Brands and agencies are having to operate under conditions of great uncertainty which make it more crucial then ever that they adapt. Changes in the behaviour of Â consumers coupled with the pace of technological advancement has created the perfect storm to challenge conventional business models and level the playing field. It’s within this chaotic world that a new consumer-centric model has come to prominence. It’s not enough for business and the advertising agencies they employ to tell consumers what they should buy. Rather the prism has flipped so that consumers are now in a position to tell business exactly what they think.
Given the shift, should agencies look to redefine themselves less as middlemen, in the subjugation of the clients they serve, and reposition themselves as strategic partners or builders of stuff? A more altruistic and experiential goal has been suggested by Tim Malbon, based on the simplicity and breath of 50/50 Make or Break.Â Yet when a brand attempts to do something similar, such as Pepsi Refresh Project, it backfires. Why is that? Is it simply that people don’t trust brands? Or is it they don’t trust brands to have embraced this new consumer-centric paradigm?
If we were to apply the three factors of identified by Heidi Hackemer’s post, that 1) there needs to be an attainable end goal, 2) delivered by a certain point in time, 3) in a system which encourages dialogue, then Pepsi Refresh meets those objectives. But I do think there is a fourth factor that needs to be considered, and that is whether the new model is enshrined in the very DNA of a particular brand?
It was at the recent Economist Innovation Summit 2011 that the topic of social entrepreneurship was touched upon and whether big business could adopt a system such as Ushahidi? Â The general consensus of the group was that corporate governance structures of big business would have to fundamentally changed if they are to be successful. This means changing how businesses measure and account for success, whether there investors buy into that shift, and finally whether this appeals to consumers.
So is there a role for agencies to facilitate this change on behalf of brands? I genuinely believe there is scope for agencies to assume a strategic partner role by effectively white-labelling a productÂ or service as a separate entity. Look at the benefits for all parties concerned, a brand can effectively outsource creative execution of a product and service and reach beyond there existing audience. Consumers benefit by engaging in a customer-centric model that taps into their core beliefs, and finally agencies can enter into a long term strategic partnership that extends beyond a typical executional campaign. The new entity has at it’s core a mandate that sets out the vision unencumbered by it’s founding partners.
The nearest example I can think of is when Amazon bought Zappos. Amazon could easily have installed a new board at Zappos, or insisted Zappos utilise their supply chain. However Amazon was in the business of value creation and recognised that Zappos was in a good place both in terms of it’s business strategy and the loyalty of it’s customers. Any attempt to upset that apple cart would have had serious financial implications for Amazon, as well tainting it as a destroyer of value.
The question is whether agencies can make the transition from creating the intangible (ideas) to the tangible (product and services)? In the next post I’ll evaluate how agencies can learn from tech startups in shipping products effectively, and how the principles of good design can orientate brands to be customer-centric.