To say that innovation is pivotal to a brand’s survival is an understatement. But where do they start? Constant tech disruptions and revolutionary business models shaking up the market mean that brands are unsure about how to capitalize on new tech, behavior, and ways of thinking.
85% of brand executives now recognize that innovation is very important, but 57% of companies don’t have a formal process to make it happen. Just 41% see their organization as an innovation pioneer. Nevertheless, 88% of organizations expect their innovation budget to increase over the next two years.
Defining Innovation
Reviewing brand briefs ahead of Ingenuity’s Digital Connect event last year, we identified innovation as a key trend in what brands see as a challenge. To explore this further, we decided to conduct interviews to discover what innovation means to brands and what they want from agencies with regard to innovation.
What became clear is that brands understand the importance of innovation but are failing to implement a clear and coherent strategy that will make it work in practice. More importantly, there is widespread confusion as to what constitutes innovation, with many brands using it as an umbrella term for anything and everything that’s new.
So, what is innovation and is it the same for every brand?
Our research unveiled two different interpretations:
- Innovation means implementing a specific type of technology (AI, AR, VR, etc.) to achieve a specific business outcome
- Innovation is a strategy, mindset or methodology that is used in a new way
Innovation as tech
Innovation could be attributed to new tech like AR, VR or AI. In our quantitative research phase, these three technologies ranked top in terms of what brands are interested in. For agencies, this indicates a clear shift in brand needs.
With innovative technology comes a steep learning curve, so it’s important that agencies get to grips with new technology fast. They must explain its use cases and benefits in a clear and simple way. If agencies can present how these technologies should be used to meet new customer behavior and values, this will help present a clear use case for adoption and implementation.
Innovation as strategy
Other brands view innovation through a different lens. For them, it’s less about the technology and more about the application of innovative strategies and thinking to business challenges. To achieve cut-through, try delivering content that adds value to the buyer’s life. Whether it’s an innovative revenue model or a new way of targeting customers, delivering outside-the-box solutions will prove increasingly important in an age of digital saturation.
What brands want
With innovation and automation comes an obvious desire to increase productivity and drive effective marketing strategies. This has always been a challenge, but with new technologies entering the market, it’s now possible for organizations to strengthen and balance the nuanced relationship between efficiency and effectiveness.
Brands are looking at data and automation as a means of enhancing their digital marketing strategies. Whether that means superior targeting or measurement, these insights will prove crucial as businesses move towards an increasingly digital existence. Organizations are keen to unpack the vast quantities of data available and pulling out the insights that matter most. From our conversations, brands are focused on reducing unnecessary spending and effort, while maximizing return and results.
What this means for agencies
As we’ve seen, innovation is at or near the top of most organizations’ marketing agendas, which goes hand-in-hand with the fact that the next decade will bring about even greater disruption in the ways customers engage with brands. For agencies, this opens up a wealth of opportunities to support and even lead brands through this transformational era.
We can find ample evidence of this across multiple industries. Diageo has recently invested £6.4m to open a new Innovation and Research Centre in Scotland as part of its investment in the sustainable growth of the distilling industry. Meanwhile, RBS’s business incubator has put thousands of firms through its entrepreneurship accelerator program in the hopes of combating the pressures of new digital start-ups like Starling, Monzo, and N26.
In the FMCG sector, Costcutter’s recent deal with Uber Eats will enable shoppers to buy household staples such as milk, butter, and bread from hundreds of local shops, all within its easy-to-use mobile app.
From new and innovative tech to disruptive business models, it’s abundantly clear that today’s businesses are seeking new methods to drive innovation. Now is the time for agencies to offer a clear, simple and compelling solution that combines innovative technology with cutting-edge strategy.
To download the full Innovation report, visit the Ingenuity website.