how the strength has strengths to make up the meat of the magazine. developed over the past decade. The Spotlight We landed on these specific traits based on an then explores the brand that best exemplifies analysis of all the brands, creative work, trends that strength. and ideas we’ve covered over the past few years. We’ve used this opportunity to showcase and So, when the editorial team weighed it all up, dig into standout companies. Some we’ve fea- what were the topics, themes and ideas that tured previously but felt worth revisiting, such 20 / 21

Culture Design

Services

Data Empowerment Collaboration

as LEGO, Chipotle, Safaricom and Red Bull. Mycoskie, founder of TOMS, gives his take on Others we delved into for the first time, like collaboration. Acclaimed journalist, entrepreneur Tesla, Etsy, Uber and Apple. and publisher Tyler Brûlé shares his thoughts Of course, the best brands are multi-talented, on content and publishing. Unilever CEO Paul but to keep things focused we decided to home Polman tells us why purpose is so vital to the in on the one aspect of their winning approach. FMCG business. And Jonathan Mildenhall, chief Finally, each section gives the last word to marketing officer at Airbnb, considers disruption. an external expert. We’ve tapped into our We’ve had a fun, but strenuous, time compiling smartest contacts, folks who are pushing the this issue for you. We hope it’ll take an hon- industry to evolve in new and previously unim- oured place alongside the rest of your Contagious aginable ways, and asked them to share their collection, and serve as an important reference knowledge with you. Sir Martin Sorrell, CEO of and companion as you help your company build WPP Group, discusses experimentation. Blake on its strengths in the new year. Strength Study / Disruption Promotional Feature

Lollipop learning What’s not to love about Chupa Chups’ latest campaign? It’s got it all. Lollipops! Instagram! Defending market share!

Of course, when you’re playing a choose-your- ‘We studied their emotions during different own-adventure game on one of the hottest points in the day – we looked at what their ten- social networks around, it’s not obvious that sion points are, how they feel and what devices one of its business objectives is to defend they use at different parts of the day.’ market share. It’s the type of information that’ll Understanding device usage at different only surface if you interview BBH Singapore’s times was key to the decision to execute on engagement planner, which is exactly what Instagram. ‘Chupa Chups was only active on we did when we featured the campaign on Facebook, which really is not the best place Contagious I/O. for us to be if we’re trying to talk to teenagers,’ says Cummings. ‘Instagram is mobile-based, Input / Output which is perfect when targeting teens on their Contagious I/O covers the Inputs and Outputs commute home from school when they’ll be of some of the most innovative and creative checking their phones all the time.’ marketing in the world: from the client brief, through to the results of each campaign. Its Inspiration, organised purpose is to find out how and why brands are We know that your teams will find inspiration creating new, game-changing marketing and from a wide range of sources. with what success. But inspiration that: So for Chupa Chups’ Get Lolli campaign, • can be filtered by brand, product category, we dug into the brand’s challenge in the mar- media type, age group, country and business ketplace and discovered that it had no direct objective lollipop competitors. However, as engagement • includes effectiveness results and exclusive planner Lindsey Cummings explains, ‘When interviews with the people who created the you walk in to a convenience store, anything campaigns around the counter is competition because • can be searched, bookmarked and turned into it’s an impulse purchase. So Chupa Chups a collaborative workspace with colleagues is competing with Skittles, with chocolates, • features multiple full-screen images and videos with mints.’ for use in presentation decks Another Input of the campaign was the research into the target audience. ‘We did a Well, that kind of inspiration is pretty rare. lot of in-depth interviews with teenagers from We call it Contagious I/O. across the world and then conducted consumer journey mapping,’ outlines Cummings. Find out more: [email protected] Disruption A startup’s success relies on coming from left-field and disrupting an established industry, or creating an entirely new one. But how can big brands make disruptive tactics work and protect themselves against the threat of being rendered obsolete?

By Emily Hare

Illustration / Matt Chase Strength Study / Disruption

isrupting an established and – let’s face Flash points product or service can gain a strong foothold in it – often complacent industry is an artful Jean-Marie Dru, chairman of TBWA\Worldwide, the marketplace. More recently, The New York D practice generally pulled off by brave, encouraged the advertising industry to embrace Times Innovation Report, published in March creative and gutsy brands. And the rewards are this attitude with his book Disruption, published 2014, warns of the dangers of ignoring these great: just think how Apple created a new breed in 1996. Dru explains: ‘It started as a methodol- entrants who often seem innocuous at first. ‘Over of music ecosystem and consigned stacks of CDs ogy for creating room for growth for our brands.’ time, disruptors improve their product, usually by to history. Look at how Dollar Shave Club took a Disruption is a strategy that TBWA continues adapting a new technology. The flash point comes 6% volume share of the US razor cartridge market to pursue, running disruption days for clients to when their products become “good enough” for with its value subscription shaving proposition. Or help them come up with new ideas and safeguard most customers.’ This leaves businesses with a consider the apparent ease with which Amazon against rivals. Dru continues: ‘It’s entering new dual problem: how to put their own disruptive became your go-to location to check prices and categories, creating new business models, thinking strategies in place, and how to protect themselves buy more or less anything. differently.’ Though regarded as predominantly from new rivals. Michael Dubin, CEO of Dollar Shave Club, negative when he started to use the word in the defines disruption in business as ‘an idea or a early 90s, Dru now says: ‘All our clients, in all Successful startups business model that produces a significant or companies, are much more open to breakthrough, When you imagine a disruptive company, it’s resonant and widespread change in an established innovative or disruptive thinking. They don’t probably a startup that is not encumbered by legacy way of doing things’. The main factors that always do it, but they like to think about it at least.’ systems, and is armed with a killer insight into provide a fertile environment for the majority of Author and Harvard Business School pro- its marketplace and potential consumers. And it’s these disruptions are recurring themes through- fessor Clayton Christensen brought his theory probably staffed by hipsters with a reception area out Contagious X: rapid technological change, of Disruptive Innovation to a more mainstream that you’d be happy to call home. However, just connected consumers, the rise of ecommerce and business audience in 1997, with the publication as renowned author and management strategist digital distribution. of The Innovator’s Dilemma. Christensen’s theory, Peter Drucker defined seven sources of innova- Taking a disruptive approach marks a refusal developed to explain how personal computers tion or opportunities in his book Innovation and by businesses to be content with incremental disrupted the mainframe computer market, Entrepreneurship, there are a variety of ways that enhancements and a desire to establish a business demonstrates how established companies can companies can disrupt their competitors or burst that is fit for the future. slip from dominant positions and how a new into a marketplace. These range from the product or service itself right through to distribution, retail and creative opportunities, leading to successful Dollar Shave Club: executions that are generally better, cheaper and CEO Michael Dubin’s simpler than existing rivals. viral video praising its razor blades was a Signature assets memorable launch for the company in 2012, Dollar Shave Club nailed price, attitude, distribu- with views currently tion and, memorably, product when it launched in amounting to 17 million 2012 with a viral video featuring CEO Michael Dubin boasting: ‘Our blades are f**king great.’ Dubin says: ‘Guys are really frustrated by the price and experience of buying razors when they go to the store. By understanding that problem really well, we were able to provide a solution that was incredibly simple, easy to use and affordable. The way we brought that to life, through great user experience online, empowered our success. And, of course, we developed a signature social asset in the video that people forwarded around to each other so that people could tell that story.’ The original video’s view count is now close to 17 million and Dollar Shave Club passed the 1 million member mark in September 2014. Creating an entirely new product or service can potentially cause the greatest disruption in an industry, or even launch an entirely new category, but it’s also the hardest to conceive and convince consumers that this is something they need. Mobile payment system Square is one such business, offering a solution that allows people to make and receive card payments thanks to a device that plugs into a smartphone. From there, Square has expanded to offer a full point-of-sale system, competing with more developed in-store hardware solutions. Since it launched in 2009, it has received almost $600m in funding, although 20 / 21

it must now look to challenges from Apple and PayPal in order to protect its business.

Compelling creativity Disruption comes in different shapes and sizes. How many brands do you know that would be happy removing their logo from their product, for example? Coca-Cola’s Share a Coke campaign originated in Australia in 2011 and has now printed more than 1,000 names on Coke bottles and cans in lieu of the brand’s distinctive logo. Initiated via Ogilvy & Mather in Sydney, Share a Coke has been the brand’s biggest local-to-global campaign in decades. It was recently credited with boosting sales in the US by 2%, reversing 11 years of decline in the country, according to The Wall Street Journal. After the debacle that was New Coke, disruptive creativity is a strategy that allows brands such as Coca-Cola to reap some of the rewards of disruption without altering their existing product or introducing something new.

Self-sabotage Jeff Bezos, Amazon’s CEO, has instilled a disruptive approach throughout the organisation. In an interview with journalist Stephen Levy, he said: ‘As a company, one of our greatest cultural strengths is accepting the fact that if you’re going to invent, you’re going to disrupt.’ Amazon’s relentless willingness to rip it up and start again shows the mark of a truly disruptive company – one that is not afraid to potentially undermine its own products and services in its quest to build the business. It disrupted its book-selling roots by launching a digital reading device. It jeopardised content sales by embracing rentals, through its ruthlessly objective about meeting those things As a company, one of purchase of Lovefilm and the introduction of and not looking for confirmatory evidence.’ the Kindle Lending Library. And its one-off our greatest cultural delivery charges were thrown into question with Adding value strengths is accepting the launch of Prime’s subscription model. These Disruption today isn’t so much a strategy as a real- the fact that if you’re all point towards a longer-term goal of a locked-in ity, and one that forces businesses to both protect customer who sees Amazon as the go-to option for themselves from competition and look around for going to invent, you’re the best, easiest and cheapest purchases or content. new opportunities. Relentlessly paying attention going to disrupt to your customers and solving their pain points Know your limits isn’t enough, however. You also have to focus on Jeff Bezos, Amazon Often, startups have no option but to take a faint signals that may, in time, become a serious disruptive approach when they’re trying to gain threat. This is a daunting task, but one that mar- a foothold, but is there a way that established keters are ideally placed to facilitate. To ensure companies can ensure they don’t fall into the trap that the company remains relevant, marketers can of only making incremental changes? Cesar Brea, serve as a conduit to share customer feedback with author and founder of marketing analytics firm the wider business, and ensure that information Force Five Partners, believes: ‘To be successful is distributed and issues are dealt with. at disruption-driven strategies, if you don’t have Marketers can combine their knowledge of scarcity you have to manufacture it yourself.’ how people are using new technologies and plat- 3M does just this by setting itself the target forms with an awareness of the company, placing of generating 25% of its revenue from products themselves in a position that is integral to busi- developed in the past five years, for example. ness growth. This understanding gives them the On the flip side, Brea counsels that compa- chance to add value through incremental changes nies can avoid being disrupted themselves by based on customer feedback. It also means they can gathering ‘continuous feedback from the market come up with something genuinely disruptive that about whether or not you are actually solving people had no idea they wanted... but subsequently your clients’ needs’. He says: ‘The trick is to be can’t live without. Strength Study / Disruption 22 / 23

Brand Spotlight Tesla In creating electric vehicles that are desirable not only for their environmental credentials, but also their speed, safety and style, Tesla’s founder Elon Musk claims his place alongside Henry Ford in turning the automotive industry on its head

here aren’t many people who would attempt to launch a best-in-class elec- T tric car while simultaneously getting a commercial space venture off the ground. But a voracious appetite for establishing new, disruptive companies runs in PayPal co-founder Elon Musk’s blood. The 43-year-old co-founded Tesla in 2004 (along with Martin Eberhard, Marc Tarpenning, JB Straubel and Ian Wright), and serves as chief executive of a company determined to bring electric vehicles to the mainstream. Since then, Tesla has forced the rest of the automotive industry to sit up and take notice as it disrupts not only what people expect from an electric car – up until now some kind of glorified milk truck – but also shakes up established practices in manufacturing, retail, design, safety and marketing. As Tesla’s vice-president of communications and marketing, Simon Sproule, explains: ‘Tesla took a fresh look at the auto industry and said: “What are the parts of the auto industry that consumers really don’t like? What are the changes that we can make to improve the experience?”, and then set about doing them.’ Strength Study / Disruption

Packing a punch The only way to cause Giga-plans So how best to impress the doubters? First: with Prior to the Model S, Tesla produced the Roadster the car itself. Tesla’s Model S combines slick other companies sports car from 2006-2012. And it is adding new design and impeccable safety features with an to change their vehicles to its fleet in the coming years. The X, impressive electric engine. At the same time it’s behaviour is to impact launching in 2015, is similar to an SUV. The extremely economical. Last year the Model S cheaper model 3, due to hit the streets in 2017, was named Motor Trend ’s Car of the Year, the their bottom line will be about 20% smaller in size than the Model first time an electric vehicle has claimed the Simon Sproule, Tesla S and will cost in the region of $50,000-$65,000, prestigious award, beating rivals including the according to Sproule. Porsche Boxster, BMW 3 Series and Lexus GS. The dual-motor Model S (known as the D), Tesla set out to prove, as Musk said at the announced in October, will be Tesla’s most Model S’s launch, that ‘an electric car can be truly powerful vehicle yet. The car includes autopilot better than any gasoline car,’ which he believes is hardware, tapping into data from radar and a critical step towards the widespread adoption ultrasonic sensors to enable active breaking of electric vehicles and sustainable transport in and self-parking. With access to the driver’s general. The luxury Model S achieved a perfect calendar, the car can even pick him or her up at 5.0 NHTSA safety rating, and the 85kwh version a given time or location. Forthcoming software of the vehicle can accelerate from 0-60 in 5.4 updates should mean that self-driving Teslas seconds. It has a maximum speed of 125 mph and become a reality in the next few years. a range of more than 200 miles. And that’s on The cars are manufactured in the US, and the top of its environmental credentials and cheaper fact that so much of their construction is under running costs. Tesla’s control is part of the business’s strength,

Tesla’s Model S was named Motor Trend’s 2013 Car of the Year – a first for an electric vehicle 24 / 25

according to automotive industry analyst James made up just 0.67% of those sold in the year to Albertine, vice-president at Stifel Equity Research. May 2014, from a total of 8.1 million, according to Albertine notes that this approach contravenes the Energy Policy Information Center. However, the automotive industry’s modus operandi. ‘What that represents a 35% increase compared with the Tesla has done, in contrast to traditional original previous year. equipment manufacturers (OEMs), is in-sourced Demand for Teslas is high, and customers are or developed in-house roughly 75-80% of its entire prepared to wait two to three months to get their vehicle production process. That’s basically the hands on the car. Tesla has built up desirability inverse of a traditional OEM. That is the most around the vehicles by creating positive experi- fundamentally disruptive element, because that ences throughout the purchase and ownership is what’s going to drive profitability, ultimately.’ process, ranging from door handles that emerge Tesla recently announced it is constructing The from the car as you approach, right through to a Gigafactory with Panasonic. Set to open in 2020 carefully constructed customer service strategy, in Nevada, the factory should produce 500,000 including an eight-year and unlimited mileage Lithium Ion batteries a year. Sproule explains that warranty on the Model S battery. The cliché of this should help make the cars more affordable, a slick car salesman in a cheap suit couldn’t be as well as provide the business with an additional further from what a Tesla buyer encounters. revenue stream. He says: ‘The cost will be 30% Sproule explains: ‘It’s a relationship-based or more lower than the current battery packs that marketing approach. It’s not just us shouting about we’re producing.’ the car and the brand. It’s about inviting people in, getting them to experience the car.’ Employee ecosystems He adds: ‘Most people have still not driven an By placing its showrooms in high-footfall electric car. So there’s a basic level of experience locations, such as shopping malls, Tesla took a that you want people to have. When people drive disruptive approach to how people actually buy an electric car, they’re like, “Wow, this is a really their cars, building on the easy access to informa- special experience.” So it makes a lot more sense tion that digital provides. This is particularly clear for us to build our marketing around experiences.’ when compared with America’s standard (read: excruciating) car-buying process of browsing and Open approach bartering on an out-of-town lot, before being Tesla’s interactions with its customers in-store, pressured into driving off in a car that might through services, owner events, factory visits and be in the wrong colour or with a slightly larger over the phone and email, provide the company engine than ideal. Tesla stores typically feature with the chance to listen, and respond to queries. display versions of the Model S, a Design Studio Sproule says: ‘We get unfiltered feedback, and where people can select paint, fittings and extras we get a lot of it. We’re directly connected to our for their car, plus a touchscreen experience where customers and they’re telling us what they like customers can learn about the benefits of driv- and what they don’t like, and we’re planning long ing electric vehicles and Tesla’s technology and term.’ This feedback has played a key role in how book test drives. The car can be configured and Tesla vehicles have evolved. ordered online either in-store or from home, and Tesla’s desire to be a positive force for change not then tracked through its production and delivery just for its customers, but also in the automotive process. Tesla’s retail network also sells the Model industry, has led to it taking an open approach, S second-hand, which lowers the price point and offering its API and patents to the world. Sproule gives a wider range of potential customers the explains the company’s motivation: ‘The stated chance to get their hands on the vehicle. aim of the company is to encourage electric vehi- Tesla has been able to establish its own retail cle development. If we hold back and keep our network and online sales platform thanks to its patents to ourselves, we are effectively restricting lack of legacy franchise agreements. Hyping up the evolution of the business.’ the disruptive elements of this approach, with transparency around costs and the opportunity Faster horses to deal directly with Tesla employees rather than While Tesla is starting to make sizeable waves in a third party is, Albertine says, ‘engendering a disrupting the automotive market, it still has far very different sort of ecosystem that will play into to go before it achieves its audacious aims. It first the evolution of the auto dealer, the auto service turned a profit in May 2013, but electric vehicle model’. In the dominant logic of the automotive sales at major manufacturers still make up less than industry, where massive dealership networks are 1% of their total. Developing consumer demand is ultimately the manufacturer’s customers and crucial in terms of both growing Tesla’s business determine which cars sell, this model stands apart. and encouraging rivals to mount a challenge that will help the entire marketplace to grow. Electric experience The way Sproule sees it: ‘The only way to cause Electric cars still have some way to go before they other companies to change their behaviour is to hit the mainstream. In the US, electric vehicles impact their bottom line.’ He continues: ‘If other Strength Study / Disruption

manufacturers see business going from their cars says. However, he believes that a clearer picture Takeouts to our cars then they will figure out a way to try to will develop over the next few years in terms of stop that. And if consumers are saying “we want demand for electric cars, how well Tesla’s retail Be your own threat / Imagine electric cars”, then every car company in the world infrastructure and service strategy is established your worst case challenger and work out how to meet that threat. will produce electric cars.’ and the total construction costs of the Gigafactory. Tesla’s dominance is growing, with a market For Sproule, keeping one eye on the future and Strive for excellence / Tesla’s cap of over $35bn, more than half of General staying in touch with consumer demand is vital vehicles excel in terms of Motors’ market value, despite GM having an for Tesla’s continued success: ‘The kicker of any design, safety and desirability, annual revenue that is 50 times greater. In 2010, business is not just to give customers what they as well as in their environmental Tesla became the first car manufacturer since want today, but to give them something that they capabilities. Ford to launch a public share float, when it raised realise they want in the future.’ Focus on the customer / $226m. Its share value has grown more than And the mark of a truly disruptive approach? Incorporate customer feedback 1,000% in the past four years, topping $250 at When your next project could potentially derail into your development plans and the time of writing. your last. Founder Musk is working on the think about what they might want Albertine has predicted that Tesla shares Hyperloop, a conceptual transportation system in the future. have the potential to hit $400 in the foreseeable that will whisk people between LA and San future. ‘Short term, the next two to three years, I Francisco in just 35 minutes, and has the potential Push for more / Constantly don’t think there’s anybody that can touch it,’ he to disrupt Tesla’s own business model. look for ways you can increase not only your business capacity, but grow the entire marketplace. 26 / 27

Opinion Do the ‘wrong thing’ Jonathan Mildenhall, chief marketing officer at Airbnb, argues that companies need to ensure they’re not so preoccupied with doing the right thing that it becomes the wrong thing

Disruption has historically surprised consumers. I don’t think anyone Several multinational businesses look for disruption in their could have predicted what impact the iPhone would have – not just annual planning, and they’ll apply it in their business model, on the mobile phone market, but across industries ranging from marketing strategies or even in creative executions. Conversations cameras to gaming – when it was launched in 2007. planning the next calendar period will quite often ask explicitly: Nowadays, consumers expect and demand that the brands they ‘What are we disrupting and what are we going to get in return for love surprise them and be one step ahead of what they need. ‘Why that disruption?’ can’t my watch do more of what my fitness tracker does? And if Established companies have models to encourage disruption, it’s not going to, then I’m going to move away from my loved watch Coca-Cola has its 70/20/10 model, for example. Seventy per- brand to something that does.’ Disruption is becoming normalised; cent of investment is proven, 20% of investment is innovative it’s becoming expected. off this and 10% is new ideas that have never been done before. When you’re being reviewed at the end of the year in those kind Doing the right thing of companies, the review starts with ‘and what did you do in the I can’t think of an industry not touched by technology. Technology 10%?’ Because organisations know that the 10% will find has turbo-charged disruption, lowering barriers to entry and making new markets, find new ways to market and find new ways to it possible to scale new ideas quickly because of the way in which apply disruptive creativity. And it’s through the management our world is now so interconnected. So why are so many established of that budget that organisations learn to feel comfortable businesses not waking up to the opportunities and the threats? with disruption. Classic companies that fail often do so because they were doing If you can’t disrupt your product, your category or your business, the right thing. And if you do the right thing forever it becomes the you can always disrupt creatively. Take Old Spice. Everything about wrong thing, because you fall out of sync with consumers. Kodak the category stayed the same, everything about the packaging is a brand that did the right thing, but although it was doing the stayed the same, the only place that the brand manager had to right thing for Kodak, the world around it had completely changed. disrupt was through the creative, and it has been done brilliantly Companies need to be constantly challenging themselves: ‘What and the brand has done it consistently. As a result of that, it has is the wrong thing for us to do right now?’ Because answering that, earned a disproportionate share of market for that brand. in the long term, could be the right thing. I love how the mobile operator Three is disrupting the mobile industry in the UK through If you’re not failing, you’re not going to innovate moves like abolishing sky-high roaming charges or not charging Tech-based organisations have an advantage in using disruptive extra for new 4G services. business strategies compared with more traditional organisations, and that’s because failure is part of the process, and investors Bake it into your business expect certain technology initiatives to fail. Management teams With six months now under my belt at Airbnb, I can honestly say see failure to be a by-product of learning at the organisation. They that I have never before worked in such a dynamic and fast-paced believe that you’re not pushing the organisation far enough and environment. And one where seeking to disrupt the status quo truly fast enough if you’re not occasionally failing. runs through the DNA of the company. In some of the more traditional sectors, I don’t think the manage- Take our brand evolution, unveiled during the summer, where we ment teams understand what to do with failure, and are certainly introduced a new marque for Airbnb, the ‘bélo’. Here we did the less confident declaring it to shareholders. unthinkable according to marketing and trademark norms, by also Business is a scary but exciting place to be at the moment. launching Create Airbnb, a website where our community can adapt Nothing is sacred, nothing protected. Disruption is not just about the symbol and make it their own. Disruption for Airbnb is not just finding a new product or revenue stream; for some companies it about changing the way people travel, it is also about changing the will be about survival. And for that reason, it needs to flow through way we do business. every aspect of the business. To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Contagious 1 / Editorial

‘The current climate is bewildering and disorienting. But for those who like a challenge, i represents a landmark opportuniy. Depie the tumult, advertising remains one of the mos effective ways of gaining an unfair advantage over the competiion... 28 / 29

The fites, mos flexible agencies are already riding the revolution. It’s time to abandon the rules, invent a new language and focus on those non-invasive ideas that have created a two-way dialogue between brands and their believers.’ Paul Kemp-Robertson, Contagious issue 1 / December 2004 A Brief History of (Contagious) Time: Bebo to Bitcoin to Bionics and Beyond

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 2023 2024 2025 • Facebook launches • Google Maps goes live • BP Deepwater Horizon • Steve Jobs announces • AOL buys Bebo • First Bitcoin transaction • Old Spice introduces • Wikipedia is • Nike launches FuelBand • Vine launches • Facebook buys • Excess heat from • Sea levels will have • Facebook dies • Nearly 1 million minutes • High-resolution • A $1,000 computer • Military drone market • Copyright on Mickey • People regularly • Teleportation enters oil disaster the iPhone for $850m Isaiah Mustafa to the ten years old WhatsApp for $19bn devices is recycled risen by one foot since out completely of video content cross bionic eyes on sale, will have the same worth $82bn Mouse expires upload their brain testing phase • Burger King’s • YouTube launches: • Compare the Meerkat • Facebook buys • The power goes out at world and Oculus Rift for 1986 global IP networks every customisable by size to a computer Subservient Chicken the first video is called • Buy-one-give-one • The IPCC concludes • Apple launches makes UK insurance • Charlie Sheen goes Instagram for $1bn the Super Bowl, Oreo • Electric car ownership • Smartphones have processing power as • Downloadable 3D • Solar is the primary $2bn second and colour to suit campaign receives ‘Me at the Zoo’ company TOMS climate change is the App store interesting reaches 1 million • Spacecraft Juno finally a sense of smell a human brain printable fashion • First manned mission source of energy • Tesla raises $226m off the rails • Google unveils Glass triumphs every face 20 million hits in its Shoes is founded caused by humans in the first car IPO in • Alibaba flotation raises worldwide arrives on Jupiter • The number of devices designs are to Mars is launched • Titanium category • Google Chrome debuts • Uber launches • Two billion people and announces • Dove’s Real Beauty • Personal devices allow • Humans wear devices • Electric air transportation first week 50 years $25bn in IPO connected to IP • The total power of all commonplace introduced at • The Human Genome • The Simpsons’ Google Now • Personal biometric • Spacecraft Dragon you to touch and feel that record and file all takes off • T-Mobile announces • Tencent announces watch the UK’s Royal Sketches goes viral. It networks is nearly twice computers equals the • Gmail launches on Cannes Lions Project completes 400th episode airs scanners for online V2 takes astronauts virtual objects their conversations the G1, the first $1bn in 2008 revenue • WikiLeaks drops more Wedding • Facebook reaches is the most successful • Airbnb valued at $10bn as high as the global total brainpower of the • DNA mapping at birth April Fool’s Day its sequencing of than 90,000 internal video ad of all time, with banking to International Space • EBay buys Skype • Charlie Bit My Finger Android phone • Osama bin Laden killed 1 billion monthly users • Tim Cook announces • Digital tastebud population human race • There are 50 billion allows diseases to be chromosomes • Michael Jackson dies reports about the war in 165 million views Station • 30 St Mary Axe for $2.6bn goes viral on YouTube the Apple Watch implants encourage connected objects identified • Spotify launches Afghanistan from 2004 • Microsoft takes • Red Bull Stratos • Robot insect spies • Glasses for the deaf (The Gherkin) is built • Twitter launches • The Chrysler automobile • Google unveils healthy eating • Live 8 takes place • Street View debuts to 2010 over Skype • China overtakes the are in military use convert words into text, in London • Obama election shows company files for • Dumb Ways to Die Project Loon throughout the world as • Google buys YouTube on Google Maps US as world’s largest and music into images A/B testing has made Chapter 11 bankruptcy, • Instagram launches • The Oprah Winfrey • Drug created to • Super Size Me released part of the Make Poverty for bargain price of • Gangnam Style • World’s first lab-grown economy. Adjusted • Mad Men starts it to the political arena closely followed by prevent obesity • The first human-robot History campaign $1.65bn in shares Show ends becomes the first • Last episode of General Motors • Habbo Hotel reaches burger is eaten for purchasing power, couples emerge as • Amazon releases • Global online population an 8.7 million monthly • Occupy Wall Street YouTube video to China’s GDP overtakes Friends airs • Facebook.com domain • Al Jazeera English • Snapchat spurns $3bn simulated personalities the Kindle hits 1 billion • James Cameron’s average users peak movement begins in reach 1 billion views US GDP by 0.2% name bought for launches bid from Facebook become more lifelike • Issue 1 of Contagious Avatar is released, New York City $200,000 • WGA writers strike for • MySpace peaks at 75.9 • A monkey in a winter is published in London • OfficeMax’s Elf Yourself marking a breakthrough greater digital royalties million monthly unique coat roams an IKEA • Alibaba Group takes campaign runs for the in stereoscopic film- visitors in the US alone over China Yahoo! first time making Illustration / Jim Stoten. Future predictions are absolutely not our own. Sources include: BBC Future, Cisco, Elon Musk, Erik Eckholm, Futuretimeline.net, IBM, IHS Jane’s, NASA, NBC News, Princeton University, Ray Kurzweil, Thomson Reuters, Touro Law Review Sometimes the world needs brands to act like NGOs. The original Contagious mantra ©2005. Use marketing to generate compound interest: if someone invests time and energy into the content, services and experience your brand offers, is what you’re giving back of increased value? Turn people into media. Cede control. Buy into the mass, but play in the niches too. Your audience is powerful and vocal – invite them to influence your brand’s direction and behaviour.

You don’t always have to reinvent the wheel. It’s easier to play to an existing behaviour than to change or create a new one. When seeking engagement, it pays to collaborate – so don’t be afraid to co-opt existing platforms and services. The best advertising isn’t always advertising. Be consumer-centric: ease the friction, solve the pain points in the customer journey.

Ten steps to brand bravery

Dare to question your assumptions. Embrace dissent. Don’t ask why, ask why not? The best answer may be 180-degrees away. Test & Learn. Devote a percentage of your production or media budget to experimentation. Be optimistically curious: failure sucks, but instructs.

Reputation is a future micro-economy. Don’t be flashy: technology should serve Data is a manifestation of the lives of living, Typography / André Beato, YCN creativity, not the other way around. breathing people. Treat it with respect. Always.

Purpose

An ever-growing number of brands are investing in a meaningful approach to their marketing communications. This strategy goes beyond traditional CSR and attempts to impact on the wider world, not just immediate stakeholders

By Lucy Aitken

Illustration / Matt Chase Strength Study / Purpose

he concept of brands taking on some of some “purpose beyond profit” in their professional to look in their wardrobe or their fridge and the biggest problems faced by the world lives. There’s a natural and inbuilt momentum feel uncomfortable about how specific items got T used to be an unusual one. While many for change.’ there. But as well as addressing their own issues corporations’ CSR departments support NGOs and cleaning up their acts, brands need to make and charities, the idea of connecting shareholder Challenging the status quo it easy for people to do their bit. value to a broader system of values has advanced A handful of brands have a clearly defined pur- French supermarket chain Intermarché, through over the past decade and is now fully formed as pose. Over the past ten years, we’ve covered a Marcel Paris, created a whole new revenue stream opposed to embryonic. Indeed, Edelman’s Trust range of impressive social enterprises – including when it offered misshapen fresh produce in an Barometer indicates a declining confidence in TOMS shoes and Sir Richard’s condoms – that initiative called Inglorious Fruit and Vegetables. governments and a growing faith in business. have purpose baked into their business model. The produce, which would otherwise have been ‘Businesses must now lead the debate for change,’ Patagonia also deserves a special mention for wasted, was sold for 30% cheaper than its more urges the 2014 report. questioning our rampant consumerism with its aesthetically pleasing equivalents. Across the This is partly due to technology helping to Common Threads Initiative. But the companies Channel, the Sainsbury’s Value of Values cam- enable brands to be in places that were formerly that have truly impressed us are those that have paign shows that you can enjoy reasonably priced off limits. Optus, a telco in Australia, now helps challenged their own status quo, scrutinised their bananas and be assured that they’re Fairtrade, or detect sharks in the sea with its Clever Buoy initi- supply chains and made some difficult decisions. know that the fish you’re buying is sustainably ative through M&C Saatchi Australia. Samsung, Multinational companies like McDonald’s are sourced. Even though cynics might suggest oth- created by Cheil Worldwide, is helping to fund heavyweight enough to bring their many suppliers erwise, people care about this stuff. research into cancer cures with Power Sleep, an on board and persuade them, through initiatives app that crunches data, using the processing power such as ‘Our Journey Together. For Good’, to Purpose ǂ sustainability of a smartphone while it charges. make important changes that have long-term But a purpose doesn’t necessarily have to There has also been a shift in corporate culture significance. Intel, meanwhile, has developed entail sustainability. In July 2014, online towards greater transparency, collaboration and and launched conflict-free microprocessors, accommodation booking service Hotels.com thinking beyond the balance sheet. What does responding to demand for more ethically produced petitioned the US government to guarantee paid your company stand for? What will its legacy be? consumer electronics, particularly smartphones. vacation days for all American citizens with What is its purpose? And despite there being a Amsterdam-based Fairphone, meanwhile, was its Vacation Equality Project. Amex’s Small healthy amount of cynicism around connecting overwhelmed with orders for its ethically produced Business Saturday, via Crispin Porter + Bogusky the words and worlds of ‘marketing’ and ‘meaning’, smartphone and, to date, has sold 55,000 handsets. in Boulder, created a new shopping day in the don’t underestimate its significance for people People want to feel good about the brands they run-up to the festive season, where Americans entering the industry. As Tim Lindsay, CEO of have in their lives. Some 91% of global consumers were invited to patronise local businesses. The D&AD and chairman of The Gate Worldwide, are likely to switch brands to one associated with concept started in 2010 as a one-off, but the wrote in The Guardian in August: ‘Younger a good cause, given comparable price and quality, following year, the US Senate declared Small people are more demanding of their employers according to a 2013 Cone Communications/Echo Business Saturday an official day, cementing it and workplaces when it comes to having at least Global CSR study. In other words, no one wants as a permanent fixture in the calendar.

Power Sleep: Samsung’s app is helping fund cancer research by tapping into the processing power of mobile phones 32 / 33

Play to your strengths Inglorious Fruit and Vegetables: There’s also a lot to be said for identifying your Intermarché created strengths and playing to them. So instead of a new revenue stream dusting off the chequebook after a natural disas- and cut down on waste by selling misshapen ter, what else could your business contribute that fruit at a discount might make a difference? Look at what Toyota did with Meals Per Hour following Hurricane Sandy: it applied the principles of Kaizen – improving work practices through continuous incremental change – to great effect with the relief effort so that families who were relying on food parcels months after the hurricane were fed and received their parcel more promptly. Singaporean telco StarHub, with DDB Group Singapore, has introduced an initiative where mobile subscribers can donate their unused data, minutes and texts to local charities every month so that people with illness or disability who rely on care-givers can benefit from access to mobile phones. StarHub plans to give 500 beneficiaries 80 minutes of talk-time, 300 SMS and 1GB of data each month for a year. More brands should step up in this way: it costs StarHub very little to redistribute something that’s already been paid for. Meanwhile, Toyota’s Meals Per Hour effort made much more of a statement about the Toyota brand and working culture than any traditional brand campaign or corporate website ever could.

Power brands So how are things going to develop in the next ten years? There will no doubt be growing numbers of evangelists and just as many cynics. Advertising can’t save the world and it’s naive to suggest it can. However, the business still attracts some of the best creative and strategic brains around, and purpose is on their to-do list. You need only take a look at the Young Lions winners from Cannes over the past few years to see that. There’s a definite first-mover advantage here: if you’re the first consumer electronics brand to push for conflict-free minerals in your product range, or the first fashion retailer to offer complete transparency in how your clothes are manufactured, there’s a clear reputational benefit over dragging your heels and having to be whipped into shape by government regulation. And the benefit to balance sheets is clear: The Stengel 50, a joint project between Millward Brown and former global marketing officer of P&G, Jim Stengel, ranked the world’s 50 fastest-growing brands between 2001 and 2011, releasing results in 2012. It clearly showed that brands which had a higher purpose outperformed the S&P 500 by 400%. ‘I wanted to prove that maximum profit and high ideals aren’t incom- If you’re the first fashion retailer to patible but, in fact, inseparable,’ said Stengel. Take AmEx Small Business Saturday as a case in offer complete transparency in how point. A total of $5.5bn was spent as a result of the your clothes are manufactured, initiative in 2012. That’s the kind of power that there’s a clear reputational benefit brands can wield. What could yours do? Strength Study / Purpose

Brand Spotlight Chipotle Chipotle has always had a clear mission: promoting the benefits of sustainable farming, one burrito at a time. And for any naysayers who consider purpose and profit to be awkward bedfellows, Chipotle’s impressive and consistent growth proves otherwise

hat does sustainability mean to almost to the point of coming to expect it – back odied in the comedy sketch show Portlandia. A you? Images of wind turbines and then it was a radical concept. couple in a restaurant obsess so much about the W winsome children? Sunny skies and Right from its inception, Chipotle set out to provenance of the chicken they’re about to order rolling oceans? While many brands over the change the way people think about and eat fast that knowing its name, breed and even seeing past ten years have made huge strides with their food. And it has been phenomenally successful a photo isn’t enough for these super-sensitive sustainability policies, there’s often a disconnect while doing so. In 2013, year-on-year revenue beings: oh no, they abandon their table to visit when it comes to communicating those efforts increased 17.7% to $3.21bn; net income was the farm in person. beyond the boardroom. That’s why Chipotle, the $327.4m, an increase of 17.8%; and the chain US burrito chain, stands out. For the past two opened 185 new restaurants (its current total Putting integrity first decades it has been busy promoting the benefits is 1,650). For brands that continue to believe Signage in Chipotle’s restaurants communicates of sustainable over industrial farming – all while that purpose and profit are mutally exclusive, the company’s Food With Integrity mission serving up a mean burrito. What’s more, over the Chipotle’s consistent growth over the past two as ‘Our commitment to finding the very best past few years, it has spawned some incredibly decades is persuasive evidence to the contrary. ingredients raised with respect for the animals, moving and memorable marketing. And all of Chipotle has been one of the loudest voices in the environment and the farmers’. Visit the com- it as far removed as possible from the clichés the good food movement. Ten years ago – when I pany’s Food With Integrity website and you can listed above. was part of the team working on the very first issue see exactly what this means in terms of livestock of Contagious – Morgan Spurlock’s SuperSize Me and the wider world. Bucking the trend was released, chronicling one man’s downward Transparency plays a big part here: if Chipotle Chipotle founder Steve Ells bucked a trend spiral into obesity as he stuck to a fast-food diet. can’t purchase naturally raised chicken for some when he opened the doors of the first Chipotle Now barely a day goes by without the O-word reason, it lets people know. This allows diners restaurant in Denver, Colorado, in 1993. This being in the news, or a food safety or animal the choice of opting for an alternative menu fast-food eaterie had no plastic furniture, welfare story hitting the headlines. Consumer option if they want to prioritise their ethics styrofoam packaging or microwaved food. behaviour is changing: McDonald’s announced over their appetite. If a brand wants to align Instead, there was an open-plan kitchen where in October that global revenues fell by 5% in the itself to a higher purpose, charting progress and customers could see their food being prepared third quarter, while Chipotle’s cap is $20bn. highlighting obstacles are vital. People don’t right in front of them. While we’ve grown used There’s much interest taken in where our food expect perfection, but honest communication to that level of transparency in food preparation – comes from, behaviour that was brilliantly par- never goes amiss. 34 / 35

Back To The Start: animation showed the plight of a farmer struggling to balance business with ethics

Content, not commercials Unlike many brands that have struggled to identify and then communicate their purpose, Chipotle has always had a clear mission. However, for a long time, it struggled to find an agency that understood it, earning it a reputation as something of a problem client and a serial reviewer: by 2010, it had been through five agencies in six years. So when it hooked up with the corporate arm of talent agency Creative Artists Agency in Los Angeles – interestingly, not a ‘traditional’ agency – it didn’t set out to do ‘advertising’, but rather to find arresting ways to tell its story.

Building brand ethics The first work from CAA Marketing was a touch- ing two-minute animation, Back To The Start, directed by Johnny Kelly via Nexus Productions in London. It documented the epiphany of a factory farmer who no longer wants his livestock to be pumped up to the eyeballs with hormones and packaged into boxes. Given that 300 family farmers in the US walk away from their land every week, this film helped to explain their struggle to balance business with ethics. The powerful short film, sound-tracked by country music legend Willie Nelson covering The Scientist by Coldplay, left audiences misty-eyed while at the same time delivering a hard-hitting message about industrialised animal production. Awards juries loved it. Among other accolades in 2012, it picked up two Grand Prix at the Cannes Lions: one for film, and the first-ever in branded content and entertainment. The latter also recognised CAA’s entire Cultivate Programme, a multi- faceted platform including a loyalty programme rewarding knowledge, not spend, and a ‘food, ideas and music’ festival. A digital-first media strategy optimised Back To The Start: it made its debut on YouTube and then to 21 million Facebook fans, leveraging the combined social media fan bases of Chipotle, Willie Nelson and Coldplay. Through paid- for downloads of The Scientist on iTunes, it raised funds for FarmAid and for the Cultivate Foundation, which has contributed more than $2m to help fund initiatives that support sustainable Strength Study / Purpose

The Scarecrow: sequel to Back To The Start scooped the 2014 Cannes Lions PR Grand Prix 36 / 37

Content is a more effective tool to pique curiosity than traditional advertising. The idea is to bring people into the conversation through something that is first and foremost entertainment, secondly says something about us, and thirdly that is designed to spark conversation Chris Arnold, Chipotle

agriculture, family farming, culinary education, Scarecrow: the game and innovation that promotes better food. Accompanying The Scarecrow was a free iOS Back To The Start continues to attract views game, a 3D platform-jumper that sought to bring on YouTube and, to date, has been viewed more to life the pro-sustainable farming theme of the than 8.5 million times. ‘The reason why it seems to film. Our eponymous hero aims to free confined resonate with people is because there’s an elegance animals, serve wholesome food and dodge robotic to the storytelling,’ Jesse Coulter, co-chief creative crows. Downloaded 450,000 times, the game officer from CAA Marketing, told Contagious. included a buy-one-get-one-free offer at the burrito chain, designed to drive footfall and sales. The Scarecrow A 2013 sequel, The Scarecrow, also wowed jurors Farmed and Dangerous at Cannes, and scooped the 2014 Grand Prix for Having successfully experimented with short- PR and Cyber. This time, the animation starred form branded content, in January 2014, Chipotle a scarecrow working at Crow Foods Incorporated. launched a four-part comedy series, Farmed and American singer-songwriter Fiona Apple’s cover Dangerous, which appeared on US streaming of Pure Imagination plays in the background while service Hulu. The show centres on a nefarious the sad scarecrow witnesses horrors like a chicken company called Animoil that wants to increase inflating after being injected, and a melancholy cattle production by feeding cows petroleum pel- cow shivering inside a metal box. The scarecrow lets. An activist, Chip, petitions to stop the firm. decides enough is enough and starts cooking However, despite its comic intentions and with freshly grown ingredients. The film, like satirical nature – including exploding cows and its predecessor, is both compelling and hopeful. over-the-top villains – Farmed and Dangerous It’s been viewed 13.4 million times. angered some farmers. One agricultural blogger, Coulter says: ‘From the outset we knew we wanted Ryan Goodman, urged the chain to ‘go talk with to continue in animation, as did Chipotle. We the farmers and ranchers that you are attacking… thought it was a great medium for the stories we’re start a dialogue and let the conversation come trying to tell and for the worlds that we’re trying to from both sides of the plate to learn where our create. It allows us to tackle complex issues in a food comes from.’ Another blogger, The Foodie way that makes them more approachable, rather Farmer, cited US Department of Agriculture than taking them on directly in live action. It statistics that claim 97% of US farms are family- became the opportunity to build a vision for a run, exploding Chipotle’s ‘myth’ that our food is different part of the campaign.’ produced by industrial agriculture. Strength Study / Purpose

Values Integration Takeouts Chipotle doesn’t talk about product integration, McDonald’s, a one-time investor in Chipotle, Make purpose a priority / preferring the term ‘values integration’. Chris has brought its suppliers on board with its sus- Purpose, business and marketing Arnold, the chain’s director of communications, tainability objectives and, like Chipotle, publishes should all form part of your says: ‘Content is a more effective tool to pique its progress, rewarding those suppliers who help brand’s holistic strategic direction. curiosity than traditional advertising. The idea it to achieve these objectives. However, unlike All brands could have a more is to bring people into the conversation through Chipotle, McDonald’s has chosen not to build its meaningful agenda, so identify something that is first and foremost entertain- communications strategy around its sustainability what your brand could do to make a difference in the world. Even if ment, secondly says something about us, and efforts. For Chipotle, its purpose, business and talking about it isn’t right for your thirdly that is designed to spark conversation.’ marketing strategy are all centred on the same brand, you should embed it in how thing: for ALL food to be sustainably sourced, you run your business. Worthy and worth watching delicious and affordable. Other brands – even in Chipotle’s category – It’s tough to be worthy and worth watching: Collaborate / Identify partners are making huge advances in sustainability. Chipotle proves that brands can be both. who will help you achieve your purposeful objectives through collaborations and alliances. Locate NGOs in countries where you’re looking to grow your brand and learn from their experience and insight.

Be transparent / Set goals and regularly report on your progress on as many channels as possible. If you haven’t fulfilled an objective, state why.

Farmed and Dangerous: four-part comedy series, which appeared on streaming service Hulu, angered some farmers 38 / 39

Opinion Ethics at the heart of business Paul Polman has been CEO of Unilever since 2009. Under his leadership, Unilever has a clear objective: to double in size while reducing the company’s overall environmental footprint and increasing its positive social impact

Almost every aspect of the world we know is changing. Rapid pop- In addition, we have moved away from quarterly profit reporting. Since ulation growth, the digital revolution, lack of global governance in an we don’t operate on a 90-day cycle for advertising, marketing, or increasingly interdependent world and stress on the environment are investment, why do so for reporting? In 2010, we launched the just some of the factors causing business to operate in an increasingly Unilever Sustainable Living Plan (USLP). Some doubted our abil- volatile, uncertain, complex and ambiguous environment. ity – and my state of mind – when we set out our ambition to grow We have created prosperity, but too many are still being left behind. the business but in a completely novel way – totally decoupling our As we should know from nature, a world not in balance will ultimately growth from environmental footprint and increasing our positive be rejected. The latest progress report on the Millennium Development social impact. Goals shows that 1.2 billion people are still living in extreme poverty; The USLP is driving innovation and growth, reducing costs, increasing 2.5 billion people lack access to adequate sanitation facilities; one in engagement and making Unilever a preferred employer. It is helping us five children fail to make it to the age of five; and global greenhouse create brands with purpose, connecting meaningful solutions with the gas emissions continue to rise. needs of everyday consumers. Domestos is helping to improve access to basic sanitation; PG Tips and Lipton are supporting sustainably Gridlocked political process sourced tea; Knorr works to source key ingredients in a sustainable While the human and environmental logic for change is overwhelming, and traceable way through a network of landmark farmers, and Dove’s the political process is gridlocked. We have the financial resources Real Beauty mission promotes self-esteem. All these brands facilitate available, but money is lost on perplexing subsidies, geopolitical conflicts a movement for change. and wars, or inefficient bureaucracy. That means the role of business is important: business creates jobs and livelihoods by producing solutions Small actions = big difference to complex problems, and can have an enormous impact at scale by Nonetheless, I challenge you to ask yourself: do people really care capitalising on its partners and stakeholders. about this enough to change their buying behaviour or even their Indeed, business can be part of the answer, but it has a responsibility consumption pattern? Consumers can be schizophrenic. On one to do it right. To succeed it must come out of the grip of short-termism hand, as citizens, we value responsible brands and products. On the and self-service. Business needs to put itself, first and foremost, at other, as individuals, we make buying decisions that are often incon- the service of society, not just shareholders. At Unilever, we strongly sistent with our role as citizens. That’s where Project Sunlight comes believe that business should give and not take from the societies and in. We launched this platform in 2013 as a means to engage directly environments on which it relies in the first place. with consumers on our sustainability. Through Project Sunlight, we want to motivate people to live sustainably by taking small actions that Crisis of ethics make a big difference. What we have experienced over recent years is not so much a crisis of Using our size and scale to pro-actively transform markets is not only capitalism, but a crisis of ethics. Initiatives like the Blueprint for Better right but also exciting. However, we can’t do it alone. That is why we’re Business can help by providing the right guidelines for businesses to working with others in partnerships like the Tropical Forest Alliance, put purpose and sustainability at the heart of their operations and earn the UN Scaling Up Nutrition Initiative, the World Business Council for the trust of those they seek to serve in the first place. Sustainable Development Action 2020 programme and the New Vision Trust in business was at an all-time low after the 2008 recession. The for Agriculture. Through these types of transformative partnerships we 2014 Edelman Trust Barometer suggests that business is recovering, can drive change at scale. having made demonstrable strides in transparency, supply chain and And yet this is still not enough. We need the right long-term framework product quality. There is now an opportunity for business to demonstrate and we need more companies to join us on the journey. Fortunately, more its longer-term commitment to change. are. The key will be greater transparency in all we do and enhanced tools of integrated reporting, including for environmental and social capital. Long term thinking It will also help to identify the free-riders, those unwilling to join and At Unilever, we are backing words with action. We have aligned take responsibility. Finally, we need governments to create appropriate management incentives and invested heavily in R&D and people to frameworks for sustainable economic growth. If we get this right, we build our pipeline of innovations and our organisation for the long term. can mobilise, scale and make a real difference. To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Small But Perfectly Formed / Little Brands, Big Thinkers

Small But Perfectly Formed In each of the past 20 issues, Contagious has celebrated seven small companies hoping to change the world. Let’s take a look at some of our favourites – and add a few more to the ranks; hand-picked by three of the entrepreneurs we’ve featured in the past By Chris Barth 40 / 41

‘Here’s to the crazy ones.’ That’s how we kicked off Small But Perfectly Formed, the section of our magazine dedicated to the startups upending industries despite their diminutive size. Since 2009, we’ve hunted great stories and have now profiled 140 dynamic companies – SBPFs, as we affectionately refer to them. We’ve featured brands innovating in sick- ness (Help Remedies, issue 21) and in health (Sherpaa, issue 37). We’ve written about EVRYTHNG (issue 31) and the kitchen sink (Lyfe Kitchen, issue 33). We’ve even covered sex (Smile Makers, issue 32), drugs (PillPack, issue 40) and rock ’n’ roll (Ed Banger Records, issue 21). Through it all, one thing has remained constant: nimble Davids are capitalising on innovative business models, brave new ideas and advances in technology to fell bloated Goliaths. As we wrote in issue 21, these are the companies ‘not only defying convention, but defining it’. Here we take a look at some of our favourite success stories – and ask a few familiar faces to pass the torch to the latest class of SBPFs. As if it could be said enough: Here’s, once again, to the crazy ones.

Shake Shack / When we profiled Danny Meyer’s burger joint in issue 22 at the beginning of 2010, it was a three-shack ‘micro-chain’ in New York City, with aspirations of expanding beyond the Big Apple. Though we noted the brand had ‘a view to dotting the east coast with up to 20 shacks by 2015’, we under- estimated the hunger for a great Shackburger. Shake Shack has blasted past that goal and now boasts 56 locations, including shacks in London, Istanbul, Moscow and Dubai. This autumn, reports surfaced that the chain is headed for an IPO, with analysts projecting a valuation as high as $1bn. company acquired Bluefin two years later in Nimble Davids are MakerBot / In mid-2011, when we first focused 2013 for just under $100m to beef up its data our spotlight on 3D-printing startup MakerBot, science capabilities around advertising. These capitalising on the company had raised $75,000 in funding days, Bluefin Labs’ founder Deb Roy is Twitter’s innovative business and was ‘headquartered in a nondescript chief media scientist. warehouse’. Since then, the brand has moved models, brave new to swankier digs – a 31,000sq ft office in BrewDog / Acquisitions aren’t the only sign of ideas and advances Brooklyn’s Metro Tech Center – while adding success. Scottish brewer BrewDog measures to its coffers. In 2013, manufacturer Stratasys its progress in litres. In 2010, when we profiled in technology to fell acquired the formerly small and perfectly formed the aggressively independent beer-maker, it bloated Goliaths brand for $403m. Today, just as we wrote in our brewed 1.58 million litres of ale and had just initial coverage, MakerBot continues to ‘lead opened its first bar. Last year, BrewDog brewed the digital fabrication revolution’. more than three times that (5.35 million litres), and the brand now has 23 locations around the Bluefin Labs / ‘The implications of the insights world, with three more planned. Along the way, for clients should truly allow advertisers to the ‘beer with balls’ has continued to turn heads, embrace television in more engaging ways,’ crowdsourcing £6.7m ($10.8m) through two we wrote in issue 28, describing Bluefin Labs’ more rounds of its Equity For Punks campaign, semantic analysis of social media. Twitter must opening a new, world-class brewery and star- have been paying attention; the social media ring in its own BrewDogs TV show. Small But Perfectly Formed / Little Brands, Big Thinkers

Over Democratising graphic design via mobile apps

Cape Town, South Africa 2012 7 Friends & family funding A mobile creative suite madewithover.com

Erik Hersman is the co-founder of Ushahidi and CEO of BRCK in Nairobi, the mobile wifi generator that took home the 2013 Most Contagious Technology and Audience Awards. We asked him to nominate an SBPF company and he suggested Over. Said Hersman: ‘Mobile creativity is about great design in the app itself so that you get convenience and simplicity packaged with real creative power, which is why I use Over.’

Background Disruption What’s next Aaron Marshall likes to experiment – fast. As Marshall credits an intuitive and unique user Over’s goal of becoming the leader for mobile founder of mobile creativity startup Over, he’s interface – along with a dash of luck – for the creatives is a tall order, to be sure. But Marshall always trying to improve his company’s offering, app’s success. Before launching Over, he spent is quick to point out that ‘anything small is not enabling a new creative class via mobile-native months researching UI designs, spending more worth doing’. Since launching, the company has apps that lower the barriers to entry in a histor- than $2,000 in the App Store. The result is a brought in $1.5m in revenues, and the team is ically expensive software category. distinctive app that is a breeze to use. ‘I think focused on cementing Over’s position as the ‘We run lots of experiments. We try lots of the UI had a lot to do with why we’ve been loved leader in mobile creativity software. things. We thrash a lot – let’s try this, let’s try by Apple and by users,’ says Marshall. ‘The creative tool space has really been that, let’s try this,’ says Marshall. Apple selected Over as one of a handful of dominated by Adobe for many years, and it Before founding Over, Marshall moved from apps given away for free on the App Store’s seems like the opening is mobile. They have product to product. When his intra-business fifth birthday. Marshall anticipated 100,000 not done a great job there. There are just a social network Potluck hit scaling issues, he downloads. Instead, Over racked up 4.6 million whole lot of new creatives that are emerging created goal-setting platform Goalsmith. The downloads in a week. globally,’ Marshall says. ‘So yeah, we see a web version took months to build, but the Despite Over’s success, Marshall prides his market opportunity, but also from a personal iPhone app was completed in three weeks. team on its humility, which he believes will help perspective, it’s a passion market fit.’ ‘No more web,’ Marshall decided. ‘I’m going the company survive long term. Having a sober Though the space keeps heating up and to do this app thing.’ view on the challenges facing the team, he Over will no doubt face stiff competition in the Goalsmith became Pingoals, where people says, helps Over avoid ‘the drunken delusions coming months, Marshall is excited about the created goals and shared them to visual-first of grandeur of an entrepreneur’. company’s direction – and its directive. ‘People platforms like Pinterest. Marshall realised that Still, not all of his decisions seem sober: last who weren’t creative before are finding out that the core technology – which let people overlay year, for instance, Marshall turned down $1m in they’re creatives, and that is a very fun spot to text on images in creative ways – was more venture funding. But he has good justification: be in. We want to go to a whole new level and valuable than Pingoals itself. He moved to Cape ‘We’re not going to take money until it’s growth give people more and more powerful tools Town and turned that technology into Over. The capital,’ says Marshall. ‘Because if it’s not so that they can be free to create and make app launched in July 2012 priced $1.99 and growth capital, it could kill us. And that would wherever they are,’ he says. ‘We want creativity made $5,000 within three days. be sad, because we like where we’re going.’ everywhere.’ 42 / 43

Ellexus Helping massive companies solve software issues

Boston, MA 2010 5 Self-funded Diagnosing and fixing enterprise IT ellexus.com

Eben Upton is the founder of credit card-sized computer Raspberry Pi. In 2012, Raspberry Pi took home both the SBPF and Audience Awards at Most Contagious. We asked Upton to suggest an SBPF company, and he told us about Ellexus, saying: ‘I think Ellexus is awesome because it has spotted (and solved) a key problem holding back high-performance computing: how exactly do you keep all those thousands of machines and all that software working at peak performance?’

Background Disruption What’s next Venture capitalist and co-founder of Netscape Technology lies at the core of Ellexus’ disruptive Now, the company is turning its sights to new Marc Andreessen once famously said that presence, specifically a software product called issues in software configuration, expanding ‘software is eating the world’. That may very Breeze. ‘We’ve developed a tracing technology its team and developing two new products. well be true, but anyone who has worked much that allows us to see which files programs are One will expand Breeze’s current software to with computers knows that sometimes software accessing while they run,’ says Francis. For work with Docker, an open application platform gets a stomach bug. example, the Ellexus team can fix ‘File Not that, in Francis’ words, ‘is very hot news at the For the layperson, glitchy software is a minor Found’ errors by identifying exactly where a moment’. Ellexus is also developing a product annoyance – turn your laptop on and off and given program is looking and helping to connect that will address storage issues related to most of the time the problem will sort itself the dots. ‘We collect all sorts of information software installation. out. For multibillion-dollar companies, though, about the programs while they’re running so ‘Obviously if you’re trying to read and write software glitches can be a much more difficult, that engineers can very easily compare one lots and lots of data to a disk, then that’s going and expensive, problem to fix. system with another and, for example, discover to take a lot of time. It really matters where that After years working as an engineer in the that when they’re starting the application one disk is stored – a lot of these companies have semiconductor industry, Rosemary Francis user is typing the letter “l” instead of the number data stored across a network, and so one appli- decided to do something about large-scale “1” and things like that,’ says Francis. cation can easily affect another application just software malfunctions. She put together a The company has found a niche working by putting too much data in the wrong place,’ team in Cambridge, Massachusetts, and with semiconductor software vendors and the says Francis. founded Ellexus. The company uses advanced IT departments of semiconductor manufac- Ellexus, which is self-funded, has been prof- software to diagnose and solve installation and turers – an industry familiar to Francis. But its itable for the past two years, pulling revenue in configuration issues on Linux systems. Think of tools also work in other areas. ‘We work with the ballpark of £250,000 ($400,000) in 2014. it as a system debugger for massive computer pharmaceutical and bioinformatics companies And its growth potential is enormous – Francis infrastructures. such as Cancer Research and the Wellcome says the company’s second-smallest client is Trust Sanger Institute, because problems with ARM, a semiconductor giant with a market cap Big Data and complex software mean that they, just under $19bn. ‘Most of the companies we in fact, have very similar computer set-ups and deal with are multibillion-dollar companies, so very similar problems,’ says Francis. that makes life quite exciting,’ she says. CONTAGIOUS ADVERT.indd 1 03/11/2014 16:47 44 / 45

Hopscotch Visual programming on mobile for kids

New York, NY 2012 6 $1.2m Seed funding Spurring creativity through playful coding gethopscotch.com

Debbie Sterling is the founder of Most Contagious 2013’s SBPF Award-winner GoldieBlox, a toy company that encourages girls to develop an interest in engineering. Sterling was excited to nominate Hopscotch to join the next class of SBPFs. ‘I love Hopscotch because it is creating a really simple and intuitive platform to get kids learning basic coding skills,’ she says. ‘Computer science education is critical to the success of our economy and Hopscotch makes it fun.’

Background Disruption What’s next Prior to founding Hopscotch, a mobile plat- Though Hopscotch began with girls as a Hopscotch’s founders have been keeping their form that teaches kids to code through visual target audience, Leavitt and John went to eye on another popular platform that allows for programming, co-founders Jocelyn Leavitt great lengths to ensure it would appeal to all creative exploration, open-ended play and com- and Samantha John noticed a disturbing lack kids. They tested different colour schemes, munity experiences: Minecraft. Leavitt speaks of diversity among their engineering peers. illustrations and more to find a balance. ‘We of the two platforms as kindred spirits: ‘They ‘They were primarily white, male, nerdy, upper- actually took it into schools and tested it. The offer the motivation and give people the tools middle-class guys who had come to engineering girls said they thought it was designed for girls, to learn on their own and spur great attitudes through a love of video games when they were and the boys said they thought it was unisex,’ about sharing knowledge.’ very young,’ says Leavitt. So the pair hatched says Leavitt. ‘Perfect.’ Hopscotch’s next challenge? Ensuring kids a plan in late 2011: find a way to get girls into Hopscotch says similar numbers of boys understand the full potential of a limitless pro- engineering early on by developing a tool that and girls are invested in the language and its gramming language. The company’s website Leavitt and John wished had existed during community, where kids can share the projects offers lesson plans and curriculum aids to their youth. they create. Says Leavitt: ‘It’s exactly what we help teachers and parents work the tool into The duo started working on the project in wanted. It doesn’t become about “Is this a girls’ their educational plans. And it doesn’t stop earnest in the summer of 2012, and released toy or a boys’ toy?” This is a fun toy where you with kids. Hopscotch has had plenty of adults the Hopscotch iOS app in April 2013 as ‘the make stuff.’ having fun with its drag-and-drop programming first-ever programming language invented to be The community, launched earlier this year, capabilities. ‘There are all sorts of possibilities, programmed on a mobile device’. The platform took off immediately. Users now share 15,000 both within a giant networked community for features colourful blocks of code that users different projects on a weekly basis, and more kids to be able to make and share and learn how can drag and drop to create games, anima- than 2 million projects have been created since to build interesting software, and in general for tions, apps and more. In fact, the language is the app’s launch. For Leavitt, it’s a joy to watch. anybody who is not an engineer,’ says Leavitt. ‘Turing complete’, which basically means if you ‘Hopscotch is this emergence system,’ she Hopscotch raised $1.2m in seed funding can dream it, you can build it with Hopscotch. says. ‘We are the designers of the system, but from investors including Kapor Capital and ‘Given enough time and storage space, you because the users are also a part of creating Collaborative Fund. The app is currently free, could rebuild the internet,’ says Leavitt. the system, there’s a lot of new stuff that comes but the company plans to introduce in-app out that we didn’t expect.’ purchases to monetise its success.

Publishing

The rise of social media platforms over the past decade has brought about an intense pressure on brands to feed the content beast. This in turn is inspiring a wave of advertising that places an emphasis on storytelling, as brands evolve from being publicists to publishers

By Chloe Markowicz Illustration / Matt Chase Strength Study / Publishing

ontent marketing has been around since Minneapolis, in 2001, it was a landmark moment. then come back for more. That was Gatorade’s goal agricultural equipment-maker John Directed by big shots like Ang Lee and Tony when it launched its online branded entertainment C Deere launched The Furrow back in 1895, Scott, and starring Clive Owen, this was content portal Mission G in 2009. It wanted its platform educating farmers about how they could become that tried to be more Hollywood than Madison to feel not ‘like advertising but news: an event more profitable. Described as the agrarian version Avenue. But BMW couldn’t achieve mass view- worthy of interest and attention in its own right’, of Rolling Stone, the magazine has covered need- ership online prior to broadband internet and Brent Anderson, global group creative director of to-know topics for farmers for more than a century. platforms like YouTube. There are probably more TBWA\Chiat\Day, Los Angeles, told D&AD. marketing professionals who have seen BMW It was for this platform that the agency created From selling to storytelling Films presented at conferences than consumers the successful Gatorade REPLAY video series, Advertising has always been about creating content who saw it in the wild. which focused on years-later rematches between to sell products, but over the past decade more Once social media platforms launched, the small, local sports teams. brands have come to think of themselves as pub- barriers to creating content were lowered. Not lishers. Making content that entertains or educates only were these online platforms free, but there Connecting through content rather than extols the virtues of a product has was also greater access to tools to create everything Content can lead to sales spikes – Gatorade sales become a bigger priority as marketers move from from audio to video to still images. These days, shot up 63% in the region where the first REPLAY buying an audience’s attention to earning it. Indeed, as David Alberts, chief creative officer of content series was staged. But it also has the longer-term 57% of marketers planned to boost budgets for sourcing firm MOFILM, explains: ‘Anyone effect of building richer engagement with its content marketing in 2014, according to Advertising can afford a broadcast-quality camera. We can consumers. Speaking about REPLAY, Jill Kinney, Age. As brands have shifted from being publicists edit on our computers. We have a distribution then Gatorade director of branded content, told to publishers, the ‘selling’ has become less overt. model online that is cost effective to get anyone D&AD that ‘longer-form branded entertainment Characterised by an editorial focus on storytelling to compose video.’ allows us to more thoroughly connect with and and sharing values instead of pushing product, It’s easy to forget that media platforms and educate our audience’. brand publishing involves creating advertising content are so much more abundant now. With Intel had already built a stellar reputation that feels more like journalism or entertainment. audiences having greater choice of what to watch in brand publishing with its Creators Project, and read, brands have had to work even harder to a partnership with Vice started in 2010, when Taking cues from Hollywood capture their attention. This meant creating adver- it launched The Beauty Inside with Pereira & When BMW launched a series of high- tising that wasn’t interruptive or a nuisance but so O’Dell. This social film series is another example production-value online films with Fallon, entertaining that people wanted to seek it out and of how content can help a brand reach out to a

Brand publishing: Intel aims to build an ongoing conversation with younger consumers (left); BMW films were a landmark moment in branded content (above) 48 / 49

target group. Speaking to Contagious about the project, Justin Cox, then Pereira & O’Dell strategy director, explained that there wasn’t an immediate sales goal: ‘What Intel wanted to do was build an ongoing conversation with younger consumers. And hopefully drive all the typical marketing buzzwords you hear and love – driving brand affin- ity, driving consideration – among this audience. Part of it was just putting the brand on the cultural map for this audience.’ Agency co-founder PJ Pereira added: ‘Instead of interrupting consumers with a “pitch” [the brand] attracts them to a lighter, but deeper message they actually enjoy.’

Value-driven marketing Focusing on values instead of product can help @SummerBreakAT&T reality series used brands achieve long-lasting cut-through in their influencer marketing to categories. ‘Product differentiation lasts six achieve social media months until it can be copied,’ says MOFILM’s success Alberts. ‘Your values are sustainable.’ He adds: ‘Anyone can claim something in 30 seconds, but if you then want to demonstrate your values, you need storytelling. Saying “I am great” is not good enough, you have to demonstrate it.’ consumers. Intel’s The Beauty Inside, for instance, influencer campaign to support it. When we Sainsbury’s Little Stories, Big Difference series was successful because it was informed by research thought about how we were going to get people of video vignettes used storytelling to convey the into young people’s journeys of self-exploration. to watch this show, obviously print and television British supermarket’s corporate responsibility The insight that millennials use technology to commercials didn’t make sense. How do we reach values. The films focused not on the products the discover their personalities inspired the mechanic these kids in a way that’s consistent with the way supermarket stocks, but how its business operates, of inviting the public to play the part of the main they consume content?’ from sustainable sourcing to nutrition labelling. character in the series. Marketers need to ask themselves not how they Audiences prefer story-led content marketing. can create great content, but how they can get Nearly two-thirds of online news visitors are more Distribution is the answer people to consume it. Kraft has revealed that it has open to digital advertising that focuses on a story Simply having content that’s entertaining isn’t a four-times-better return on investment through rather than selling a product, revealed research enough to attract views. As The New York Times content marketing than through targeted adver- from the Internet Advertising Bureau. Custom Innovation Report, designed to get the Grey tising, but that is only because it has put major content is 92% more effective than traditional Lady out of the digital ditch, notes: outlets like dollars behind distribution. As Julie Fleischer, advertising at increasing awareness and 168% ‘BuzzFeed, Huffington Post and USA Today are Kraft’s director of data, content and media, said in more powerful at driving purchase preference, not succeeding simply because of lists, quizzes, a Content Marketing World speech in September: according to UM research. celebrity photos and sports coverage. They ‘If you wouldn’t spend money behind it, then why are succeeding because of their sophisticated do it? It’s shouting into the wind without making Laughing, gasping and goose pimples social, search and community-building tools and a sound.’ In the early days of YouTube there was So, how do brands win at publishing? The obvious strategies, and often in spite of their content.’ a misconception that, because it was a public free answer is by creating engaging content. It needs This awareness of how distribution works and platform, brands didn’t need to spend any budget to be consistent with their overall positioning knowledge of how to get clicks is why brands are on promoting their videos. ‘Brands thought that and point of view, which explains why the brands so keen to collaborate with the likes of BuzzFeed if we build it, they will come and that was surely responsible for some of the best content also and Vice on creating content. wrong,’ Nelson-Field tells Contagious. ‘We found have the clearest sense of identity. Emotionally Influencer marketing is also becoming an that distribution has the greatest effect on the charged content is also more likely to be success- important strategy to ensure content gets seen. variation of sharing. Distribution trumps emotion. ful, as shown in a study by Karen Nelson-Field, AT&T’s @SummerBreak, a 2013 reality series There is definitely a hierarchy: paid is without a senior research associate at the University of that unfolded on social media in real time, doubt king, and content is queen.’ South Australia’s Ehrenberg-Bass Institute for amassed 15 million views largely due to its clever The best brand publishers have not just created Marketing Science. ‘Content creators should influencer campaign. The initiative took over the amazing content, but have figured out how to aim to increase the emotional appeal of their existing @SummerBucketList Twitter handle, get people to consume it over the creations of videos, with less emphasis and fewer restrictions already popular among teens, turning it into bonafide media companies. Net-a-Porter’s Porter on the creative devices they use,’ she wrote in @SummerBreak’s home. AT&T hired the young magazine, for example, is comfortably competing Viral Marketing – The Science of Sharing. ‘Creators woman behind the account to work with its social with Vogue and Harper’s Bazaar. Brand publishers should worry less about whether the video content team to craft an authentic voice for the handle extraordinaire like Red Bull and GoPro are in the contains a baby, a dog or a celebrity, and instead and help with fan engagement. Billy Parks, who position where their content can generate revenue. invest in pre-testing to ensure the material makes worked on the campaign as EVP of digital pro- By seriously investing in content creation and – the viewer laugh, gasp or get goose pimples.’ duction and programming at the Chernin Group, crucially – distribution, brands are proving that Content can be more emotionally resonant told Contagious in early 2014: ‘I would never, ever, publishing is a potent way to connect with audi- when it is based on strategic learnings about ever, run a content programme without a solid ences, drive consideration and even earn money. Strength Study / Publishing

Brand Spotlight Red Bull From daredevil stunts to unusual events, Red Bull has always been synonymous with great content. But its branded content has become more than a mere marketing tool, marking its evolution into a true publishing company

ou don’t crack open a Red Bull because than the burst of energy the drink unleashes, that Flugtag contest: Red Bull has carved out it tastes good. And yet Red Bull has has made it a billion-dollar business. And this a niche for itself by Y managed to sell 40 billion cans of the brand has been built on content – exhilarating, setting up unique stuff since the company was founded in 1987. heart-pumping content. challenges ‘Taste is of no importance whatsoever,’ founder The product’s energy-boosting nature makes Dietrich Mateschitz told Bloomberg Businessweek. its association with extreme sports a natural fit. Quite a bold statement for a drinks manufacturer, As Mateschitz told Fast Company: ‘When launch- but that’s because Mateschitz sees it as more than ing a product called an energy drink and named a drink: ‘It’s an efficiency product. I’m talking Red Bull, a product that stimulates body and about improving endurance, concentration, reac- mind, it is a short step to the roots where Red Bull tion time, speed, vigilance and emotional status.’ came from. We have been doing this for 20 years – now it’s called adventure sports, extreme sports More than a drink and outdoor sports. Most of the national Austrian Red Bull is also a powerful lifestyle brand. ‘It is champions in those days were personal friends of still an energy drink, [but] Red Bull now also mine and we spent all our leisure time mountain represents a certain approach to life,’ kitesurfer biking, windsurfing, snowboarding, etc.’ Robby Naish, whom Red Bull has sponsored Red Bull went from just hanging out with since 1994, told Inc. It is Red Bull’s brand, rather athletes to sponsoring them, which it first 50 / 51

did in 1989 with Formula 1 racing driver Doing the impossible just through its events but its stunts too. These Gerhard Berger. In building unique properties like the daredevil acts are a smart way to make Red Bull All this sports action makes for some pretty Dolomitenmann, or Flugtag, an absurd contest stand out in the fiercely competitive drinks mar- thrilling material, which explains why Red Bull where teams are challenged to fly homemade, ket. As Jeremy Edwards, founder of sponsorship has been creating content since its inception. human-powered machines off a six-metre deck, agency Activative, says: ‘It is a route to create a ‘One has to admit that this was easier with Red Red Bull has carved out a niche for itself. No one competitive marketing awareness platform with Bull Energy Drink than it is with ordinary creates events like Red Bull. And that means only rivals like Coke and Pepsi with whom it simply food products, soft drinks, or detergents,’ added Red Bull gets to tell their stories. This is true out- can’t compete in terms of scale and ad budget.’ Mateschitz. His statement downplays Red Bull’s side of sports too. For instance, instead of simply The brand broke five Guinness World Records shrewd content creation strategy. The brand sponsoring a concert tour or music festival, Red when it sent Felix Baumgartner to make a free-fall hasn’t just been documenting exciting events that Bull’s Revolutions in Sound annual event takes jump 24 miles above the earth, with 8 million complement its active personality, but creating over the London Eye, with each of the attraction’s people watching YouTube’s live stream in awe. them and then capturing them. This has been revolving capsules hosting a different music gig, It wasn’t just that millions were enthralled by going on since the launch – just one year after and each concert being streamed online. this literally out-of-this-world content, it had the company was founded – of the Red Bull Red Bull does more than simply slap its logo a business impact too. Sales in the US rose 7% Dolomitenmann: an extreme relay race that com- onto an existing event. Since the beginning, to $1.6bn six months after the Red Bull Stratos bines mountain running, paragliding, kayaking it has had the key to creating killer content mission, according to research firm IRI. The 2012 and mountain biking. because it has made amazing things happen, not stunt is yet another example of Red Bull’s talent Strength Study / Publishing

Revolutions in Sound: annual event stages a separate music gig in each of the London Eye capsules 52 / 53

Red Bull built an independent media business on its heritage of creating great content. This became popular because, even though it was created by an FMCG brand, the product was never the focus

for making the impossible happen. That’s what Beyond marketing the brand has done ever since it teamed up with Mateschitz has said that his goal for Media House Baumgartner to break the record for the highest is to establish a global media network covering ever BASE jump in 1999, when he leaped from print, TV, mobile, music and new media. And The Petronas Twin Towers in Kuala Lumpur, Media House’s output really is all encompassing. It then the world’s tallest buildings. produces all the content for the brand itself, which includes RedBull.com, a digital sports, action Owning the story and lifestyle platform, as well as the men’s active ‘We have no real material assets, our asset is the lifestyle magazine, The Red Bulletin, which has brand,’ Mateschitz has said. He overlooks Red a publishing run of more than 3.1 million copies Bull’s second most valuable asset: its content. a month. Media House also works with media ‘Whenever we did any event, or signed an athlete partners, for instance teaming up with NBC or executed a project, everything has been put on Sports Group to create the Red Bull Signature film or photographed. Stories have been told,’ Series, bringing action sports coverage to US TV. Red Bull Media House North America managing It has developed radio stations, even produced director Werner Brell told Fast Company. ‘It’s part feature-length films like 2011 snowboarding of the DNA of the brand.’ documentary The Art of Flight, which hit the top When Red Bull founded its own independent of iTunes’s movie sales charts. media company, Red Bull Media House, what These editorial projects helped strengthen Red appeared to be a strange move for an FMCG Bull’s brand but the company has made no secret company was in fact a natural progression. of its goal for Red Bull Media House to become ‘Storytelling has been part of the Red Bull DNA profitable. Products like Terra Mater, a National since its foundation,’ a Red Bull Media House Geographic-style magazine, don’t have any Red Bull spokesperson tells Contagious. ‘Back in the 1990s branding at all. Red Bull’s Content Pool, managed the company decided to make the investment in by the Media House, provides free images for producing its own content to bring those stories editorial media covering Red Bull events. But this across with the detail and quality they deserved. year, Red Bull launched its Photography licensing That content was shared with consumers and portfolio, working with a team of photographers to media contacts around the world. In 2007, the make images from Red Bull photoshoots available next step of professionalisation was taken: con- to media buyers and syndication houses, creating tent production, collection and distribution was a new revenue stream for the company. formalised by launching Red Bull Media House Red Bull built an independent media business as a new business with a target of sustaining its on its heritage of creating great content. This own revenue stream.’ became popular because, even though it was cre- Red Bull had already been filming and photo- ated by an FMCG brand, the product was never graphing all the exciting things it was doing, and the focus. ‘This strategy avoids the limitations of working with broadcast, print and digital media being a product-centred business and embraces the to publish this content. By creating its own fully social, cultural and corporate evolution of being fledged media business, Red Bull took content a content and lifestyle business,’ says Activative’s creation, production and distribution into its own Edwards. ‘It also keeps those core Red Bull drink- hands. As Brell explained to Fast Company: ‘In ers further enwrapped in the Red Bull lifestyle content, everything has to do with rights owner- and therefore keeps them loyal.’ ship. If you don’t own the rights, it’s a little more Instead of engaging in ‘pure marketing for expensive to do things in media. The advantage consumer goods’, Mateschitz told Fast Company, we have is we own the life cycle from beginning Red Bull’s media output became ‘a way to tell to end... With the Media House now in place and our consumers and friends what is new about creating our own media channels, we have greater our approximately 600 athletes worldwide, their leverage and opportunities to bring our events to achievements and next projects; another band life and to the audiences we want to reach.’ launch or song hit from Red Bull Records; what Strength Study / Publishing

Red Bull Stratos: US sales rose 7% to $1.6bn after Felix Baumgartner’s free-fall jump

is going on regarding nightlife, people, events, comes in, you make it based on a continuous and Takeouts culture, Formula 1, etc.’ long-term dedication to an idea of what you want to explore. The level of talent that gets involved Earn the audience’s attention / Consistency and commitment with the Academy can only get this involved when Take cues from Hollywood and The brand’s deep entrenchment in the worlds there is a certain amount of understanding that think about how best to entertain people rather than just push your of extreme sports and underground music has this exercise is not a short-term branding grab, but product onto them. endowed its content with authenticity. People read an actual investment in a cultural conversation.’ The Red Bulletin because Red Bull has proven itself As an FMCG company that publishes content Connect to the customer / to be an expert in sports. The brand’s reputation that is more than just advertising, Red Bull has Consider how you can start a as a publisher is founded on consistency. reinvented the notion of branded entertainment. conversation and build more Since 1998, Red Bull has been holding its ‘The perception is that there is content and there’s meaningful interactions with annual Music Academy, bringing together young advertising,’ Raymond Roker, The Red Bulletin’s consumers. musicians, producers and DJs for two weeks of associate publisher in the US, told AdWeek. ‘We’re Your values will help you workshops, recording sessions and performances. challenging that perception. The audience understand out / Don’t just boast It’s this long-standing commitment that gives stands their athlete has brand logo stickers all over about how wonderful your Red Bull a legitimacy to create content about the board and the helmet, and that’s okay. If the brand is, rely on your values music. Speaking about the Daily Note, a magazine end result is a good piece of content, parsing where to show people. published for the 2013 New York Red Bull Music it comes from is missing the point.’ Academy, Torsten Schmidt, a founder of the It is Red Bull’s commitment to entertaining its Invest in distribution / Great content will get you nowhere if Academy, told PopMatters: ‘You don’t make the fans by delivering them great content, rather than no one is going to see it. Daily Note based on a six-month culture-marketing simply selling them more energy drinks, that has brief that you will abandon when the next CMO helped make it a multi-billion-dollar brand. 54 / 55

Opinion Brands must learn to edit Tyler Brûlé, founder of Monocle and design and communication firm Winkreative, talks to Chloe Markowicz about how brands can become stronger publishers

What do brands need to do to get content right? clean the rooms, and you have the CEO tweeting constantly about how Brands need to take a deep breath first. We’re five years into this journey they’re opening new locations, that demystifies the brand. Because of companies becoming publishers and I think that many companies are you’re constantly on, it doesn’t leave any room for the consumer’s still finding their own way, for a variety of reasons. Some waded in not imagination. We tend to forget about that. We’ve moved into this area realising how expensive it is to operate their own newsroom or their own where everything has to be completely transparent and nothing can be feature desks. And you have a lot of companies who think, ‘Oh, we’ll opaque anymore. But who says? I would argue that with good branding just hire a bunch of writers. They’ll come into our company four times a lot is residing in the head of the consumer. a year. They’ll dip their toe into the brand and then they’ll venture out again.’ Then they’ll be disappointed because they haven’t managed to How is creating content specifically for free digital channels capture the essence of the brand. You need to be living it day in, day hurting brands? out. We’re still in this process where a lot of companies don’t have it With free channels, you’re talking to people who may not have 100% right. spending power. Companies like the fact that you have to spend 20 AUD ($17.50) to buy Monocle. It means that there’s a very good What are brands getting wrong when it comes to publishing? chance that consumers might buy a business-class ticket on your air- The big issue is editing. A lot of companies have not come to grips with line, or they might buy a pair of your trainers because they can deploy how to edit yet, what should be said and what needs to be hidden in $20 a month to purchase something. As opposed to saying, ‘Yeah I the long grass. With the advent of social media and all of these free can be on all these channels. They’re free for me, they’re free for the digital channels, that’s a major consideration. Because these channels consumer.’ Those companies don’t really have a sense of what the are free, people think, ‘Well let’s use them as much as we can.’ They’re potential purchase is there. information buffets. All you can eat. Except in this case it’s sort of the I think we’re already entering a settled-down period with publishing. reverse: all you can vomit out. People have recognised you don’t have to be on all these free channels. One of the big challenges for companies now, when you’re constantly If you’re a brand and a whole bunch of new malls have opened up, do on, when you have all these channels available to you and you think you need to be in every single one? Media channels are no different. You suddenly you’re in the content business, even though your business is have to pick your battles. Companies think if a media channel is free, making cars or producing soba noodles or whatever, is that there’s a they might as well use it. They’re not thinking about the environment or certain demystification. the people who might use it.

What do you mean by demystification? What advice would you give to brands looking to move into Once upon a time you had advertising that enticed you through publishing? great photography and a wonderful television campaign, and you Invest in a good editor, that’s the most important thing. Don’t think that would find your way to that bottle, or that hotel, or whatever it was. But it can just be your CMO. Maybe your CMO is just used to working with there were also so many other layers behind it that weren’t quite clear. traditional ad copy, or their background might be retail or CSR. There is For a great brand, 50% of it is in your mind. But suddenly when you an art to understanding what makes a good lead, what’s going to hook have all of these channels available to you to communicate all the time, somebody and whether to craft your message in one page or in the and you have your front-office manager who has to deliver a blog, and standfirst. Don’t kid yourself that suddenly you can just vault anybody you have the head of housekeeping talking about how she and her team with a marketing background into an editor’s seat. To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Dead Technology / Devices And Platforms

simply, there came a point when mobile connectivity had to be The about more than ‘doing email’. Misled by a last gasp of corporate demand for simple handsets, however, parent company Research In Technology Motion (RIM) was simply too slow. ‘BlackBerry, Nokia and Palm had platforms based on the hardware Boneyard constraints of 2000, and were not able to exploit the new possibilities of hardware by 2007,’ Evans The device / The BlackBerry says. ‘They were not able to match Looking back over ten years of We’ve chosen to refer to ‘The the iPhone (and later Android) explosive digital development, BlackBerry’ as a generic device because they were designed for because in many of our lives it totally different trade-offs. They had Will Sansom considers the played a similar role to that of an to start again from scratch, from devices and platforms that either office stapler – namely one based a position several years behind fell from grace or failed to reach on a singularity of purpose, ‘doing Apple. Changing your entire plat- email’ – and therefore we rarely form is almost always a life-threat- it. What lessons can be learnt, invested enough care or emotion ening process for a tech company.’ and how can startup founders to distinguish between different and industry giants alike avoid models. And it is this unapolo- The lesson / Don’t sacrifice getically limited functionality that long-term survival in the interest of similar fates? ultimately led to its downfall; put stringing out short-term success.

It’s out of character for Contagious to pay heed to anything but the best and brightest, but sometimes there is a grim productivity to be found in considering the dim and dismal. I’ll spare you a generic quote about the power of learning from mistakes, but course-correcting based on others’ failures has helped ensure the survival of some of the technologically fittest companies operating today. The app / Foursquare It is in the spirit of championing ‘But I know people who still use Foursquare,’ I hear you cry. Of course you such enlightenment and progression do, but then you work in marketing. Evans, whose firm led an investment that Contagious has identified five round in the company back in 2010, didn’t have a comment. We do: the harsh truth is that for the majority of the civilian world, being mayor of of the highest-profile tech fails of the somewhere that specialises in artisanal coffee and silly moustaches is past decade with the aim of calling not a valid form of social currency. out the things that went wrong, how, Once the darling of Silicon Valley, Foursquare now finds itself struggling to provide sufficient return on the $160m-plus investment it has why and what exactly we can learn received over the years. Its solution was to split what it does into two from each digital demise. parts: check-ins are now via sibling app Swarm, whereas Foursquare is We also asked industry expert attempting to offer a Yelp-esque crowdsourced recommendation service. But therein lies the problem – Yelp already exists and is extremely Illustrations / Melvin Galapon Benedict Evans, partner at venture popular. And as for Swarm, early iterations repeatedly crashed and were capital firm Andreessen Horowitz difficult to use – at least too difficult to stop users simply checking in via and a renowned technology industry Instagram with a pretty picture instead. In short, Foursquare ‘innovated’ its way out of a job. analyst, to offer his perspective on a The lesson / If you don’t evolve or add value to your original value few of our choices. proposition, others will. 66 / 67

The company / Nokia non-touchscreen handsets, of who value the polished experience ‘We have more than one explo- which Nokia still had a command- over apps.’ sion – we have multiple points of ing global market share. The Nokia Microsoft’s current predica- scorching heat that are fuelling a name was killed off entirely after it ment is only too reminiscent of blazing fire around us,’ explained eventually sold the handset division Nokia’s original refusal to let go The network / Google+ former Nokia CEO Stephen Elop to the tech behemoth for $5.4bn of its already failing Symbian OS, Google+ is not as popular as in his infamous ‘burning platform’ in September 2013, although proof that it always was, first and Facebook – we should get that out memo to employees in 2011. The Windows Phones remain some- foremost, a hardware company. Its of the way first. It has nowhere near sentiment was simple – change thing of a technology pariah. failure, however, was in its institu- the number of total users, nor the or die – although proceeding to ‘Right now, Microsoft is stuck tional refusal to admit its short- number of monthly active users. nestle into the protective bosom in the same position as Apple 20 comings in software, embrace the So as a scaled social network (in of Microsoft was arguably a com- years ago,’ Evans explains. ‘It has open-source revolution that had the traditional sense of the term) bination of both. a perfectly good product, but its arrived and have faith in its ability you could be forgiven for thinking The consequent obligation to ecosystem is too small to attract to compete on what it was good that it failed to launch. But let’s be use Windows Phone OS over the a meaningful base of developers. at – building phones. clear, Google+ was never intended booming, open source Android It comes a late third, if ever, in the to compete on like-for-like terms alternative was undoubtedly one roadmaps of the core apps. That The lesson / If conceding mar- with Facebook et al. of the biggest nails in Nokia’s cof- means currently it is only really ket share is inevitable, be smart Evans explains: ‘Google+ is two fin – not least because Windows selling at very low prices as an enough to defend what you have things – a single unified profile Phone wouldn’t even work on alternative to Android – to people by playing to your strengths. for your activity on Google, and a social network that uses that profile. The social network has failed to gain much traction, but the profile has worked very well. Google is now much better able to build up a sense of what you search for and why, allowing it to give every user better results (and advertising).’ The category / through other devices – an opinion Recent additions to the plat- Health tracking Evans shares: ‘The key is providing form, including a friend polling Lots of us know a hardened tri- actionable information and ideas, feature and a separate app for athlete or marathon runner who not just a graph of how many steps video Hangouts, support the notion swears by their heart-rate monitor, you’ve run.’ of Google+ as a service-driven but the health tracking category Perhaps the failure of health- space that facilitates the creation has repeatedly promised to crack tracking technology to achieve of separate and, ultimately, more the mainstream only to be dis- mass adoption is in its inability meaningful individual networks. So missed as a fad. Everyone from to integrate meaningfully into our an unfair inclusion in this list? Not students to suits and millennials lives. This could be an interface necessarily. Had Google defined a to mums was supposed to be issue or even a broader perception clearer vision for the platform and self-quantifying by now and the gap that needs to be addressed articulated this better to the world’s world’s most digitally savvy sports through advertising. Either way, connected public, it might just have apparel manufacturer even waded until we’re shown how these expen- the scale it craves and users would in with its own solution, only to sive and slightly geeky-looking have the post-Facebook social remove it two years later. So what’s gadgets will actually change our connectivity they deserve. going wrong? lives, it’s unlikely we’ll give over the In issue 37 of Contagious, our necessary wrist-based real estate. The lesson / Opening a new very own Dan Southern claimed service means nothing if you can’t that the broader wearable tech The lesson / Adoption of a new communicate its raison d’être and category needed to offer more technology relies on it fitting seam- value to the people who are going than wrist-sized representations lessly into people’s lives, not the to give it life. of data we can already access other way around. The Case Laggards Top dogs Study 2004

Cash-in nyse nke Nike : 248% Contagious imagines winning big Issue 1 / December 2004 on the stock market with brands PlayStation nyse: sne 47% we’ve featured as case studies Issue 4 / September 2005 McDonald’s nyse: mcd 210% By Raakhi Chotai Issue 1 / December 2004

Nokia nyse: nok 53% Issue 5 / December 2005

3 otcmkts: huwhy 255% Issue 5 / December 2005

American Apparel nysemkt: app 88% Issue 8 / September 2006

StellaArtois ebr: abi 197% Issue 6 / January 2006

Let’s talk about something important. Put that coffee Nintendo otcmkts: ntdoy 66% Issue 10 / March 2007 down. At Contagious, we’ve always argued that creativity generates profit. So we decided to analyse exactly how Mini etr: bmw 146% Issue 12 / September 2007 our lauded Contagious Case Study companies would perform in the stock market, to see if our editorial choices M&S lon: mks 30% held weight. Issue 12 / September 2007

To test the hypothesis, we created two theoretical port- Uniqlo tyo: 9983 248% Issue 16 / September 2008 folios. In one (the control portfolio) we invested $2,000 per quarter in something that mirrored an accessible EA nasdaq: ea 26% whole equity market (the Vanguard Total Stock Market Issue 15 / June 2008 Index Fund – VTSMX ). In the other, we bought $1,000 Converse nyse: nke 196% worth of shares in every brand (or its parent company) that Issue 17 / December 2008 we’ve ever profiled in a case study*. With quarterly issues, BestBuy nyse: bby 25% for ten years with two brand case studies in each, that Issue 21 / December 2009 takes us to 80 companies stamped with the Contagious Hyundai krx: 005380 235% seal of approval. Issue 19 / June 2009 For example, our first issue featured case studies on Nike and McDonald’s. It was published in December Barclaycard lon: barc 27% Issue 23 / June 2010 2004. So into the basket went $1,000 each worth of Nike and McDonald’s shares, priced historically for December Domino’s nyse: dpz 481% Issue 23 / June 2010 2004. Simple. And those two did pretty well. Today, that initial outlay would be worth 830% more. HTC tpe: 2498 88% If money could talk it would tell you that creativity is Issue 27 / June 2011 king, beating the control by a respectable 17%. If you’d Delta nyse: dal 190% followed the Contagious gospel, you’d have made a cool Issue 34 / March 2013 $52,000 on top of your initial $80,000 investment not Safaricom lon: vod 31% including dividends. That’s roughly $12,000 more than if Issue 34 / March 2013 you’d stuck your dollars in a fund. The more discerning among you might have chosen to avoid HTC, American Apparel and Nintendo, which have 2014 made spectacular losses in the past few years. Well, struggling sales, a harassment lawsuit and not being able to top the N64 will do that to a business. If we could turn back time, we’d have bet the farm on Domino’s (because who can resist a melted cheese-filled Control Contagious crust?) or sneaker sovereign Nike. Together, they increased Invested $80,000 $80,000 by roughly 900% over the period. Profit $40,000 $52,000 So remember: A-B-C. Always. Be. Creative. Value inc dividends $129,000 $143,000 *When a company’s stock wasn’t available, we substituted our control stock, the VTSMX % Gain 49% 66% 68 / 69 Illustrations / Tim McDonagh, Handsome Frank Handsome McDonagh, / Tim Illustrations

Why the collision of celebrity life and digital media is reshaping popular culture By Will Sansom Insider / Digital Celebrity

’m not bi-polar, I’m bi-winning.’ Delivered during an interview with the ABC network in the midst of his extremely public melt- down in 2011, Charlie Sheen’s iconic soundbite may have been cunningly disguised as a spitball of nonsensical self-assurance. But, in retrospect, it provides a neat and (ironically) sobering summary of celebrity in the past decade. Having plied his trade as the star of hit CBS sitcom Two and a Half Men since 2003, by 2011, Hollywood veteran Sheen was the highest-paid actor on television. However, unable to win his constant battles with substance abuse, Ihe followed his third failed stint in rehab by publicly criticising the show’s extremely successful creator, Chuck Lorre. The four remaining episodes of that season were cancelled and Sheen was not only sacked but also banned from entering the Warner Bros production lot, just for good measure. It is what happened next that is remarkable. Rather than drifting into drug-addled obscurity, Sheen charged into social media-fuelled hyper-stardom – his implosion and increasing infamy careering hand-in-hand as he broke a Guinness World Record for the fastest time to reach 1 million followers on Twitter. At one stage, he was amassing 129,000 new observers a day. Despite being pulled off one of the world’s biggest entertainment stages, he found himself with a larger audience than ever. Bi-winning indeed. His millions of followers watched in real time as he stumbled down from his trip and eventually found (partial) redemption. Some were fans, some were voyeurs, some lovers and some haters; what united them was the unfettered glee at having a direct line to a public figure losing his shit on a rather large scale. Social media had once again pulled its neatest of tricks: combining the illusion of intimacy with the thrill of a globally collective experience. It just so happened to be around the self-destruction of a human being. Across the pages of this anniversary edition of Contagious, you will find much musing on the impact of digital media on companies. The purpose of this piece is to consider what changes these same platforms have wrought on the human brand – the celebrity. These are the people who, through some virtue of talent, tenacity or just lucky timing, occupy positions of unique importance and influence winning another term in office by tweeting a photograph of himself in modern society. More so than most brands or businesses, for hugging his wife, Michelle – quickly claiming the record for the most better or worse. And as we’ll see, their transformation at the hands retweeted post ever (until Ellen De Generes went to the Oscars of the internet has been no less profound. with her Samsung Galaxy Note 3 and took a selfie with the stars). Even pop singer Jessica Simpson constantly reminds us that Close encounters there is no observation too small or unimportant for public con- The great Sheening of 2011 perfectly illustrates the first significant sumption, with tweets like: ‘Dear elderly man at the gym: it’s hard impact on the concept of fame – namely that real-time platforms 4 me 2 keep composure whilst punching at chipmunk speed when have provided the rich and famous with unmediated access to their yr ball sack spills out of yr wind shorts.’ Quite. More recently, adoring (or abhorring) public. Gone are the days when celebrities Queen Elizabeth II tweeted for the first time, perhaps appropriately would hide behind armies of publicists and press officers; in just from the Science Museum in London, where she was opening a 140 characters they can now connect instantly with millions. And new exhibition about the information age. It is yet to be confirmed what’s more, a tweet from an A-Lister will slip into your feed along- whether or not One was amused... side one from your best buddy about missing the train. There is an immediacy and illusion of proximity that is compelling not just for Publishers, not psychopaths fans, but also for the celebrities themselves, who can reach out The increasing predictability of celebrity mishaps on social media and engage whoever they want, whenever they want. has led many sensible management teams to hand over control of It’s not just disgraced TV stars who have taken advantage of their talent’s Twitter and Facebook to more responsible parties, Twitter: Miley Cyrus and Sinead O’Conner – two musical icons giving rise to a lucrative line in micro-managing celebrity social from different decades – spatted over sexploitation; everyone media strategy. Should Pitbull’s shirt be pink or white, for example? from Fergie of the Black Eyed Peas to Kate Middleton announced One could be forgiven for thinking that these middlemen are their pregnancies on the platform; President Obama celebrated defeating the object of social media – shattering the illusion of 70 / 71

intimacy by capitalising on the apathy or idiocy of the famous. Digital voyeurism Those agencies at the sharp end of celeb social strategy, Social media has undoubtedly imbued celebrity life with a new however, claim to do far more than simply vet tweets and hit transparency, although the second – and most recently publi- send at the appropriate time. When done right, it can help that cised – impact of digital technology has pushed this to its very celebrity resonate in the most culturally relevant way possible. limits. Earlier this year the internet erupted with the scandal of Mark Adams is director of London and Manchester-based nude celebrity photos being leaked via 4chan – the simple digital The Audience, an offshoot of the LA firm co-founded with Sean bulletin board that doubles as a gateway to the seedy underbelly Parker. As well as overseeing the largest social publishing network of the internet. A long list of celebrities, most of them young and in the world, they have provided consultancy for Charlize Theron, female, were hacked, including Oscar winner Jennifer Lawrence, Pharrell Williams and Barack Obama. He explains: ‘I think we pop star Rihanna and supermodel Cara Delevingne. get to show stuff that no traditional media can really delve into. Unable to identify the hacker behind the leak, the legal represent- Sometimes we have really pushed this and we have to argue quite ation of the celebrities turned instead on the technology com- often with the PR people about whether or not that is a good idea. panies. First in the firing line was Apple, criticised for breaches of In our opinion, the biggest mistake that social media ever made its iCloud storage platform. Next was Google, from which infamous was falling into the wrong hands. It fell into the pot with PR and celebrity lawyer Marty Singer is still seeking damages on behalf marketing when it should have fallen into the pot with publishing. of his numerous exposed clients. In a letter addressed to (among ‘PR and marketing is about making withdrawals from the cultural others) CEO Larry Page, executive chairman Eric Schmidt and account and contributing nothing to popular culture, talking about co-founder Sergey Brin, he claimed that Google was not doing product and being a psychopath who’s obsessed with themselves. enough to prevent the spread of the leaked images: ‘Because the Publishing, when done right, is about contributing to and curating victims are celebrities with valuable publicity rights you do nothing popular culture, about understanding what makes its heart beat – nothing but collect millions of dollars in advertising revenue... as faster and that’s where we are coming from.’ you seek to capitalise on this scandal rather than quash it.’ Insider / Digital Celebrities

NOW / NEXT / WHY 2015 LONDON Contagious’ annual trends briefing 21 April A crash course on the future of marketing Expect to be challenged by what you hear, but not by how we say it NEW YORK Earlybird tickets: Single £380 / $620 3 for 2 £760 / $1240 10% off for subscribers 6 May Chicago event in partnership with SOCIALDEVIANT CHICAGO 19 May For more information contact [email protected] / +44 203 206 9275 72 / 73

The biggest mistake that social media ever made was falling into the wrong hands. It fell into the pot with PR and marketing when it should have fallen into the pot with publishing Mark Adams, The Audience

Aggressive legal posturing aside, Singer makes a valid point from the size of their following to where they are popular and how about the currency of celebrity profile – the value of which is much of their music is being consumed, as well as things like their determined by public demand. ‘Let’s not forget that these were tone of voice, overall aesthetic and creative sensibilities. This is very personal photographs that anyone in the world could have incredibly useful to help inform the decision to sign (or not sign). sent,’ confirms Adams. ‘What makes it different for celebrities is However the final deciding factor is still lodged somewhere in that that they are people of public interest.’ infamous “gut instinct” – the day algorithms alone decide what Indeed, with our appetites already whetted by increased access gets signed is the day the music dies.’ to more private aspects of celebrity life via social media, the leaked Damian Kulash is lead singer of indie pop band OK Go, photos felt like a compelling inevitability as well as a shocking famous not only for the credibility and inventiveness of their breach of privacy. And with hackers only too ready to sate the brand collaborations, but also the mind-boggling videos in public’s voyeuristic hunger, it is likely that the immediate solution which they wrap their music. We interviewed him the day after for celebrities will lie (ironically) in a more deliberate separation the launch of the band’s latest video for single I Won’t Let You of their digital from their physical lives. Down, which at time of writing had amassed 11.2 million views in nine days. The new celebrity He provides an artist’s perspective: ‘Getting an electric guitar While established celebrities overcome these digital trials and was never that huge a barrier to entry. Making music wasn’t hard, tribulations, there is, of course, a new generation for whom the but figuring out how to become part of wider culture was. Today, web and its various platforms present life-changing opportunities. It social media is amazing, not because it gives everyone an oppor- may be naïve to presume that any plucky teenager with a webcam tunity, but more because it removes the old gatekeepers who and a scrap of talent can make a star of themselves; and yet – be decided “this band or this type of art is going to be big”. So it’s it bands like the Arctic Monkeys, who relied on MySpace rather not necessarily about complete democratisation but this process than a record deal to launch their career; or Justin Bieber, who being shaken up. The interesting thing is that we’re yet to see who originally started recording videos of himself singing R&B songs the new gatekeepers are – if they will exist at all.’ on YouTube – the entertainment industries continue to be disrupted When pushed on whether new gatekeepers can even emerge by the democratisation of fame. in such a landscape, he expands: ‘I don’t see, at least in the near Federico Bolza, vice-president of strategy at Sony Music future, any countervailing force to this fragmentation, but I do Entertainment, explains how social media has affected the com- think that people have a hard time dealing with chaos and look for pany’s discovery and acquisition of new talent: ‘I’m not sure that aggregators, taste-makers or at least those who can help them digital and social has changed how artists are found – that remains understand the world around them. In some cases this might be a human art rather than data-based science. existing powers-that-be reinventing themselves, it could be new ‘What has changed is the amount of contextual information that people emerging, but I think it’s also the technology itself settling is available when we are thinking of signing an artist – everything and finding those who work best with it.’ Insider / Digital Celebrity

The new normal The music industry may have the clearest cases of social media breaking down barriers for wannabe Beyoncés and making it easy for them to catapult themselves onto MTV or the Billboard Hot 100, but the effect on the world of video – and its budding stars – has been even more significant. Sure, there may not be as many obvious Bieber equivalents bagging lead roles in Hollywood blockbusters, but that’s precisely the point – they don’t need to – they are happy on YouTube. To understand why, let’s consider one vlogger in particular. Swedish video game reviewer Felix Arvid Ulf Kjellberg – better known by his YouTube alias PewDiePie – is currently the platform’s most popular uploader, as well as its biggest earner. The 25-year- old has 32 million subscribers to his channel and his videos have received 6.5 billion views in less than five years – helping him overtake Rihanna with the most viewed YouTube channel of all time. He makes an estimated $4m (£2.5m) a year in ad sales and with little or no overheads (he works alone), most of that is pure profit. Kjellberg is currently signed to YouTube’s largest multi- channel network (MCN) Maker Studios, which was recently acquired by Disney for $550m (although this could rise to $950m if specific financial targets are hit). His contract expires in December, and at the time of writing, it was rumoured that he would not be renewing but instead venturing out with a couple of trusted colleagues to create his own MCN. Notoriously press shy – perhaps further proof of his unease in the traditional media sphere – Kjellberg did give a rare interview to ICON magazine in his native Sweden, where he hinted at his aspirations: ‘So far, all the networks have been managed in such an incredibly poor way, it’s embarrassing really. I’d like to help other YouTubers.’ Kjellberg’s desire to remain the master of his own destiny is not surprising; why, with his audience, would he want a media owner, sponsor or agent getting in the way? More intriguing is his intention to give back to the platform and its users who helped make him. This takes precedence over simply focusing on becoming a new media mogul by replicating the commercial structures of existing 74 / 75

MCNs or, indeed, the entertainment and media industries are champions not just of YouTube channels, but of individualism, from which they borrow. Kjellberg clearly has neither the entrepreneurship and freedom of expression. They may still be busy desire nor the need to play Hollywood ball: he’s helped reacting to and atomising established trends, genres and tribes, invent an entirely new game. but as the power shifts, they will become increasingly responsible for shaping whole new socio-cultural movements – new ways of All in the niches looking, listening, loving and living. This is something that only a Of course, if you bumped into Felix Arvid Ulf Kjellberg on the handful of ‘traditional’ celebrities have ever managed to achieve street, you’d most likely have no idea who he was. And therein and yet for the new generation, defined by technological and social lies the final striking factor in the evolution of the celebrity. Put empowerment, it will be second nature. simply, my mum has heard of Jay-Z; she may not know the lyrics of Can’t Knock the Hustle, but she’s aware that he’s a big deal, Next episode which probably suits them both. It seems only appropriate to return to our original protagonist, Mr The internet and its most frequented entertainment platforms have Sheen. In the cold light of day following his glorious debacle of created and nurtured such a plethora of niches that the celebrities 2011, he said this: ‘Fame is empowering. My mistake was that I who star in them remain unapologetically specific in their appeal. thought I would instinctively know how to handle it. But there’s no Take 15-year-old Amanda Steele, whose MakeupbyMandy24 manual, no training course.’ tutorial channel has 1.8 million subscribers and 111 million views. He said this as an established 46-year-old actor, son of a celebrity She is idolised by 12- to 14-year-old fashionistas across the US family and star of numerous Hollywood hits before that specific and yet, would a 16-year-old girl who’s into post-metal music career ‘incident’. He was, of course, speaking partly of his own know who she was? Unlikely – she’s probably too busy watching chemical and sexual vices. But cocaine and porn stars have been the immaculately coiffed Shane Dawson’s Emo Hair Tips video, around for decades – social media has not. There is no question along with his 6.2 million other subscribers. And, of course, her that in the hands of the well-versed, or the well-supervised, dig- brother will be contributing to the 150 million views collected by ital and social media are revolutionising how celebrities not only Brian Wyllie, AKA TSMTheOddOne, one of the leading figures influence culture, but actually shape it. There may be no manual, on Amazon-owned video game broadcasting community Twitch... but evolution – be it social, cultural, political or, indeed, techno- you get the picture. logical – has never indulged us with such a luxury. Kulash pulls it back to music: ‘When I was growing up, it was There is one reassuring constant that is perfectly illustrated about how many people you could get to show up at a little punk by former YouTube sensation, top Twitter celeb and supposed rock show in your neighbourhood church, but now underground new media native, Justin Bieber, every time he lashes out at the music isn’t geographic at all. It’s all about small communities you paparazzi, gets caught street racing or cries when his pet mon- can find online and that’s really beautiful because it allows an key is confiscated by the German authorities. And this is that the almost baroque world of miniature subcultures that are intimately individuals beneath the celebrity sheen remain flawed, fallible and, connected to one another. You actually now need only ten people ultimately, human. So, as far as the future of celebrity is concerned, to make a crowd.’ we can conclude with a similar sentiment to that echoed throughout The impact of these proliferating niches on wider culture is yet to these pages: technology evolves, enables and empowers, but it’s be seen, although it is clear that these emerging internet celebrities nowhere near as important as the people who wield it. 32969 Leo Burnett

HAPPY 10TH ANNIVERSARY F ROM LEO BURNETT

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Once just the tactical shaping of products, over the past decade design thinking has paddled upstream to become a set of strategic principles for tackling the world’s biggest problems

By Ed White 32969 Leo Burnett Illustration / Matt Chase HAPPY 10TH ANNIVERSARY F ROM LEO BURNETT

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ECD: M. Tutssel AD: Brian Marcus D: P: Coleen Capola AE: CSM: J. Proctor Strength Study / Design

hether in the sloping profile of the Porsche 911, the brutal asceticism W of early, Dieter Rams-era Braun products, or the colourful rebelliousness of the first Nike Air Jordan, design – the process by which function translates into form – has always mattered to people. Well-designed things are meaningful, and they delight us in their aesthetic and ergonomic qualities, balancing rational and emotional needs. It matters for business too: it’s no coincidence that design is implicit in one quarter of marketing author, consultant and professor Philip Kotler’s four Ps (product). Behavioural economics has taught companies what we’ve instinctively known: that people favour simplicity, clarity and ease of use when choosing what products to buy, qualities that good design exemplifies. ‘Less’, said the master of minimalism Dieter Rams, ‘is more’. ‘Our job is to make daily life simpler and more efficient,’ says fuseproject founder Yves Béhar, the man behind iconic initiatives such as One Laptop Per Child, connected lock August and Clever Befitting design’s rise in stature has been an heightened expectations from people and hyper Little Bag for Puma. ‘Great experiences will be expansion of its definition into new areas and connectivity mean the pace of change is rapid and shaped by our ability to edit down complexity in titles, reaching deep into every part of the enter- the unknowns, well, really are unknown. ‘I think both the bits and the atoms.’ prise: digital, service, interaction, experience businesses have begun to understand that a more A recent New York Times blogpost heralded and, latterly, business and organisational design. creative approach to solving their problems has the ‘golden age of design’, and wryly pointed out become necessary,’ says Roberts. how that phrase has been trumpeted four times Complexity and uncertainty in the past ten years. But over the past decade, As those new areas and titles grew, the same Design for changing needs design has grown in influence and stature beyond fundamental changes in the business landscape In this new world order, a set of business attributes product. Design has moved from a craft – the that brought them on sparked complexity and for success is emerging: user-centricity, speed tactical prettification of products – to a strategic uncertainty. ‘When businesses and markets were and adaptability. philosophy. local, products “dumb”, and people only watched Established half a century ago, the principles Design thinking now underpins the principles TV or read the papers, the competitive edge for of design thinking – deep ethnographic and of some of the world’s most successful companies. business in the 20th century was – to grossly qualitative research to uncover needs, synthesising Witness former Rhode Island School of Design simplify – risk management, process efficiency creative solutions to meet those, prototyping and president John Maeda’s appointment as design and optimisation, or “exploitative”,’ says IDEO testing with users, and iterating based on feedback partner to top VC firm Kleiner Perkins Caufield London partner Iain Roberts. – embody that new mode. & Byers last year as a nod to the influence the ‘Jim Hackett, the CEO of Steelcase, talked ‘Design is about learning, the process and discipline now exerts in top entrepreneurial circles. about classic strategy as being like understanding approach is fundamentally explorative,’ argues ‘Design used to be an afterthought,’ Béhar the “knowable knowns” of a market,’ says Roberts. Roberts. ‘It’s one that’s about value creation. tells Contagious. ‘In the 80s and 90s, brands were ‘You could understand institutional knowledge, It’s one that’s about creating new forms of communicating with their customers almost plan your strategy in response to that and deploy the future and it’s one that’s built on the exclusively via advertising. With the advent of the change. Big, systems-level infrastructure, distri- premise of agility and iteration.’ That exploratory internet and social, where communications are bution, brand, technology were all advantages.’ approach has proved uniquely suited to solving direct and instantaneous between consumers and But the 21st century is wildly different. problems far beyond their initial remit of making companies, design is what everyone can relate to.’ Globalisation, technological development, physical products. 78 / 79

Transdisciplinary design innovation matters. ‘There are so many choices Americans who were used to cheap, grab- The core principles of design thinking are shared out there that unless what is proposed to us is of and-go coffee shouldn’t have wanted Starbucks’ openly, too, which has helped it seep into the a higher idea, quality and emotional connection, highly marked-up product. But the chain crafted world’s most successful brands, leading them to I don’t see why anyone would buy it.’ a warm, friendly ‘third place’ where people wanted new ways of working and creating products. to spend time and money between work and home. A key component of design thinking is Brand experience design Starbucks’ legendary customer service training, cross-disciplinary teams, which deliver break- Similarly, the strongest businesses of the past ten curated music, promotional material, advertising through solutions by bringing wide-ranging years have ensured that their brand and ethos and branding are all designed to express the brand: perspective to problems. ‘To create an emotional spanned every touchpoint with people, from welcoming, personal and helpful throughout. link with people is a tremendous task, it requires product to packaging, retail, customer service, In true user-centred fashion, it has kept up with every part of a business to be aligned behind advertising and digital service. its customers’ habits, evolving spaces to be more design,’ says Béhar. These brands – Coca-Cola, Apple, McDonald’s local, distinct and sustainable, and, especially, its Nike’s Flyknit material, which revamps tradi- and Google, among others – are stitched together evolution of digital marketing. Starbucks intro- tional knitting with digital technology, embodies by a consistent design language across everything duced free in-store wifi and an online content that philosophy. ‘We have cross-functional teams they do. ‘We firmly believe that brand, user network, including news and entertainment, as that bring together innovation, design, market- experience, organisation and business model are its customers gravitated to consuming media on ing, communications, digital and strategy and interdependent today,’ says Roberts. laptops and tablets. As mobile grew, so Starbucks they take a holistic approach to taking a product One of the most striking examples of the break- has created programmes catered to it, including innovation from concept through to market,’ says through power of design is Starbucks, which has tie-ups with payment platform Square, social Mike Yonker, VP of product innovation at Nike. engineered a multi-billion-dollar revolution in gifting through Twitter and NFC-based cam- ‘People have little interest in me-too prod- coffee drinking through what we now recognise paigns in China. ucts and experiences,’ explains Béhar, on why as experience design. The future of design As products become, as tech VC Brad Feld has put it, ‘software wrapped in plastic’, consultancies like frog talk about the ‘Third Wave of Design’, posing Design for a simple life: fuseproject founder a new set of challenges. Merging hardware and Yves Béhar created software, data and predictive analytics, designers connected lock August are creating new, contextually driven and person- alised digital services like Google Now that evolve and adapt to the needs of the user. (More on that in the Services Strength Study, p99.) In higher-order strategic terms, organisational design aims to embed agility, creativity, exploration and user centricity into businesses – Barclays bank, for example, now has a 200-strong design team leading product development, and countless companies are building out innovation labs to generate a steady flow of new ideas. Business design, meanwhile, is learning from the startup world. Design firms like IDEO, frog and fuseproject are taking equity stakes in exchange for accelerating growth, so called Venture Design. ‘It means our responsibilities are increased to ensure the company performs well over time. It’s a great way to align all the stakeholders around the same vision, and to make design central to achieve success,’ argues Béhar. Perhaps most telling for the evolution of the discipline overall, however, is the rise of the founder/designer at companies like Airbnb and Mailbox. ‘They’ve baked this process of learning into everything they do, how they build their brands, how they build products, how they build organisations, it’s baked in at an infrastructure level,’ says Roberts. Design’s place at the heart of modern business seems, then, assured. In Design Q&A, a short film interview from 1972, legendary designer Charles Eames was asked what he thought the boundaries of design were. ‘What,’ he presciently threw back, ‘are the boundaries of problems?’ Strength Study / Design 80 / 81

Brand Spotlight Apple Design as an organising principle has made Apple the world’s most successful brand

ften cited as the most valuable company Ive in charge. Ive rewarded Jobs’ gamble by on Earth, it seems quaint to remember creating a new class of lifestyle electronics that O Apple in 1997: on the edge of bank- were as covetable as they were practical: the ruptcy. A bloated product portfolio, forgettable candy coloured iMac, titanium body Macbook advertising and a muddled retail strategy meant Pro, iPod, iPhone, iPad and, most recently, the the company had been haemorrhaging cash for Apple Watch. 18 months and was now on the brink. Filled with desperation, the board brought back Design with purpose founder Steve Jobs and, well, the rest is consumer Jobs’ first task after rejoining Apple was instilling electronics folklore: Jobs whittled the product clarity and singular focus throughout the business line from 15 to four, consolidated distribution in around a set of core values. It was giving the one national chain, nearly halved operating costs company purpose, before the word had entered and rehired advertising agency Chiat\Day, which marketing’s lexicon. had earlier created 1984, acclaimed as one of the Facing a deflated team, Jobs’ rallying cry, greatest TV ads ever made. which was captured in a video of an internal Facing an empty product pipeline, Jobs bought meeting in 1997, was to make the best possible the company valuable time to regroup, penning a products to delight people, and help them change deal with arch rival Microsoft that injected $150m the world. ‘The way to do that is not to talk about into the business and persuaded Bill Gates to keep speeds and feeds... Our job is not about making providing support for Windows for Macintosh boxes for people to get their job done. Our core for five years. value is we believe people with passion can change But what shifted Apple from rescue, through the world for the better. And the ones that are crazy recovery and into a world-beating success was Jobs’ enough to think they can change the world, are decision to move Apple from an engineering-led the ones that actually do.’ company to a design-led company. The now iconic Think Different campaign, At its most basic, that strategy led to a restruc- which was created in just eight weeks with a newly turing of the internal pecking order for product rehired Chiat\Day, was strikingly unusual for design priorities. Traditionally, the company an electronics company. Eschewing rational had been led by engineers, with designers called product benefits, the campaign emotionally in at the end of the process. tethered the company’s ambition to iconic Jobs inverted that model, championing world-changing figures such as Muhammad Ali, an uncompromising design-first approach Mahatma Gandhi, Neil Armstrong and Martin by putting a young British designer called Jony Luther King, Jr. Strength Study / Design

Design is the fundamental soul of a human-made creation that ends up expressing itself in successive outer layers of the product or service Steve Jobs, Apple

‘To me, marketing is about values,’ said Jobs at the same meeting. ‘This is a complicated, noisy world, and we’re not going to get a chance to get people to remember much about us. No company is. So we have to be really clear what we want them to know about us.’ ‘The best example on the planet of a company that has an idea, has a soul, has always understood its centre, it’s Apple,’ says Chiat\Day founder and chairman Lee Clow, who worked with Jobs and Apple for three decades. Apple co-founder Steve Wozniak has said that Jobs’ greatest talent was marketing, and from Think Different to the modern day, Apple’s advertising has alternated between strongly emotive work and slick product demos. The result? Apple’s advertising has consistently moved technology from tool to aspirational lifestyle product, be that computers, music players, or smartphones and tablets. Apple’s brand premium has led to blockbuster sales and the highest profit margins in the sector.

Everything is the brand While competitors have slowly caught up with Apple in terms of advertising, one of the brand’s key strengths over the years has been a singular design sensibility. By having a vertically integrated business, Apple has been able to control how the brand is experienced in hardware, software, packaging, retail, ecommerce and through to its advertising. Apple was among the first to recognise the value of controlling and designing an ecosystem across products, services and marketing. Jobs’ decision to control the retail experience by building Apple Stores has reinforced the premium brand and delivered average returns per square footage enjoyed only by jewellers. By creating 82 / 83

Past and present: world-changing historical figures featured in Apple’s early print ads, while cities around the world are home to futuristic Apple stores, such as this one in Shanghai Strength Study / Design

Takeouts

Start with people / Markets and organisations are increasingly complex, but one thing is immutable, and central to design thinking: user needs. Unearthing what people want and delivering against that in ways that delight is an enduring competitive advantage.

Everything is the brand / Products, packaging, retail spaces, services, advertising, even business models and human resources… they’re all part of how people perceive your brand, and they’re all touched by design. It’s the unifying thread across the entire brand One object speaks volumes experience, and transdisciplinary teams are key to delivering that. about the company that produced it and its values and priorities Adaptability beats strategy / Change is more rapid than ever, Jony Ive, Apple (quoted in The Telegraph) requiring companies to shift from big strategy to adaptability. Even Apple recognises that speed is the new IP. And the design process of prototyping quickly, getting things to market and iterating based on real feedback will be central to thriving companies in the next decade.

its own seamless, simple content outlet through Deeply influenced by the expressive function- iTunes, and later the App Store, Apple made alism of Bauhaus, and designers like Dieter Rams its iPods more valuable, and locked people into and the Eameses, the core ‘less is more’ design its ecosystem. values were enshrined way back in the brand’s very Across all its businesses, the key for Apple first advertising, a brochure from 1977. ‘Simplicity has been a deep understanding of design being is the ultimate sophistication.’ beyond superficial product aesthetics, extending ‘As technology becomes more complex, Apple’s more widely into user experience. ‘Everything a core strength of knowing how to make very brand does adds up to the totality of a brand and sophisticated technology comprehensible to mere how people see it, view it, trust it or don’t like it,’ mortals is in even greater demand,’ Jobs told The says Clow, who first met Jobs as a 23-year-old New York Times in an interview at the time of the starting out in the business. It has led to agency iPod launch in 2003. and brand working uniquely closely to shape every More than a decade later, with a new Apple part of the Apple brand experience. Watch, home automation and health monitoring ‘Nothing was insignificant,’ he adds, saying that to add to its constellation of products, that strength the two would work for hours on the colour of the is more important than ever. Apple has faced bathroom logos, would rewrite stock certificates down challenges from every consumer electronics and user manuals. ‘It had to be as cool as an ad... firm, carving a premium niche for itself in the He wanted it to be a conversation about how to mainstream that has yet to be truly challenged. use the technology that he felt was going to make Its differentiator has been putting design at the your life better.’ heart of everything it does. ‘In most people’s vocabularies, design means The simplicity dividend veneer,’ Jobs told Fortune magazine. ‘It’s interior Jobs’ shrewd observation was that as technology decorating. It’s the fabric of the curtains, of the grew more complicated, ease of use would confer sofa. But to me, nothing could be further from competitiveness. One of his favourite expressions the meaning of design. Design is the fundamen- when presenting new Apple products to the public tal soul of a human-made creation that ends up was ‘It Just Works’, a dig at the complexity of expressing itself in successive outer layers of the most technology. product or service.’ 84 / 85

Opinion Where can design thinking take us? Sue Siddall, partner at IDEO, on using design thinking to tackle complex business challenges and inspire creative confidence

Around the time Contagious launched, I was a group account director reading experience for a big media company; and a created paradigm at advertising agency M&C Saatchi, London, running large clients such shift in the way scientists can publish their work. as British Airways, Asprey, Nestlé and BT. It was fun, and not dissimilar But I think the role for design thinking will be further upstream yet. to the TV show Mad Men, but more light-hearted. And you knew the Disciplines such as business and organisational design go to the heart client output – ads – whether 60-second TV ads or glossy magazine of business operations, but also help tackle deeply difficult problems. campaigns. We were dealing with a fait accompli in terms of what we We’re using design thinking to create a world-class, affordable and had to sell. Our role was to turn that into a must-have dream… with the scalable education system (including classrooms, curriculum, business right logo size. We were, in short, the end of the process of bringing model and training) in Peru. With dementia, mental illness and chronic something to market. lifestyle diseases swamping our healthcare system and overwhelming When I joined IDEO, my eyes were opened to a world where we were us, health is one of the biggest, most complex opportunities. And we’re at the beginning of that process. Instead of creating dreams, we helped starting to see human-centred design applied there. companies understand what they should make, based on observing real consumer needs. A world where the answer wasn’t an ad. Design Creative confidence thinking, I learnt, meant being comfortable with ambiguity but asking Ultimately, the future of design thinking may be like our work with the the right question; having an approach, tools and a talented group of Singaporean government, where our ambition is to foster creative con- designers inspired by human needs. This is an approach the US had fidence through the nation. Not just designing things, but by providing been using for a while, but design thinking quickly picked up across individuals, organisations, communities and countries with the tools to the globe after the 2008 financial crisis when clients were looking for ask the interesting questions, to be comfortable with ambiguity, while another way to grow. having an approach that they know will get them to a new and better solution. Most importantly, it’s to be inspired by the one thing that drives Diverse challenges design thinking and will never change – evolving human needs. We’ve applied design thinking to increasingly diverse challenges Over the past decade, design thinking has taken me from the end of across every sector and touchpoint, including service, space, retail a process, right to the heart of why businesses exist in the first place. and digital. To their fundamental purpose for being, beyond making money: serving In the UK alone, recently, we’ve created a holistic physical and digital people. That’s where I believe design will create disproportional impact experience for Royal Academy of Arts visitors; redesigned the digital over the next ten years, and beyond. To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Predictions / What We Got Wrong What we got wrong Being an early-warning system for brands and a handy instruction manual for the future isn’t as easy as Contagious makes it look, OK? But we’re big enough to admit a few of our mistakes...

‘While appearing fairly lightweight, Twitter can also Flops & be used as a to-do list, a newsletter and as a people Failures management tool.’ Nokia: ‘The world’s most Issue 10, 2007 valuable non-US brand,’ we said in issue 5, 2005. Either all non-US brands are in REAL trouble, or this may no longer be true. ‘Despite becoming something ‘Bouncing songs from Zune to Zune’ turned out of a media darling, Facebook not to be ‘the most seamless technological expression of the still faces competition from “listen to this!” factor’. Classmates.com.’ Issue 9, 2006 Issue 9, 2006 ‘Join the Stickybits revolution,’ we cried in 2010. We later covered founder Billy Chasen’s second-stab company turntable.fm, months before he shut it down. Issue 30, 2012 On augmented reality: ‘The

We dedicated a Birth of a opportunities are limitless.’ Brand feature to personal video recording device Flip Video Some limits have since been in issue 19, 2009. Meanwhile, Apple was manufacturing iPhone- spotted. shaped nails for Flip’s coffin. Issue 19, 2009

‘Sound cards in magazines are becoming more popular’ we observed in issue 3, 2005. Our unfortunately timed Put your ear to this page to see if they still are. concierge culture trend was

User-generated news and published at the start of 2008. information network Current TV ‘inverted the television pyramid’ Post-financial crisis, items such in 2008, and closed down in as the ultra-expensive Vertu 2013. Issue 15, 2008 phone seemed a bit brash. Issue 14, 2008 86 / 87

Cover Catastrophes

Our editoral director’s son was so traumatised by Philips TV’s clown mask on the cover of issue 19 that he hid it behind the back of a bookcase for a year.

Our tenth issue brought with it a heated editorial debate about what should star on the front cover – Steve Jobs’ revolutionary iPhone, or a cartoon dog from a Volvo campaign. The dog won, and the iPhone was mentioned briefly in our ‘Did you hear?’ section.

According to contributor Social sites we’ve Joseph Jaffe, mass marketing loved, left & lost was ‘dead’ in 2005, issue 4. Dodgeball / Location-based Friendster / This pioneer of social networking platform social networking was crushed Current prognosis: dealt a body blow by an Adam by Facebook’s giant thumb. Sandler film. Issue 16, 2008 reasonably spry. Issue 9, 2006 Bebo / Its founders bought MySpace / ‘The stigma back the site for $1m in 2013 attached to online socialising after selling to AOL for $850m is dissolving.’ Not thanks to in 2008. Now it ‘dreams up fun MySpace anymore. ideas for social apps’. Hmm. Issue 11, 2007 Issue 15, 2008

Second Life / The leap ‘from Ning / The ‘create-your-own cult community to cultural social network’ social network phenomenon’ that we anticipated didn’t turn out to be the next never quite happened. big thing. Issue 8, 2006 Issue 16, 2008 Strength Study / Experimentation

Contagious.indd 1 04/11/2014 12:00 Experimentation Over the past decade, Contagious has observed that brands fostering an experimental approach have been better equipped to understand new technologies and platforms and quicker to adapt to the fast-changing environment. They stay ahead, they don’t keep up

By Alex Jenkins

Il lus tra tio n / M at t C h a s e Strength Study / Experimentation

hen Contagious launched in 2004, This approach as a business strategy gained the Defense Advanced Research momentum with the release of Eric Ries’ 2011 W Projects Agency (DARPA) also book The Lean Startup, in which the software launched its Grand Challenge in which driver- engineer and entrepreneur outlined a philosophy less vehicles competed to navigate 150 miles of of continuous innovation. Although originally unpopulated Mojave desert. The most successful created with tech companies in mind, the con- vehicle failed to make it eight miles into the cepts have been successfully applied to business in course and many believed the challenge beyond general – notably the importance of a ‘build- anyone’s capabilities. However, just six years later, measure-learn’ mentality, an emphasis on mini- Google announced that a fleet of its autonomous mum viable products and a willingness to accept cars had covered more than 140,000 miles on failure as a necessary part of the learning process. populated American roads. Commenting on the As Ries notes: ‘This is one of the most important speed with which mankind’s technology improved lessons of the scientific method: if you cannot fail, between those two events, MIT scientists Erik you cannot learn.’ Brynjolfsson and Andrew McAfee in their book Race Against the Machine observed: ‘This is the Fail to learn, learn to fail world we live in now. It’s one where computers The cult of ‘fail forward’ and (for the time-poor) improve so quickly that their capabilities pass ‘fail forward faster’ may have been destined for from the realm of science fiction into the everyday the soundbite trashcan if it didn’t have such world not over the course of a human lifetime, high-level and vocal proponents. For example, or even within the span of a professional’s career, Ed Catmull, president of both Pixar and Disney but instead in just a few years.’ Animation Studios, frequently cites the value of Like the geek at the back of Ferris Bueller’s class It’s good to fail: failure in his 2014 book Creativity, Inc.: ‘Failure trying to quantify just how fast life is moving, Pixar and Disney’s isn’t a necessary evil. In fact, it isn’t evil at all. It computer scientist Ray Kurzweil has predicted Ed Catmull believes is a necessary consequence of doing something failure is a ‘necessary that: ‘[The achievements of the 20th century] consequence of doing new,’ and ‘If you aren’t experiencing failure, then were equivalent to about 20 years of progress at something new’ you are making a far worse mistake: you are being the rate of 2000. We’ll make another “20 years” driven by the desire to avoid it. And for leaders, of progress in just 14 years (by 2014) and then do especially, this strategy – trying to avoid failure the same again in only seven years.’ by out-thinking it – dooms you to fail.’ As technology has rapidly improved, people The perils of avoiding failure were echoed in have just as rapidly adopted and accepted it. a tweet from Google executive chairman Eric Autonomous cars are already legal in four states Schmidt in September this year: ‘When tech’s of the US and are being tested in Singapore, Japan cheap and experimentation’s easy, over-worrying and Germany. They will also be legal on roads about risk is a great way to fall behind.’ in the UK by 2015. Over the past decade, the In this sense, failure is a misnomer and really impressive has become ubiquitous to the point of is a synonym for learning. If organisations can mundanity: gesture controls, voice recognition, square themselves with the semantics, the logic touchscreen devices, the social web and enter- pany’s objectives. The challenge has been com- of experimentation and failure becomes clear. tainment streaming are now features of everyday pounded by the sheer quantity of new networks, When faced with a world for which we have no life. The so-called hedonic treadmill ensures that making it a struggle to decide which platforms precedents, implementing processes for under- many of us go from ‘Wow! That’s new and cool!’ and technologies to put resource behind. How do standing and exploring that world will safeguard to ‘Yeah, whatever’ in weeks. you know if you’re backing the next Facebook or the future of our business – even though there will throwing company money at the next Second Life? be inevitable missteps along the way. Operating behind the curve A decision to step back and wait to see what gains However, while consumer adoption has matched traction is a decision to concede any first-mover Riding the crest of innovation the swiftness of newly created tech and platforms, advantage or, worse still, arrive at the party as We’ve seen that acceptance manifested in the rise brands have typically struggled to keep pace. For everyone else is leaving. of brand and agency labs – parts of the business decades, marketing departments built themselves often ring-fenced to explore new platforms and around a few proven media types and processes, Exploring experimentation technologies in a safe environment. In Contagious with little need to optimise for adaptability. In the One of the most successful ways to address 27, the then director of strategy at Google Creative past decade, that need has become an imperative the challenges of a fast-changing environment Labs and former co-founder of BBH Labs, as new platforms are launched and scale within has been for organisations to adopt a culture of Ben Malbon, used the analogy of a lab being months – for example Vine, which launched in experimentation. While that can mean an ele- like a speedboat to the supertanker that is the January 2013 and within six months boasted ment of ‘suck it and see’, true experimentation main company: ‘Scouting into the future, feeding 40 million users. has its roots in the world of science and a more back knowledge, opportunities, talent; literally, Brands and agencies have found themselves directed path of exploration. Scientists tend operating over the horizon... To survive, agencies chasing consumer attention as it quickly shifts en not to have a philosophy of ‘let’s sling a buncha must effectively become innovation companies, masse to nascent platforms. However, marketers chemicals in a test tube and see what happens’. moving at least as fast as culture, quickly triag- often have no skills or expertise, no precedents They start with a hypothesis, explore it through ing new technologies, formats and opportunities for engagement and scant time to evaluate how experimentation and learn from the outcomes to both on behalf of their clients as well as their appropriate these platforms may be for the com- aid decision-making. own business.’ 90 / 91

This is one of the most important lessons of the scientific method: if you cannot fail, you cannot learn Eric Ries, The Lean Startup

While the role of a dedicated lab has been the subject of debate (if you’re the innovative department, then by extension the rest of the company isn’t?), the importance of an R&D mindset outside the traditionally product-focused R&D department has found widespread acceptance. Brands in traditional, non-tech sectors, such as Mondelēz, American Express, AB-Inbev and British Gas, have all committed to innovation labs in a bid to keep pace with the changing environment. Similarly, although not ubiquitous, company hack days are becoming increasingly commonplace and show the world of brands taking another lesson from the working practices of Silicon Valley.

The world is our R&D dept The approach of a ring-fenced trial can also be extended to marketing, with brands opting for a small roll-out of a costly or potentially controversial campaign to a contained audience to gather data and decide whether or not to dis- seminate it further. The McDonald’s Our Food. Your Questions campaign by Tribal Worldwide, Toronto, falls squarely into this category. Allowing the Canadian population to have any questions answered in public resulted in people inevitably bringing controversial topics to the table, such as ‘Is pink slime used in any of your chicken products?’ or ‘If you’re trying to promote quality and so-called healthy food, why all the additives?’ With the potential to open the fast-food retailer up to a public kicking, the trial proved successful enough for McDonald’s to roll Your Questions out across the US and Australia.

Future focus As an attitude of adaptability becomes accepted as a worthwhile business practice, the challenge will be to find the balance between experimentation and focus, knowing when to tinker and gather data, and when to channel resource behind the best bet. In his 1922 book Approximations, French liter- Our Food. Your ary critic Charles Du Bos wrote: ‘The important Questions: McDonald’s thing is this: to be able at any moment to sac- experimented with a campaign to publicly rifice what we are for what we could become.’ answer consumers’ Experimentation is the exploration of exactly questions about the what your business could become. company and its food Strength Study / Experimentation

Project Loon: Google’s initiative brings wifi connectivity, via helium balloons, to remote areas and those affected by natural disasters 92 / 93

Brand Spotlight Google How two computer scientists built one of the world’s most successful companies through experimentation on products, processes and people

wo things strike you when browsing the One of the key routes to achieving this has been Wikipedia ‘list of Google products’ page. what Google has dubbed 20% time, allowing staff T The first is that company founders Larry to spend 20% of their time working on whatever Page and Sergey Brin sure have put out a lot of they choose as long as it may in some way benefit things during their 16 years in business. Google the company (an approach which owes a lot to products and services have become so entrenched 3M’s 15% time but is, y’know, 5% better). in our day-to-day lives that we take them for In the 2014 book How Google Works, executive granted. The Chrome browser, the Android chairman Eric Schmidt and senior vice-president operating system, YouTube, Blogger, Gmail, of products Jonathan Rosenberg admit that the Maps, the Nexus range of phones and tablets, reality is more like 120% time, often involving and, of course, Search. staff working after hours but, ‘Regardless of when The second thing that strikes you is that Page you take your 20% time… no one can stop you and Brin sure have killed a lot of things in their doing it’. It’s a level of trust and freedom many 16 years in business. The list of discontinued companies might aspire to but few implement. Google products is an impressively large grave- More fool them, given that Google’s 20% time yard, with the company burying more of their has spawned success stories such as Gmail, Google product lines in the past decade than most Now and AdSense – the latter earning $3.4bn companies probably managed to create. Ride (c.22% of the company’s total revenue) in Q1 Finder, Reader, Page Creator, Buzz, Wave, Orkut, 2014. Not bad for a spare-time project. Notebook, Latitude, Talk and iGoogle all shuffled The trio of Brin, Page and Schmidt felt that off this virtual coil. In total, 91 products are listed ring-fencing time on speculative 20% projects as discontinued. was important enough to address in their 2004 However, that level of prolific failure is to be Founders’ IPO Letter, explaining that its value to expected when your company has a trial-and-error potential shareholders lay in the fact that ‘most risky approach baked into its products and its culture, projects fizzle, often teaching us something. as well as its resourcing and even its people man- Others succeed and become attractive businesses.’ agement. And it’s precisely this foundation of Supporting speculative projects is also mani- experimentation that has helped make Google one fested in so-called demo days, where engineering of the most successful companies on the planet. teams clear their diaries of all commitments for five days in order to spend that time entirely on A culture of experimentation prototyping ideas that are demonstrated at the Following the stellar success of the original end of the week. Google Search, Brin and Page wanted to ensure And, unlike many companies, Google likes their company would provide staff with an envi- to continue its experiments once products ronment where similar ventures could flourish. are out in the field. At the 2014 Google I/O Strength Study / Experimentation

developers’ conference, Page talked of how ‘... of organisational psychologists, sociologists It shouldn’t really come as a surprise that Google we need to be honest that we don’t know the and decision scientists have conducted exper- applies experimentation to its people manage- impact of changes and we should be humble iments into areas such as employee health ment. When your entire product base is up for about that... We should launch things in a more (reducing calorie intake at on-site eating facilities grabs, why not your team too? The rapidity with humble way and see what the effect is and adapt by altering plate sizes and positioning of junk which the company – and indeed the tech sector as we go.’ Schmidt and Rosenberg underline this foods versus healthy treats in the ubiquitous snack – operates makes it highly likely that, whatever philosophy: ‘Iteration is the most important part areas), the type of rewards that make workers skills employees need today, they may need a few of the strategy.’ happiest and encouraging employees to save more new ones in 18 months’ time. As Schmidt and for retirement. Rosenberg explain: ‘The world is changing so Our people are lab rats In a 2012 post on the Google Research blog, fast across every industry and endeavour that it’s ‘Whether it’s creating self-driving cars or trans- PiLab manager Jennifer Kurkoski explains: ‘Doing a given the role for which you’re hiring is going lating the web into 64 languages, we love big bets. R&D in HR isn’t a particularly common practice, to change.’ Our company culture encourages experimentation but when your employees build virtual tours of and the free flow of ideas,’ declared a post on the the Amazon... you need creative ways to think Experimental budgeting Google Careers blog in 2013. ‘This perspective is about productivity, performance and employee Unlike many companies that extol the value of not limited to our engineering teams and technical development... By fostering conversations on the experimentation, Google puts its money where its roles, but extends to all Googlers who share a issues confronting modern organisations, the mouth is, not just in employee time but in finan- desire to challenge what’s possible.’ PiLab... aims to generate new theories and to cial allocation too. The Founders’ IPO Letter set It’s not an idle claim. The application of challenge existing ones.’ out exactly how Brin, Page and Schmidt channel the scientific method at Google extends into Challenging existing theories hasn’t been the company’s funds: ‘Our business environment HR, where the company’s experimental approach something from which PiLab has shied away. One changes rapidly and needs long-term investment. is brought to bear on organisational issues, such recent research project, Project Oxygen, set out to We will not hesitate to place major bets on prom- as how you manage people when your head count answer the management-troubling question: ‘Are ising new opportunities... For example, we would goes from two to 52,000 employees in 16 years. managers necessary?’ The answer came back in fund projects that have a 10% chance of earning The company’s People & Innovation Lab, or the positive, with data analytics used to quantify $1bn over the long term. Do not be surprised PiLab, conducts applied experiments to work the eight good management behaviours that can if we place smaller bets in areas that seem very out the most effective people management improve performance. Number one was ‘be a good speculative or even strange when compared to our and productivity methods. A team consisting coach’. You can Google the rest. current businesses.’ 94 / 95

That attitude is formalised in the company’s Moonshot thinking: Google ‘sci-fi’ 70/20/10 approach to resource allocation, with developments, 70% of resources being put behind core products, clockwise from 20% dedicated to emerging parts of the business top, Street View; experimenting with and 10% on completely new projects. technological advances at Google[x]; Google Shoot for the moon Glass; Project Wing; driverless car prototype Perhaps what differentiates Google most from other companies is not merely its willingness to fail, but just how high it sets its sights. The founders frequently talk about taking ‘big bets’. Page has publicly bemoaned the business world’s lack of ambition and how it defaults to thinking 10% bigger, whereas Google encourages what it calls moonshot thinking: ‘The grey area between audacious technology and pure science fiction. Instead of a mere 10% gain, a moonshot aims for a ten times improvement over what currently exists.’ That attitude has seen the company tackle projects few others would contemplate, such as manually photographing more than 5 million miles of roads in order to create Street View, making every book in the world searchable, or building its own driverless cars. The latter is a product of Google[x] – a facil- ity with a remit to deliver major technological advances. Under the guidance of Brin and ‘captain Strength Study / Experimentation

of moonshots’ Astro Teller, Google[x] has been company’s income is generated by advertising. Takeouts responsible for Project Loon – an initiative to Baking in a culture of experimentation ensures Fail to learn / Accept that bring wifi connectivity to remote areas and those that Google is constantly looking for ways to failure is an inevitable part of affected by natural disasters by helium balloons defray the risk of relying on one revenue stream learning when exploring the new. (featured on the cover of Contagious 36); contact by exploring new opportunities before it needs You only truly fail when you don’t lenses that can monitor glucose levels in tears to – before, as some companies have found, appraise and learn. for diabetics; Project Wing – a drone delivery desperation sets in. service; and Google Glass. The futuristic nature Ring-fence selectively / Ensuring time, budget and of the work has earned Brin not unreasonable A complete lack of atychiphobia resource are ring-fenced is a comparisons with billionaire Iron Man inventor Of course, the secrets of Google’s success aren’t great way to foster a culture of Tony Stark. really secret at all: hire the best people you can, experimentation. Don’t let less Despite the science fiction-like advancements put your users first, think big, develop a bias for obviously experimental parts being made, the founders remain focused on action and nurture a culture with a complete lack of your business ring-fence what is beyond the horizon. ‘We’re at maybe of atychiphobia (no need to Google it – it means a themselves away from a trial-and- 1% of what is possible,’ Page commented at fear of failure). For companies looking to emulate error approach.

Google I/O. ‘Despite the faster change, we’re the success of Google, completely eradicating a Experimentation beats still moving slow relative to the opportunities fear of failure across the organisation will be the desperation / A culture built on we have.’ hardest to implement – hardest to justify lost curiosity and exploration of the It’s easy to downplay the wilder end of Google’s money and wasted man hours; hardest to man- new ensures that opportunities experimentation – when you have a multibillion- age inter-team dynamics when one department are constantly considered – far dollar annual income you can afford to fritter away succeeds and another fails; hardest to convince better than having to react when a little staff time on niche projects. But looking investors of the value of rewarding risk. a competitor launches their latest future-facing venture. a little deeper at where that money is derived And the best way to tackle this? Try a few exper- from tells a different story: around 90% of the iments and see how things work out for you.

Visionary development: contact lenses that can monitor glucose levels in tears for diabetics 96 / 97

Opinion It pays to be paranoid Sir Martin Sorrell, CEO of WPP, tells Alex Jenkins why short-term thinking and an unwillingness to change are obstructing experimentation in the industry

At a conference in October this year you said that, in a complex short-term view. The rise of financial procurement has made people environment, there is a real need for experimentation. Can you focus too much on costs, lack of pricing power, slower global growth. outline why? The average tenure of a CEO is five years, the CMO in America is two There are two big shifts that are taking place – one is geographical years, and the CFO in America is three years. These are short lifespans and one is technological. and not long enough to implement strong strategic change. The geographical one is not that difficult to figure out. If sanctions are lifted in Iran, that will be a market that opens, just like in Myanmar or Do you think that misaligns their incentives? If you’re only in a Vietnam. But trying to figure out the technology shift is much tougher. role three years, you’re only going to take a three-year view? When I look at WPP’s revenues, they’re more than 50% different I think that’s part of it. I think boards are naturally conservative. It’s all than they were 14 years ago. Back then, digital was close to zero. It’s far too short term. now 36% and in the next 14 years I’d say the shift will be even greater. The biggest problem is unwillingness to change. The attitude of ‘why Take Digital, Fast-growth Markets and Data, which are our three pillars should I change when that change may not affect me?’ is the attitude along with Horizontality – getting people to work together. You have to you have to get over. It’s getting people to think long term and not look at get your existing, traditional businesses to move into those fast-growth their navels but at the horizon. It’s very easy to say, but very tough to do. markets and to adopt a digital frame of mind. You have to get your digital Having been at this for a long time, I think we’re probably more focused brands to look at the fast-growth markets as well as the mature markets. on the long term. So experimentation is really vital, particularly in a world Then, finally, you have to be willing to dabble with different structures, that is moving at the speed that it is. to try different approaches, eg 51% control, 20% associate interests, to make investments and to morph new models – which is what we did How do you balance a culture of experimentation with a with [NYC-based ad tech company] AppNexus. company’s ability to focus? We’re a substantial company, the largest in our sector, but not large in You have to continuously think about how things are going to change a general sense. We don’t have unlimited resources and neither would and how they might change. I think you probably have to be more exper- I want to take the risk of paying some of the valuations that we see in imental even if it takes your eye off the focus ball. You have to multitask, the internet space. With AppNexus, a private company, we injected exactly the same as with new technologies. You have to watch television some revenue in return for equity and then topped up our stake to 15% on the screen, play with your iPad, play with your smartphone, tweet with some cash. and there’s also the society bit as well. This is, I think, a less risky, more considered, approach than splashing out large sums of money. It’s educated risk. Do you think that the ad industry has sufficiently embraced experimentation? As someone with a business background, how do you reconcile A few years ago, we were going to get destroyed by Google. A few expenditure on an experimental approach, which almost inher- years ago, we were going to get destroyed by the recession. We man- ently guarantees a level of failure? aged to survive both. It doesn’t mean that we will be able to survive in Post-Lehman Brothers in particular, but even pre-Lehman, companies the future. It pays to be paranoid as Andy Grove [former CEO of Intel] have become too conservative in a slow-growth world. They’re too pointed out many years ago. Now, I think it pays to be more and more focused on looking down at their shoes rather than at the horizon, not paranoid, because of the speed of change. You have to be Einstein focused enough on top-line growth. We can’t survive by just cutting to figure out some of the technological changes that are going on. If costs, particularly in professional services. So we have to find the you were a hotel owner, did you think you would be subject to what’s geographical pockets, the digital pockets, the data pockets and then happened recently with Airbnb? If you were a taxi driver, did you think win business by working together. Those are the four strategic pillars you would have to deal with Uber? that are the most effective. When you have a legacy or a traditional business, you change the engines on the airplane while it’s flying, which is particularly difficult So your advice for the head of a brand or agency, for whom the when you have new, disruptive business models that are evaluated in bottom line is going to loom large, is to take a longer-term view different ways and attracting talent and capital on different terms. and explore those pockets? This is not a problem for the ad industry in particular, it’s a problem The long-term view is absolutely critical. I think there’s too much of a for everyone. StrengthRead Study / Service Design what over 200 marketers think about programmatic

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Services How the application of service design thinking has radically redefined the role, and value, of marketing in the digital age

By Patrick Jeffrey

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dvertisers can no longer just rely on carefully curated TV spots or glossy print A ads. Today, the way a brand behaves is key – not only in communications, but in every interaction it has with a customer. A report by software company RightNow found that 86% of people would pay more for a better brand experience. And a 2010 poll by Accenture revealed 64% of customers have switched companies due to poor service. Experiences, not messages, have become the number one priority for brands. Over the past decade, the industry has adapted to this shift by re-imagining the role of marketing. In their paper ‘Evolving to a New Dominant Logic for Marketing’, Stephen L. Vargo and Robert F. Lusch claimed that a ‘service dominant logic’ is replacing the ‘product dominant logic’ of the past. Rather than simply delivering tangible products to market, they argued, marketers must consider how to deliver intangible services to customers. ‘[Service-centred dominant logic] has the potential to replace the traditional goods-centred paradigm,’ they wrote in 2006. The result has been a rise in advertising that doesn’t really feel like advertising. Tools, services and utilities have become important new ways for brands to engage with consumers. By removing friction or improving an experience, these solutions set themselves apart from the polished, measured emissions of traditional advertising.

Connecting the dots This new marketing paradigm has been heavily influenced by service design, a discipline that established itself around the turn of the millennium. Unlike traditional design practices, service designers create experiences around the needs of the customer. At every touchpoint, service designers pay close attention to reducing customer pain and speeding up processes so that there’s a consistent, intuitive journey. ‘Ten years ago we thought of the product as the hero, and other touchpoints – call centres, mobile, distribution and marketing – were seen as secondary,’ says Chris Risdon, a design director at San Francisco-based consultancy Adaptive Path. ‘But service design recognises that all of these can leave an equal impression with the customer.’ Done well, this approach can transform a business. A 2013 study by Harvard Business Review found that focusing on the entire journey is 30-40% more strongly correlated with customer satisfaction than one touchpoint. And it’s 20-30% more strongly correlated with business outcomes, like high revenue, repeat purchase and low customer churn. The Government Digital Service is a living, breathing example of this transformation. A team of service designers is hauling the British government into the digital age by delivering 25 exemplar services built around the needs of 100 / 101

Let’s create the experiences that customers want and then we can worry about marketing them afterwards Erik Rogstad, AKQA

users. And a new website, GOV.UK, aims to be dialogue with its target market – a conversation a single domain for every customer need across that benefited both brand and consumer equally. all government departments. By making services Not all branded utilities were as effective digital by default, the government is on track to though. From the mid-noughties onwards, as save £1.7bn ($2.8bn) each year. marketers figured out how to add value with services, a slew of digital tools clogged up the Services, not messages web, and our app stores. Research from Deloitte, Over the past decade, marketers have started to published in 2011, found that 80% of branded apps recognise the influence of service design and the had been downloaded fewer than 1,000 times. importance of the service-dominant logic outlined Hardly evidence of a new marketing paradigm. by Vargo and Lusch. In 2006, The Barbarian Group’s Benjamin Marketing as service design Palmer and Anomaly’s Johnny Vulkan coined The smarter businesses, of course, realised that the term Branded Utility. This highlighted a new introducing a service-dominant logic required approach, where brands used tools and services to much more than a nifty digital app. It involved offer added value to customers and create inter- changing processes, reallocating resources and action opportunities. ‘Branded utility is about communicating with customers in new ways. services, not messages,’ we wrote in a special report It needed brands to think about the holistic in 2008. ‘It’s about brands embedding themselves consumer journey, to carefully consider each in people’s daily lives.’ touchpoint, and to re-imagine products as services. Putting this thinking into practice, baby care Nike, once a bread-and-butter apparel business, behemoth Johnson & Johnson created a digi- successfully re-envisioned its offering to include a tal service that offered advice and tips to new relevant service. Nike+, which launched in 2006, parents. Babycenter.com quickly became the big- is a digital fitness ecosystem that enables people gest baby site on the web, and helped the brand to track their runs, connect with friends and reach 78% of its target audience in the US. achieve health goals. Today, it counts 18 million ‘It contains all that anyone would ever want to members. ‘When I buy this product, take it home know about each stage of parenting, from getting and sign up for the services, I’ve created a link pregnant to raising a toddler,’ said one glowing so much stronger than anything you could say review. For Johnson & Johnson, this created a in communication,’ said Stefan Olander, Nike’s Strength Study / Service Design

Once you have established a direct relationship with a consumer, you don’t need to advertise to them Stefan Olander, Nike 102 / 103

vice-president of digital sport, at the Cannes Living services Smart spending: the iGaranti mobile app Lions Festival in 2012. As billions of products connect to the internet over uses an alogrithm For Nike’s customers, the experience of getting the coming years, the boundaries between services to analyse spending out there, challenging your friends, pushing your- and marketing will continue to blur. Cisco predicts habits and predict future expenditure self and enjoying sport is far more powerful than that 50 billion objects will be web-connected by any advertising messages. It doesn’t tell people to 2017 – from toothbrushes to televisions, cars to ‘Just Do It’, it enables them to do just that. ‘The clocks. And, according to service design agency experience itself becomes the manifestation of Fjord, this will create a ‘third wave of computing’ your brand, and your communication channel,’ that’s as influential as the dawn of mobile: an era says Fabio Sergio, vice-president of creative at where customers won’t just expect a useful service, design firm frog. ‘Nike+ is a social-media strategy, they’ll expect it to learn, evolve and adapt to their a marketing campaign, a service, a product and a individual needs. brand, and it’s all wrapped up in one experience In 2013, we covered Turkish bank Garanti’s that people interact with across different channels mobile app (built by Fjord), which showcased and in different moments in their life.’ glimpses of this future. iGaranti uses a smart US-based airline Delta has also embraced this algorithm to crunch data around personal spending philosophy when designing digital services for its habits and predict future expenditure. And con- passengers. The Fly Delta app lets people book text – time, location, etc – is used to personalise flights, check in, find their gate and even stream communications. Part banking app, part lifestyle TV shows to their device while in the air. The companion, this is designed to remove worry from in-built bag tracker also allows customers to keep finance. ‘Just focus on living your life, because iGa- tabs on the whereabouts of their luggage. ranti will help you with all your banking concerns,’ Delta’s focus on the entire experience has said Ayse Demir Ozer, head of digital channels and elevated its app beyond a one-off branded utility. business development at Garanti, in Contagious 37. And it’s emblematic of Vargo and Lusch’s ‘new Creating future-facing services like this requires dominant logic’ – instead of talking about flight brands to master many strengths – from har- routes or added extras, these services offer a more nessing data to get a better understanding of indirect (and useful) approach to connecting with consumers, to collaborating effectively with other people. ‘Let’s create the experiences that customers companies in a complex new digital ecosystem. want and then we can worry about marketing them But, most importantly, it requires a laser-sharp afterwards,’ said Erik Rogstad, managing director focus on the user-centric principles of service of AKQA Washington DC (one of Delta’s agen- design. To paraphrase John F. Kennedy, ask not cies), in Contagious 34. ‘For Delta, the product is what your customers can do for you, ask what you the brand, the experience is the brand.’ can do for your customers. Strength Study / Services

Brand Spotlight Uber Uber’s ride-sharing service has revolutionised the taxi industry, but it’s not stopping there. Now the company is vying to become the central nervous system of tomorrow’s hyper-connected world

here’s an ‘Uber of’ just about every Camp thought of ‘pushing a button to get a ride’. By focusing on how industry. SpoonRocket is the ‘Uber of’ Fast-forward five years and that vision is now a people feel, Uber T food delivery. TaskRabbit is the ‘Uber of’ reality in more than 200 cities on six continents. errands. Bannerman is the ‘Uber of’ security. And The brand’s mission – ‘transportation as reliable makes sure it’s better, there’s even an ‘Uber of’ medical marijuana (Eaze, as running water, everywhere and for everyone’ more streamlined and in case you were wondering). So what exactly does – will take it to hundreds more cities in the next that make Uber? It’s the poster-child for a digital, few years. And, after a successful funding drive more pleasant than the on-demand service brought to a traditional land- in June 2014, Bloomberg estimates that Uber is same journey delivered scape. Today, it connects car owners with people now worth $17bn. looking for transportation. Tomorrow, it plans to Underpinning this growth is a service that by other organisations be something much, much bigger. solves almost every gripe we have with the taxi Fabio Sergio, frog design ‘Uber is building a digital mesh, a grid that goes industry. Ever stood in the rain waiting for a over cities,’ said Shervin Pishevar, serial entrepre- cab to come your way? Or had to stop off at an neur and Uber board member, in an interview ATM because you have no money to pay the with Inc. ‘Once you have that grid running, in driver? Uber solves this, and more. When a everyone’s pockets, there is a lot of potential for customer opens the app and ‘pushes the button’, what you can build as a platform.’ In the future, the GPS map shows the taxi approaching. It tells you’ll probably consider opening the Uber app you how long you will have to wait for your ride, when you need a convenient ride somewhere. what the driver’s name is, what car he or she is But you could also use it to buy a coffee, deliver driving and how other passengers have rated the your groceries or even pick up your weekly service. Once you reach your destination, Uber marijuana prescription. automatically debits your account and lets you rate the experience. It also lets passengers split Building an empire the fare with a couple of taps. The idea for a ride-sharing service came in 2009, ‘Uber starts with the customer experience and when CEO Travis Kalanick and his friend Garrett then figures out how the service can deliver that 104 / 105

experience,’ explains Fabio Sergio, vice-president of creative at design firm frog. ‘By focusing on how people feel throughout the process, they make sure it’s better, more streamlined and more pleasant than the same journey delivered by other organisations.’ This creates a truly holistic experience, where every step of the journey is tied together by technology – the smartphone and app effectively become connective tissue between touchpoints.

Uber for an ice cream As usage has increased, so too have the options available to customers. Uber members in London, for example, can choose between an Uber X (low- cost travel), Exec, Lux and Taxi (which lets you order a Black Cab – a compromise made after London’s iconic taxis went on strike to protest against the brand’s growing influence in the city). And, during last year’s Independence Day celebrations in New York City, residents could request an Uber helicopter to take them to East Uber’s app lets users pay for their journey Hampton. ‘Blair Waldorf, Don Draper and Jay and rate the experience Gatsby got nothing on you,’ said the company’s blog post announcing UberChopper. But diversification hasn’t only come in personal travel. The brand has experimented with new uses for the service that don’t involve delivering passengers from A to B, yet still take advantage of Uber’s tech. On 18 July this year, it launched a day- long UberIceCream service, where anyone in 144 cities could request to have an ice cream delivered to their home or office. And similar campaigns have run with roses on Valentine’s Day, kittens on National Cat Day and even Mariachi bands in San Francisco (just tap the button for a fiesta!). These are smart PR plays from Uber, designed to increase exposure and sign-ups in various cities around the world. But they’re also future experiments, helping the company to gauge how it can expand its service beyond personal travel. Speaking to Inc last year, Kalanick outlined this vision as ‘the cross between lifestyle, which is give me what I want and give it to me now, and the logistics Crafty or Capitalist? required to get it to you’. In other words, a much broader remit than an on-demand taxi service. As Uber rapidly grows, so do question marks over its business practices. The company has already announced a few For example, the brand’s surge pricing policy (a system where fares fluctuate trials that could potentially become bigger than depending on the supply and demand) has been criticised, with novelist Salman one-off PR stunts. In August, UberFresh launched Rushdie describing it as a ‘cynical rip-off’. Media reports in August detailed that in Santa Monica, and provides a fixed-price lunch people attending San Francisco’s Outside Lands music festival were charged up to menu for a flat fee of $12. The same month, Uber 7.75 times the usual rate. (One reveller was billed $391 for an 11-mile journey.) Corner Store launched in the Washington DC More recently, PayPal founder Peter Thiel called Uber ‘the most ethically area, allowing users to shop from a list of more challenged company in Silicon Valley’ after it ran a secretive campaign to recruit than 100 daily staples, including toothpaste, drivers from its main rival, Lyft (of which Thiel is an investor). Operation SLOG medicine and beauty supplies. And in New York (Supplying Long-term Operations Growth) armed hundreds of private contractors City, residents can send packages quickly and safely with pre-pay mobile phones, credit cards and recruitment kits, which were used to via an UberRush courier bike. hail a Lyft ride and then convert the drivers over to Uber. So suddenly Uber starts to feel like much more While Lyft has accused Uber of sabotage (for ordering and then cancelling than a taxi firm – here it’s a catering business, 5,500 rides over a ten-month period), media opinion is divided on whether Uber a postal company and a grocery supplier. And broke any laws in the process. However, with collaboration being such an important each of these is underwritten by the brand’s same, pillar of the future service ecosystem, Uber must ensure that it doesn’t alienate any smart service. potential partners with ethically questionable tactics or business strategies. Strength Study / Services

Takeouts

Design around the user / Good service design always starts with the customer’s perspective and works back from there.

Think holistically / Don’t just solve one pain-point, look at the entire customer journey and ensure that every touchpoint is frictionless and user-friendly.

Experience is a shared asset / In a complex and connected economy, brands need to collaborate to ensure that the customer is put first.

Curate, don’t create / It’s not always essential to design your own game-changing services. How can your brand offer more value by teaming up with companies like Uber?

Social services experiences together. ‘Once you have the infra- In August, Uber announced its boldest step structure in place, you can become the social yet – it opened its application programming plumbing that other companies can continue to interface (API) to other developers – and in so build on top of,’ says frog’s Sergio. ‘That’s a major doing nailed its intentions of becoming a ‘central change from the past, where you needed to build nervous system for cities’ firmly to its mast. An everything from the ground up. Now, it’s about open API effectively lets other mobile applications combining APIs from various service providers interconnect with Uber’s app to create a fluid to create a seamless experience.’ experience for the user. ‘While simple on the This strategy has drawn comparisons with surface, the seamlessness of the Uber experience Amazon’s expansion from ‘bookstore’ to belies the enormous complexity that powers it,’ ‘everything store’. And various industry experts read the company’s statement. ‘But now that we believe that Uber and Amazon may end up going have this fundamental capability in place in over head to head in the race to create a truly scalable 40 countries around the world, there are so many on-demand delivery service. While this hasn’t things we would love to see built on top of it.’ been confirmed by Uber (and, indeed, Jeff Bezos This means that Uber can use the power of its is an investor), the audacity of the comparison service to collaborate with companies and extend shows just how far the brand has come in the its influence into new sectors. Other apps can past five years. now pass a destination address to Uber, display So, what else does the future hold? Clearly, pick-up times, provide fare estimates and access it’s impossible to know. And a big question mark trip history. The programme launched with hangs over the ethical practices of the business (see 11 initial partners, including United Airlines, boxout, p105). But it does, at least, have a shot at Starbucks, Time Out, TripAdvisor and Hyatt becoming a defining brand of the next ten years. Hotels & Resorts. So if you really want a caramel ‘Uber has the chance to be a once-in-a-decade if macchiato but can’t get out of the office, Uber can not a once-in-a-generation company’ wrote David deliver it to your door. Or if you want a taxi to Plouffe, former White House campaign manager collect you from the airport, why not reserve one and adviser to Barack Obama, after joining the from within your airline’s dedicated app? company as SVP of policy and strategy in August. By opening its API to any brand, Uber is But, for Kalanick and Uber, fulfilling that oppor- vying to become the service that gels multiple tunity will take more than just pushing a button. 106 / 107

Opinion Services start here How digital technologies are giving brands an unmissable opportunity to transform the way they deliver services. By Louise Downe, service designer, and Russell Davies, director of strategy, at Government Digital Service, UK

You know what Service Design is, right? It’s workshops and people say- 1. Start with user needs ing ‘stakeholders’ a lot; Post-It notes and increasing brand engagement You can hire plenty of people to help you with ‘Business Transformation’. metrics in call centres; and shortening queues in fancy hotels. Right? The problem is, that’s where they’ll start – with the business. They’ll That’s not what we mean. redesign you, cut your costs and give you a new target operating model We call it service design – lower case – because it’s not anything (and the chances are that will always remain a target). Unfortunately, complicated, it’s not a set of tools, or a process, or an ideology, or a somewhere in all that, your users tend to get lost. Starting with users, new word for UX or co-design. It’s the design of services, because rather than with the business, means starting with service design. That services don’t just happen, they’re designed. They may be designed well will get you a better result for the business. or badly, deliberately or accidentally – but they are designed. Service design happens. And it happens everywhere, all the time. 2. Go to where the problem is Services are things that help someone to do something. That’s It’s too easy for large organisations to separate strategy and delivery. what most large organisations do, most of the time. But too often, Clever people in the centre have clever thoughts about how things the practice of service design is conflated with the illusion of Service should be and chuck their ideas over the wall to beleaguered delivery Design and is kept in the box labelled ‘Corporate Distractions’ along- people. That’s not how you get good services. Form follows function side innovation and away-days and CSR – leaving services to emerge as much as function follows form. You can’t separate a problem from on their own. the solution. To design anything functional, you have to be in constant But service design is too important to be kept on the sidelines. negotiation with the limits of your materials. It’s the same for services. And most large organisations are going to have to get it right Your strategy (or policy) people have to be part of a service design because digital technologies are giving them a once-in-a-lifetime process. They must be part of the team working that out with users, opportunity to transform the way they deliver their services. And if they through prototypes and iteration – in the place where the service is don’t design them well, or at least design them deliberately, then they being designed, built and delivered. will fail. This is what we’re starting to learn at the Government Digital Service 3. This is for everyone and in government departments and agencies across the UK. Digital Right now there are Service Designers and there are web designers. has given us all the opportunity to rethink and redesign the services Service Designers tend to work in niches, web designers tend to work we offer. That means more than digitising paper processes. It means at scale. The digital businesses that seize the public imagination and redesigning our services by going back to what a user needs and grow to billion-dollar valuations overnight tend, mostly, to be exclusively redesigning the way we make that happen. digital. They start from scratch, building systems and processes they There’s an implicit link between what redesigning around user needs need to deliver their services separately. But government services – and requires, and how we work to do it. It means that we need to change the next generation of businesses that need to transform, from banks to the way our organisations are structured. Just as you’d design a better retail to utilities – can’t just ignore the services they already have and machine to produce a better product, we need to design our depart- the inherent complexity that comes with that. ments to deliver better services. This is not sexy. It’s not innovative. But We have to move at the pace of digital but we need to iterate our entire it’s important. It makes life better for your users. It makes work easier service – including paper forms, call-centre scripts and assisted digital for your staff. It helps you cut costs and it opens up new possibilities channels – in the same time-frame. Making something for everyone that for your organisation. works that way is a new skill, an emerging profession, something that exists Here are some things we’ve learned: at the intersection of Service Design and Digital. That’s designing services. To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Do you know how to make a good video?

studioyes.co.uk creative video content Do you know how to make a good video? Empowerment How inspiring people and giving them the wherewithal to make a difference became a darn good way to grow a brand community

By Arwa Mahdawi Illustration / Matt Chase studioyes.co.uk creative video content Strength Study / Empowerment

Empowerment, n. The fact or action of acquir- But for the purposes of outlining how brands But the more natural context for empowerment ing more control over one’s life or circumstances have built themselves on the strength of empow- among those coming from a marketing background through increased civil rights, independence, erment, we’re going to go back a little further, to are soft tools. They typically use strong insight at self-esteem, etc. (Oxford English Dictionary) Stewart Brand’s ground-breaking Whole Earth their heart to drive empowerment. Soft tools are Catalog, an informative array of self-sufficiency familiar because they look just like ad campaigns, Fauxpowerment, n. The fact or action of knowledge that was later described as a precursor but they differ in one respect: they create a badge of shamelessly pretending your marketing message to the early web. The work was subtitled Access to belonging and instil agency in those who pass along is in some way empowering when you’re really just Tools, which is the phrase that best describes how the message or contribute an idea. Empowerment flogging a terrible product or, even worse, actually brands can create genuine moments of empower- doesn’t just mean using technology to close social creating new forms of insecurity or inequality, etc. ment: by creating tools for, and with, audiences. gaps by connecting people to infrastructure – it (Contagious English Dictionary) Empowerment is not a marketing slogan or a means closing social gaps caused by cultural ste- tagline or a campaign idea. It is not a buzzword or reotypes, and using technology to open previously h God. We just committed a cardinal a trend or a fad. In the examples and case studies closed systems. sin of essay-writing and began an article that follow, you’ll see that true empowerment, O with an Oxford English Dictionary as practised by brands, means transforming the Everyone goes to Harvard definition of the subject. But this isn’t school, status quo, either by facilitating access to tools One of the most exciting examples of gaps closing and in this case it might be warranted. that people wouldn’t otherwise have or by building is in massively open online courses. Often, brands ‘Empowerment’ is one of the most used and capabilities or breaking down societal barriers. have an exciting role to play in this kind of empow- badly abused words in marketing. Any discussion Empowerment can encompass anything from erment. In 2013, Bank of America worked with of how empowerment has become central to the providing unbanked populations with access non-profit Khan Academy to offer free financial success of modern brands involves understanding to financial services via their mobile phones; literacy courses through the academy’s online and eschewing the meaninglessness that has built overturning cultural stereotypes about gender; or education system. The programme reached out to up around the word over the past few years. giving people a platform to have their voices heard. customers and non-customers alike to educate all participants in a simple, effective way. AT&T has Stewart Brand & vaginal rejuvenation Consumers are doin’ it for themselves also embraced the trend. In 2014, it partnered with One particularly egregious example of this sort of One reason empowerment has become such an online education company Udacity to create the ‘fauxpowerment’ can be seen in the advertising for interesting area in business is because technology world’s first ‘NanoDegree’: an affordable resource 18 Again, a ‘vaginal tightening and rejuvenating has enabled consumers to empower themselves, for potential employees to learn the specific cream’ pitched to Indian housewives in 2012. to build their own tools and share them with expertise needed for a job with the company. The An incredibly cringe-worthy TV commercial for like-minded others. online curriculum costs $200 a month and teaches the product drew widespread ire for its spurious Over the past decade, collaborative consump- students basic programming skills like data claims that the cream was basically feminism in tion has grown exponentially as people bypass analysis and iOS application design. The pro- pharmaceutical form – rather than, you know, a established structures to trade among themselves. gramme is available to anyone, including current way to make money from women’s insecurities People no longer need or rely on brands for AT&T employees who need further education about their age and attractiveness. information, access or entertainment in the way on critical software disciplines. The goal is for they once did, leading to a shift in the traditional all graduates with a NanoDegree to be qualified value exchange between brands and consumers. for an entry-level software position at AT&T. Basically, if brands aren’t making themselves Brazil’s largest language school, CNA, recently useful in some way, or acting as a positive force worked with FCB Brasil, São Paulo, to develop in people’s lives, then they’ll slowly find them- Speaking Exchange – a video chat tool that con- selves obsolete. nects students learning English with native speak- ers in the Windsor Park Retirement Community Hard and soft tools in Chicago. The pilot has been so successful that One of the most important differentiations CNA now plans to roll the technology out to more when it comes to empowerment is the difference than 500 schools in Brazil, and has more than between hard and soft tools. This isn’t a massive 1,600 nursing homes and senior centres in the US gulf, but it’s an interesting framework to consider interested in pairing their seniors with students. how we, as communicators, create opportunities. Thus, a dual benefit is realised: kids learn English Over the years, we’ve lauded plenty of what while older members of society can find a new we’d call hard tools: robust services that deliver outlet for their wisdom and knowledge. a physical or digital product that disrupts the status quo. Raspberry Pi, for example, barn- Closing the gender gap via images stormed a new movement of at-home makers, Brands showing strength in empowerment are whether they’re controlling a small, program- also now beginning to use soft tools to help repair mable computer to make games, or a sous vide conflict and anxiety. Research by the Geena Davis cooker hacked together from fishtank heater Institute on Gender in Media found that the parts. BRCK, the skeleton key of network more media a girl consumes, the fewer options access being developed in East Africa, is another she believes she has in life. This insight gave rise example of this sort of hard tool. Skype, as Ethan to the Lean In Collection, a library of images Zuckerman discusses in our opinion piece, is devoted to the powerful depiction of women, yet another, as is Safaricom’s M-PESA, Bitcoin girls and the people who support them. It’s jointly and Twitter. curated by Getty Images and LeanIn.org, the 110 / 111

women’s empowerment non-profit founded by Campaigns of enpowerment (top to Sheryl Sandberg. bottom): Dove’s Real At the Cannes Lions Festival of Creativity in Beauty Sketches; 2014, Getty’s Pam Grossman noted: ‘The Lean P&G’s Like a Girl for its Always brand; CNA’s In Collection has images of girls, not in pink Speaking Exchange and fairy wings, but who do karate and who are learning about maths and science. Women are shown in positions of leadership, women who are proud to use their voice to be heard. We’re trying to build a visual microcosm of the kind of world that we want everyone to live in.’

From real beauty to real empowerment Female empowerment has become a major advertising theme in recent years, shifting the focus from women’s looks to women’s abilities. Unilever’s Dove work, led by Ogilvy, was the innovator in this space, regularly calling into question how women are portrayed or see themselves. But more brands are taking on certain stigmas and building empowering programming. P&G feminine care brand Always’ Like a Girl project from Leo Burnett brought documentarian Lauren Greenfield to shoot a social experiment and declare its mission to redefine the phrase ‘like a girl’ as an expression of strength. Pantene’s Philippines division delivered a gender-role-questioning viral, Labels Against Women, via BBDO Guerro, to the tune of 48 million views. And CoverGirl’s #GirlsCan spot, by Grey in New York, brings together some of today’s most influential women. Instead of simply celebrating their beauty, the P&G brand creates a candid and compelling rallying cry for female empowerment. While a hashtag is a far cry from a robust service, these campaigns and others, addressing bullying, LGBTI rights and more, have become soft tools that have begun to influence broader social movements.

Importance of focused empowerment Simply giving money doesn’t constitute empowerment. Giving money is charity; giving tools is empowerment. In this regard it’s interesting to chart the evolution of Pepsi’s Refresh Project, which launched with much fanfare in 2010. At the time, the idea of a billion-dollar brand redirecting $20m in Super Bowl spending to fund community projects was considered, in many respects, revolutionary. Only four years later and it seems, well, slightly dated. The problem was that there was no focus to the project. Any company can give money, or set up a foundation, or donate things. Focused empowerment needs to tie back to the intrinsic capabilities of the business and have a long-term goal that is linked to company growth. A new generation of brands is telling us we have potential, from Dove saying ‘you are more beautiful than you think’ in its Real Beauty Sketches, to Apple selling its iPhone 5s by reminding us ‘you’re more powerful than you think’. The ones who help us bring that potential to life will win out in the end.

Strength Study / Empowerment

Brand Spotlight Safaricom It’s rare for a single brand to be responsible for a commercial revolution, and we won’t claim Safaricom is. But Kenya, the country at the heart of Safaricom’s success, is a shining light in the infrastructural jumps that M-PESA and other services have enabled

hile empowerment can take many forms, one of its constant tenets is W that it inspires action rather than simply consumption, and turns helping people into a holistic part of helping the brand. On that level, Kenya’s largest telecommunications company, Safaricom, stands out as one that can truly describe what it does as ‘empowerment’. The company has devoted itself to building services that improve the lives of the 19 million Kenyans it counts as its customers. In fact, when Contagious spoke to Bob Collymore, Safaricom CEO in 2013, he claimed that M-PESA – Safaricom’s mobile money transaction service – wasn’t set up to make money but to ‘transform lives’. ‘Our success is not measured by the profits we make, but by the difference we make,’ Collymore told us. Safaricom has made transforming lives a key driver of profitability, marketing and growth. 112 / 113 Strength Study / Empowerment

The mobile is a powerful piece of technology, so how can we use it to improve society? Bob Collymore, Safaricom

Starting with M-PESA, Safaricom has been Radiating outward able to connect people to infrastructure or services For Safaricom, M-PESA’s development and pop- they wouldn’t otherwise be able to access. That ularity has led to a more fully expanded role for might mean healthcare with its Daktari 1525 the brand in the market. ‘Safaricom is the catalyst telemedicine initiative, its foray into energy with that has transformed the country at grassroots leased home solar power initiative M-KOPA, level. Although it started as a telecommunications or even political awareness and safe driving company, it is providing services to each and every education. sector,’ Gaurav Singh, general manager of WPP- It’s easy to naysay Collymore’s powerful rhet- affiliated Scangroup told Contagious. oric. ‘It’s not that I want to be here as a philan- As the impressive list of ancillary services and thropist,’ Collymore told us, ‘but the mobile is a users for M-PESA grows around the world, it’s powerful piece of technology, so how can we use especially worth looking at what the service has it to improve society?’ But that societal improve- targeted as another infrastructural leap: medicine. ment, led by M-PESA, has had exceptional results. In 2012, Safaricom teamed up with Call-a-Doc Safaricom’s share price is up 450% since his four- to launch mobile health tool called Daktari 1525. year tenure as CEO began, and M-PESA accounts This gives Safaricom’s subscriber base the ability for 98% of mobile money in Kenya, which itself to receive expert advice on health issues 24/7 – has a third of the globe’s 61 million mobile money just by dialling 1525 on their mobiles. This is an accounts. But there’s plenty of room to grow. In invaluable service in a country where one doctor Kenya, 90% of transactions are currently cash. attends to 10,000-plus patients but more than 70% of people have a mobile phone. Mobilised money Mobile health services are burgeoning across M-PESA was launched in 2007 in Kenya by Africa, where mobile penetration has outstripped Safaricom and is now used by 16.8 million active infrastructure development including paved customers worldwide, who make more than roads and access to electricity and the internet. $1.24bn worth of person-to-person transactions A report by The Global Observatory for eHealth, per month. The system is based on text message a special mobile health unit established by the technology, meaning that M-PESA customers World Health Organisation, estimates that up only need a feature phone to access it. to 40 African countries are using mobile health The service has since been extended to Egypt, services. Large countries with several phone India, Lesotho, Mozambique, Tanzania, South operators – such as Ethiopia, Nigeria, South Africa and Afghanistan. In 2014, it launched in Africa and Kenya – are leading the way, but the Romania, enabling unbanked Romanians to use momentum across the continent as a whole is their mobiles to pay utility bills, make deposits already considerable and growing. and withdraw cash. Customers can use M-PESA to transfer sums as little as one new Romanian lei Bigger business ($0.31) up to 30,000 lei ($9,275) per day. They can Last year, Safaricom launched a mobile banking even use the mobile currency to pay for goods such service for its customers called M-Shwari. The as newspapers or coffee at participating stores. service enables Safaricom customers to save The service is addressing a key need in Romania. money and apply for loans using their mobile As Vodafone (part owner of and partner to phones instead of a traditional bank account. Safaricom) director of mobile money Michael M-Shwari was launched in collaboration with Joseph says: ‘The majority of people in Romania the Commercial Bank of Africa, and in the first have at least one mobile device, but more than three months the service accumulated 1 million one third of the population do not have access registered users and deposits of nearly 1bn Kenyan to conventional banking.’ For the seven million shillings ($11.6m). Romanians who transact mainly in cash, M-PESA M-Shwari enables users to deposit as little as could be a lifeline. 1 shilling ($0.01) and borrow as much as 114 / 115

Transforming lives: Safaricom’s mobile money services M-PESA (above) and M-Shwari (left); campaign for health tool Daktari 1525 (above left)

Our success is not measured by the profits we make, but by the difference we make Bob Collymore, Safaricom Strength Study / Empowerment

Takeouts

Think tools / Empowerment is different from CSR or Purpose in that it puts power into the hands of the people. What would be impossible for a user without your brand or one of its services? If just that tool were dropped, fully formed, into a hypothetical world, what would happen?

Partner up / Identifying kindred spirits will not only help you have shoulders to cry on when things inevitably get hard, it’ll also allow a tool to have a broader relevance than your imagination. You’re smart, but limited. Augment your vision by finding allies.

Stay gold / While it’s always important that project ambitions are grounded in reality, truly empowering services don’t let cynicism impact an idea’s ethos or values. Sticking to the dream of delivering a truly revolutionary experience or transformative service is central to creating something actually empowering.

100,000 shillings ($1,160). To be eligible for Collymore said. ‘Why? Because 40% of the an M-Shwari loan, users must be a Safaricom country’s GDP is generated by that sector. But customer, have used M-PESA for at least six what challenges do they have? A challenge around months and have deposited money into their access to affordable financing, because that can M-Shwari accounts. M-Shwari offers customers be quite tough. We can say to them let us help a 7.5% interest rate and requires them to pay back you set up a website, let us help you manage your their loans in full after one month, rather than in payroll, let us give you some accounting software. monthly instalments. ‘We’ve often said M-PESA is not a banking ‘You do not need to go to a branch and fill in product, it complements banking products. In application forms. Just one click on your phone itself it’s a payment product. It gets rid of a lot of and you will have a bank account at no cost,’ corruption, particularly in terms of revenue col- said Safaricom’s Collymore. ‘M-Shwari is a lection, such as if you want to collect car-parking ground-breaking financial service innovation that fees or licence fees.’ will foster a culture of saving and allow Kenyans This summer, Kenyan regulators ruled any with no collateral to access micro-saving and loans and all mobile subscribers in Kenya could use products through the convenience of their mobile M-PESA, a blow to the premium that Airtel phones at very competitive terms.’ and other subscribers pay to access the service As Safaricom’s partnerships, including those to transfer money. To compensate and continue with banks, grow, even more territories open up to thrive, Safaricom must continue to innovate for the brand to bring empowering programmes M-PESA and its universe of ancillary services to the market. ‘We want to make a big difference to create more opportunities for empowerment to the small, medium and micro-sized industries,’ and grow the economy in Kenya. 116 / 117

Opinion The third wave of tech empowerment How do you make the world a better place? Build the tools to do so and empower people to make positive changes, says Ethan Zuckerman, director of MIT’s Center for Civic Media

We’re at a moment 20 years into the commercial web, where people system than fixing what’s broken. When you feel like it’s very hard to are asking questions about what they can influence and what they make change through law, through norms or through markets because can fix. If you are a citizen and you want to have an impact on society, there are things that are breaking those systems, code becomes a what’s the way that you think about making change? Looking for change particularly rich strategy. through code is something that, at present, feels new and promising to a whole lot of people. South-south problem solving What I think underlies this is the notion that systems are hackable. You What I’m hoping is that in wave three, we will celebrate Africa-focused should be able to look at a system, tinker with it and push the boundaries innovation because it’s not going to change the developed world. The of it. This realisation has been at the base of a number of revolutions. combination of local creativity and local problem-solving with interna- The open-source software revolution, for instance. That great software tional-level engineering, creates an interesting third wave that goes doesn’t have to come from a company where everyone shows up from south-south. 9-5 and wears badges. It might come from a loosely organised global It’s basically developing-world innovation for the developing world, group of people working together towards some common goals. but potentially spreading from Africa to India and back. It’s a whole economy that is going to be quite opaque unless you spend meaningful Disproportionate impact amounts of time in the developing world and actually understand why This is a serious change, the idea that by building tools from code you this stuff is cool. can have a disproportionate impact on what happens in society. That’s When we think about brands, I think the most under-valued model is a very interesting and quite profound shift. It takes down industries the ‘Build great stuff and ask people to do what’s right’ model. and builds new ones. And that’s only possible because a new toolkit I’m fascinated by the idea of standing up and saying: ‘I love this, I comes online. want this to happen.’ The first thing is to ask: ‘What would you make if When you go ahead and develop Skype, suddenly Voice over IP you just wanted the world to be better and you weren’t thinking about becomes pervasive. You may not mean to kill the long-distance tele- direct return?’ Because the nice thing about a brand is you can get all phone industry, but you are going to, and didn’t have to pass a law to sorts of indirect return. You can basically say: ‘We’ve made something do so – you just had to win the market and win the norms. awesome, the world is a better place because we’ve made it and as Where I think it gets really interesting is when we bring this into the long as you sort of connect it to our brand, we’re going to do okay, African context with mobile payments. generating revenue in the long run.’ There’s a huge amount of change that comes with that first introduc- There’s no reason why you can’t go a step further, and say: ‘Hey, we tion of novel tech. The mobile phone provided technology to solve this are really lucky we’ve got reach, an audience and we’ve got a team. edge case problem, ‘How do I make a phone call while I’m in the car?’. We’re going to build tools we think can make the world better, and we It became this core new capability within African society, answering are going to use it as a way of constructing our brand as being a group questions like ‘How do we know where people are? How do we transact of people who care about improving the world, not just selling shampoo.’ business? How do we deal with weaknesses in our infrastructure?’ That’s potentially very, very powerful. Then there’s a second wave of innovation, African tech hacks on top The key is to start from the notion of what do people love, and how of western tech, and then you get hybrid, which is leaning very heavily do you give someone something that they love. If you are a citizen and on the mobile phone network, but with a particular African use of it – it’s you want to have an impact on society, that’s the way that you think now turning money into code. Money becomes code, and then code about making change. becomes money on the other end of the system. All M-PESA does is formalise it and creates a much easier infrastructure for it. Ethan Zuckerman is also co-founder of blogging community Global This is all based around the theory that in many systems, if things are Voices and author of Rewire: Digital Cosmopolitans in the Age of really messed up, you are far better off trying to build a new functional Connection, out now from W. W. Norton. Strength Study / Collaboration

China is 10 years ahead of the West when it comes to social commerce. Understanding why and how this is – closely examining China’s trends, technology developments and user behavior – will empower Western companies to successfully anticipate customer needs in their own markets a decade from now.

Razorfish invites you to an exclusive, highly curated four-day tour 2-6 March 2015. An insider’s look at platforms, technology and exposure to digital renegades who spur innovation and growth unlike any other market. Join CEO of Razorfish Global, Tom Adamski and the Razorfish leadership team in Beijing, Hangzhou and Shanghai to meet with game-changers such as Tencent, TaoBao and Sina Weibo, among others.

Illustration / Matt Chase Collaboration We expect a lot from brands today – digital prowess and impeccable social skills – and it’s getting harder and harder to do it all alone. Increasingly, the most successful are soliciting a little help from their friends, working with partners of all shapes and sizes to build better businesses

By Georgia Malden

Illustration / Matt Chase Strength Study / Collaboration

f all possible futures, who would have CTIA Super Mobility Week in Las Vegas, global thought we might be ordering pizza technologist at Ford, John Ellis, said about the O through our car’s dashboard? Thanks strategy: ‘Embracing open innovation and engag- to a partnership between Ford and Domino’s in ing the software developer community is critical the US, drivers of the 1.5 million Ford SYNC for the future of the connected car and ensuring AppLink-equipped vehicles are speeding into a that we continue to keep pace with advances in pepperoni reality. consumer electronics.’ Unlikely a decade ago, that collaboration is The success of this kind of approach, the one- indicative of the kind of fresh brand partnerships to-many collaboration, has been proven. P&G’s that increasingly characterise today’s business open innovation programme Connect + Develop, landscape. Partnering is at an all-time high, with launched in the early 2000s when only about 15% IBM’s biannual CEO study reporting in 2012 that of P&G’s innovations were meeting revenue and more than two-thirds of chief executives planned profit targets, has resulted in more than 2,000 to partner extensively, up from just half in 2008. agreements and helped to triple P&G’s innovation In a fast-changing market, where your next com- success rate. More than half of its innovation now petitors may come from anywhere, today’s most comes from some kind of external collaboration. successful companies recognise that they need to Other multinationals have since launched their look beyond their own boundaries to get ahead. own innovation initiatives, from GE’s hook-up with crowdsourcing product development platform External expertise Quirky to Nike’s new partnership programme In addition to a diverse set of brand partners, Nike+ Fuel Lab. from Amazon to Spotify, last year Ford also opened up access to its AppLink platform to 1+1=3 developers-at-large via its Ford Developer The sometimes-unexpected juxtaposition of Program. Announcing the finalists of a hack- thinking and capabilities that comes from athon the company ran in September as part of collaborating introduces possibilities that neither party could achieve on its own. Take, for example, Sephora and Pantone’s Color IQ. Pantone has been focusing on consumer licensing to expand its business into a more lifestyle consumer audience. But this partnership goes beyond a limited-edition range based on Pantone colours and instead creates something of genuine utility for Sephora customers.

Colour co-ordinating: Pantone and Sephora teamed up to create Color IQ, a system to diagnose skin tone, so that customers can find an exact match foundation 120 / 121

Finding a foundation that matches your col- Slice of the action: Domino’s Pizza Mogul ouring can be insanely difficult. With Color IQ , application allows users can diagnose their exact skin tone, map it to customers to create a Pantone colour (specially created for Sephora), their own pizza, share it on social networks, and then find their optimal foundation. What’s and earn a percentage more, it connects to their digital profile so they of the takings can shop online or on mobile, making repeat purchase easier and deepening loyalty with the brand. This is about aligning knowledge and assets in the creation of a new service that adds real value to people’s lives.

Pooling data In this era of Big Data, some of the smartest partnerships involve brands combining their respective data sets to enhance the customer experience. MasterCard and roaming infrastructure company Syniverse, for example, teamed up this year on a service that links spend data to the geographical co-ordinates of cardholders’ mobile phones to verify whether users are in the same place as their card. The aim is to prevent credit-card fraud, as well as reduce the number of genuine transactions that are declined, which currently stands at we evaluate what we want to do is through this My Starbucks Idea demonstrates is that collaborat- 50-80%. The initiative, therefore, removes prob- decision filter: is it authentic to who we are and ing effectively, and authentically, requires brands lems for cardholders, while saving MasterCard the the brand? Is there a narrative to tell that makes to be prepared to act on people’s suggestions. cost of recovering any fraudulent transactions and sense? Do people want to talk about it at dinner? Rewarding customers for their participation helping to instil faith in the brand. Is there virality baked in? And finally, does it have can go beyond intangible benefits to financial Meanwhile, American Express has embarked a positive impact and do good in the world?’ The rewards. A case in point comes from Domino’s on a range of partnerships to differentiate its approach is paying off: more than half of its traffic Pizza in Australia. The Pizza Mogul application brand and appeal to a younger audience, from its and sales comes from word of mouth. Partnerships takes the ‘create your own pizza’ concept and tie-up with TripAdvisor that links card members’ are also fundamental to furthering the brand’s turns it into a way for people to make money spend data with their social recommendations to buy-one, give-one social mission. Warby Parker from sales of their designs. Pizza enthusiasts can its more recent integration with Uber that enables has sold more than 1 million pairs of glasses to give their creation a name, share it to their social card members to use their reward points to pay date, and at the same time distributed an addi- networks and earn a slice of each pie. Domino’s for taxi rides. Commenting on the TripAdvisor tional 1 million to people in need, with the help Pizza Australia founder Don Meij reported in deal in October 2013, Stacy Gratz, vice-president, of partners including non-profit VisionSpring. August, six weeks after the initiative launched, international digital partnerships and social media that the top moguls were earning up to $5,000 strategy at American Express, said: ‘We want to Collaborating with consumers per week. There’s a clear win-win here. Domino’s be seen as more than just a payments company… One of the biggest shifts of the past decade has gets an army of people driving sales on its behalf. we want to make sure we are creating experiences been the rise in brands working more closely In return, it gives up a percentage of its takings. so people say, “Wow, I wouldn’t expect American with their customers in the development of their Express to partner with this group.”’ business. This goes beyond crowdsourcing a big Toward mutable brands ad through a contest to inviting consumers to have True collaboration can be something of a holy All shapes and sizes a say in how you run parts of your business. This grail – with fears of competitive risk, revealing Today’s successful brands are showing themselves approach is increasingly becoming the hallmark proprietary information and sharing gains with a to be flexible and able to work with partners of of the most successful companies. According to third party. The real strength that we see emerging very different kinds. One of the most lauded IBM’s CMO Insights Study 2014, businesses that lies in not only being prepared to share credit, startups of the past few years, online eyewear invite customers to play a part in shaping their but to let go of the reins to create shared value. retailer Warby Parker, has pursued a steady strategic direction and the products and services Witness Tesla’s announcement this summer that stream of collaborations since it was founded they offer are 59% more likely to be outperformers. the electric vehicle brand was releasing its patents in 2010. Partners have included musician Beck, A prime example is Starbucks’ My Starbucks in a bid to move the whole industry forward. supermodel Karlie Kloss, charitable architectural Idea platform, which celebrated its fifth birth- In today’s culture of open-source technology, organisation Architecture for Humanity, record day last year with the announcement that more peer-to-peer platforms and social media, there is label Ghostly International and even Warner than 150,000 ideas had been submitted and 277 an expectation on brands to be more open – not Bros on a set of Superman-inspired frames for brought to life. Ideas put into development as a to exist in isolation but to co-operate with others, the release of Man of Steel. result of community discussions include skinny including consumers themselves. Those with the For Warby Parker, collaborations are about drinks, drive-thrus and new flavours such as confidence to embrace this way of working recog- finding different ways of telling its brand story and Mocha Coconut Frappuccino. My Starbucks Idea nise that a strong brand is not a monolithic and creating reasons for people to talk about it. In an also acts as a valuable real-time CRM platform, sealed entity, defined by one-way impenetrable interview with SmartPlanet last year, co-founder giving consumers a space to voice concerns and communications. Instead, it is permeable and Neil Blumenthal said: ‘As for partnerships, the way Starbucks a rich source of insight. What, crucially, mutable, shaped by the input of others. Strength Study / Collaboration

Brand Spotlight Lego The creative possibilities of the humble brick are in finding the right pieces to put together. And LEGO is proving itself as adaptable as its core product when it comes to collaboration and co-creation

ook at all these things that people built. You film dedicated to those fans: the screens behind co-branded consumer products. The toymaker’s might see a mess… What I see are people him show five movies created by LEGO users, relationship with Hollywood goes back to 1999 LEGO images used by permission,® 2014 The LEGO Group LEGO 2014 The permission,® by used images LEGO L inspired by each other and by you. People submitted via a competition on the brand’s social when it signed a deal with George Lucas’s iconic taking what you made and making something media platform ReBrick. Star Wars franchise. Since then, licensing has new out of it.’ So says Emmet, the hero of The been fundamental to how the company works LEGO Movie, as he tries to stop Lord Business It’s cool when you’re part of a team with external partners to constantly reinvent from gluing the universe irreversibly together: The LEGO Movie dominated headlines for itself for children hungry for the next new thing. it’s both the inspirational, climactic message of the company this year, not least when LEGO The film is a showcase of those partnerships, the film and the rallying cry for the imaginative announced in September that it had overtaken bringing together characters from DC Comics potential of the plastic block. rival Mattel as the world’s largest toymaker by and Disney, among others, in the kind of glorious, It’s also the spirit of how LEGO collaborates sales, driven in large part by the success of the film imaginative mash-up that replicates the way kids with its fans: giving them the space and the tools and its associated product line. But this unlikely play with LEGO. to constantly reimagine what can be done with blockbuster also spotlights the multiple ways The film’s production process bore the same the brand, both in terms of product development LEGO collaborates to build its brand. collaborative hallmark. While the film-makers and marketing. And it’s fitting that as Emmet The partnership with Warner Bros is itself praised LEGO for not controlling the storyline, says these words, there’s an Easter egg in the the culmination of years of working together on the toy company was heavily involved in the 122 / 123

film’s creation. ‘They were very influential Consumers have very strong on story, script, every major casting decision, associations with what the brand every director decision,’ producer Dan Lin told Bloomberg Businessweek. ‘It’s a hybrid movie made is and what it isn’t. It’s really out of [computer graphics] and real bricks. They important that we understand co-built the movie.’ Even the marketing was collaborative. In a first and respect this for UK TV, and a beautifully playful reinvention Peter Espersen, LEGO of standard advertising practices, PHD London worked with several other brands including BT and Confused.com to construct an entire ad break with each brand’s advert recreated in LEGO. The Awesome Alliance platform, meanwhile, developed by Konstellation, Copenhagen, invited families to complete missions based on the movie, then share their creations on social media. And then, of course, there was the ReBrick film competition, which gave budding LEGO film-makers their five seconds of fame within the film itself.

Celebrating the fans LEGO has an advantage: its ardent following of highly engaged users who have long been sharing their creations. Peter Espersen is head of community co-creation and one of the brains behind ReBrick, its bookmarking site for teenage and adult fans. He estimates that there are between 15 and 20 million pieces of LEGO-inspired, user-generated content spread across the web, from Flickr and YouTube to a host of individual LEGO fan sites. ReBrick attempts to tie them all together, amplifying the great things people are making. It does this not just by enabling people to share and discuss their creations in a central hub, but also by generating spikes of interest via crowdsourcing initiatives such as The LEGO Movie competition. Although the ReBrick website was made by LEGO, everything on it is fan-driven – from content moderation to the name itself, chosen in collaboration with the community, which has become something of a crucible for the brand. ‘There’s a lot of sense-making happening between consumers themselves about what LEGO is. They have very strong associations with what the brand is and what it isn’t,’ says Espersen. ‘It’s really important that we understand and respect this.’

LEGO images used by permission,® 2014 The LEGO Group LEGO 2014 The permission,® by used images LEGO Learning to play nicely LEGO hasn’t always recognised the importance of its fans. A key turning point was the release of the computer-controlled Mindstorms range in 1998. Within weeks it had been set upon by hackers, who – foreshadowing the later hacking of Xbox Kinect – opened up new possibilities by modifying the product in ways the company hadn’t foreseen. Initially, LEGO wanted to fend off the hackers, Building blocks of animation: designers but then it realised the value of this consumer from the company input, and invited them in. The next generation worked with the film- of the Mindstorms product was co-developed makers to create The LEGO Movie with an elite group of users, and when LEGO Strength Study / Collaboration

Mindstorms NXT was launched in 2006, the This kind of collaborative effort is a clear win- firmware was released as open source. win. LEGO is exposed to new ideas and talent; The lessons from Mindstorms about the bene- users get to influence new product development fits of involving adult fans have had repercussions and earn money off the back of their creations. across the business. For example, the idea for the But it isn’t easy. You need both the mindset and LEGO Architecture series came not from within process in place to make it work, says Espersen. LEGO but from architect and fan Adam Reed ‘When you do things like LEGO Ideas, it all Tucker, who left his practice to join forces with seems nice and dandy from the outside, but it’s the company in 2007 to develop the project. The actually very disruptive inside the walls of the partnership has helped LEGO open up previ- company. That’s something you need to manage ously untapped markets such as museums and very closely.’ souvenir shops. Tucker is one of an elite group of just 12 LEGO certified professionals worldwide. Working with the competition These are not LEGO employees, but fans who One of its most disruptive moments came with have turned their passion into a profession and the Minecraft collaboration in 2011. It was the are officially recognised by LEGO as trusted third project to be commercialised via the plat- business partners. form, smashing the 10,000 votes target in just 48 hours and crashing the site three times in the Crowdsourcing NPD process. The company fast-tracked the production LEGO has also been flexing its muscles with schedule, bringing out the LEGO Minecraft one-to-many collaboration via its crowdsourc- Micro World set just six months later, and has ing platform LEGO Ideas (previously LEGO since entered a more official partnership with CUUSOO). This helps solve what Espersen the computer game. calls the ‘idea tyranny’, which sees the company They make for uncomfortable bedfellows, inundated with thousands of unsolicited ideas given their potentially competitive nature. It’s it has no process to deal with. The site acts as a a measure of LEGO’s willingness to let go that way both to capture those ideas, and to tap into it has embraced the relationship, even involving what’s trending and could prove successful in Minecraft’s millions of fans in the co-development the marketplace. of the new line launched this November. Users submit their designs to the site to be voted ‘Credit to LEGO,’ said Mojang chief executive on by the community. Those that receive 10,000 Carl Manneh in an interview with the Financial votes are then reviewed by LEGO to see whether Times in July. ‘They could see us as competition they will go into production. People whose ideas and not work with us, but they’re basically just are selected for production are rewarded with embracing it and putting a lot of effort into 1% of the total net sales of the product. So far, this project.’ the platform has spawned eight new models, including a replica of the Ghostbusters Ecto-1 Digital building blocks and the Exo Suit, a kind of homage to the original While LEGO remains rooted in the physical LEGO Classic Space theme, with a bit of Tony brick, partnerships like the one with Minecraft Stark thrown in. help it explore ways to use digital to enhance For this, LEGO involved the community physical play. ‘What we’re finding is that if you are not only in the design of the product, but also very good at writing books, you are not necessarily its marketing. Together with LEGO, a crack the best to turn that book into a great movie. team of fans hand-picked by the Exo Suit’s You need somebody who makes movies… and creator, Peter Reid, workshopped the suit’s in our case we need partners who can translate backstory, the artwork for the box and the launch the physical LEGO experience into the digital campaign itself, including teaser images, blog experience,’ said CEO JØrgen Vig Knudstorp to posts and videos. the Financial Times. 124 / 125

LEGO Ideas acts as a way to capture consumers’ ideas and tap into what could prove successful in the marketplace. The platform has so far spawned eight new models, including a replica of the Ghostbusters Ecto-1 as well as the Exo Suit Strength Study / Collaboration

Another such partner is Google, with whom The film drew more than 6 million views and 1 Takeouts LEGO collaborated to bring bricks to the web million signatures urging the toy company to ‘stop using 3D graphics technology. The Build with playing’ with the oil conglomerate. Eventually it Give and get / Collaboration Chrome platform was pioneered by the Google capitulated, announcing that it would not renew can deliver expertise, ideas Chrome team in Australia, working with M&C the contract at the end of its term. While some and talent that you don’t have inside your company, opening Saatchi/Mark, Sydney, and North Kingdom, criticised LEGO for bowing to Greenpeace’s up new business opportunities Skellefteå, but opened up more widely in January strong-arm tactics, there’s humility in the move and revenue potential. But you to coincide with the launch of The LEGO Movie. too: an acknowledgement of public sentiment need to give too, whether that’s Now people anywhere can build their own and recognition that the context in which the by sharing knowledge, earnings LEGO creations, using digital bricks, and place partnership was made is no longer relevant in or credit. them wherever they want in the world using today’s climate. Google Maps. It’s a charming tool, complete with Espersen, meanwhile, is humble about the steps Release control / Not everyone is prepared to dispense with lessons on becoming a Master Builder provided by that the company has made so far in its collabora- patents and IP, but having the Vitruvius from the film (though sadly not voiced tions with consumers, acknowledging that there confidence to let go can take by Morgan Freeman), and is indicative of the kind may have been a bigger impact on the brand than you in directions you might never of flexibility that LEGO is demonstrating when on the company itself. ‘I think we’re seen as very have dreamt of on your own. it comes to working with partners. edgy and innovative, and a lot cooler than we used to be because we involve consumers. I think we Set clear boundaries / As in Humble beginnings… and endings are just trying to catch up to the good PR we’re any good relationship, people need to know where they stand. But it hasn’t all been plain sailing. LEGO getting.’ And when we praise him for LEGO’s Be transparent and clear about learned the hard way this summer about the collaborative nous he corrects us with a rebuttal your rules of engagement power of internet mobilisation and the risk of worthy of Emmet himself: ‘I would like to say, and make sure you have the a misplaced alliance when Greenpeace released when people say, “Oh my goodness, you do some framework in place to manage a video spoofing The LEGO Movie in protest great things,” no, actually our users do some great the process. against the company’s partnership with Shell. things, with the things we provide for them.’ 126 / 127

Opinion Open for business Blake Mycoskie, the founder and chief shoe-giver at the original One for One company TOMS, on building a collaborative marketplace, and the power of generosity to grow your brand while doing some good in the world

TOMS works with more than 100 ‘Giving Partners’ to deliver shoes, been amazing, but then you also do something with Charlize Theron or sight and now (through its latest brand extension into coffee), clean Charity Water that really highlights the giving and the good work that water to people in need. There have been alliances with high-profile they’re doing. And then you do something with Element Skateboards, individuals and organisations that have similar social goals, as well as where you help create skateboards for kids and a skate park in Africa partnerships with designers who bestow their cachet and credentials – they’re all so different. The real success is in the community and the on their more pedestrian rubber-soled partner. Meanwhile, the launch movement around TOMS and other companies that are doing this type of the TOMS Marketplace ecommerce platform has led to the brand of business. using its leadership to curate a network of smaller social enterprises, The biggest lesson is making sure that both parties clearly identify bringing together partners and customers alike around a set of shared what they hope to get out of the collaboration. Setting clear expectations values. Here, Blake Mycoskie explains the value of collaboration to the is really important. But it’s also about looking at both organisations’ brand, and what the future holds for partnerships. communities and fans, because it’s not just about connecting based on whatever product or thing we promote, but involving communities We refer to TOMS not as a company, but as a movement. What too, and seeing how we get them to be excited about this and celebrate we’re trying to create through our company is this ideology shift of on different platforms. using business to improve lives, and the idea that it isn’t a competitive marketplace but a collaborative one. The more people share in this idea Power of the new of using business for good, the more the customer will come to demand Collaborations help with that because they can galvanise fans online. it of all companies. And I think that’s when the game is won in a sense, It’s the newness – people want new things from brands. Collaboration when business as a whole is shifted globally not from just focusing on allows you to do something with the brand that’s not traditional, that’s profit, but focusing on people and the planet as well. Collaborating is a little different or unexpected. On some level it’s collectible too, a really key part of that. because you don’t usually do collaborations for very long, especially It’s also about uplifting other brands. Sometimes the market leaders the limited editions. are seen as the behemoths. Take Microsoft or Google, or any other Where it’s headed is cross-industry. Previously, you saw a lot of company that’s first to do something and rises to prominence – often, fashion brands, high and low, collaborating. So you had Karl Lagerfeld they’re seen as trying to keep the competition out. I hope people see for H&M or Stella McCartney for adidas. What you’re seeing now TOMS as the exact opposite. Despite being the market leader and is cross-industry: so a brand like TOMS collaborating with a hotel originator of One for One and an early company to embrace a social company to create an experience to help the homeless. That’s more entrepreneurial purpose to business, I hope people think: ‘Wow, TOMS where the future of collaboration lies. It allows the brand to speak to a opened a marketplace to help promote other companies instead of just bigger audience, and it allows the audience to experience something doing all these ideas itself.’ different and new from the industry than they would normally experience. We’re talking to banks, hospitality companies, restaurants, food Sum over parts and beverage companies. Right now more than ever, we are open for There are so many different collaborations we’ve done, I wouldn’t say business for collaborating. one was more successful than another. It’s really more about the sum, For us, the give is just a part of what we do. I don’t look at it as easy not about the individual collaborations. You do something with Ralph or hard. Where things go wrong is if it’s not authentic. If it’s authentic Lauren or Tabitha Simmons from a fashion design standpoint that has and it’s real, it works really well. To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

Place your order at www.tinyurl.com/contagiousx Offer expires January 31st 2015. Strength Study / Culture

We speak. They listen.

F or over 160 years The Economist Group has excelled at speaking to a unique, hard to reach audience, and engaging them in conversation and debate.

We produce content that helps us to build a strong and lasting relationship with them. We bring the world’s greatest minds together to discuss, debate and innovate. And we source and create unimpeachable data that guides business and countries forwards.

We want to offer you that same service. The Economist Group's Client Solutions team can create content programmes that help you build a dialogue with our audience – and can make them think differently about your brands, products and services.

From award-winning video production to global events; from worldwide data gathering to rich interactive tools; and from white papers to short stories – we can bring the expertise of The

help you tackle the challenges your business faces.

For more information about The Economist Group's Client Solutions, please contact Alexandra Delamain at [email protected] or +44 (2) 20 7576 8113.

The Economist Group We speak. They listen.

F or over 160 years The Economist Group has excelled at speaking to a unique, hard to reach audience, and engaging them in conversation and debate. Culture We produce content that helps us to build a strong and lasting relationship with them. We Though it’s often unfairly lumped in with that bring the world’s greatest minds together to most anodyne element of branding – values – discuss, debate and innovate. And we source today company culture is marketing. And for and create unimpeachable data that guides a lucky few it has become brand dynamite that business and countries forwards. galvanises employees and delights customers We want to offer you that same service. The Economist Group's Client Solutions team can By Dan Southern create content programmes that help you build a dialogue with our audience – and can make them think differently about your brands, products and services.

From award-winning video production to global events; from worldwide data gathering to rich interactive tools; and from white papers to short stories – we can bring the expertise of The help you tackle the challenges your business faces.

For more information about The Economist Group's Client Solutions, please contact Alexandra Delamain at [email protected] or +44 (2) 20 7576 8113. Illustration / Matt Chase

The Economist Group Strength Study / Culture

n This Is A Generic Brand Video, Kendra live in the minds of consumers through customer Eash, associate creative director at Edelman, reviews on Amazon, user-generated content and I assumes the role of scriptwriter and dispar- employee tweets, as much as through sparkly, agingly dissects clichéd corporate brand videos. top-dollar TV adverts. In fact, 86% of customers The opening lines of her poem set the tone: ‘We trust word-of-mouth recommendations compared think first of vague words that are synonyms for with the 62% who trust ads on the telly, according progress, and pair them with footage of a high- to research from Nielsen. Corporations have spent speed train.’ the past decade sensing that the ‘control’ they If the YouTube channels of Fortune 500 exert over their brand has been on the wane, and companies and startups offered a goldmine of they’ve been right. inspiration for Eash’s witty observations, then Should a company now fail to align what it the ‘values’ paraded on corporate websites would says with the way it behaves, its inconsistencies be a paradise for a follow-up. All too often these are more likely to be found out and are also more worthy vows are, on closer inspection, truisms or damaging. Recently, a photo emerged online promises so vague that they can be considered little of a poster meant for staff of UK supermarket more than corporate wallpaper. As Eash writes in Sainsbury’s that was mistakenly displayed in a a later verse, ‘Equality, innovation, honesty, and shop window for the public to see. It encouraged advancement are all words we chose from a list.’ staff to play their part in getting shoppers to spend Yet, in recent years, the technology-induced 50p more on each visit, at odds with the brand’s drive towards transparency has demanded that public campaign for shoppers to ‘Live Well For more light is shed on the inner workings of com- Less’. A quick-thinking response from deep- panies and that their brands speak truthfully to discounter Lidl, via TBWA, London, com- genuine corporate behaviour. pounded Sainsbury’s embarrassment by publicly Meanwhile, a new generation of workers has telling its own staff to encourage shoppers to been building multibillion-dollar global compa- spend 50p less on each trip. nies from scratch. From organisational design Brands that can leverage their culture to address to office layouts, they have set about redefining tension have a powerful weapon. When, in 2009, a company culture in their own terms. Today, the video emerged online of two Domino’s employees elements that forge together to form work culture tainting pizza and laughing about it, the furore can hold tremendous marketing potential. that the clip created forced the company into a soul-searching product rethink – as documented Transparency triumphs by Crispin Porter + Bogusky, Boulder, in the In the decade that Contagious has been champi- subsequent Pizza Turnaround campaign. The oning the new, brave and bold in brand-funded warts and all film traced the journey of the innovation, corporate behaviour has come under executives and chefs, featuring footage from focus Pizza Turnaround: increased scrutiny. Consumer power has grown groups and candid interviews. It paved the way Domino’s released a in tandem with technology, making information to year-on-year sales increases of 14.3% by May warts and all film as part of an effort to be about companies more accessible and people more 2010. Since then, Domino’s has pioneered ever more open about its likely to act on it, with tools to help them rapidly closer collaboration with customers to ensure company culture self-organise and exert their influence. Brands the misalignment between company culture and branding never happens again. Companies can also experience major business benefits by candidly explaining how they do things, without the typical rush of advertising adrenaline. Saddleback Leather, a premium manufacturer of leather bags based in the US, doubled sales when CEO Dave Munson used YouTube to take on counterfeiters. His 12-minute monologue to camera, How to Knock off a Bag, cleverly worked in insights on his company’s people and culture, leading to a major sales spike in January 2014. Another film, Tim and Susan Have Matching Handguns, profiled two company employees and was screened at Sundance Film Festival. ‘If more people would just share what they’re about in the business, they would do well,’ explains Munson.

Digital first, culture thirst By 2019, Generation X (those born between 1965 and 1978) will be in charge, having spent two decades ‘bumping up against a grey ceiling of 130 / 131

boomers in senior decision-making jobs,’ trumpeted a Time magazine report on the future of work in 2009. By then, around half the workforce will also be made up of millennials, according to accountancy firm PWC. While outgoing baby-boomers take with them vast experience, for the incoming generations, digital is simply the way the world operates rather than something that happened to them somewhere along the way, and the nine-to-five has radically altered as a consequence. Constant changes in tech standards demand innovation to stay ahead. That’s a big ask of organisations that inherently value experience over merit. However, digital-first organisations have conversely thrived in this scenario by cultivating environments that help them to radically and rapidly disrupt and re-engineer the world around them. As Google executive chairman Eric Schmidt explains in his recently published How Google Works, ‘When it comes to standard of decision- making, pay level is intrinsically irrelevant.’ These companies encourage challenging ideas, even dissent, from anywhere and strive to do away with layered, traditional hierarchies. Far from this being a chaotic or distracting force, a strong culture – which is constantly restated and reinforced – keeps things on track. Baking in this type of culture requires methods that break with 20th century convention, and on Hierachy-free: online footwear company occasion the results have gone on to pique inter- Zappos has done est beyond the traditional business-lit audience, away with managers entering popular vernacular. Netflix, the content streaming service, has no limit on staff holidays; online footwear giant Zappos has done away with managers and pays applicants NOT to join the company; the employees of Valve, a games (such as ‘How to Workshop’) to a wide pool of developer, determine each other’s pay. learners, including current and would-be clients. Once, these internal policies might have Meanwhile, Etsy, the ecommerce platform for been kept under wraps. Today, they are actively independent makers, publishes an innovative thrust into the limelight by businesses keen to annual ‘Values and Impact’ report. Similar to prove their worth to talent, investors and even an annual financial report, this openly details customers. Unofficially, communities like those employee engagement and happiness bench- on Glassdoor, an employer review website, do marked against the national average. their bit to expose how things really are behind the scenes. Finding ways to best present culture The call for culture to the world has therefore become an interesting Could marketing and HR be called on to work task for HR and marketing, particularly in the more closely in future, in an unlikely alliance? hunt for the best talent. The evidence above suggests that collaboration Netflix’s Slideshare presentation Freedom and between the two can be fruitful for companies Responsibility may have unexpectedly become with distinctive cultures to share. Additionally, the most viewed HR document of all time, with one in three companies globally now complains more than 9.5 million views, but the creation of of a lack of talent, according to Manpower, and Zappos’ Insights division is a calculated move. seven out of ten workers in the US are disengaged Paying participants are taught by the retailer Could marketing and in their work says Gallup. Meanwhile, research how to cultivate a happier, more engaged culture HR be called on to from Edelman reports that just 18% of consumers for their own companies, while also attracting globally trust business leaders. talent for Zappos in the process. Wolff Olins, a work more closely Being able to expertly capture and articulate London-based brand consultancy, has launched in the future, in an culture – rather than merely choose words from Wolff Olins Kitchen, where its consultants and a list – means tackling these considerable internal strategists teach – and show off – their skills unlikely alliance? and external pressures. Strength Study / Culture

Brand Spotlight Etsy At online marketplace Etsy, culture is the business model, aligning the goals of its investors with its community of craftspeople, while meeting the needs of artisan-loving buyers and motivating employees

iven that Etsy, an online marketplace for handmade or vintage items, was G prestigiously recognised by the Great Place To Work Institute in 2013 as being, well, a great place to work, what you’re about to learn may come as a surprise. Less than half of the company’s employees feel positive about their ability to accomplish all that is required of them in their work life. Additionally, a significant number feel they have questions about job clarity and believe the feedback they receive from managers about performance needs to improve. How does Contagious know this? Well, we haven’t had to trawl through online forums or scan the Twitter accounts of employees to hunt for a whiff of a whinge. Nor has a clandestine meeting with a trusty source led to a scoop. Quite the opposite, in fact. 132 / 133

A Great Place to Work: Etsy, the online marketplace for handmade and vintage items, received the accolade in 2013 Strength Study / Culture

Etsy is telling everyone about it, whether you’re Growth in kind late 2013, a policy overhaul has allowed sellers to an employee, a job candidate, the media, a mem- Since 2005, Etsy has been a market for hand- work with manufacturers and employ staff under ber of its 1 million-strong seller community, an crafted goods. The platform is a delightful jumble certain constraints. This has allowed some of those investor or a buyer who contributed to the (though easily searchable) of artistry, clothing, sellers to scale their businesses to meet demand, $1bn-plus sales on the platform last year. Its 2013 jewellery, vintage items and more – in fact, there using emerging tools like 3D printers. But it has Progress Report is published online and includes are reportedly more than 26 million listings. displeased some puritans who believe ‘handmade’ the results of an annual employee happiness survey For each of those, Etsy makes 20 cents and then should always mean precisely that and suspect Etsy for all to see. In fairness, the good things far out- receives a 3.5% transaction charge when an item might be losing sight of its customers. weigh the aforementioned areas for improvement: is sold. A commitment against resellers and mass ‘In trying to grow the business it’s actually 86% of employees feel positive about their sense manufacture has fostered loyalty among the about representing the 1 million small businesses of connectedness and trust in the company and community and ensured 30 million artisan-loving that are on our platform,’ counters Katie Hunt- 91% feel positive about their alignment to Etsy’s buyers keep coming. It’s also proved enticing to Morr, senior manager, Values and Impact team. values and goals. But going back to the gripes: investors: nearly $100m has rolled in from the likes ‘We’ve made a lot of decisions that have foregone how often do you see that kind of admission of of Index Ventures and Union Square Ventures. revenue for Etsy as a company because it would vulnerability from a company? Getting to where it is today hasn’t been easy, have been at the sacrifice of their interests.’ This It’s just one example of Etsy’s remarkable though. As Etsy grew, technical problems plagued is where the power of Etsy’s culture comes into approach to its culture, which it has cast in a the site. In 2011, co-founder Rob Kalin gave way play. It is fundamental to the value proposition of pivotal role on a journey to ‘reimagine commerce’ as CEO to then CTO Chad Dickerson, as the shared trust between Etsy, sellers and buyers. In with the world’s makers. board sought improvements in performance. Since that respect, culture really is the business model. 134 / 135

What we create in the office is going to be expressed on our platforms to our sellers, through our buyers, through marketing channels, throughout the support system Katie Hunt-Morr, Etsy

Etsy’s Plotting progress and the report also shares those findings. The Values Like most companies, Etsy has a set of values, Values and Impact team consults daily with dif- but instead of languishing in the backwaters of its ferent divisions on how to improve on the findings ‘We are a mindful, corporate website, they’re the fabric of day-to-day and implement values-based decision-making. transparent, and work. ‘Our mission and values are the foundation This has been particularly important in recruit- humane business’ of our culture,’ says Hunt-Morr. ‘They’re talked ment. ‘When you have the people who’ve been ‘We plan and build about at every level of the company, in meetings around for a couple of years outweighed by the for the long term’ and all our communication. It’s not a requirement; number who’ve been here for a year or less, it’s ‘We value just a genuine expression of who we are.’ important to have those things formalised in a craftsmanship A core deliverable of Hunt-Morr’s Values and way that is understandable and absorbable by in all we make’ Impact team is the annual Progress Report, which everyone,’ says Hunt-Morr. ‘We believe fun is used to both understand culture and inform should be part of day-to-day operations. It measures progress made Office as community hall everything we do’ by the company in terms of employee happiness, To look at Etsy’s offices in Brooklyn’s DUMBO ‘We keep it real, community impact and ecological footprint. Etsy neighbourhood, one could easily assume the com- always’ is also designated a Benefit Corporation, part of pany was simply another tech firm competing in which means its social and environmental per- the perk-fuelled race for talent. Through another formance, accountability and transparency come lens, the space really resembles the workshops, under rigorous independent assessment each year, garages and studios of the sellers it represents. In Strength Study / Culture

some ways it’s run like one too. Etsy School, for Trusty tribulations Takeouts example, gives staff the opportunity to share their When Dickerson took the decision to overhaul Culture needs to be heard / own skills and talents with each other. ‘As the the policy on ‘handmade’ items in 2013, he knew As businesses grow, company continues to grow, it’s more important it would be a decision that could displease many. understanding what’s going on than ever to foster dialogues between co-workers Far from shying away, though, Etsy went on the at the shop floor level becomes in different teams, on different floors, even in front foot and stayed close to its community. In more difficult, especially for different cities,’ writes Michelle Traub from the addition to explaining the decision to the media, senior managers. The Etsy PR team on the school’s official blog. Dickerson fronted Town Hall meetings with its Progress Report ensures culture has visibility and that The office also brings the outside in. Twice a maker community that were broadcast online. efforts to respond are focused week local caterers and restaurants supply a com- Some of the attendees went to the heart of the on the right things. munal lunch using ingredients sourced from New issue, expressing their unease at potentially York State, New Jersey and Connecticut. ‘Eatsy’, competing with small scale manufacture. Was Culture needs to be lived / as it’s known, is another opportunity to bring Etsy selling out? For values to be meaningful and people together as a community, while consuming ‘There was lots of anxiety about growing engaging rather than corporate responsibly and supporting smaller businesses. with Etsy,’ admits Dickerson. The new policies wallpaper, they need to be lived in ideas, actions and day-to-day would remove the constraints Etsy was placing Code as Craft decisions. Doing so impacts and on sellers who were struggling to expand, without enriches every touchpoint you Living the values like this is Etsy’s lifeblood. As letting mass producers in. ‘Authorship, responsi- have internally and externally. It Hunt-Morr explains: ‘What we create in the office bility and transparency’ has emerged as a value- makes you distinct. is going to be expressed on our platforms to our based definition of handmade. It potentially sellers, through our buyers, through marketing presents a grey area over what truly constitutes Make someone responsible / channels, throughout the support system.’ handmade and relies heavily on trust between the Making values part of the day-today is hard as businesses grow. Little wonder, then, that the engineering company, its staff, sellers and buyers. The Values and Impact team team embraces a motto of ‘Code as Craft’, tak- This makes Etsy’s values and culture more at Etsy consults with different ing inspiration from the makers it supports to important than ever. ‘Transparency of decision- divisions every day to help make approach their own work with the same ethos. making is huge and that’s internal and external,’ decisions more instinctive and As such, the team produces a frequently updated adds Hunt-Morr. ‘We talk a lot about why continuously aligned. blog and hosts semi-monthly events of the same certain decisions were made and it’s always down name that explore the topic and their experiences to values alignment. It’s an internal compass for in more detail. us all.’ 136 / 137

Opinion The rock of your culture In a volatile world, culture is the solid base around which you can build change, argues author and consultant Dave Gray. But it’s also the hardest thing to transform

Any human group, from a family to a nation, a startup to a global com- Green fingers pany, has a culture. It’s simply ‘the way that things get done here’. The A frequently used metaphor for a business is that of a machine, but things they talk about. The language they use. The things that are okay working with culture certainly isn’t something that you can design by or not okay. blueprint. It’s more like gardening. You can’t force things to grow. You Today, when it comes to companies, social media and the web have have to create the conditions in which they can take hold. Companies made many of these things, including the things culture doesn’t ade- grow better and more productively if they understand their own nature quately address – the failings – more visible to the public. Those things and try to support the things that they are trying to grow into. were always there, but now they’re visible. Therefore true power lies in learning to examine and understand This is a critical point when you think about marketing. It’s increasingly culture, your company’s specific ‘way that things get done’. This is difficult for external marketing not to map out the way that things really especially hard, however, for senior executives, because the more get done. Goldman Sachs is a company that had one internal theory senior you are, the more likely there are people around you protecting and a different one that it presented to the world. Once both were you from the truth. compared to each other, it had a PR disaster. To understand culture you need to truly listen to your employees and customers. Collect as many views as possible and overlap them with one Theory of organisation another to see where resources and constraints lie for different people. I believe that culture is part of something I call the ‘theory of organisation’. Where there is tension, or pain, that could be a symptom of something Companies that have been most successful in a sustainable way over going on that can reveal where the company wants to, and can, grow. extended time periods have a theory of organisation that is a unique and sound strategic fit for whatever is going on in the marketplace. It’s The precariousness of market dominance ‘the way things get done’ there, in the wild. IKEA, Southwest Airlines, Companies’ ability to come to understand their own culture in this way Nordstrom and McDonald’s all have very beautiful theories of organi- has always been important. But today, there’s more focus on it because sation, which (and this is crucial) their customers clearly understand. hyper-competition is intensifying. Ten years ago the stakes didn’t seem as Amazon and Zappos are like this, too. Their cultures are distinct and high to senior executives because there was a feeling that deterioration very different, but that’s one of the reasons the former acquired the and decline were not imminent. Culture might be the next CEO’s problem. latter in 2009. Amazon doesn’t want to incorporate Zappos’ culture But now firms can be disrupted rapidly. It’s hard not to notice a company into its core business. But it does, I believe, see Zappos’ humanist, like Nokia, for example, going from dominant to an also-ran in less than customer-centric culture as a legitimate alternative. Amazon is betting a decade. No one is immune to these kinds of market shifts, so there’s on automation and ease of use. Zappos is betting on openness and an increased awareness of the precariousness of market dominance. human relationships. With acquisition, Amazon in effect gets to bet on But any company that has been successful already has the seeds of both red and black at the same time. something special inside it. See it as being a doctor. You need to be Most companies, however, don’t have a cohesive theory. They’re able to probe and ask if it hurts because these pain points are signals constantly looking at successful ones, trying to find a template that they of what a company wants to grow into. can apply to themselves in order to change. These efforts are doomed. While culture is the most stable thing to build any change around within Dave Gray is a consultant and the author of Gamestorming and a company, it’s also the hardest to change. The Connected Company Feature / Job Title Safari

Passing quickly by the elephant’s graveyard of job titles with the word ‘Storytelling’ in them, Job Title we leave behind rational thinking and enter the creepy and the kooky, the mysterious and spooky witchery woods. It’s in this supernatural habitat that we may be Safari lucky enough to spot one of the Abracadabra- The changing industry merchants of marketing, able to escape the shackles of joyless job titles, Houdini-like, and landscape has spawned a be reborn as Digital Marketing Magicians, whole host of new job titles Joint Magic Makers or perhaps even a By Chief Taxonomy Wrangler Wizard of Light Bulb Moments! Narrowly avoiding a parting shuriken of share- of-voice as we leave, we arrive at an altogether more noble habitat. It’s here we encounter the alphas, the royal masters of the industry with a nomenclature to match. Scanning from a distance we catch a glimpse of a Digital Our planet is home to a huge variety of market- Overlord just behind what looks to be a ing wildlife, with each individual species from Content Marketing Czar. Each surveys his all sides of the agency and client kingdoms or her territory from atop a lofty perch. locked in its own, life-long fight for survival. As the industry evolves, so too do the jobs required within it, and the names we choose to describe them. Our knowledge of some of these jobs extends back centuries. Others we’ve discovered only recently. It’s no surprise Some may scoff at the idea of any kind of that relatively modern industries such as digital wizard being taken seriously in today’s cor- communications and technology have nurtured porate jungle. A more forgiving view is that it some of the newer and more colourful examples reflects the belief that managing the best brands of taxonomical flora and fauna. Come with me requires an alchemist-like approach combining now as we set off on a safari travelling from the the magic of subconscious brand preference Serengeti of search engine optimisation to the together with the science of rational purchase antediluvian plains of brand planning. decisions. Maybe. Just as ‘Advertising Directors’ from the early days evolved into ‘Marketing Directors’ and then ‘Brand Directors’, job titles reflect an insightful If we pan across from this group, in an view of how the relationships between compa- encampment no lower down, we see the nies, employees and their customers change. self-appointed Spiritual Leaders of the industry. In the future we can expect this to continue, Here we find a world of those not satisfied with with new job titles that reflect emerging areas the limitations of power implicit in earth-bound of marketing communications such as Director titles. From the Evangelists (of anything) of Gesture and Experience or the cross-pol- and Data Priests, to the Marketing Gurus, lination of roles such as CIO and HR Director Supply Chain Shamen and Direct Mail Demi to bring forth a VP of Experimental Learning Gods this enterprising herd has had the vision Capability. Or perhaps the increasing focus to reframe their roles from the merely temporal on mindfulness within the workplace will lead to the spiritual. to new roles linking spirituality with business The first group we encounter is the warrior performance in the form of Commercial Brand caste. Brought up in a ruthlessly Spartan state Chaplains or perhaps a Pope of Pricing & of nature where business is a zero-sum game Promotions? of market share theft, these proud soldiers of As widely and wildly as our systems of classi- Illustrations / Adam Nickel, Synergy Art Synergy Nickel, / Adam Illustrations Fortune magazine exist on a constant barrage We catch a glimpse fication roam, what’s important is defining these of marketing as military analogy. The Brand of a Digital Overlord creatures by their behaviour: flyers, swimmers Warrior sees every marketing task as a ‘target’, or walkers? Or, to cut to the primeval chase, audiences that must be ‘captured’ and competi- just behind what how do they respond when their mothers ask tors that must be ‘encircled’ or ‘outflanked’. The looks to be a Content what they really do for a living? near cousin – the great-crested SEO Ninja Marketing Czar. Each Any similarity to actual job titles, now or in the past, is is no less martial in his ass-kicking approach, entirely non-coincidental. The creatures described above surveys their territory can be seen in the wild by explorers armed with the appro- although perhaps with more of a taste for priate equipment (LinkedIn). No marketing creatures were nunchucks than Nielsen. atop a lofty perch harmed in the making of this article. a stroKe of GeniUs is not asseMBled in a factorY. We can‘t ManUfactUre ideas froM Wood or steel. theY are liKe livinG BeinGs. Born to a coMMUnitY, noUrished in the riGht environMent, and Given the space to thrive. and liKe people, theY need GUidance— help froM those individUals Who possess the sKills to lead theM to Greatness.

Berlin school of creative leadership

creative_leaderschip_rz_02.indd 2 31.10.14 10:38 Index / Contagious X

18 Again 110 Disruption 19-27 Image Explosion 8 North Kingdom, Stella Artois 68 4Chan 71 Dodgeball 87 Intel 48-49 Skellefteå 126 Stengel, Jim 33 Dollar Shave Club 19-20 Intermarché 32 Sterlin, Debbie 45 A Domino’s Pizza 68, 120-121, Ive, Jony 81 O Stickybits 86 ABC Network 70 130 Iwata, Jon 63 Obama, Barack 70-71 Stifel Equity Research 25 Activative 51-53 Dove 111 Ogilvy, São Paulo 111 Swarm 66 Adams, Mark 71, 73 Downe, Louise 107 J Ogilvy & Mather, Sydney 22 Syniverse 121 Adaptive Path 100 Dru, Jean-Marie 21 Jay-Z 8 OK Go 73 Airbnb 27 Du Bos, Charles 91 Jennings, Ken 62 Olander, Stefan 101-103 T Airtel 116 Dubin, Michael 19-20 Jobs, Steve 8, 81, 82, 84 Optus 32 TBWA, London 130 AKQA, Washington DC 103 Johnson & Johnson 101 Over 42 TBWA\Chiat\Day, Los Albertine, James 25 E Joseph, Michael 114 Angeles 48 Alberts, David 48-49 EA 68 Joshi, Prasoon 59 P TBWA\Worldwide 21 Always 111 Eames, Charles 79 Page, Larry 71, 93 TED 11 Amazon 59, 75 Eash, Kendra 130 K Palm 66 Tesla 22-26 American Apparel 68 Edwards, Jeremy 51-53 Kalanick, Travis 104-105 Pantene 111 The Audience, London, American Express 32, 121 Ellexus 44 Khan Academy 110 Pantone 120 Manchester 71, 73 Anderson, Brent 48 Ellis, John 120 Kinney, Jill 48 Parks, Billy 49 The Chernin Group, Los Andreessen Horowitz 66 Elop, Stephen 67 Kjellberg, Felix 74-75 Pepsi 111 Angeles 49 ANZ Banking Group 64 Empowerment 10 9 -117 Konstellation, Pereira & O’Dell, San The Mayo Clinic 63 AOL 87 Espersen, Peter 123-124, Copenhagen 124 Francisco 48-49 The Weather Company, Apple 6, 66, 71, 81-84, 86 130 Kraft 49 Pereira, PJ 49 New York City 64 AT&T 4 9 , 110 Etsy 132 Kris, Mark 63 PHD, London 123 The X Factor 13 Evans, Benedict 66-67 Kulash, Damian 73-74 Pishevar, Shervin 104 Three 68 B Experimentation 89-97 Kurkosi, Jennifer 93 PlayStation 68 TOMS 127 Baidu 61 Kurzweil, Ray 90 Polman, Paul 39 Toyota 33 Bank of America 110 F Privacy 12 Tribal Worldwide, Barclaycard 68 Facebook 67, 70, 86 L Procter & Gamble 111, 12 0 Toronto 131 Barclays Bank 79 FCB, Brasil 110 Leavitt, Jocelyn 45 Publishing 47-55 TripAdvisor 121 Barker, Esther 111 Fjord 103 LEGO 122-130 Purpose 31-39 turntable.fm 86 BBDO Guerro, Manila 111 Fleischer, Julie 49 Leo Burnett, Chicago, Twitch 75 Beard, Randall 64 Flip Video 86 London, Toronto 111 R Twitter 41, 70, 75, 86, 110 Bebo 87 Fluid 64 Lidl 130 Rams, Dieter 78 Béhar, Yves 78, 79 Ford 120 Lin, Dan 123 Raspberry Pi 11, 4 3 , 111 U Best Buy 68 Foursquare 66 Lindsay, Tim 32 Red Bull 49-54 Uber 11, 104-106 Bieber, Justin 18, 73-75 Foxtel 59 Lusch, Robert 100 Rhodin, Michael 62-64 Udacity 110 Bitcoin 15 , 110 Francis, Rosemary 43 Ries, Eric 90 Unilever 3 9 , 111 BlackBerry 66 Friedland, Jonathan 59 M Rihanna 71, 74 Uniqlo 68 Bluefin Labs 41 Friendster 87 M&C Saatchi, London 85 RIM 68 Upton, Eben 43 Blumenthal, Neil 121 frog 102 M&C Saatchi/Mark, Risdon, Chris 100 Ushahidi 11, 42 BMW 48 fuseproject, SF, Sydney 126 Roberts, Iain 78-79 Bolza, Federico 73 New York 78 M&S 68 Rockefellers 11 V Brand, Stewart 110 MakerBot 41 Rogstad, Erik 103 Vargo, Stephen 100 BRCK 42, 110 G Malbon, Ben 90 Roker, Raymond 54 Vertu 86 Brea, Cesar 22 Gatorade 48 Manneh, Carl 124 Rometty, Virginia 62, 64 Vice 48-49 Brell, Werner 53 Geena Davis Institute on Marshall, Aaron 42 Rosenberg, Jonathan 92 Vig Knudstorp, Jørgen 124 BrewDog 41 Gender in Media 110 MasterCard 121 Rutter, Brad 62 Vine 11 Brin, Sergey 71 Getty Images 111 Mateschitz, Dietrich 50-53 Brûlé, Tyler 54 Glassdoor 131 McCandless, David 58 S W GoldieBlox 45 McDonald’s 32, 34, 68, 91, Saddleback Leather 130 Warby Parker 121 C Google 8, 60-61, 67, 71, 130 Safaricom 6 8 , 110 , 112-116 Warner Bros 122 CAN 110 73, 92 MCN 74 Sainsbury’s 49, 130 Watson 62-64 Catmull, Ed 90 Google Chrome 126 Memorial Sloan-Kettering Samsung 32 WayBlazer 64 CBS 70 Google+ 67 Cancer Center 63-64 Sandberg, Sheryl 111 WellPoint 63 Chiat\Day 81, 82 Government Digital Service Microsoft 67 Scangroup 114 Wikipedia 13 Chipotle 34-48 100, 107 Mildenhall, Jonathan 27 Schmidt, Eric 71, 92 Winkreactive 55 Classmates.com 86 Gratz, Stacy 121 Minecraft 126 Schmidt, Torsten 54 Wolff Olins, London 131 Clow, Lee 82, 84 Gray, Dave 137 MINI 68 Second Life 87 World Health Coca-Cola 22 Greenfield, Lauren 111 MIT Center for Civic Media, Selfies 11 Organisation 114 Collaboration 119 -12 7 Greenpeace 126 Cambridge 117 Sephora 120 WPP 97 Collymore, Bob 114 -116 Grey, New York 111 MOFILM 48-49 Sergio, Fabio 102, 104-106 Wyllie, Bryan 75 Converse 68 Grossman, Pam 111 Monocle 55 Services 99-108 Cox, Justin 49 Munson, Dave 130 Shake Shack 41 X Crispin Porter + Bogusky, H Musk, Elon 24, 26 Sheen, Charlie 70, 74 XPRIZE 13 Boulder 32, 130 Hersman, Erik 42 Mycoskie, Blake 127 Shell 126 Culture 129-137 Honda 59 MySpace 73, 97 Siddall, Sue 85 Y Current TV 86 Hopscotch 45 Singer, Marty 71, 73 Yelp 66 HTC 68 N Singh, Gaurav 114 Yonker, Mike 79 D Humby, Clive 58 Naish, Robby 50 Skype 110 , 116 YouTube 13, 73-75 Dallas Museum of Art 60 Hunt-Morr, Kate 134 Nelson-Field, Karen 49 Somaya, Vikram 65 Ltd Press / Indigo Printers Data 57-65 Hype Cycle 8 Netflix 9, 59, 131 Sony Music Z Davies, Russell 107 Hyundai 68 Ng, Andrew 61 Entertainment 73 Zappos 131 Delta 68, 103 Nielsen 64 Sorrell, Sir Martin 97 Zuckerman, Ethan 110 , 117 Demir Ozer, Ayse 103 I Nike 68, 79, 101-103 Sproule, Simon 23-26 Zune 86 Design 77-85 IBM 60-64 Ning 87 Starbucks 79, 121 Dickerson, Chad 134 ICON Magazine 74 Nintendo 68 StarHub 34 Disney 61, 74 IDEO, London 78, 85 Nokia 65-68, 86 Steele, Amanda 75 To celebrate the tenth anniversary of Contagious we are offering 25% off all new subscriptions Additionally, we’ll give an extra two digital logins with every subscription, so that key members of your team can benefit from Contagious thinking too.

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