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Shaping and Scaling
a Whole New World
—
Inside the Driving Forces of Disruptive Innovation
Numbers that
define today’s
transformative
world
549m
WeChat users in China
7million
Apple smart watches sold
(Global Equities Research)
85m
Views of #LikeAGirl
since June 2014
23.8m
Virtual reality devices
sold by 2018
75%
Of all mobile messaging
traffic by 2018 will be via
messaging apps
450m
People using mobile
payments by 2017
$53.2bn
Value of wearables
market by 2019
(Juniper Research)
$500m
Uber’s annual revenues
in San Francisco
$45 billion
Valuation of three year
old Chinese smartphone
maker Xiaomi
$120
billion
Value of augmented
reality market
by 2020
$7.1 trillion
Worldwide market of
The Internet of Things
by 2020
The C-suite’s topic-du-jour, disruptive
innovation, is leading to thrilling, seismic
shifts across the world’s industries and
markets. At the same time, it’s sending
shivers down the spines of slow-adapting
players who cling to models from a by-gone
era and live in paralysing fear of being
‘Netflixed’. And it’s not only the client-side
riding the disruption wave. As technological
change continues apace, creative, media
and PR agencies have had to invest
time and money to meet the challenges
thrown up by disruptive innovation, to
ensure they’re offering clients true market-
changing thinking based on technological
expertise, rich insights, innovative
communications and breakthrough
creative ideas.
Successful marketing in the digital age
has become a magic, heady mix of
inputs such as storytelling, influencer
relationship-building, employee advocacy,
multi-stakeholder messaging, online
community management, amplification
of third party endorsement. These are all
elements that we believe have always been
at the very core of PR. Combine these
inputs with outstanding, heart-stopping
creativity and highly targeted media
buying and, together, it’s a potent force.
Success for brands today lies in a seamless
amalgam of activities, separated not by
disciplines, but instead bound by a focus
on people, and how best to communicate
with them. There was never more impetus
for greater integration between marketing,
and communications.
Was there ever a more
exciting or challenging
time in business
than today?
At MSLGROUP, we work with a number
of well-recognized disruptive companies
and brands around the world, as well as
companies with rich heritage who are now
retooling for the future. We also work with
dynamic Asian brands taking pole position
on today’s global stage and pioneering
tech start-ups who we are increasingly
connecting with many of the global
brands we represent. To all these clients
we promise a deep understanding of how
to build connections between technical
innovation, brand marketing and people-
centric communications.
In this short publication, we touch upon,
among others, some of these clients’
stories and share our perspective on how
disruption plays out as a force within
markets: the creative process, technology
and communications. And to the marketing
communications industry, we lay down the
gauntlet: disruptive innovation offers us
all an opening to embrace the polar shift
towards a greater integration combining
dissimilar currents into explosive ideas,
the chance to help create ever-more
meaningful partnerships for our clients,
and the prospect of delivering insight-fueled
foresight to help companies predict what’s
over the horizon. The speed of change has
never been faster. The bar has never been
higher, the opportunity has never been
greater. We hope you enjoy the read.
Trudi Harris
Chief Communications Officer,
MSLGROUP
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 01
The combined forces of tech’s rapid advance and
our chronic addiction to smartphones have made
it easier for digital challenger brands to transform
our behaviour in fundamental ways. Look at how
platforms like Kickstarter have democratised
investing, enabling anyone to own a stake in
products or projects. Take TV. It’s no coincidence
that the term ‘binge-watching’ entered the Oxford
English Dictionary in 2013, the same year as TV
streaming service Netflix unleashed its incredibly
binge-worthy House of Cards. Think of the range
of accommodation we can select on Airbnb when
we go on holiday. And, in an example of innovative
disruption that’s been so phenomenal that its
brand name has become a byword for it, Uber has
transformed how we get around. As Renee Wilson,
chief client officer at MSLGROUP, and chair of the
PR Lions jury in Cannes in 2014 observes: “Brands
like Netflix, Uber and Airbnb have completely
changed the game for consumers and the industry
alike through their growth and massive uptake.
Things will never go back to the traditional
marketplaces that they were. Never.”
02 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 03
Market
Disruption
Today’s consumer wants
convenience and personalisation
and if they don’t get it from your brand,
they’ll look elsewhere.
“
—
Renee Wilson,
Chief Client Officer, MSLGROUP
While some industries remain ripe for disruption,
others have already experienced more than their
fair share. The music industry has been repeatedly
disrupted over the last few decades: the decline
of hard copy sales was then succeeded by more
people accessing music via streaming. Apple,
having played a key part in changing our music
consumption habits, is now itself on the receiving
end of innovative disruption from, among others,
Chinese smartphone brand Xiaomi. This three-
year old company is currently valued at $45bn –
yes, even more than Uber – making it one of the
most valuable private tech companies in the world.
Not content with stealing Apple’s lunch, Xiaomi
has also launched competitively priced rivals to
GoPro and Jawbone products.
Involving Users
Whether it’s a Xiaomi smartphone that
resembles an iPhone but costs half the
price or using Uber Rush to ship a parcel
across town, disruptive innovation starts
with the user experience. As Renee Wilson
says: ‘Today’s consumer wants convenience
and personalisation and if they don’t get it
from your brand, they’ll look elsewhere.’
People are intolerant of poor service and
want reliable, usually app-based convenient
services. Wilson says: ‘If you make her life
easier [with services] like finding a taxi,
getting food for dinner or booking a hotel
room based on smart data points like habits
and preferences you will win her over.’
Some disruptive businesses go further,
making their users an integral part of the
brand experience. Uber rates drivers and
passengers, so if you misbehave in the
back of an Uber car, good luck finding
a driver to pick you up. Airbnb would be
nothing without its community of guests
and hosts who, once again, rate each other.
And people have welcomed this opportunity
to show off how well behaved they are:
in seven years, Airbnb has established
a presence in 192 countries. Hilton hotel
group, a 96 year old company, is in 78.
Meanwhile, in its native San Francisco,
Uber’s revenues are $500 million per year,
making it three times the size of the
taxi market. Never mind disruptive,
that’s explosive.
Wilson adds that, by involving users and
handling their data in a way that offers
a more personalised service, disruptive
businesses earn more consumer trust.
That value exchange then evolves into
a virtuous circle, supplying the consumer
with a trusted service that they’re happy
to recommend and assisting the rapid
growth of the disruptor. She says:
‘Disruptive companies use data to more
precisely personalise their services
which make the consumer feel like the
company really understands them, and
encourages trust. Because people trust
the company more, they are more likely to
share more data the next time they use the
service/product, so the cycle starts again.’
04 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
Changing the rules
Many messaging apps have already
been disruptive by building trust through
offering convenient services like organising
transport or seamless purchase and
payment. Japanese messaging app Line
now has 181 million active users across
the globe, and users in certain territories
can use it to order and pay for groceries
and cabs. Globally, messaging app
WhatsApp now has 800 million users
and Snapchat has 100 million active
daily users. Between them, messaging
apps will account for 75% of all mobile
messaging traffic by 2018, according
to Juniper Research. Yet its Tencent-
owned WeChat which has been the most
disruptive, winning over 549 million
Chinese smartphone owners by morphing
from a messaging app into more of a life-
management app, leaving a wealth of
apps with singular functions in its wake.
Alice Hu, deputy Asia digital lead at
MSLGROUP in Shanghai, comments:
‘WeChat is ingrained in everyday life.
There’s a service component and that
ability to make your life easier has been
a dramatic shift. The barriers are reduced
from jumping from one app to another,
so all your information is in one place
under one log-in which is why it’s been
so popular.’
She continues: ‘Throughout the
day WeChat is the main source of
communications: Asian messaging apps
are how colleagues, friends and clients
talk minute to minute.’ According to Hu,
WeChat’s role as a digital companion has
taken a year. And it’s disrupting traditional
business practices too: whereas the
exchange of business cards used to be an
established part of making connections,
that tradition is being replaced by scanning
a QR code that gives new contacts
your WeChat ID. The app’s group chats
feature has become a popular internal
communications platform for Chinese
enterprises. In fact, WeChat became
so integrated so quickly into Chinese
work culture that, in September 2014,
it introduced an Enterprise Account with
business users in mind. Given WeChat’s
exponential take-up, it was no surprise
to see Apple vice president Kevin Lynch
accessing it, along with Uber and Twitter,
when he demonstrated the Apple Watch
for the first time.
800m
WhatsApp users
100m
Snapchat daily
active users
75%
of all mobile messaging
traffic by 2018
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 05
WeChat is
ingrained in
everyday life.
There’s a service
component and
that ability to
make your life
easier has been
a dramatic shift.
“
—
Alice Hu,
Deputy Asia Digital Lead,
MSLGROUP Shanghai
Communications
Disruption
If you analyse what a brand
or organisation needs to deliver
marketing success in the digital age,
the result is a long list of PR outputs.
“
—
James Warren,
Head of Digital, UK and EMEA,
MSLGROUP
06 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
One of the biggest changes has been the
changing role of PR to become much more
central to a brand’s business strategy.
As James Warren, head of digital UK and
EMEA at MSLGROUP points out: ‘If you
analyse what a brand or organisation needs
to deliver marketing success in the digital
age, the result is a long list of PR outputs.’
What’s more, PR agencies are frequently
the first agency to which a technology
start-up reaches out. As these nascent
companies seek to secure venture funding
and publicise their story, PR agencies are
often guiding them behind the scenes.
That gives PR agencies something
of an edge over other communications
companies in terms of understanding new
tech. ‘PR is on the frontline of disruption,’
says Jeff Melton, SVP, global technology
& platforms at MSLGROUP. He explains:
‘Other agencies will be able to get you
reach, impressions and frequency, but will
people trust the message? Is it credible?
That’s where PR and communications
comes in: we are better at getting people’s
attention. We earn trust because we bring
the message of emerging companies
and it’s much more credible. And that’s
probably going to be the most important
thing that a young emerging disrupting
company needs. They may not need mass
and frequency, but they do need credibility.’
The communications industry has been
far from immune to the forces of innovative
disruption. Its tectonic plates are constantly
shifting in order to represent an evolving
landscape of brands where stalwarts rub
shoulders with startups.
Integrated strategy
Historically, PR and other communications
disciplines like advertising used to
collaborate rarely on client business. But
as innovative disruption has presented
more challenges and opportunities, clients
are requiring more integrated strategy
and execution from their communications
partners. Melton points out: ‘It’s less about
roles and responsibilities and more about
an agency’s ability to put together the
pieces in the smartest way. That’s what
clients are seeking.’
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 07
PR is on the
frontline of
disruption;
other agencies
will be able to
get you reach,
impressions
and frequency,
but will people
trust the
message? Is it
credible? That’s
where PR and
communications
comes in...
“
—
Jeff Melton,
SVP, Global Technology & Platforms,
MSLGROUP
Creative
Disruption
Consumers are taking more control of how
they spend their time and where they let
brands in. It’s about making your brand part
of their lifestyles, not the other way around.
“
—
Renee Wilson,
Chief Client Officer, MSLGROUP
08 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 09
Detaching from traditional roles and
responsibilities can spawn incredibly creative
ideas. Reflecting on her chairmanship of the
PR Lions in 2014, Renee Wilson says: ‘Last year
was a real moment in time at the Cannes Lions
International Festival of Creativity as it was clear
there was a blurring of the lines as to what was
PR versus advertising versus digital.’
She makes the point that the campaigns
that really stood out were those that
included elements of disruptive behaviour
or thinking, whether that was the computer-
generated Filipino child Sweetie by
Lemz in Amsterdam, an initiative which
helped identify 1,000 paedophiles from
71 countries, or the PR Grand Prix winning
Scarecrow for restaurant chain Chipotle
which combined a beautiful film with a
gaming element and a mobile coupon to
drive footfall in-store.
From this year’s Cannes entrants, the most
prominent example of creative disruption
is the #LikeAGirl campaign for the Procter
& Gamble sanpro brand Always. Rather
than showing the product and extolling its
protective virtues, #LikeAGirl kicked off a
conversation with a powerful piece of video
by director Lauren Greenfield. This social
experiment invited both women and pre-
pubescent girls to undertake certain actions
like run or throw a ball or kick ‘like a girl’.
The women initially did it in a ridiculous
way, while the young girls were strong and
serious. When the women got another shot,
having reconsidered the phrase ‘like a girl’,
their second take was more confident and
self-assured.
This social experiment has amassed a total
view count of more than 85 million since
#LikeAGirl launched in June 2014. Over
the last year, it’s reached half the world’s
population, generating 4.58 billion media
impressions in 150 countries. What’s more,
81% of 16-24-year old women support
Always in reclaiming ‘like a girl’ as an
inspiring statement as opposed to an insult.
With the audience
#LikeAGirl is such a creative tour de
force because it taps into wider current
debates around gender equality and female
empowerment. Brands, with the help of
communications agencies who are plugged
into the zeitgeist, can contribute to these
discussions with a strong – and potentially
disruptive – point of view. And that means
not just judging the tone of the content
correctly but also the context in which
it’s being received. Pascal Beucler, senior
vice president and chief strategy officer
at MSLGROUP, says: ‘We need to be on
people’s timeline, we need to be in the
kitchen when they’re cooking, or on the
train when they’re travelling. We need to
be where they are and engaging with them,
matching the right content on the right
channel in the right language, creating
a connection and a conversation.’
Audience participation characterises a
landscape where disruption is becoming
the norm. Just look at the amount of
information people share on Airbnb
about their home and its environs, or
how an Uber ride can be personalised,
with passengers even able to select the
music they want to soundtrack their
journey. ‘People trust and support these
brands because they’ve been created in
an authentic way,’ says Renee Wilson.
‘Consumers are taking more control about
how they spend their time and where they
let brands in. It’s about making your brand
part of their lifestyles, not the other
way around.’
81%
of 16-24-year old
women support Always
in reclaiming ‘like a girl’
as an inspiring statement
as opposed to an insult.
1000
online groomers
across 72 countries
were identified by the
computer generated
Sweetie campaign
10 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
Technological
Disruption
If you are a tech company, what makes
people interested and attracted to you is
creativity. You need to connect tech and
people through emotion.
“
—
Pascal Beucler,
Chief Strategy Officer, MSLGROUP
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 11
Tangible Disruption
In the coming years, this will happen
when people try a holiday before they
book it using virtual reality headsets like
Facebook-owned Oculus Rift, which will
start shipping in early 2016. It’s already
starting to happen in the automotive
industry, with car brands using virtual
reality to help potential buyers get a
sense of a car before taking it for a real
test drive. And brands continue to work
with augmented reality specialists such
as Blippar that enable those who’ve
downloaded an app to access an additional
layer of content to further engagement.
Blippar, which raised $45m from US
fund Qualcomm Ventures in March, has
apparently been downloaded onto the
screens of more than 25% of the UK’s
smartphone-owners. Such companies will
be at the forefront of the augmented reality
market which is predicted to be worth
$120bn by 2020, according to Digi-Capital.
Companies in the virtual/augmented
reality space will undoubtedly disrupt
more conventional brand selection and
purchasing patterns in increasingly
sophisticated ways. Yet some of the most
disruptive tech can also belong to the
Internet of Things. In other words, it’s a
physical product that’s connected to the
internet. The Internet of Things is estimated
to be worth $7.1 trillion by 2020, according
to IDC, and it’s no surprise to see one of
retail’s most disruptive forces, Amazon,
at its helm.
Emerging tech such as wearables, artificial
intelligence and virtual reality will mean new
dynamics in disruption in the coming years.
Analyst firm Global Equities Research
claims that Apple has sold seven million
smart watches so far and the wearables
market, according to Juniper Research,
will reach $53.2 billion by 2019. Meanwhile,
2015 sales of virtual reality devices are
forecasted at 5.7m units for 2015, rising
to 23.8m in 2018, according to KZero,
a consulting firm specialising in the
virtual space. At the same time, artificial
intelligence will evolve from Google Now,
Siri or Cortana on your smartphone to next-
generation systems supplied by companies
such as IBM alongside startups like Scaled
Inference and MetaMind Inc. Facebook,
Google, Baidu and Chinese ecommerce
giant Alibaba are among those investing
in the tech.
Branding, not bandwagon-jumping
For brands, technological disruption
means identifying appropriate partnerships
that help communicate something about
their brand as opposed to jumping on
the latest bandwagon. Oreo’s Trending
Vending Machine at SXSW Interactive
in 2014, for instance, invited attendees to
create, print, and eat customised Oreos
that were based on trending Twitter
conversations. A vending machine,
created by Maya Design, enabled people
to customise their Oreo using a technique
similar to a 3D printer. The Oreo Trending
Vending Lounge says something powerful
about Oreo, that it’s listening, it’s interested
in what its audience has to say and is
able to react to it.
$53.2 bn
reached in 2019 by
the wearables market
7 million
Apple Watches claimed to
have been sold by Apple
12 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 13
The Amazon Button enables people to
touch a connected branded button (for
instance, for Bounty kitchen towel or Tide
detergent) to re-order it, eliminating the
need for either written or digital shopping
lists and making people brand-loyal at the
same time. That’s every packaged goods
marketer’s dream and it’s already here.
And even that tech is likely to be disrupted
as Amazon’s Dash Replenishment
Service (DRS) will one day be integrated
into household appliances. Amazon is
apparently already working with Whirlpool
on a washer dryer that automatically
orders detergent when supplies run low,
while Brother is building a printer that
can automatically order ink. Amazon is
innovating so rapidly, it’s disrupting itself
as it goes.
Disrupting the disruptors
One final note, however. While it’s easy to
get swept up in the tidal wave of love and
affection for the disruptors that make our
lives easier, more enjoyable or entertaining,
it’s worth remembering that they are at
constant risk of disruption themselves.
Firstly, with a renewed focus on user
experience (and some smart tech hires),
interesting reinventions are underway.
For instance, far from Marriott licking its
wounds as holiday-makers use Airbnb
and business travellers try new services
such as Breather, it is now enabling people
to communicate with hotel staff via a
messaging app prior to and during their
stay. It also invested in a turbo-charged
Oculus Rift experience to sell not just
particular destinations but also a glimpse
of grandeur synonymous with a stay in a
Marriott, reminding people about what they
like about staying in a hotel. Secondly, new
tech will come along which will unnerve
the disruptors. What will happen to Uber
drivers when driverless cars become more
commonplace? And as the most popular
aspect of disruptive dating app Tinder, the
swiping, has now been emulated by a range
of copycats including crowd-funding app
Tendr, the novelty is starting to wane.
We are in the privileged – perhaps even
slightly spoilt – position of witnessing so
much technological advance that we now
come to expect new types of service and
continuous innovation, and are impatient
when businesses don’t understand that.
As Pascal Beucler puts it: ‘Transformation
is no longer an option but an urgent
necessity for clients. It’s difficult to believe
that we can still play the game we were
playing a while ago. At some point we
have to transform and change.’
$7.1 trillion
The Internet of Things
estimated worth by 2020
Transformation is no longer an
option but an urgent necessity for
clients. It’s difficult to believe that
we can still play the game we were
playing a while ago. At some point
we have to transform and change.
“
—
Pascal Beucler,
Chief Strategy Officer, MSLGROUP
25%
of UK’s smartphone
owners downloaded
blippar onto their screens
14 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
In a social media age, disruptive ideas,
products and services spread when
trustworthy people recommend them.
Employees are often neglected as power advocates for a brand, but
PayPal grew its business substantially when it realised that many of its
15,000 employees were using cards or other payment options instead of
PayPal. So it invited them to Be The Customer, challenging and urging
them to be active brand advocates PayPal product users.
This long-term commitment saw employees awarded points when
they used PayPal or found bugs and suggested improvements. In just
nine months, nearly 7,000 employees had signed up, generating more
than $22 million in payment volume. PayPal payments at employee
cafeterias, which had accounted for only 13% of sales, had more than
quadrupled to 66% within the first four months. Employees identified
at least 300 product bugs and suggested 75% more ideas for product
improvements than the previous year. In the first nine months
of 2014, the company acted on these, improving the experience
for 95 million customer transactions and resulting in $2.5 billion in
additional revenue. Employees became so passionate about referring
merchants to accept PayPal that 8,600 employees participated in
PayPal It, the merchant referral programme, generating 369,000 leads
and 114 new merchants who generated $6m in payment volume.
Be The Customer helped contribute to 2014 revenue growth of 19%
over the same period in 2013. Be The Customer scooped a 2015
PRWeek Global award for Employee Communications and PRSA
Big Apple Award for Reputation and Brand Management.
7000
PayPal employees
signed up
75%
increase in ideas
suggested by PayPal
employees
95 million
customer transactions
were improved by the
additional ideas put
in place
$2.5 billion
additional revenue from
the customer transactions
PayPal:
Be The Customer
Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 15
‘Healthcare will go through extreme transformation. There are
many problems that haven’t yet been solved and there are now
more companies than ever that are seeing the opportunities to
solve them from a tech standpoint,’ says Jeff Melton, SVP, global
technology & platforms at MSLGROUP. Melton cites the example
of Apple’s ResearchKit, launched in March 2015. This open source
software framework is designed for medical and health research
to assist doctors and scientists gather data from participants
using iPhone apps. It has the potential to transform an iPhone
into a powerful tool for medical research and, by launch in March
2015, it had already has already partnered specialists in asthma,
cancer, cardiovascular health and Parkinson’s Disease. ‘Partnering
these four incredibly reputable establishments will show how
Apple devices can serve as research tools to gather data to solve
problems,’ predicts Melton.
But healthcare’s transformation won’t begin and end with Apple.
Other players such as Google, Microsoft and IBM are all keen
to enter the global healthcare industry – worth $3.8 trillion,
according to Plunkett Research – with software that could disrupt
conventional healthcare practices. What’s more, they’re jostling
with thousands of startups, particularly from Asia.
Bronwen Andrews, MSLGROUP’s head of EMEA business
development and healthcare says: ‘Asia didn’t used to be a
player in healthcare, but now there is a huge amount of innovation
in healthcare in that region. South Korea in particular is a big
player. That country has a huge government initiative encouraging
research and development within Asia and many companies there
have been enjoying double digit growth over the last five years.’
Yet disruption brings with it certain issues, particularly in a
sector as sensitive as health. Firstly, there’s a need to balance
the new and the next with respect for processes that keep us
safe. Secondly, concerns over privacy are perhaps even more
prominent in healthcare than in finance. ‘Disruptive companies
are fast moving companies,’ says Andrews. Yet how those newer
companies fit into ways of working that are trusted by patients
is challenging, particularly when it’s a company with no proven
track record in Europe or North America.
She says: ‘These companies don’t want to wait around. They
want partners who are their eyes and ears in the market who
can offer speed and strategy. We can be influential in helping
them to navigate new markets.’
Healthcare:
‘Extreme Transformation’
16 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
About
MSLGROUP
MSLGROUP is Publicis Groupe’s strategic
communications and engagement group, advisors
in all aspects of communication strategy: from
consumer PR to financial communications, from
public affairs to reputation management and from
crisis communications to experiential marketing
and events.
With more than 3,000 people across close to
100 offices worldwide, MSLGROUP is also the
largest PR network in Europe, fast-growing China
and India. The group offers strategic planning and
counsel, insight-guided thinking and big, compelling
ideas – followed by thorough execution.
www.mslgroup.com
MSLGROUP.COM
If you would like to talk to MSLGROUP about how we
can support you in your business transformation,
please contact Trudi Harris, Chief Communications Officer,
trudi.harris@mslgroup.com

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Inside the Driving Forces of Disruptive Innovation

  • 1. Shaping and Scaling a Whole New World — Inside the Driving Forces of Disruptive Innovation
  • 2. Numbers that define today’s transformative world 549m WeChat users in China 7million Apple smart watches sold (Global Equities Research) 85m Views of #LikeAGirl since June 2014 23.8m Virtual reality devices sold by 2018 75% Of all mobile messaging traffic by 2018 will be via messaging apps 450m People using mobile payments by 2017 $53.2bn Value of wearables market by 2019 (Juniper Research) $500m Uber’s annual revenues in San Francisco $45 billion Valuation of three year old Chinese smartphone maker Xiaomi $120 billion Value of augmented reality market by 2020 $7.1 trillion Worldwide market of The Internet of Things by 2020
  • 3. The C-suite’s topic-du-jour, disruptive innovation, is leading to thrilling, seismic shifts across the world’s industries and markets. At the same time, it’s sending shivers down the spines of slow-adapting players who cling to models from a by-gone era and live in paralysing fear of being ‘Netflixed’. And it’s not only the client-side riding the disruption wave. As technological change continues apace, creative, media and PR agencies have had to invest time and money to meet the challenges thrown up by disruptive innovation, to ensure they’re offering clients true market- changing thinking based on technological expertise, rich insights, innovative communications and breakthrough creative ideas. Successful marketing in the digital age has become a magic, heady mix of inputs such as storytelling, influencer relationship-building, employee advocacy, multi-stakeholder messaging, online community management, amplification of third party endorsement. These are all elements that we believe have always been at the very core of PR. Combine these inputs with outstanding, heart-stopping creativity and highly targeted media buying and, together, it’s a potent force. Success for brands today lies in a seamless amalgam of activities, separated not by disciplines, but instead bound by a focus on people, and how best to communicate with them. There was never more impetus for greater integration between marketing, and communications. Was there ever a more exciting or challenging time in business than today? At MSLGROUP, we work with a number of well-recognized disruptive companies and brands around the world, as well as companies with rich heritage who are now retooling for the future. We also work with dynamic Asian brands taking pole position on today’s global stage and pioneering tech start-ups who we are increasingly connecting with many of the global brands we represent. To all these clients we promise a deep understanding of how to build connections between technical innovation, brand marketing and people- centric communications. In this short publication, we touch upon, among others, some of these clients’ stories and share our perspective on how disruption plays out as a force within markets: the creative process, technology and communications. And to the marketing communications industry, we lay down the gauntlet: disruptive innovation offers us all an opening to embrace the polar shift towards a greater integration combining dissimilar currents into explosive ideas, the chance to help create ever-more meaningful partnerships for our clients, and the prospect of delivering insight-fueled foresight to help companies predict what’s over the horizon. The speed of change has never been faster. The bar has never been higher, the opportunity has never been greater. We hope you enjoy the read. Trudi Harris Chief Communications Officer, MSLGROUP Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 01
  • 4. The combined forces of tech’s rapid advance and our chronic addiction to smartphones have made it easier for digital challenger brands to transform our behaviour in fundamental ways. Look at how platforms like Kickstarter have democratised investing, enabling anyone to own a stake in products or projects. Take TV. It’s no coincidence that the term ‘binge-watching’ entered the Oxford English Dictionary in 2013, the same year as TV streaming service Netflix unleashed its incredibly binge-worthy House of Cards. Think of the range of accommodation we can select on Airbnb when we go on holiday. And, in an example of innovative disruption that’s been so phenomenal that its brand name has become a byword for it, Uber has transformed how we get around. As Renee Wilson, chief client officer at MSLGROUP, and chair of the PR Lions jury in Cannes in 2014 observes: “Brands like Netflix, Uber and Airbnb have completely changed the game for consumers and the industry alike through their growth and massive uptake. Things will never go back to the traditional marketplaces that they were. Never.” 02 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 5. Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 03 Market Disruption Today’s consumer wants convenience and personalisation and if they don’t get it from your brand, they’ll look elsewhere. “ — Renee Wilson, Chief Client Officer, MSLGROUP
  • 6. While some industries remain ripe for disruption, others have already experienced more than their fair share. The music industry has been repeatedly disrupted over the last few decades: the decline of hard copy sales was then succeeded by more people accessing music via streaming. Apple, having played a key part in changing our music consumption habits, is now itself on the receiving end of innovative disruption from, among others, Chinese smartphone brand Xiaomi. This three- year old company is currently valued at $45bn – yes, even more than Uber – making it one of the most valuable private tech companies in the world. Not content with stealing Apple’s lunch, Xiaomi has also launched competitively priced rivals to GoPro and Jawbone products. Involving Users Whether it’s a Xiaomi smartphone that resembles an iPhone but costs half the price or using Uber Rush to ship a parcel across town, disruptive innovation starts with the user experience. As Renee Wilson says: ‘Today’s consumer wants convenience and personalisation and if they don’t get it from your brand, they’ll look elsewhere.’ People are intolerant of poor service and want reliable, usually app-based convenient services. Wilson says: ‘If you make her life easier [with services] like finding a taxi, getting food for dinner or booking a hotel room based on smart data points like habits and preferences you will win her over.’ Some disruptive businesses go further, making their users an integral part of the brand experience. Uber rates drivers and passengers, so if you misbehave in the back of an Uber car, good luck finding a driver to pick you up. Airbnb would be nothing without its community of guests and hosts who, once again, rate each other. And people have welcomed this opportunity to show off how well behaved they are: in seven years, Airbnb has established a presence in 192 countries. Hilton hotel group, a 96 year old company, is in 78. Meanwhile, in its native San Francisco, Uber’s revenues are $500 million per year, making it three times the size of the taxi market. Never mind disruptive, that’s explosive. Wilson adds that, by involving users and handling their data in a way that offers a more personalised service, disruptive businesses earn more consumer trust. That value exchange then evolves into a virtuous circle, supplying the consumer with a trusted service that they’re happy to recommend and assisting the rapid growth of the disruptor. She says: ‘Disruptive companies use data to more precisely personalise their services which make the consumer feel like the company really understands them, and encourages trust. Because people trust the company more, they are more likely to share more data the next time they use the service/product, so the cycle starts again.’ 04 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 7. Changing the rules Many messaging apps have already been disruptive by building trust through offering convenient services like organising transport or seamless purchase and payment. Japanese messaging app Line now has 181 million active users across the globe, and users in certain territories can use it to order and pay for groceries and cabs. Globally, messaging app WhatsApp now has 800 million users and Snapchat has 100 million active daily users. Between them, messaging apps will account for 75% of all mobile messaging traffic by 2018, according to Juniper Research. Yet its Tencent- owned WeChat which has been the most disruptive, winning over 549 million Chinese smartphone owners by morphing from a messaging app into more of a life- management app, leaving a wealth of apps with singular functions in its wake. Alice Hu, deputy Asia digital lead at MSLGROUP in Shanghai, comments: ‘WeChat is ingrained in everyday life. There’s a service component and that ability to make your life easier has been a dramatic shift. The barriers are reduced from jumping from one app to another, so all your information is in one place under one log-in which is why it’s been so popular.’ She continues: ‘Throughout the day WeChat is the main source of communications: Asian messaging apps are how colleagues, friends and clients talk minute to minute.’ According to Hu, WeChat’s role as a digital companion has taken a year. And it’s disrupting traditional business practices too: whereas the exchange of business cards used to be an established part of making connections, that tradition is being replaced by scanning a QR code that gives new contacts your WeChat ID. The app’s group chats feature has become a popular internal communications platform for Chinese enterprises. In fact, WeChat became so integrated so quickly into Chinese work culture that, in September 2014, it introduced an Enterprise Account with business users in mind. Given WeChat’s exponential take-up, it was no surprise to see Apple vice president Kevin Lynch accessing it, along with Uber and Twitter, when he demonstrated the Apple Watch for the first time. 800m WhatsApp users 100m Snapchat daily active users 75% of all mobile messaging traffic by 2018 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 05 WeChat is ingrained in everyday life. There’s a service component and that ability to make your life easier has been a dramatic shift. “ — Alice Hu, Deputy Asia Digital Lead, MSLGROUP Shanghai
  • 8. Communications Disruption If you analyse what a brand or organisation needs to deliver marketing success in the digital age, the result is a long list of PR outputs. “ — James Warren, Head of Digital, UK and EMEA, MSLGROUP 06 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 9. One of the biggest changes has been the changing role of PR to become much more central to a brand’s business strategy. As James Warren, head of digital UK and EMEA at MSLGROUP points out: ‘If you analyse what a brand or organisation needs to deliver marketing success in the digital age, the result is a long list of PR outputs.’ What’s more, PR agencies are frequently the first agency to which a technology start-up reaches out. As these nascent companies seek to secure venture funding and publicise their story, PR agencies are often guiding them behind the scenes. That gives PR agencies something of an edge over other communications companies in terms of understanding new tech. ‘PR is on the frontline of disruption,’ says Jeff Melton, SVP, global technology & platforms at MSLGROUP. He explains: ‘Other agencies will be able to get you reach, impressions and frequency, but will people trust the message? Is it credible? That’s where PR and communications comes in: we are better at getting people’s attention. We earn trust because we bring the message of emerging companies and it’s much more credible. And that’s probably going to be the most important thing that a young emerging disrupting company needs. They may not need mass and frequency, but they do need credibility.’ The communications industry has been far from immune to the forces of innovative disruption. Its tectonic plates are constantly shifting in order to represent an evolving landscape of brands where stalwarts rub shoulders with startups. Integrated strategy Historically, PR and other communications disciplines like advertising used to collaborate rarely on client business. But as innovative disruption has presented more challenges and opportunities, clients are requiring more integrated strategy and execution from their communications partners. Melton points out: ‘It’s less about roles and responsibilities and more about an agency’s ability to put together the pieces in the smartest way. That’s what clients are seeking.’ Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 07 PR is on the frontline of disruption; other agencies will be able to get you reach, impressions and frequency, but will people trust the message? Is it credible? That’s where PR and communications comes in... “ — Jeff Melton, SVP, Global Technology & Platforms, MSLGROUP
  • 10. Creative Disruption Consumers are taking more control of how they spend their time and where they let brands in. It’s about making your brand part of their lifestyles, not the other way around. “ — Renee Wilson, Chief Client Officer, MSLGROUP 08 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 11. Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 09 Detaching from traditional roles and responsibilities can spawn incredibly creative ideas. Reflecting on her chairmanship of the PR Lions in 2014, Renee Wilson says: ‘Last year was a real moment in time at the Cannes Lions International Festival of Creativity as it was clear there was a blurring of the lines as to what was PR versus advertising versus digital.’ She makes the point that the campaigns that really stood out were those that included elements of disruptive behaviour or thinking, whether that was the computer- generated Filipino child Sweetie by Lemz in Amsterdam, an initiative which helped identify 1,000 paedophiles from 71 countries, or the PR Grand Prix winning Scarecrow for restaurant chain Chipotle which combined a beautiful film with a gaming element and a mobile coupon to drive footfall in-store. From this year’s Cannes entrants, the most prominent example of creative disruption is the #LikeAGirl campaign for the Procter & Gamble sanpro brand Always. Rather than showing the product and extolling its protective virtues, #LikeAGirl kicked off a conversation with a powerful piece of video by director Lauren Greenfield. This social experiment invited both women and pre- pubescent girls to undertake certain actions like run or throw a ball or kick ‘like a girl’. The women initially did it in a ridiculous way, while the young girls were strong and serious. When the women got another shot, having reconsidered the phrase ‘like a girl’, their second take was more confident and self-assured. This social experiment has amassed a total view count of more than 85 million since #LikeAGirl launched in June 2014. Over the last year, it’s reached half the world’s population, generating 4.58 billion media impressions in 150 countries. What’s more, 81% of 16-24-year old women support Always in reclaiming ‘like a girl’ as an inspiring statement as opposed to an insult. With the audience #LikeAGirl is such a creative tour de force because it taps into wider current debates around gender equality and female empowerment. Brands, with the help of communications agencies who are plugged into the zeitgeist, can contribute to these discussions with a strong – and potentially disruptive – point of view. And that means not just judging the tone of the content correctly but also the context in which it’s being received. Pascal Beucler, senior vice president and chief strategy officer at MSLGROUP, says: ‘We need to be on people’s timeline, we need to be in the kitchen when they’re cooking, or on the train when they’re travelling. We need to be where they are and engaging with them, matching the right content on the right channel in the right language, creating a connection and a conversation.’ Audience participation characterises a landscape where disruption is becoming the norm. Just look at the amount of information people share on Airbnb about their home and its environs, or how an Uber ride can be personalised, with passengers even able to select the music they want to soundtrack their journey. ‘People trust and support these brands because they’ve been created in an authentic way,’ says Renee Wilson. ‘Consumers are taking more control about how they spend their time and where they let brands in. It’s about making your brand part of their lifestyles, not the other way around.’ 81% of 16-24-year old women support Always in reclaiming ‘like a girl’ as an inspiring statement as opposed to an insult. 1000 online groomers across 72 countries were identified by the computer generated Sweetie campaign
  • 12. 10 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 13. Technological Disruption If you are a tech company, what makes people interested and attracted to you is creativity. You need to connect tech and people through emotion. “ — Pascal Beucler, Chief Strategy Officer, MSLGROUP Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 11
  • 14. Tangible Disruption In the coming years, this will happen when people try a holiday before they book it using virtual reality headsets like Facebook-owned Oculus Rift, which will start shipping in early 2016. It’s already starting to happen in the automotive industry, with car brands using virtual reality to help potential buyers get a sense of a car before taking it for a real test drive. And brands continue to work with augmented reality specialists such as Blippar that enable those who’ve downloaded an app to access an additional layer of content to further engagement. Blippar, which raised $45m from US fund Qualcomm Ventures in March, has apparently been downloaded onto the screens of more than 25% of the UK’s smartphone-owners. Such companies will be at the forefront of the augmented reality market which is predicted to be worth $120bn by 2020, according to Digi-Capital. Companies in the virtual/augmented reality space will undoubtedly disrupt more conventional brand selection and purchasing patterns in increasingly sophisticated ways. Yet some of the most disruptive tech can also belong to the Internet of Things. In other words, it’s a physical product that’s connected to the internet. The Internet of Things is estimated to be worth $7.1 trillion by 2020, according to IDC, and it’s no surprise to see one of retail’s most disruptive forces, Amazon, at its helm. Emerging tech such as wearables, artificial intelligence and virtual reality will mean new dynamics in disruption in the coming years. Analyst firm Global Equities Research claims that Apple has sold seven million smart watches so far and the wearables market, according to Juniper Research, will reach $53.2 billion by 2019. Meanwhile, 2015 sales of virtual reality devices are forecasted at 5.7m units for 2015, rising to 23.8m in 2018, according to KZero, a consulting firm specialising in the virtual space. At the same time, artificial intelligence will evolve from Google Now, Siri or Cortana on your smartphone to next- generation systems supplied by companies such as IBM alongside startups like Scaled Inference and MetaMind Inc. Facebook, Google, Baidu and Chinese ecommerce giant Alibaba are among those investing in the tech. Branding, not bandwagon-jumping For brands, technological disruption means identifying appropriate partnerships that help communicate something about their brand as opposed to jumping on the latest bandwagon. Oreo’s Trending Vending Machine at SXSW Interactive in 2014, for instance, invited attendees to create, print, and eat customised Oreos that were based on trending Twitter conversations. A vending machine, created by Maya Design, enabled people to customise their Oreo using a technique similar to a 3D printer. The Oreo Trending Vending Lounge says something powerful about Oreo, that it’s listening, it’s interested in what its audience has to say and is able to react to it. $53.2 bn reached in 2019 by the wearables market 7 million Apple Watches claimed to have been sold by Apple 12 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 15. Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 13 The Amazon Button enables people to touch a connected branded button (for instance, for Bounty kitchen towel or Tide detergent) to re-order it, eliminating the need for either written or digital shopping lists and making people brand-loyal at the same time. That’s every packaged goods marketer’s dream and it’s already here. And even that tech is likely to be disrupted as Amazon’s Dash Replenishment Service (DRS) will one day be integrated into household appliances. Amazon is apparently already working with Whirlpool on a washer dryer that automatically orders detergent when supplies run low, while Brother is building a printer that can automatically order ink. Amazon is innovating so rapidly, it’s disrupting itself as it goes. Disrupting the disruptors One final note, however. While it’s easy to get swept up in the tidal wave of love and affection for the disruptors that make our lives easier, more enjoyable or entertaining, it’s worth remembering that they are at constant risk of disruption themselves. Firstly, with a renewed focus on user experience (and some smart tech hires), interesting reinventions are underway. For instance, far from Marriott licking its wounds as holiday-makers use Airbnb and business travellers try new services such as Breather, it is now enabling people to communicate with hotel staff via a messaging app prior to and during their stay. It also invested in a turbo-charged Oculus Rift experience to sell not just particular destinations but also a glimpse of grandeur synonymous with a stay in a Marriott, reminding people about what they like about staying in a hotel. Secondly, new tech will come along which will unnerve the disruptors. What will happen to Uber drivers when driverless cars become more commonplace? And as the most popular aspect of disruptive dating app Tinder, the swiping, has now been emulated by a range of copycats including crowd-funding app Tendr, the novelty is starting to wane. We are in the privileged – perhaps even slightly spoilt – position of witnessing so much technological advance that we now come to expect new types of service and continuous innovation, and are impatient when businesses don’t understand that. As Pascal Beucler puts it: ‘Transformation is no longer an option but an urgent necessity for clients. It’s difficult to believe that we can still play the game we were playing a while ago. At some point we have to transform and change.’ $7.1 trillion The Internet of Things estimated worth by 2020 Transformation is no longer an option but an urgent necessity for clients. It’s difficult to believe that we can still play the game we were playing a while ago. At some point we have to transform and change. “ — Pascal Beucler, Chief Strategy Officer, MSLGROUP 25% of UK’s smartphone owners downloaded blippar onto their screens
  • 16. 14 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 17. In a social media age, disruptive ideas, products and services spread when trustworthy people recommend them. Employees are often neglected as power advocates for a brand, but PayPal grew its business substantially when it realised that many of its 15,000 employees were using cards or other payment options instead of PayPal. So it invited them to Be The Customer, challenging and urging them to be active brand advocates PayPal product users. This long-term commitment saw employees awarded points when they used PayPal or found bugs and suggested improvements. In just nine months, nearly 7,000 employees had signed up, generating more than $22 million in payment volume. PayPal payments at employee cafeterias, which had accounted for only 13% of sales, had more than quadrupled to 66% within the first four months. Employees identified at least 300 product bugs and suggested 75% more ideas for product improvements than the previous year. In the first nine months of 2014, the company acted on these, improving the experience for 95 million customer transactions and resulting in $2.5 billion in additional revenue. Employees became so passionate about referring merchants to accept PayPal that 8,600 employees participated in PayPal It, the merchant referral programme, generating 369,000 leads and 114 new merchants who generated $6m in payment volume. Be The Customer helped contribute to 2014 revenue growth of 19% over the same period in 2013. Be The Customer scooped a 2015 PRWeek Global award for Employee Communications and PRSA Big Apple Award for Reputation and Brand Management. 7000 PayPal employees signed up 75% increase in ideas suggested by PayPal employees 95 million customer transactions were improved by the additional ideas put in place $2.5 billion additional revenue from the customer transactions PayPal: Be The Customer Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 15
  • 18. ‘Healthcare will go through extreme transformation. There are many problems that haven’t yet been solved and there are now more companies than ever that are seeing the opportunities to solve them from a tech standpoint,’ says Jeff Melton, SVP, global technology & platforms at MSLGROUP. Melton cites the example of Apple’s ResearchKit, launched in March 2015. This open source software framework is designed for medical and health research to assist doctors and scientists gather data from participants using iPhone apps. It has the potential to transform an iPhone into a powerful tool for medical research and, by launch in March 2015, it had already has already partnered specialists in asthma, cancer, cardiovascular health and Parkinson’s Disease. ‘Partnering these four incredibly reputable establishments will show how Apple devices can serve as research tools to gather data to solve problems,’ predicts Melton. But healthcare’s transformation won’t begin and end with Apple. Other players such as Google, Microsoft and IBM are all keen to enter the global healthcare industry – worth $3.8 trillion, according to Plunkett Research – with software that could disrupt conventional healthcare practices. What’s more, they’re jostling with thousands of startups, particularly from Asia. Bronwen Andrews, MSLGROUP’s head of EMEA business development and healthcare says: ‘Asia didn’t used to be a player in healthcare, but now there is a huge amount of innovation in healthcare in that region. South Korea in particular is a big player. That country has a huge government initiative encouraging research and development within Asia and many companies there have been enjoying double digit growth over the last five years.’ Yet disruption brings with it certain issues, particularly in a sector as sensitive as health. Firstly, there’s a need to balance the new and the next with respect for processes that keep us safe. Secondly, concerns over privacy are perhaps even more prominent in healthcare than in finance. ‘Disruptive companies are fast moving companies,’ says Andrews. Yet how those newer companies fit into ways of working that are trusted by patients is challenging, particularly when it’s a company with no proven track record in Europe or North America. She says: ‘These companies don’t want to wait around. They want partners who are their eyes and ears in the market who can offer speed and strategy. We can be influential in helping them to navigate new markets.’ Healthcare: ‘Extreme Transformation’ 16 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation
  • 19. About MSLGROUP MSLGROUP is Publicis Groupe’s strategic communications and engagement group, advisors in all aspects of communication strategy: from consumer PR to financial communications, from public affairs to reputation management and from crisis communications to experiential marketing and events. With more than 3,000 people across close to 100 offices worldwide, MSLGROUP is also the largest PR network in Europe, fast-growing China and India. The group offers strategic planning and counsel, insight-guided thinking and big, compelling ideas – followed by thorough execution. www.mslgroup.com
  • 20. MSLGROUP.COM If you would like to talk to MSLGROUP about how we can support you in your business transformation, please contact Trudi Harris, Chief Communications Officer, trudi.harris@mslgroup.com