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Innovation in a time of recession

06 Oct 2020  |  Marcos Angelides 
Innovation in a time of recession

Innovation is often shelved, left as a plaything for the rich, writes Marcos Angelides, chief strategy and innovation officer at Spark Foundry UK. But in reality, it's the brands with the least budget who are best suited to innovate

What's the biggest difference between agencies and clients?

I once listened to a brand director share his take on the topic. Quite simply he said, "agencies deal in possibilities while clients deal in probabilities".

Agencies, he said, focus on the new and exciting ways to approach a brief. They look at the unbridled possibilities. Clients, on the other hand, are continually assessing the risks. They want to understand how probable the recommendations are, how likely they are to succeed.

The latter may seem reductive, an excuse for clients to focus on short term metrics. But for many businesses, especially now as we enter the deepest recession in history, the reality is much starker. Their very existence may depend on the next campaign. A drop of just a few percentage points might be the difference between survival and bankruptcy.

The definition this brand director shared has always stuck with me. It's a reminder that agencies and clients often speak entirely different languages. We're trying to have a conversation with each other, yet neither side has a translator. This breakdown in simple communication sits at the heart of many client/agency issues. But nowhere is it more prominent than the topic of 'innovation'.

Agencies may believe that the power of an idea will outweigh any concerns, that the opportunity itself will carry it through, whereas clients need to consider any potential risk. This is something that some agencies are poor at calculating - because they don't deal in probabilities, they deal in possibilities.

As a result, innovation is often shelved, left as a plaything for the rich. An indulgence of the super brands. Businesses who can afford the 70/20/10 rule because the 70% is more than enough to get the job done.

But in reality, it's the brands with the least budget who are best suited to innovate - and most capable of proving it.

All it takes are two pieces of information. A clear business goal and a budget. If the brief contains nothing else, that's enough.

From there, an agency can forecast how suited the budget is to achieve the goal. In fairness, some shops have more tools to do this than others. Some have specialised investment planners powered by billions of dollars of measurement data and refined through cutting edge AI. But even the most basic agency can use experience and PCA's to forecast likelihood.

That assessment will lead to one of three conclusions.

1. The first is that the budget perfectly matches the desired business goal. In this instance, the topic of innovation is redundant. There's no point talking about untested possibilities when standard creative and media will achieve your goals. It may sound boring, but if it ain't broke...

2. The second option is where the budget is more than what's needed. In this instance, innovation can play a big role, but it has to be more than an extravagance. The focus should be on long term opportunities that reach beyond the lifecycle of the current campaign. It's the brand equivalent of making hay while the sun shines.

3. The final option, the one that's least considered but most important, is when the budget is far smaller than required. In this instance, the reflex move is to double down on tried and tested methods. To follow the tactics everyone else follows. To drive towards incremental improvements. But if you have to deliver double digit growth with only half of last year’s budget then following the same tactics as before are guaranteed to fail. The probability of success is 0.

This is when innovation must take centre stage.

By using this calculation upfront, it helps focus everyone's energy. Traditional tactics are sure to fail, so the only thing to do is embrace the unorthodox. It gives guardrails to the process. It provides logic to the decision. It ensures strategy is present.

From here, a brand can quickly define an 'innovation playbook'. It can assess its strengths and how they can be maximised, it can assess a competitor's weaknesses and how they can be exploited. And it can evaluate innovative thinking to make the whole greater than the sum of its parts.

The industry is littered with examples. Volvo's 'interception' allowed them to win the Superbowl without buying a TV spot (see the video below). Burger King turned its biggest competitor into a performance channel for their own app. Missguided partnered with a little-known show called Love Island to smash its summer sales targets.

Those campaigns used a fraction of what their main competitors were spending. And that became their advantage. They knew that playing by the same rules would result in failure. So, they chose a different path. One that may have seemed risky from the outside but was ultimately born from logic. A strategic assessment of the marketplace that even the CFO can’t ignore.

So, the next time someone says that innovation can't be justified, that the risks can't be calculated and it's simply too expensive; don't be fooled. It can be very simple to define the role of innovation. Now more than ever.

So, while agencies and clients continue to debate the possibilities versus the probabilities, it's when those two things come together that you know you've hit gold.


Marcos Angelides is chief strategy and innovation officer at Spark Foundry UK

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