Toy stories: Agencies invest in tech innovation

The quest for fresh ideas is taking some agencies into areas well beyond their traditional role, and even well beyond anything to do with marketing. For instance, Y&R has set up an incubator for startups (see case study) and its offshoot VML Labs is designing products, while Dentsu has just created a smart T-shirt.

“What VML doesn’t do any more is just make ads. We moved on from that a long time ago,” says Aden Hepburn, MD and ECD of VML Labs Australia. “Now we are making products as well.”

These products include a GPS surf watch, co-created with surf brand Rip Curl, that records the number, speed and location of waves a surfer catches. And a ‘Guide Dots’ app for the visually impaired, using Google Maps and other data to call out places as the user passes them.

“We’re a digital creative technology and marketing agency at a global level and we make all sorts of stuff,” Hepburn says.

He explains that VML already has a large user interface (UI) team that works with clients on designing and packaging products. It is now using those skillsets to “take a leadership role” in product development. The projects — usually a couple each month — are decided by a VML Labs committee. The company provides some financing and “the time and the tools from the global network to make it happen”, says Hepburn.

Ideas get backed for different reasons. Some are worth taking to clients, others are worth prototyping and putting on the website to showcase capabilities. “Sometimes we just have a staff member who comes up with a genius idea and why it should be made.”

An agency with a pedigree in making things is Dentsu, which years ago developed some of the core technology for Honda’s Internavi car navigation system. 

More recently, it has come up with the Asoberu-T, a shirt that doubles as a kind of media player. Users can scan the shirt with a smartphone app, triggering dedicated interactive music or video content for each shirt. 

Dentsu CCO Yuya Furukawa describes it as “a whole new genre of T-shirts”. He explains how this fits into the role of the agency. “Whatever has the highest success rate of solving issues becomes a core business domain. Whether we apply technology or traditional creativity, the principle of what benefits advertising agencies is the same as long as we can provide value — something that did not exist before, something people need, something that is fun.”

Matt Godfrey, Asia president of Y&R Advertising, says collaboration and openess are critical for agencies to succeed. “Creativity is what we do, and that is what we think our core product is.” 

By contrast, agencies with a closed view of the world, or who are unwilling to collaborate, will fall behind. 

That is the thinking behind the Spark Plug incubator programme, which Godfrey says is not aimed at making money, but at generating change and ideas. “We’re in a solutions industry; clients come to us with problems and opportunities or options and we need to think of ways to help them achieve their goals.”

The attraction of startups is their agility and how they think about the world, adds Godfrey. “The speed of change isn’t going to slow down. There will never be a point in the next 10 years where you’ll say ‘we’ve caught up with the technology’. 

“So the idea that you will always be at the cutting edge is a non-starter.” 

After running in Y&R Singapore for 18 months, the Spark Plug scheme is now being expanded into a ‘speed-dating’ style event, where startups and clients can be introduced to each other. 

“It will give clients more access to more ideas,” Godfrey says, pointing out there were 22,000 startups in Singapore last year. “You can’t have one model where they are all in one agency.”

BIG IDEAS What tech startups can teach agencies

Nico Abbruzzese, global director of creative technology, Maxus

There’s much that traditional agencies can learn from fast-growing technology startups. As an R&D division and creative technology unit of a media agency, we are constantly researching and developing new technologies to solve problems for our clients and ourselves.

What we discover enables us to expand the horizon of how we solve a marketing communication problem.

We believe in rapid prototyping as a way to get a physical representation of our ideas.

True innovation is imagining the invisible lines that connect the previously disconnected and then figure out how to make it real — 1 per cent inspiration of 99 per cent perspiration. So what can an agency do to spark this mindset?

Seek diverse talent: To foster a culture of innovation, agencies must start thinking of putting diverse kinds of talent at the centre of the organisation.

For us, it’s about putting the geeks back in the middle of the talent mix rather than at the sidelines of the agency processes.

Foster curiosity. The geeks I talk about are fundamentally people with an insatiable curiosity. We look for those who spent their childhood pulling things apart to understand how they worked (and sometimes putting them back together).

We constantly encourage people to spend time on their passions, rather than keeping them as an after-hours activity.

Flex the processes.When working with diverse talent you have to keep processes agile enough to allow that diversity to express itself. We encourage talent to bring in new processes and models, and to be constantly learning and adapting.

Open Innovation. Lastly, it’s about opening the doors to let innovation in. For instance, by allowing our people to participate in non-client-led projects — even outside the organisation ­— to encourage diverse development.

We’ve found that all of this pays significant dividends in the thinking and the products we bring to our clients.