The Emergence of Convergence....

Looking at the Microsoft web site and I noticed that Microsoft has launched a range of webcams and are marketing them as digital communication devices. This has come hot on the heels of the lanch of the new Windows Live Messenger - the replacement for MSN Messenger which to my mind is Microsoft's response to Skype (we'll see how that goes, but the theory seems right).

This observation comes in the same week that I took delivery of a new XBox360 - the Microsoft second generation games console and media device. It was this second reason that drove me to acquire one as I am in the throws of setting up a home media network (the XBox360 will act as a terminal to access any digital content stream on either a Media Centre PC or a WindowsXP machine - apparently). It is an impressive piece of technology.... the integration of the networking technology and the fact that the profile links to my MSN ID is impressive. It is fine to talk about this concept of multi-channel access to consumers, but this is the concept in action.

The link between a webcam for Windows Live Messenger and my XBox360 comes from my sense that we are watching a gradual piecing together of a generational shift in communications, media and entertainment -and the true convergence of the three. Behind the scenes, companies like Microsoft, Sony and others are working hard to build an internet based "backbone" of profile services and information designed to facilitate this convergence. My MSN profile powers the preferences for my XBox Live account. My communications - now voice, video and email - are now linked to an account through which I can consume content and entertainment. I can currently buy games online through XBox Live and I am sure that movies, music and other content is not far away (especially given the announcement of the Microsoft ZUNE over the last couple of weeks - their much vaunted "iPod Killer") and the fact that Windows Vista is purporting to even better support for rich-media content. This is one vendors take on how to bring all of these things together, but it is a vendor who has started to deliver some real, workking products to the market.

So ... what's the point? The point is that the notion of convergence is very quickly becoming a reality. By integrating all of these functions, applications and content at the "software" layer, the vendors are changing the playing field. A telco no longer provides the capacity to make phone calls (let alone video calls), I no longer need to visit a retailer to buy a game, I don't need to go to a video store to get a movie and I buy my music by the song, not by the album. The usual gumpf about the "shift in the balance of power" would fit here, but for me, it is the signficance of all of this coming together into a ubiquitously accessible "user profile" which is the real story. The digital channels are narrowing their focus - it is all about ME (well all the "MEs connected to the internet)!

For marketers and providers of content and services to consumers, it is time for a wake up call - get your head around the "real convergence" - the convergence of content, services, profiling, marketing, information, resources, entertainment - EVERYTHING in a user-centric model. Clever marketers are not jumping onto the YouTube bandwagon now and hoping to be cool (that is Soooooooo last month), nor are they racing to generate podcasts of mediocre, self-indulgent, low-value promotional waffle. They are working hard to understand what consumers want from a converged model and how to reach them in this environment.

Our team are working on some very cool ideas in this space, albeit that getting the clients to be brave enough to reach into the new market opportunity. We are learning (and applying) the important principles of "shared value" and "user defined services" and a whole bunch more. Some of these things are very clever abd I am sure will deliver some significant innovation to our clients... but then, the team are working pretty hard to change the world!!

Not alone out there......

I just saw Dave Clutterbuck's latest opinion column for AdNews and I have to say that I AGREE!!

From what I can see the Big Idea is like the flash of light from a magician’s wand – Divert the attention away from what is really going on while you work furiously to pull a rabbit out of the hat (which NO ONE was expecting)...... sure.....

Is the industry pursuit of the Big Idea really a tacit admission that given the volatile and variable state of the advertising industry these days that the veneer of “value” that some of the agencies used to provide in a structured, oligopolised “old world adland” is starting to wear through. Is it that some of those agencies that have always held themselves out to be “oh so creative” have actually been found wanting in a market where the old rules no longer apply and you actually have to be…. dare I say it…. creative?

I sit in amazement as the industry reacts to change, as Dave rightly says, with a rush to becoming Experts In Everything ("EiE" - I've created a new TLA!!!) – the perspective I see is that the integrated agency of the future is going to be switched on, plugged in, juiced up and able to deal with all the marketing needs of the cyber-generation*. Trouble is, it is a little harder than that and the industry had better wake up.

There is a potential credibility storm brewing as agencies race to enter the digital services markets – purporting to their clients that they can handle all things online. This naiveté is fostered by the assumption that the internet (and increasingly mobiles) is a creative medium and so surely must be the domain of the ad agency, but the real concern is that this is a genuine collision of marketing and technology and it is all a little harder than that.

You can integrate the offer / message with the ability to act on the offer / message which means that commerce is going on – and commerce means money is changing hands and money changing hands means that there is real business risk, first hand. Campaigns are connected to business systems and this creates an opportunity for the bad guys out there… and agencies aren’t generally equipped to deal with this.

There are stories out there even today; the agency who launched a campaign for a FINANCIAL INSTITUTION earlier this year which was hacked in under an hour. No money was stolen but surely such a compromise cuts to the very core of the FI’s value proposition – security, safety and trust. (by the way, the creative was spectacular….) We see tonnes of executions which don’t comply with the privacy laws (those pesky laws), aren’t accessible and are just badly designed. I have first hand experience of an agency supplying creative for an online campaign which was 76MB (please upload this for us), designed for an Apple Mac super screen (over 1900 pixels wide) and with no navigation in or out…. Just amateur really. It takes years to develop the skills and capability in this space and throwing money at a room full of geeks won’t achieve any shortcuts.

So the purpose of this rant – in these times of change, PLEASE Agency Colleagues, divert your attentions to understanding the science and structure of marketing in the new world and avoid the rush to EiE … there are plenty of very clever SPECIALIST companies out there… get to know and love them!!



* Cyber everything is a term which must be due for re-propogation.
PS> I am thinking that to take on this trend I should start an agency called CyberEiE.com ... see if I can capture EVERY buzz-word....

You ROCK my world!! (Ode to a great team)

A busy week this week with a round of investor presentations in Melbourne and Sydney and the announcement of our interim half yearly results (audited results will come out in a couple of weeks) and it has been a real pleasure.

The company (Hyro) has been working through a plan we set out a little over a year ago. As I explained in our presentations, there were three things we had to do; clear the decks of the history we inherited when we joined Hyro, set the company onto a commercial footing (which means operating profitably) and then pt everything into place to make the most of the opportunity ahead of us.

I am pleased to say (and it is in the announcements) that the team have achieved everything we set out to do - on time and a little ahead of expectations. The company has posted an operating profit for the second quarter (which has taken us into an operating profit for the half) and all of the tactical and strategic things we have had to do have been done, on time.

There aren't any great secrets to this; we have a wonderful team of people who have kept their heads down, their minds on the task and have not, at any stage done anything other than concentrate on doing the very best they can for our clients - these people are amazing!

It is a little humbling - when you can see what this team has been able to do from a starting position well behind where you would like to be and with one hand tied behind their backs thanks to the history they inherited, I can only imagine what they can do now that all the ingredients for success are in place.

And the great thing? At the same time as building the momentum for success, the Hyro team will be changing the world.....

Interesting times ahead.....

It has been a while since the last post - I'll put it down to a very busy end of financial year, but truth be known, I think the "busy-ness" of the business is only linked in part to the time of year.

I have picked up some publications from a couple of different sectors (advertising, IT, marketing, government and even the magazine which comes in the weekend newspapers) and the news all round is the same - the internet is important, growing and taking corporate and government marketing expenditure and investment funds away from traditional activities.

I saw a statistic in AdNews this week which stated that in the UK, internet advertising will pass MAINSTREAM NEWSPAPERS for the first time this year; 13.3% of marketing spend compared to 13.2% for newspapers - a very significant milestone for our industry.

For us, this is manifesting itself in the increasing demand and increasing "quality of opportunities" we are seeing. Not only are we being asked to respond to more proposals, but the projects are better funded, better developed and more significant than they have been at any time in our recent past. This is getting serious.

The time of year is significant in one respect - the change-over of budget years. In 2005/06, most corporations and governments in our markets were "caught by surprise" and underestimated the significance that online channels would achieve over the last 12 months - most projects were funded from "borrowed funds" from other projects or budget fund. With the passing of th 1st of July, corporate budgets have now been reset and most corporations have allocated explicit funds to digital projects, specifically in the areas on mobile and internet activities.

So... the gun has gone off .... we have spent nearly a dozen years building capability to respond to the opportunity we have in front of us right now. .... now we get to enjoy the challenge, effort and reward of getting to change the world ....