OTT: When TV and Digital Video Worlds Collide

OTT is a bit of a buzzword in entertainment right now and it’s more than just a passing trend. If you’re not sure what it is, ‘Over-the-top’ is a term used for streaming film and TV content without having to subscribe to satellite pay-TV services. Why does it matter? Well, we’ve known for a long time that live TV viewing time dropping steadily over the last few years which is why TV networks like Seven are jumping on the OTT bandwagon. 

In the University of Sydney’s Master of Marketing program, students learn the importance of staying on top of trends as well as the necessity of identifying technologies that have the ability to disrupt entire industries. Marketing Matters explores the impact of OTT on the future of entertainment.

TV audiences are fragmented
These days, when it comes to entertainment, we really are spoiled for choice. We have more screens, platforms and channel choices than ever before so it makes perfect sense that Australians engage with broadcast television differently. The latest edition of Australia’s multi-screen report for July to September shows ‘traditional’ television viewing habits remain dominant, but the number of devices and program options is fragmenting audiences.

In an article by Mumbrella, the report describes the changes in viewing behaviour as being most notable during prime time, when the TV is increasingly being used for other purposes beyond just broadcast television during these hours.

“The gradual decline in time spent viewing live and playback TV over the past five years follows the spreading behaviour that screen, content and platform choice enable. ‘’ the report said.

The time Australian TV viewing audiences are spending watching broadcast television in Q3 2016 compared with the same time last year.

The collision of television and digital video

I can almost hear your mind working over the details of how it all works. Trust me, I was wondering as well.

Essentially, OTT can largely be broken down into three different revenue models:

1. SVOD (subscription-based services such as Netflix, Amazon and Hulu);

2. AVOD (free and ad-supported services such as Crackle); and

3. TVOD (transactional services such as iTunes, Vimeo On Demand and Amazon Instant Video that allow users to pay for individual pieces of content)

Australian subscriptions for Over-the-Top (OTT) TV services such as Netflix and Foxtel Play have shown major growth since 2015, with the proportion consumers subscribing to OTT surging from 26 percent last year to 40 percent in 2016, according to new research from subscription, billing and CRM specialist, Paywizard..

Image source: Paywizard

The success of Netflix and other SVODs has prompted TV competitors to adapt. At first, TV networks and studios were happy to make some short-term gains by licensing their older programming to Netflix. But in retrospect, the move probably played a major role in the erosion of linear TV ratings as viewers switched over to on demand instead of the live broadcast. Fun fact: Netflix now has 93.8 million subscribers globally.

Is this the end of the Foxtel monopoly?

Well, no. Not just yet. OTT is much different from pay-TV providers ,whose business model centers on selling customers bundles of popular channels with less popular ones and still make a profit. According to Digiday, traditional satellite TV providers (like Foxtel) will still play an important role in the growth of OTT as they excel in areas that TV networks don’t have an expertise in. Eg. sales, marketing and customer management.

“Part of the reason OTT didn’t develop more quickly than it did is that for a lot of content owners, they were able to solve the tech challenge, but they didn’t have the DNA to sell directly to consumers,” said Simon Jones, vp of marketing at Conviva, a video analytics company.

Finally Seven is venturing into OTT video content delivery

Image source: Yahoo

At the core of Seven’s strategy for Total Video and TV Everywhere lies their new OTT product, 7plus. Encompassing live and on demand, as well as an extended content library from some of the world’s largest studios, exclusive original commissions and binge-watching features, Seven’s newest addition to TV viewing platforms is a total game changer.

“7plus is a cornerstone of our strategy, leveraging our content creation, our marketing strengths and our partnerships to deliver content to our audiences on their terms. Taking our content beyond broadcast television has moved to a new level with the streaming of our market-leading video content live or on demand, on any device.” said CEO Tim Worner.

According to Bandt, 7plus was developed in partnership with many of the world’s leading OTT technology companies to deliver an exceptional user experience for both consumers and advertisers. In addition to the extensive library of premium, brand-safe content and an enormous back catalogue, the service delives Australians live broadcast sport, live streamed and on demand for free.

Besides the fact that it’s free (for now), it’s actually pretty exciting for advertising too. When television is consumed on a live stream, OTT’s addressable TV replaces broadcast ads with targeted digital video ads targeted to the individual user. Described by Bandt as a more personalised and immersive advertising experience Addressable TV combines the scale and engagement of TV with the targeting of digital.

Kurt Burnette, Seven’s chief revenue officer, said: “7plus will take Seven to a new level of content, innovation and engagement. Over the coming months, consumers and advertisers will see Seven dramatically expand the delivery of Australia’s favourite content in new and exciting ways. Addressable TV at scale is a game changer which will deliver marked improvements in targeting and ROI. We’re delighted to be the first Australian network to make it available at scale on all our brands.’’

This just demonstrates the ability of a disruptive technology like OTT to completely redesign the entertainment landscape. The result? A superior user experience that is personalised, targeted, offering much more value than ever. Can you remember life before Netflix? I can’t. And I can also tell you that I can’t remember the last time I watched live broadcast television. Perhaps I’ll give 7plus a go.

Alyce Brierley
Current student in the Master of Marketing program at the University of Sydney Business School

Finding The Key To Brand Meaningfulness

Source: Brand Meaningfulness, Havas Media, 2017

Millennials expect more from brands than any other generation. If you are a Millennial, it probably doesn’t surprise you that 77% demand useful, interesting or meaningful content from brands that go above and beyond their core product. We know that it’s all about the experience (and cool new things). So why does brand meaningfulness matter?

Havas Media’s second annual Meaningful Brands Index,  involving over 134,000 people in 23 countries and their impressions of more than 400 brands confirmed that meaningful brands outperformed the stock market by 120% last year. On the opposite end of the spectrum, it was also found that 74% of consumers wouldn’t care if the brands they use on a daily basis just disappeared. At the University of Sydney Business School’s Master of Marketing, students have studied the evolution of consumers’ relationships with brands and understand that meaningfulness is directly linked to value.

Source: Brand Meaningfulness, Havas Media, 2017

Brand meaningfulness matters.

Brands that go above and beyond their core product/service have the ability to make a positive, tangible impact on their customer’s lives. Currently only 27% of the brands we use today make an effort at improving lives. These brands are rewarded with stronger loyalty and deeper audience connections, which promotes trust. Of all the brands in the world, only 57% are trusted. In Australia, that number is even lower with only 25% of brands earning their consumers’ trust. Surely that’s something that needs to change?

"Instead of putting up another campaign of billboards with celebrities saying 'Buy our shoes, they’ll turn you into a master runner,' Nike+ actually helps makes you a better runner. That’s a constructive way to build a meaningful brand." Umair Haque, Director of the Havas Media Labs

So what exactly is the best way to engage an audience?

Yes, you guessed it. It turns out that engaging audiences through meaningfulness is directly linked to content. The role of content is to educate, inform, entertain, inspire, reward and help customers. Not only that, if it’s meaningful, it can also be a driver of personal well-being.

The numbers don’t lie. There is a direct correlation  of 71% between how a brand performs on improving personal wellbeing and the strength of its content. These days  84% of consumers expect brands to provide content. And that’s not just limited to social media. Associated brand content also includes experiences, entertainment, stories and even solutions which can be broken down into six categories:

1. Inspire
2. Educate
3. Reward
4. Inform 
5. Help 
6. Entertain 

Creating a brand that matters. 

According to Umair Haque, Director of the Havas Media Labs, we should stop selling ‘stuff’ and instead bridge the product to the consumer by being useful with tangible human benefits. Haque explains that it means companies must stop thinking in terms of short term gains and instead rethink the entire organisation:

"That requires rethinking organisation, strategy, and especially marketing. It means rebuilding organizations to measure and track human well-being. It means crafting a human strategy, to deliver higher levels of well-being across a company’s constituencies, at two, five, and 10 year intervals. And it means investing in marketing which doesn’t merely promise shinier stuff to people--but ignites higher levels of human potential in them."

Understands what matters to your audience.

There are personal benefits that tangibly improve people’s lives, collective benefits that contribute to the economy, environment and society as well as functional benefits such as developments in product and service such as quality, price, innovation and craftsmanship.

Take for example IBM’s ads with purpose, ‘Smart Ideas For a Smarter City’ which was  designed to help improve people’s daily lives.

Know the types of benefits that your brand delivers.

Nivea's inherently useful solar advertisement charger goes straight to the heart of what Nivea stands for: encouraging staying safe in the sun while encouraging active and healthy lifestyles. This simple and meaningful act equates to growth in trust and business performance.

Define the type of role you want to play in people’s personal or collective wellbeing.

This all come back to brand archetypes. Is your brand a teacher who educates and connects, a coach who motivates and encourages a healthy lifestyle or a protector?  For the 4th of July, Ancestry.com released a thought-provoking ad about equality to teach the idea that we are all more alike than we think.

Activate through the right mix of touch-points, content and experiences.

In GE’s commercial, “What If Millie Dresselhaus, Female Scientist, Was Treated Like a Celebrity,” the company celebrates Dresselhaus, one of the world’s most accomplished female scientists, who died on Feb. 20, 2017. GE uses content to their advantage, engaging with audiences through social experiences and storytelling. Provoking the audience to question why celebrities like Kim Kardashian, Beyonce, Lady Gaga are in the limelight while scientists, inventors and doctors are rarely celebrated.

Brands who understand the benefits of going beyond product differentiation to actually making a difference are the ones that gain their audiences’ trust. Creating meaningful content has the ability to bridge the gap between brands and customers, communicate value, drive affinity and emotional connections that engage audiences and  propel a brand’s values and messages and most importantly, sales. 

Alyce Brierley
Current student in the Master of Marketing program at the University of Sydney Business School

What’s All This Buzz About Cause-sumption?

As brands are becoming more and more comfortable with supporting causes, the question arises as to when or whether it’s okay for them to get involved or simply stay on the sidelines. The wider trend whereby brands use morality as marketing means that corporate social responsibility (CSR) has now become a mandatory and mainstream practice.

Why you ask? Well it turns out that a whopping 91% of Millennials have indicated that they would switch brands to one associated with a cause, according to a 2015 study by Cone Communications. Are Millennials that different from the older generations? Answer? Yes. There are generational differences in the value drivers. For Millennials, over 70% donate to charities based on their passions. Conversely, 60% of Gen Xer’s and 59% of Baby Boomers, it’s about supporting the local community.

Master of Marketing students at the University of Sydney Business School, learn that in the new model of business, value is co-created with both customers and suppliers. So it makes sense that brands are finally listening to their customers and realising that for most of them, value comes from feeling good about their purchases.

How feel-good purchases are driving cause-sumption. 

Brands allow consumers to express their values by advocating for causes and incorporating CSR schemes into their business models. Feel-good purchases of self-expression have been dubbed cause-sumption. Not just a buzzword, there are real insights supporting the term. "Millennials often use their spending power to express who they are and cause-sumption makes it accessible," says Kirk Olson, VP of Trend Sights at Horizon Media.

Nowadays, it’s largely expected that brands commit to good corporate citizenship. "It used to be that companies would align with charities that shared their same values," says Olson. "Now brands are taking these do-good values and baking into their corporate identities.

Image source: Nonprofit Tech For Good

Do the benefits of cause-sumption outweigh the risk?

The benefits of engaging in cause-sumption marketing can’t be denied. Just take a look at the numbers. In the first ten years of Dove’s Real Beauty campaign, from 2004-2014, sales reportedly grew from $2.5 billion to $4 billion, and the award-winning “Evolution” ad spot earned an estimated $150 million worth of media time. The campaign started a conversation about the diversity in beauty, inspiring women to be comfortable in their own skin. Consumers have been rewarded by feeling good about their choice to support a company that promotes body positivity. While Dove’s profit margins continue to soar. It’s a mutually beneficial relationship.

While this style of marketing makes for memorable brand messages that connect well with consumers, brands should know that playing the cause-sumption card is not without its own reputational risks. Take for example TOMS One for One program that promises to help a person in need for every pair of shoes purchased. Sounds great in theory, right? Turns out, it’s not easy to please everyone. Recently, TOMS have been criticized for replacing local markets and hindering economic development.

Image source: TOMS

Not even Dove is safe from criticism. The Real Beauty campaign has often received scepticism, as you might remember from earlier this month when Dove was forced to apologise for their latest ad blunder. The ad sparked outrage because of its depiction of a black woman turning herself white, resulting in #BoycottDove to spread on Twitter.

Image: Twitter user, Chastity tweets about Dove’s whitewashing campaign.

Around the same time, Dove’s parent company, Unilever, simultaneously produced Axe ads that seem to endorse misogynist commercials for men. Now Unilever is sparking further outrage in Australia with their application to the Fair Work Commission to terminate an expired enterprise agreement covering Streets Ice Cream factory workers in the Western Sydney suburb of Minto.

You have to ask the question, ‘Do they think we’re so easily fooled?’ In the past we may have been duped but these days, consumers are far too connected and involved to ignore brands transgressions. 

Image source: Huffington Post

From cause-sumption to political activism
Today’s political climate is turbulent at best, which means that brands who meddle in politics risk alienating a huge portion of their consumer demographic. Take for example the profound effect of President Trump’s controversial and polarising policies on the US economy.

For the second time this year, following the opposition of Trump’s immigration ban, 162 Silicon Valley tech companies united to file another legal brief against the President’s executive order to restrict the country’s visa program. They argued that the ban, which prohibited migration from seven Muslim-majority countries, was unlawful, discriminatory, and harmful to the economy.

For tech companies who regularly hire highly skilled immigrants, the impact would affect a significant segment of the workforce. In this scenario, lack of public opposition to the ban could be interpreted as implicit support. For those immigrant workers, the silence from their company would ring loud and clear.

Meanwhile, in Australia, Coca Cola announced their support for same-sex marriage. The Kings Cross Coke sign will be lit up in rainbow colours until the results of the marriage equality survey have been announced.

Image source: The Daily Telegraph

In a statement by Coca Cola, the company said it believed in the power of bringing people together.

“Whether it was the struggle for human rights in the United States in the 1960s to a group of young people from many nations on a hilltop in Italy in the 1971, around the world we’ve always stood up for diversity, inclusion and equality. We proudly strive for these qualities in our own business and support these rights for all in society.’’

“We understand that not everyone will agree with our stance and we respect people’s right to hold a different view. We hope they’ll respect our right to support our staff, their family and friends, and our customers and consumers so that all can share the simple happiness of being together.”

So what do you think? Is it better for brands to stay on the sidelines or take the risk of alienating consumers by standing for something? Or is the real risk alienating them by standing for nothing? Whatever the case, the fact still remains that for Millennials at least, there is always a cause worth fighting for and brands have the opportunity to capture their loyalty by offering them the chance to unite. Who knows? Maybe they can actually bring about real change.

Alyce Brierley
Current student in the Master of Marketing program at the University of Sydney Business School

How To Prepare For Life Post-Graduation

University of Sydney graduates have been named the most employable in Australia for the third year running and in the top 5 globally, according to the 2018 QS Graduate Employability Rankings. What is the special ingredient that makes USYD students so special? Is it education, hard work or connections? Or maybe a little bit of everything? MoM looks at how students transition from the classroom to the boardroom with this simple how to guide.

Photo: Lise Lehto, Master of Marketing Graduate October, 2017.

According to the Australian government’s Job Outlook report (2014-2019), the Advertising and Marketing sector is expected to increase its demand for qualified professionals by over twenty percent. This presents an opportunity for graduates to compete with an advantage for leadership roles in the industry. But in a highly saturated industry, the competition calls for a serious game plan.

The University of Sydney’s Master of Marketing program provides a practical learning experience, in a ‘real business’ context, to equip its graduates with the critical-thinking skills to advance their careers. The high quality professional experience gained gives graduates the differential advantage they need to stand out. But do graduates know how to play on their assets and sell themselves to an employer?

I visited The Careers and Student Experience Lounge in the Abercrombie Business School last week and spoke with an incredible career advisor, Yvonne Coburn, who gave me some great career advice. Yvonne is a Senior Executive with over 25 years of National and International experience in top level Executive Search Assignments and Leadership Consulting across a broad cross section of industries. And lucky for the University of Sydney, she also volunteers to coach students about their career plan.

Here are some of the tips that Yvonne gave me to help me stand out from the crowd.

Create a personal career map. 

This first step is probably the most difficult thing to do because you really need to sit down and work out what type of role you want and in what industry. Most people kind of just fall into jobs and then realise half-way through their career that they are no longer enjoying what they do. You can avoid that early on by creating a career map.

Ask yourself these questions:

• What type of role do you want?
• What kind of organisation would you like to work for. Is it a multinational or a startup?
• How fast do you want your career progression to be?
• Who do you know from your network that can give you a referral?
• What skills do you have for the job and which do you need to acquire?
• Do you have, need or want international experience?

Image source: University of Leicester.

Complete a SWOT analysis of your strengths and weaknesses, and the industry you want to work in. 

Yes, this marketing framework can be used to help you get a job. First do an internal analysis and write down all your strengths; all your skills whether they are tangible or intangible, your weaknesses and areas that need development. Next, look externally to the industry or sector you’d like to work it and identify and opportunities. Jump on Euromonitor or IbisWorld while you still have access through The University of Sydney Library Portal. Finally, identify any threats. These include the difficulties of breaking into the industry, also any resources that are lacking or jobs and sectors that are in danger of being made redundant due to technology.

Image source: ArtTech.

Find a mentor. 

This is probably the best advice yet. Find someone who has had success in a career path similar to the one you want to follow. You can ask someone you know or reach out to them on LinkedIn. The Sydney Marketing Society applications for mentors open next May for students who have just joined the program. The AMI also has paid opportunities to be paired with a mentor, but places are limited so you have to get in quick. 

For women, Yvonne was telling me about this event called Mentor Walks, a monthly meetup that connects emerging female leaders with a range of senior women from a diverse professional community. Women get together to walk and talk, discuss their challenges, successes, aspirations, and lessons learned. The next Mentor Walk  in Sydney is on the 27th of October.

Image source: Mentor Walks.

Apply to graduate recruitment programs. 

This one may seem like a no-brainer but if I’m being honest here, I always thought that graduate programs were mainly for undergrads. Turns out I’m wrong! Yvonne assured me that many of the companies who offer graduate programs offer placements for post-graduate students as well. So if you get the chance, pop into the Careers and Student Experience Lounge and ask for a copy of Australia’s Top 100 Graduate Employers for 2017 or have a look online. Likewise the University of Sydney’s official Marketing society SMS have many corporate sponsors who offer opportunities that don’t have the same volume of applications as LinkedIn or job sites.

Image source: Alyce Brierley

Revise your cover letter and CV, and brush up your interview skills. 

Finally, the most important thing is your CV. This is what gets you noticed, so you want to be absolutely certain that you stand out for the right reasons. In my last employment related blog, ‘5 Reasons Why Your Job Hunt Needs A Marketing Strategy’ I wrote about the benefits of using online tools like Canva’s Resume templates to help bring an element of design to your CV. Design is just one way to help you stand out from the crowd but the content is what’s going to sell you to employers.

The Careers and Student Experience Lounge is open Monday – Friday, 12-3pm (teaching weeks only) Basement Level, Abercrombie Building. Visit them to receive coaching on your resume and cover letters and learn about all of the online careers resources dedicated to Business School students. Alternatively you can email them at business.careers@sydney.edu.au 

Alyce Brierley

Current student in the Master of Marketing program at the University of Sydney Business School

Marketing For The Start-Up

Everyone knows that innovation starts with an idea. Each year, Incubate brings together staff and students involved with ground breaking discoveries and transformative inventions to celebrate world-changing ideas. If you had a great idea, product or service, would you know what it takes to see it to fruition? 

The winners of the University of Sydney’s 2017 Student Challenge, Somnium Lab, stole the show at Innovation Week, with a perfectly customisable pillow and an autonomous UAV-based system that can detect airborne pathogens. The annual event gives student-led teams the opportunity to pitch their best ideas to a panel made up of entrepreneurs, industry, government, academics and fellow students.

MoM speaks with Miles Tycho Hugh to find out what the next steps are for the start-up and how they plan to market their revolutionary product.

Source: University of Sydney, Creator of Somnium Lab, Suri Susilo and Miles Tycho Hugh

More than just an idea. 

Somnium Lab will revolutionise the way we sleep by creating perfectly customisable pillows that align to the curves of the spine. Developed by biomedical engineering PhD candidate Suri Susilo and Miles Tycho Hugh studying a Bachelor of Commerce and Liberal Studies, the pillows are designed to relieve pain and optimise sleep.

They’ve created the world’s first filler-less height adjustable pillow, which will ensure everyone has the correct sleeping posture regardless of their height and size. It’s an invention that could disrupt a product that has remained largely unchanged for the past 100 years.

As the winners of the Richard Seymour Memorial Prize for best startup business pitch, Somnium Lab plans to release their first product on Kickstarter in January 2018, using their $10,000 in grant funding, mentoring and services from Genesis and INCUBATE, the University Student Union start-up accelerator and entrepreneur program.

MoM: How was the Somium Lab pillow conceived?

MUTU actually started 2 years ago, as a helmet. This helmet has spring-like air chambers sticking out all over it that you could set at certain heights. The adjustable air chambers could be inflated/deflated so that the spine was at a net neutral angle while sleeping, and the fact that they were on a helmet meant that if the person moved in their sleep, the cervical spine would always be kept at the same angle. 

However, no one wants to actually wear a helmet to bed - its hot, hard and a hassle. So, the helmet was cut in half, and that became the first prototype for the pillow Somnium Labs are bringing to market today. 

MoM: What have been the challenges thus far?

Tycho: So many challenges - but that’s why we’ve learnt so much. 

Marketing.

The marketing efforts behind trying to get somebody to get excited about and pay for a product that does not yet actually exist, is difficult. This was made even more difficult by the fact that we were marketing a pillow, which people often need to touch and feel before purchase. A pillow isn't the sexiest or attention-capturing product category either. 

Time management.

Needed to learn to be comfortable with ambiguity, and with things changing at the last minute. We have pivoted countless times over the past few months as new information emerges/we learn new things, and I remember saying that I felt like a leaf caught in the wind. We originally planned to solely target the physiotherapeutic community, but realising the regulatory hurdles, relatively small and slow moving market, we have now expanded our focus to everyday people who are just sick of saggy pillows which make them wake up feeling stiff and sluggish. Based on this, we’ve had to change our sales model from B2B to B2C, and have completely reframed the way we communicate our product offering. 

Dealing with uncertainty.

Start ups are very risky ventures, and as a co-founder, I am answerable to all successes and all failures. Almost all outcomes can be directly traced back to what me or Suri did or did not do. It’s quite daunting, comprehending the gravity of that accountability everyday, but it’s also a great driving force if you have learn to manage it. It’s really important to maintain a belief in yourself that you can actually do what you need to do everyday - “I can and I will.” 

Everyone is telling you what to do. While this is great – and for the most part, everyone is trying to help – managing those opinions and remembering that they’re just opinions, is key. 

MoM: What is the most rewarding aspect of starting your own business?

Tycho: Two things:

1. Being able to make something that is your own. 
2. Access to a great and eclectic network of interesting and inspiring people through the startup community. 

MoM: What advice could you give students wishing to get involved in a start-up?

Tycho: 

1. Build an MVP and get it out there. 
2. Ideas are great but they need to be acted upon. 
3. Don’t cry over spilt milk.   
4. Don’t get too attached to any singular course of action. 
5. Perfect is the enemy of the good.
6. Remember what you want from your start-up and operate accordingly. 
7. Don’t work yourself into oblivion; you are your start-up – it will break if you do. 

MoM: What is the most critical part of achieving success in a start-up?

Tycho: Execution. I always used to think that a start-up was basically just a cool idea. I thought that having a good idea was all I needed have a successful start-up. Very quickly I learnt that I was very wrong. Ideas do not operationalise themselves, nor do they sell themselves. It’s actually quite easy to come up with an idea. Bringing that idea into being is gruelling, and where you are the most liable for failure. The start-up world moves so quickly so you don't have the luxury for careful, methodical planning; you learn by doing and then iterate or pivot based on market feedback. This basically means that to be successful, you need to be able to very efficiently make things a reality (whether that be a Facebook campaign, prototype, etc.) in very little time with few resources. You can’t be afraid to get down and dirty in the mud. 

The most recent challenge we have experienced related to execution is manufacturing. So far, all prototypes have been 3D printed and assembled, slowly, by hand. In the manufacturing world, 3D printing is too expensive and difficult to access, so we'll need most things to be injection moulded. 

However, the first few factories we spoke to said that what we wanted moulded could not be done. So, having had enough of the 'no' word, Suri hopped on a plane to Thailand to source a manufacturer in person. Having asked a few friends for some names, and searching on the internet for suitable manufacturers, Suri compiled a list of who to see in country. Methodically, she tracked down a factory that could make what we needed. The trip was a success. Most start-up work, at least in the early days, is really all about the hustle and grind.

MoM: Why a pillow, of all things?

Tycho: The pillow as we know it, is merely an accessory to sleep. It is a soft thing to lie your head on. Almost all pillows follow a one size fits all model, and are filled with either feathers or foam. We have become accustomed to shitty pillows that sag over time, pillows that lump and clump, and pillows that are either too high or too low. The average pillow is almost certainly filled with bacteria, dust and dead skin, and coming into the summer months, will feel far too hot. Our pillow (MUTU) is a filler-less height adjustable pillow that never sags, and never clumps. The MUTU uses air-suspension technology that allows each pillow to be customised in height, creating a perfect contoured surface that makes your head feel weightless. MUTU's unique suspension system can be adjusted and locked to support you throughout the night without fail.

INCUBATE is the award-winning startup program at the University of Sydney. They provide funding for students, alumni and researchers to launch high-potential startups through their accelerator program. They have a community of over 3000 entrepreneurs, accelerated 70 startups, provided more than $19m in external funding, created over $50m revenue and 100+ Jobs. 

If you are a student who is serious about entrepreneurship, follow the link  to find out how to apply to the next Accelerator program.

Miles Tycho Hugh
Current student awarded the Honours Canon Scholarship and joint winner with Suri Susilo of the 2017 Student Innovation Challenge at the University of Sydney Business School.

The Marketing Challenge: Aligning Strategy with Behaviour Drivers

Source: Bain (2016)

The following blog post contains abstracts from an article, ‘The Technological Revolution: The Marketing Challenge’, written by Dr Peter Steidl, founder and Principal of Neurothinking. Dr Steidl is a strategic consultant with a particular interest in neuromarketing who has carried out assignments in 20 countries on five continents. His clients include Fortune Global 100 corporations, start-up companies, professional services firms, federal and state government agencies and not-for-profit organisations.

The Oxford Martin Institute in collaboration with Citi, McKinsey & Co, the World Bank and other credible parties has undertaken a detailed, in-depth assessment of today’s jobs, evaluating to what extent technologies that are already being deployed today or are in advanced stages of development are likely to make jobs redundant.

Technological disruption will eliminate a large number of jobs while creating relatively few new jobs. It is therefore no wonder that the focus is shifting to the question of how to deal with a very large number of people who can’t find work.

Source: Bain (2016)

This leaves two core strategies open to retailers and brand owners:

1. Become the price leader – an option that is not feasible for many retailers and brand owners.

2. Develop a strong emotional relationship with the consumer which will lead the consumer to shop rather than delegate the shopping task or, if delegating, to specify the retailer or brand that constitutes the preferred option.

Developing a strong emotional relationship
To achieve a lasting, strong, emotional relationship with a retailer or brand, there is a need to move the relationship above the actual offer by standing for something that is seen as more valuable by the consumer. This strategy elevates the relationship between the brand and consumer to a higher emotional level, creating a much deeper and long-lasting connection than a short-term campaign, product innovation or shopper marketing initiative could develop

An understanding of Deep Rooted Drivers of Behaviour will give you a head-start when you are attempting to develop a relationship with consumers at a higher emotional level. Deep Rooted Drivers of Behaviour are hard-wired brain circuits that drive behaviour over longer periods of time – sometimes a whole lifetime - and are widely shared.

Source: Bain (2016)

Aligning your strategy with Deep Rooted Drivers of Behaviour
I am sure this comes as no surprise, but we need to consider a wider range of Deep Rooted Drivers of Behaviour (DRDs) that may allow us to develop long-lasting, strong, emotional relationships between a retailer or brand and the consumer. To do this we only have to consider what might have helped humankind to survive in a natural hostile environment: these traits were typically hard-wired into the brain over some 4 to 5 million years as humans with those traits were more likely to survive and pass their traits on to the next generation.

Source: Bain (2016)

The first and obvious DRD is the BelongingDRD. We are hardwired to belong because anyone who lived in isolation in a hostile natural environment had a very short life expectancy. It is worth noting that Belonging is a stronger driver with women than with men. This is because women had to build informal networks with other women to fight off the physically stronger men who would have happily killed the infants who had other fathers, seeking to ensure their genes would be carried forward into the next generation instead.

Another important driver is the CompetitionDRD, which is a stronger driver with men. This means that men often become part of a group because it may help their own status or allow them to compete for status in the group, rather than to just simply belong. But the CompetitionDRD can also be activated by creating an opposition or enemy. For example, setting up Apple as being the opposite or enemy of PCs activates the ‘us and them’ feeling that is driven by the CompetitionDRD.

Common to all humans and of critical importance when it comes to marketing is the ShortcutDRD that drives us to, well, seek shortcuts. In all likelihood we are driven to seek shortcuts because our nonconscious, intuitive mind is much faster and more powerful than our conscious, rational mind. This means that the nonconscious mind can make an intuitive decision quickly using associations, familiarity or other shortcuts, leaving it to the conscious mind to rationalize the choice. The ShortcutDRD is the foundation of priming, which is an essential element of the majority of successful shopper marketing initiatives.

We also all share mirror neurons that represent the EmpathyDRD, and by feeling strong emotions others feel we are likely to connect with others. This DRD will boost the feelings we share with a group – say barracking for our team during a sporting match is much more emotionally involving when we do it together with like-minded people, as we can feel their emotions which lifts the intensity of our own.

Consider the ExplorationDRD. We are all hardwired to explore, although this is typically a stronger driver with males than females. This means that we need to offer consumers new challenges, new news, perspectives and content. We need to open the door to some new insights or achievements, allow them to break through barriers and generally to feel that progress is being made – in whatever form is appropriate.

Dopamine ensures that we all seek rewards. The RewardDRD is probably the most obvious but there are of course many different ways of rewarding consumers. The essential point is that we need to trigger a dopamine release that makes the consumer feel good – and to seek more and even stronger rewards once their dopamine levels decline.

Source: Bain (2016)

Refocusing the marketing effort

I believe there will be a need for marketing to be much more focused to be effective given the adverse market environment. More specifically, marketing will need to focus on the decisive point.

It follows that between today and when a significant number of consumers use digital personal assistants we have to develop experiences shoppers value and want to experience again and again.

This suggests that all marketing initiatives need to ultimately focus on the decisive point: they may use primes (in advertising, social media campaigns, etc.) that can be activated at the decisive point; they may build emotional connections that can be triggered at the decisive point; they may create dopamine hits that can be repeated at the decisive point; and so forth. Shopper marketing needs to become the starting point for the development of a marketing campaign, rather than being an afterthought as is often the case today.

Finally, there is a need for researchers to broaden their horizons. Many researchers – including those using neuroscience based methodologies – focus on assessing elements of execution, such as the likely impact of advertisements, product features or package designs; the impact of particular package sizes or the optimal price to charge. They test planograms and new products in virtual stores and observe how shoppers react to displays using facial analysis or in-store cameras.

In summary, to future-proof your business you need to:

• Create a shopping experience that is rewarding and exciting, triggering dopamine hits and, by doing so, creating a desire to come back for more, again and again.
• Create a strong emotional connection between your brand and the consumer to make sure your brand is selected when shopping and specified when using a digital personal assistant.

Finally, as I am sure you remember, it is very likely that a significant number of consumers will be under severe financial pressure and this will make it even more important for the emotional relationships that are being built between consumers on the one hand and retailers and brands on the other are strong enough to create a desire in the consumer to personally engage.

Source: Bain (2016)

What we are likely to see happen…
In coming years there will be some likely developments due to the less than favourable future we have to prepare for. Retailers and brand owners will increasingly collaborate to create exciting and rewarding shopping experiences. Retailers will complement run-of-the-mill on-line catalogue type stores with exciting and rewarding store concepts that engage shoppers and bring them back, again and again. Brands will shift more of their spending to shopper marketing, i.e., in-store initiatives. Consultants, communications and shopper marketing agencies will adopt a shared focus, resulting from an integrated approach and true collaboration.

Think back to the Global Financial Crisis. In some ways it is a long time in the past, but does it really feel like a full ten years have passed since the events in 2007 started the crisis? The time ahead of us always seems longer – ten years may seem like a lifetime. You may agree with (some of) my points, but feel that there is plenty of time to take action later. After all, you are extremely busy right now and have to focus on your quarterly results. But look back ten years and you realize how quickly time passes.

The events we are anticipating will take a few years to play out. Ten years may be an appropriate planning horizon, although the impact of the technological disruption will be felt much earlier. Whatever you do, don’t fall into the trap of thinking that this gives you plenty of time to get ready for this new and different operating environment. To succeed you really need to start today.

Dr Peter Steidl is the Principal of Neurothinking. He can be reached at peter@neurothiking.com or via Linkedin and would value any comments or input related to the topic of this contribution.

*To read the full version of this article, download a free PDF version here.
**To explore Bain’s interactive map of the 30 elements of a Value Pyramid click here.

Patent Battle Gets UGG-ly

Let’s play a game. One of these products is not like the others: Champagne, Greek ‘style’ yoghurt or fetta, ‘Port’, ’Sherry’ and ‘Ugg’ boots. Yes, they may have something in common- they are all regional products that are intrinsically linked to a country or culture. If you said that Ugg boots are not like the others, then you would be right.  But do you know why?

Ugg boots were born out of the emergence of Australian surf culture around the same time as Australian cottage industries like Quicksilver (1969), Billabong (1973), and Rip Curl (1969). It started when a couple of jackeroos from Victoria and Western Australia crafted a pair of sheepskin boots with linoleum soles that were used them to keep the feet warm on cold mornings. Ugg boots are about as Australian as French Champagne, yet it’s a Californian-based company, Deckers, who owns the rights to trade as UGG Australia.

The University of Sydney’s Master of Marketing students who have been exploring Australian Consumer Law this semester should understand why this is enough to get any Aussie livid. Especially as the boots were conceived down under and these thieving mongrels are prohibiting anyone else from distributing them.  

On their website, the ACCC signals that they have an ongoing interest in intellectual property issues and copyright. The policies are under constant review, with the latest revision Competition and Consumer Act 2010 from the original Copyright Act 1968. They state, ‘’While it is largely accepted that the individual grant of copyright or intellectual property rights will rarely cause competition concerns, the ACCC is aware that there may be instances where intellectual property rights may confer market power”. Does this qualify, I wonder?

Photo: Clipping from surfing magazine in 1970 advertising Ugg boots

UGG belongs to Australia, not Deckers.

For years now, the future of the ‘UGG’ trademark (formerly ‘UGG Australia’) has been up in the air. In 2016, Deckers, whose annual turnover is $2.4billion, instituted a legal battle against Australian manufacturers for the right to sell their shoes as ‘uggs’. The court action called for multi-million dollar punitive damages and for all of Australian Leather's ugg boot stock to be delivered to Deckers in the US for destruction.

Obviously, this didn’t sit right with the ACCC. Nor did it impress Eddie Oygur, the founder and owner of Australian Leather Pty Ltd, proud manufacturers of ugg boots since the early 1990s. Mr Oygur responded to the action by counter-suing Deckers, claiming that their trademark of ‘UGG’ was based on the falsehood. He alleged that Deckers made false and misleading representations by using the former brand name UGG Australia, when their products were made in China. Since Deckers has now rebranded from ‘UGG Australia’ to ‘UGG’, the ACCC has decided they have bigger fish to fry, leaving Australian Leather Pty Ltd out in the cold - so to say.

Source: SMH, photo by James Alcock. Australian Leather owner Eddie Oygur

Eddie Oygur argues that a thriving Ugg boot industry in Australia could employ 3000 people. "This is a company importing the name of "ugg" into Australia, undercutting all the manufacturers...we can't compete," said Mr Oygur, during his deposition for the hearing. "[In LA] they attempted to mediate and wanted me to commit to selling only in Australia and New Zealand, but I said that was unacceptable...I want to take this right to the end, even if it means selling my property, getting an overdraft, I'm willing to do that."

UGGs should simply buy uggs.

All Aussies, including Prime Minister Malcolm Turnbull, believe Uggs should simply be uggs. The New York Times reported that in an attempt to help protect Australian interests, a letter dated in July 2017, Mr. Turnbull said he had asked the Australian Embassy in Washington to get information from the United States government about the dispute and to “reiterate Australia’s view that ‘ugg’ is a generic term.”

In an interview with the Sydney Morning Herald, South Australian Independent Senator Nick Xenophon has previously compared the fight to protect the word "ugg" to "the French protecting champagne, the Portuguese protecting port, the Spanish protecting sherry and even the Greek protecting fetta".

Stop ripping off our culture, you corporate bullies!

While Deckers maintain that they bought the patent fair and square from Australian entrepreneur Brian Smith back in the 1990’s, most Aussies don’t really give much credence to that. It’s like patenting the name Bondi and stopping others from using it. Oh wait that also happened!

In July 2017, Abercombie & Fitch tried and failed to prohibit a Sydney cosmetics company, Bondi Wash, from acquiring a trademark in the US. You think that’s bad enough? It doesn’t stop there! Uluru, the sacred rock formation in central Australia, is trademarked in the United States by a California carpet company. Kakadu, the name of a national park, is claimed by a number of companies in the United States. 

Matthew Rimmer, an intellectual property and innovation professor at Queensland University of Technology’s law school reiterates that “Certain words really belong in the public domain. There’s a certain Australian pride in the ugg boot, and a belief that it is a common article of clothing in Australia and resentment over it being claimed by a United States trademark holder.”

Poor Deckers are whinging about the infringement of their rights. 

The more I read about this topic, the more it makes my blood boil. Turns out that Deckers have filed a number of multi-million-dollar patent infringement lawsuits against J.C. Penney, Target, Gina, and now, H&M. 

Deckers have stated that H&M is a competitor of the famed boot maker and is stocking boots that intentionally infringe their design patent-protected boots. Deckers reckon that it was done “intentionally, fraudulently, maliciously, wilfully, wantonly, and oppressively, with intent to injure Deckers in its business and with conscious disregard for Deckers' rights.” “In an effort to exploit [its] reputation in the market,” H&M has “deprived Deckers of the right to control the use of its intellectual property.” 

The individual lawsuit, Deckers Outdoor Corp. v. H&M Hennes and Maurtiz, L.P., 2:17-cv-00103, seeks upwards of $100 million in damages. 

End the monopoly. 

So what do you think? Do Deckers have grounds? Under any other circumstance, I believe that they would. But you can’t deny the fact that UGG was stolen from Australian footwear manufacturers in the first place.  The damages that they owe Australia for all the years they have prevented Australian manufacturers from selling their footwear would set a precedent, giving Australians a leg to stand on when reclaiming their rights, interests, culture and name from international corporations.

This case, among others, have raised concerns about foreign companies gaining exclusive ownership of high-profile Australian place names in their branding. International businesses should be wary of exploiting Australian imagery, because Aussies are sick of them tapping into the benefits of associating products with Australia. Using Australian images, generic terms for Australian places, or using the word ‘Aussie’ fools consumers into thinking they are buying products made in Australia.

Alyce Brierley

Current student in the Master of Marketing program at the University of Sydney Business School

Aston Martin Should Listen to Women

Master of Marketing student, Francesa Lai originally wrote this article in April of 2016. Since then she has has worked in the agency world in New York, and recently moved to Australia to study at the University of Sydney. These two experiences have lead her to re-examine an article she had previously written, and explore this topic through the lens of her increased knowledge and experience.

For a long time, the Aston Martin was one of the coolest cars one could want to buy. James Bond’s car of choice. But now the company is cash strapped and looking to grow their consumer base quickly by getting millennials to buy their cars.

Aston Martin holds the secret to what’s ‘most important’ to women drivers.

It is launching “it’s most important car” (the new DB11) to target young female drivers — specifically young rich millennial female drivers. Their new target customer is “Charlotte”. She’s a rich American female in her late 30s. When Aston Martin first began talking about the DB11 at the 2015 Geneva Motor Show, CEO Andy Palmer noted that “She’s a cool lady, she’s an attractive lady”.

I’m skeptical. Obviously I understand the ‘rich’ part. These cars aren’t cheap to develop and produce. But what makes Aston Martin think it can attract millennials, specifically women, away from all the other options available?

In it’s 102 year history, Aston Martin has reportedly only sold 70,000 cars, and only 3,500 of them to women. That’s 0.5% in the entire history of the company. So they’ve got a mountain to climb when it comes to marketing cars to women, and that’s no easy task either, considering a lot of women aren’t attracted to cars the same way men are.

But, have no fear! DB11 is definitely going to catch the eye of the cool and attractive Charlotte! How? By talking about shape, space and sound. *Slaps face* Did they learn nothing from their 2011 ‘Aston Martin loves women’ campaign? If you haven’t seen that one, watch the ad below.

Do women love Aston Martin?

Shape, space and sound. How is this different to how they market sports cars to men? It’s not. A quick look at the website for the Mercedes S-Class shows that they’re essentially using the same three principles to market their car. Same story for the Porsche 911 Carrera S and the BMW M6.

It’s not that women don’t buy sports cars — Aston Martin themselves have had female customers — but they’re not a majority. So having a woman as a key target customer is risky. As I am learning through my lectures, doing due diligence before launching a new product or focusing your efforts on a specific customer segment can make or break the project. 

In trying to capture Charlotte’s attention by highlighting the DB11’s shape, space and sound, Aston Martin are being lazy, assuming that these attributes are enough to convince Charlotte to purchase a car because they’ve been so successful before. 

In revisiting this topic I’ve looked at the official DB11 page, and there are no depictions of women driving the car. In fact, the page is largely dominated by images and video of the car in action, and one photograph of Marek Reichman, the Chief Creative Officer of Aston Martin, gesturing to the front of the car. It seems the declaration that Aston Martin was going to focus on attracting millennial females was nothing more than a headline generator. In fact, instead of being a disaster, the Guardian reports that the DB11 has allowed Aston Martin to post soaring revenues in the first quarter as it attempts to recover from six years of losses.

The most important thing to women may actually be fuel consumption.

So it sounds like the company is doing just fine. However, there are cracks in this facade. Why? Aston Martin are selling flashy oil and diesel dino-cars in a market where everyone else is offering more innovative alternatives, and Aston’s competitors are focusing on more than how a car looks, sounds and feels.

The company is planning to develop hybrid versions of their cars, but they’re already way behind in the innovation game. Tesla’s electric cars are already on the market and selling like hotcakes. Aston Martin’s closest rivals on the lower end such as Mercedes and BMW have already integrated hybrid or other innovative environmentally friendly technologies into their range. 

Aston Martin AM-RB 001 hybrid

On the supercar end, Porsche (with the 918), McLaren (with the P1) and Ferrari (with LaFerrari) are battling it out to see who has the fastest, most technologically advanced yet environmentally friendly cars. Outside of the “environmentally friendly innovation” camp, Volvo has pledged to ensure that by the year 2020 they will reduce “the number of people that die or are seriously injured in road traffic accidents to zero” in their range of cars. 

Shape, Space and Sound

Even in sensible family cars and hatchbacks from brands like Kia, Ford, and VW, one can easily find lots of utilitarian features (hands-free calling, touchscreen GPS, etc), as well as various gas mileage friendly solutions. It’s clear that these companies aren’t just looking to sell the sounds and looks of a car, they’re selling a tool that helps people get things done, and has turned the uncool hybrid or eco-friendly car into a must-have status symbol which projects an image of innovation and sophistication. They have responded to the fact that customers are looking for new and functional solutions in their cars. So, what can the DB11 do? Go 200 miles per hour, fit two golf bags and two child seats. 

When it comes to women in the automotive industry, there is still a long way to go. Aston Martin is being advised on engaging women by Belinda Parmar, CEO of Lady Geek, who pointed out that “the car industry needs to think about de-masculinising the industry, not feminising it”. 

At least Aston Martin has shied away from pink washing their efforts to attract women. Some might say that in marketing to women, the secret is to address them directly and  ask them what they actually want. Perhaps then manufacturers will design cars where the grab handle won’t chip nail varnish and make-up won’t stain leather interior. Women don’t always know what they want, but they do want to be listened to.

Francesa Lai