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Marketers like Chipotle are turning to consulting firms to help transform their businesses — and ad agencies are nervous

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Chipotle Mexican Grill
Photo courtesy Chipotle Mexican Grill
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Here’s why ad agencies need to worry about consulting firms: traditional ad shops can’t handle burrito orders.

At least, that’s what the consultants say.

Chipotle has recently tapped Deloitte Digital to build and maintain its Apple and Android Apps as it looks to implement mobile ordering across its network of restaurants. On the surface, that may not seem like that big a deal. It’s just one app after all.

But as consulting giants like Accenture and Deloitte circle around the ad agency business, it’s partnerships like the Chipotle app that some in the ad industry see as a harbinger of things to come.

They say that while traditional and even digital ad agencies are still great at making ads and buying media to make sure they get in front of the right people, they aren’t as well equipped to make apps that are so vital to a company’s business – let alone all the billing, data collection and logistical implementation required.

And as digital customer experiences become a crucial part of marketing – people are literally holding a company’s brand in their hands after all – the argument is that consulting companies, with their informational services heritage, are best equipped to handle this kind of work. And the more that the Deloittes of the world can get their hooks into marketer’s operations, the more ad assignments they’ll be entrusted with – which puts classic ad agencies in a disadvantaged position, or so the thinking goes.

Indeed, in the ad industry, where the future of the ad agency model isconstantly being examined, consulting firms have become the new bogeyman. Fair or not, firms like Accenture and IBM are seen as having a better claim on driving real business results in an industry known for making pretty ads and making sure they get where they are supposed to.

What’s so great about consultants?

Greg March, the CEO of the independent ad agency Noble People, summed up the conventional wisdom regarding consulting firms as thus: “They’ve got MBAs, they’ve got money for days, and they have access to the C-suite decision makers.”

Consulting giants have also been making lots of acquisitions in this sector of late; last year, Deloitte bought the San Francisco creative agency Heat, reported Adweek.

During an interview at the Cannes ad festival in June, Michael Kassan, CEO of the ad advisory firm Medialink, even predicted that a giant consulting firm would end up buying one of the big four ad agency holding companies like WPP or Publicis.

“The real difference is, we bring a few things they don’t have,” said Donald Brady, principal, Deloitte Consulting LLP and Customer Experience Innovation Leader at Deloitte Digital. “We have deep industry expertise and can handle complex technical solutions. [Agencies] are coming from creative world. They don’t have the depth or scale.”

Brady noted that Deloitte last year recorded $37.8 billion in revenue and has a presence in over 150 companies. DeloitteDigital alone has  10,000 employees in 48 countries.

By nature, companies like Deloitte see themselves as playing a more integral role in helping assess and improve their clients’ businesses that goes well beyond marketing.

“Our clients come to us with really big challenges. Transformational challenges,” said Oliver Page, Principal at Deloitte Digital. Transformational challenges such as changing the way people order and pay for food in thousands of restaurants – a behavior which is increasingly becoming the central way people interact with many brands.

Page said that in the quick service restaurant category, it’s very early but in some cases ordering via apps is accounting for 1% of a company’s business. Chains like Panera Bread have seen digital ordering take off, as Business Insider reported in June.

“That channel really is becoming a huge revenue driver for restaurants,” said Page.

“It’s moving quickly. What you end up having when you interact with your customers is a much richer data set. That’s what is unique [about what we do]. Making ordering easier or more convenient is what consumers are looking for, and it is what the brand represents. And making these things work in the real world, it’s not easy.

“This is a testament to where the market is going,” Page added.

Left brain vs. right brain

Perhaps. For his part, March argued that both ad agencies and consulting firms have their natural strengths and weaknesses, and that each side’s weaknesses can be addressed by hiring different types of people.

He admits to being biased, but he believes it will be easier for ad agencies to hire more analytic-driven people than for consulting firms to get more creative.

“From what I’ve heard from people who have worked on both sides, the consulting firms are not really strong on how to engage creatively,” he said. “A culture of creativity is really hard.”

March said that agencies are hardly bereft of offering their clients potential ways to change their businesses. The question is, do they know how to execute them?

At the same time, consultants have to prove they can deliver on ad campaigns that work. “The knock on these guys has always been, they give you decks and then leave,” March said. “They’ve got to change that. If you are going to charge somebody $2 million for a strategy that’s one thing, but now they are going to have to execute.”

Gene Liebel, co-founder of the digital agency Work and Co, which works with Facebook, Apple and Marriott, and others, agreed that in 2017 more marketers need help building digital tools to help them directly interact with their consumers. But he also doubted whether consulting firms are up to the task of handling the little things, or can attract the right talent to deliver.

“Someone still has to do the hard work of designing and building successful digital services, and that execution piece is what’s actually the toughest,” he said. “The talent pool for the best engineers and best digital designers is surprisingly small, and those people are drawn to places where they can go beyond just concepting great digital experiences. They want to make real things. And actually witness their ideas make it out into the world to be used by real consumers.”

In other words, Chipotle’s app better work really well. Or like many marketers, the company might soon be looking for a new agency.

This article was originally published on Business Insider. Copyright 2017.

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DJG partners with GetStarted to create voice-activated content experiences for brands

DJG’s new partnership breaks ground for voice-activated branded content experiences.

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Content marketing firm Digital Journal Group (DJG) and voice technology platform GetStarted today announced a partnership to build voice-enabled experiences for brands wanting to reach audiences via smart home devices such as Amazon Alexa and Google Home.

This partnership will leverage DJG’s cross-industry content marketing and storytelling experience for leading B2B and B2C brands, and GetStarted’s technology platform that allows organizations to create dialogue and conversation via smart home devices.

“Voice is a really exciting space for us because it allows for totally new kinds of content experiences, as well as unique data insights that are possible as a result of the way people interface with content,” says Chris Hogg, President and Partner at DJG. “Up until now, a person’s interaction with their smart speaker has been largely query-based, where an individual asks for information such as weather, recipes or events in their calendar. Our partnership with GetStarted allows us to shape the experience on behalf of a brand, allowing an organization to have a conversation with a person around their interests.”

In Canada, 77% of the population is aware of smart speakers, and 26% own a device according to research from Edison Research and Triton Digital. In the United States, 80% of the population is familiar with smart speakers and nearly one quarter (24%) own a device.

The DJG-GetStarted partnership allows companies to connect their audience via the voice-activated speakers they already have in their home, so no additional hardware is required.

As part of its partnership, DJG will design and deliver voice-enabled content marketing experiences for brands via a managed service, and GetStarted will provide the voice technology platform. 

DJG will focus first on creating brand-audience experiences that deliver surprise and delight via voice, as well as deepen engagement and conversion opportunities for organizations exploring new ways to connect with an audience. 

“We are very excited to count DJG as a key member of our pioneering launch partner group to explore the rapidly growing voice activation arenas,” says Norbert Horvath, CEO and Co-Founder at GetStarted. “Using our innovative GetStarted dialogue management platform, brands are now able to design, launch, iterate quickly, and perfect their conversation-based content experiences with their respective audiences.  We are looking forward to pursuing this opportunity together with DJG by engaging and actually listening to what the stakeholders have to say.”

DJG offers consultation, design and build services for voice-enabled experiences for multiple stakeholders within an organization:

  • For marketers: Give your audience access to news and information, exclusive content, thought leadership and insight, as well as offers and contests.
  • For internal communications and HR teams: Deliver company updates, news and executive messaging on a one-on-one basis with distributed teams and remote workforces.
  • For virtual event organizers: Provide attendees with “backstage access” to speaker interviews, sponsor information and exclusive content. Attendees can engage with their smart speaker live during an event, deepening engagement and creating a new kind of virtual attendee experience.

“While the use of voice in content marketing, HR and events is still in its infancy, we anticipate audiences will move in this direction and be open to new kinds of content experiences via conversation with a smart home device, so we’re building for it now,” says Hogg. 

For more information or to discuss how voice-activated content experiences could be produced for your business, contact DJG.

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A marketing mindset translates to DX success for banks and credit unions

43% of banks saw a stronger ROI in digital transformation efforts by giving marketers a seat at the table.

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A winning strategy for banks and credit unions in their digital transformation efforts? 

Bringing marketers on board.

Global marketing agency Metia Group polled 500 senior financial marketers in the US and Europe between April 27 and May 17 — covering institutions of all sizes with active DX initiatives underway. Their research found that the most successful efforts are those where a marketing mindset was applied.

Of those institutions surveyed, more than one third gave their marketing teams a full seat at the table to determine company-wide DX efforts.

As a result of including marketing teams, 43% of banks said their initiatives exceeded expected ROI. This compares to only 23% of the other institutions not taking the same marketing-led approach.

Additional key findings of the Mindset Matters report include:

  • Institutions with a marketing mindset were able to pivot their customer experiences more rapidly in response to COVID-19, with 32% finding it easy to pivot the digital customer experience, versus 25% of other institutions.
  • Financial institutions with a marketing mindset were found to be more likely to have built digital experiences superior to their competition: 60% versus 35%. They also reported greater success in terms of customer acquisition, increased deposits, and improved cross-sell rates.
  • 69% of those surveyed believe that the role of marketing will be even more critical post-COVID in securing a strong future for financial institutions.

“Marketing experts are the most customer-centric personnel in any organization, and their absence from the digital transformation process in the majority of financial institutions is a missed opportunity,” said Liz High, Vice President of Insight and Strategy at Metia. Smaller institutions that have been further disadvantaged by COVID-19 have a clear opportunity to extend the impact of the resources they do have, by putting their senior marketers in the driving seat. The same is true of the larger banks that want their investments to deliver what matters to their customers.”

The report from Metia can be downloaded here.

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2020 digital transformation trends in media and entertainment

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Back in July, Netflix reported its first domestic subscriber loss since 2011, and lowest quarterly subscriber growth in three years.

Stock value, of course, plunged — a mind-blowing $17 billion in one day — proving that especially for the media and entertainment industries, immunity from disruption is non-existent, even for massive pioneers like Netflix. 

Writing in Forbes, Futurum Principal Analyst Daniel Newman explains that while last year’s digital transformation (DX) trends for media and entertainment were focused around the increase in video ads, buzz for digital experience, and the resulting rise in mobile data usage, predictions for 2020 focus on the need to “cap the crazy.”

There’s a need to “realize what types of technology and advancements and content creation will really drive business in 2020 — and which will merely drive companies into the ground,” Newman writes. 

2020 will also be an “inflection point,” he says, “where companies are going to better operationalize current technology.” Preparing will be key, with organizations working to handle emerging technologies like 5g, mobile AR/VR, and conversational AI — while maintaining a balance between profits and connecting with the customer. 

Here are Newman’s top four predictions for digital transformation in media and entertainment:

Applied AI for operations: Spending is growing faster than profits at today’s organizations, which is a business no-no. Media and entertainment companies need to take the wheel on spending, but the situation is still controllable. 

“Every company today, aided by AI and machine learning, has the power to be smarter about where and how they’re spending. They have the ability to see what’s working and what isn’t.”

Privacy: The trust gap is currently massive, and media and entertainment are at the centre. Consumers overwhelmingly (61% in one survey) feel that companies no longer have control over data and privacy.

“In the future, there will be a significant opportunity for brands to work on offering greater levels of data usage transparency,” Newman says, “to deliver best of breed experiences while also providing consumers a better understanding of how data is being used.”

This will translate into giving better and more levels of control to consumers, including information on what brands know about them and having the right to be forgotten.

Focus on building intelligent enterprises: Going hand-in-hand with the aforementioned spending issue, companies in media and entertainment need to shift their focus on building smart enterprise, “not just cool and exciting media arms.”

With the innovation that’s taken place within media and entertainment, it’s important that “companies apply the same effort to the back office to make sure operations can support growth and scale profitably.”

Personalization: Gen Z-ers and Millennials are willing to pay for personalization. Especially if it’s well done and lead to deeper engagement. In 2020, Newman explains, companies will take a closer look at both successful content and which audiences they’re attracting. The result will be, thanks to AI and machine learning, more niche communication and customized content geared to specific audiences. 

Going beyond content, “it’s time for the industries to clean up their databases and make smarter outreach,” Newman says. “2020 will leave no room for messy communication and customer relationship management.”

Given that consumers haven’t changed their habits too much, previous predictions continue to hold out. The coming year, however, “will focus more on getting a handle on the wild masses of content being created and shared across an endless number of channels.”

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