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What does a cultural strategist actually do?

Joana Stolz talks about her job as Cultural Strategist at the Serviceplan Group and gives insights into her “every day work”.

Virtual Reality – where will it take us?

It used to be a hobby for geeks. Today, Virtual Reality edges towards the mainstream: The VR industry is expected to break the $1bn (£710m) barrier for the first time this year, according to Deloitte; and with Goldman Sachs predicting the market could be worth $80bn (£56.8bn) by 2025 the opportunities are only going to get bigger, taking the industry to new heights.

However, the strongest selling point of Virtual Reality is not only taking us to new heights or places, but turning us into someone else. It has the power to influence our physical and emotional responses to reality by letting us experience this reality – in a virtual world. All we have to do is to give them the access.

Earlier this year, at South by South-West (SXSW) – the big film, music and interactive trade fair, festival and meet-up in Austin Texas – Per Poulston, Chief Innovation Officer of Serviceplan Group, had a chat with Bruce Vaughn, the former Chief Creative Executive at Walt Disney Imagineering. He told him about what the Imagineering labs call “Portals”.

He used the gate to Disneyland as an example: It’s a simple gateway you go through to enter the Main Street in Disneyland. On it there is a sign saying: “Here you leave today and enter the world of yesterday, tomorrow and fantasy”. And that is what people do. They simply and immediately accept being in a world where giant mice are completely normal, where trash collectors routinely break out singing and where the small shops on the street are not fierce competitors but best friends. “Portals” allows us to transport people into a whole new world, a whole new experience.

Once regarded a science fiction fantasy, the idea of a virtual environment is now a very possible future and it works because it puts people at the epicentre of an experience and has the potential to dramatically change the way we approach education and the world of business.

When it comes to education, VR creates a sense of presence to help students vividly absorb and remember what they’ve learned. Technologies such as Leap Motion ensure that users can utilise their gestures and hand movements whilst in a VR experience, maintaining the sense of being in a classroom scenario.

We at Serviceplan Middle East have partnered with SAMSUNG to envision and create an easily deployable VR educational platform in the Schools of the UAE. We want to enable future generations to grow up supported by VR experiences in both the classroom and the workplace – which is very much in line with H.H. Sheikh Mohammed Bin Rashid Al-Maktoum’s vision of wanting to provide “NEW GENERATIONS with the skills needed for the Future.”

By advocating for virtual classrooms, our philosophy is deeply rooted on enabling. We would rather train children to seek and to explore, to teach and to learn from each other, rather than simply being tutored. We would rather have them creating than consuming; innovating rather than just listening. The world of VR means that students have all the information they need right in front of them, without the need to interrupt the experience to reference external materials.

But this is more than just a novelty. Students in developing nations can also benefit from the same immersive experience. VR hardware is slowly becoming more affordable and, like the PC and smartphone before it, manufacturers will seek to produce more affordable options. These devices can then be distributed to developing countries, where students can gain access to the same level of high-quality education as their peers throughout the world. This furthers the democratisation of education, putting students across the world on an equal footing from the onset.

Perhaps the most utopian application of this technology will be seen in terms of bridging cultures and fostering understanding among young students, as it will soon be possible for a third-grade class in the UAE or USA to participate in a virtual trip with a third-grade class in India or Mexico.

Innovation is in Serviceplan’s DNA. In fact, our CEO, Florian Haller, reinvented the art of keynote speeches at our recent Innovation day In Munich by taking a free fall from a helicopter whilst inviting guests to experience an array of 360 and virtual experiences on showcase by our clients and partners, as a bold statement towards our future in innovation. The full clip can now be viewed on YouTube, while the virtual showcase can be experienced –first hand – at our Dubai offices in the upcoming Festival of Innovation. Visit serviceplan.ae to book your seat.

On integration we will stand

At Serviceplan Middle East, we’ve always counted on clients to recognize the fine line between defragmented and consolidated services as we stood our ground pro-integration. Here we share our successes and some hard lessons learned along the way.

A decade and a half ago, network agencies initiated the epic move towards specialization, marking the exodus of in-house media departments into global media houses. By the time we set up shop in Dubai in 2009, the argument has evolved into full service vs. specialist shops. Full service agencies were valued for their one-stop-shop solution, but were heavily critiqued for going broad but not necessarily going deep. On the other hand, specialist shops were esteemed for perfecting their individual crafts, but were deemed hugely lacking in macro perspectives.

Specialist agencies have become the norm as digitalization started to hound traditional full service agencies. Today, the territories are all but blurred. The demarcation line between creative and media houses have seemingly vanished – with media agencies becoming content creators, and creative agencies becoming learned consultants of content platforms. Specialist agencies started offering integrated and consolidated services, while big network agencies began shape-shifting again. Take the decision of one French powerhouse in late 2015 when it announced that it was restructuring its ranks into four consolidated hubs, putting client services at the heart of its mission. Transformation, it claimed, will be driven by the fusion of technology and creativity, with focused divisions in creatives, media, and technology among its four hubs.

Sticking to our “I” Guns

As believers of Integration, the plan was crystal clear from the onset. While we started the traditional route delivering only offline services in 2009, we stuck to our long-term vision of building a “Haus Der Kommunikation” in Dubai to offer specialized services under one roof. We knew there was no room for alternatives since we belong to an independent, family-owned agency group, headquartered in Munich, whose “Haus der Kommunikation” concept has weathered the industry’s shifting tides across 45 years of operations. 7 years into our own experience, we came to realize that boundaries aren’t limitations but opportunities to reinvent oneself, if only to stay profitable and above water in a region that has yet to see its full potential but is already besought with fierce competition from all angles.

When we started, well-meaning industry advisers were saying you either go big or you go boutique. Boutique was the preferred route to gain a good share off the pies of big-name regional clients who remained stable or were recovering fast post 2008. Niche offerings, they said, would help one zero-in on specific gaps that big networks may not be quick or flexible enough to fill in. Niche, they argued, would guarantee a steady flow of income for boutiques for as long as niche is delivered with measurable efficiencies.

The problem? We were neither big nor boutique. We were, in reality, gap-fillers in our own industry, occupying a niche somewhere between a big network agency and a specialized boutique shop. We were extremely careful not to get across as another “indie” house wanting to capitalize on Dubai’s diversity and central location as we highlighted the hybrid nature of our concept. “A subsidiary of Europe’s largest and most successful independent agency group poised to offer innovative communications, innovative digital solutions, brand-individual media, and strategic market research under one roof,” we soon realized, is a concept unheard of in the region. Worst, it is one that often leaves most clients baffled, and at times doubtful.

But their doubts weren’t unfounded. On lots of occasions, we were too adamant to prove our case that we barged into pitches for specific requirements with a full portfolio of consolidated ideas that span offline, online, even experiential. Most times we would leave presentations patting our backs, elated over pleasantly surprised and extremely impressed prospective clients, only to rub ourselves sore come decision time when we are finally told that while our concept was by all means strategic and commendable, budgets could only accommodate specified requirements. Yes, those heartbreaks came in a handful, alongside our more substantial wins.

But with almost 8 years worth of learnings, we’ve come to reinvent ourselves. Not only are we the first agency established outside of Europe that ultimately catapulted the group’s internationalization, we are also the first to introduce a fifth communication pillar – Serviceplan Experience, which offers brand storytelling in a physical space. Today, Serviceplan Middle East continues to stand its ground, advancing the group’s three invincible “I’s” of Integration, Internalization, and Innovation.

 

Looking behind, looking ahead.

The rules of VR are still unwritten. A rare opportunity for brand communication.

Innovations in the communication sector are routinely advertised and seldom redeemed. With virtual reality, it is different. This ‘Next Big Thing’ justifies every hype. VR used to be under rather than overestimated because it really is a completely new medium.

When a new, successful medium develops, it must be compared for a time with what is already known, in order to learn about the concepts. This influences the creative form for a while. Film began as, ‘living photography, perfect in every detail and life-sized’, television as visual radio, the World Wide Web as hypertext. With VR it is exactly as the name implies, which in this case refers to: VR is ‘something like reality’. Naturally, VR explains as little about reality as any other medium. But we leave out research and convention, in order to classify VR as a medium. That is why every article about VR is a personal account, and that is why experience really makes a difference here: you cannot grasp what you have not experienced.

VR will be regarded as an immersive medium, with the promise of ‘as if’ — as if you were there, as if you are the person, being represented. The idea of visual immersion is, however, actually older. In 1787 Robert Barker built his walk-in, 360-Degree-Views and called it ‘Panorama‘. Even older are the ‘peep-boxes’, which were popular in 19th-century salons and funfairs; small, wooden apparatuses for viewing exhibitions on paper, wood or glass. Early VR-Gears as well.

These panoramas and peep-boxes were primarily optical illusions. With digitalisation in the 1980’s, came tactility in production, the viewer becoming an actor. Jaron Lanier developed the ‘Data Glove‘ and characterised the notion of Virtual Reality. The visual representation, which the Data Glove can operate, is still abstract and prone to blocks, but trendsetting. One’s own body awareness influences what we see. We can act within the picture.

In modern VR both come together — physicality and panorama. To that end, VR has a few tricks up its sleeves, which effectively outwit our brain. And currently, it seems to be, as if we still fall for this repeatedly. The transfer to the virtual abyss in the laboratory for the umpteenth repetition got the heart pounding and generated measurable, bodily fear. False experiences in the VR-Dummy, the simulated person, who ‘I’ am, can trigger quasi-traumatic effects. So noticeable , that the consciousness researcher Thomas Metzinger, formulated an Ethics of VR Production with his colleagues.

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In British Thorpe Park, the mentalist and illusionist Derren Brown, been sending visitors to his ‘Ghost Train‘ since July. Equipped with a VR gear kit, you are literally a participant in a gruesome scenario, attacked by demons and other such passengers. Brown strengthens the already convincing VR illusion with motion, change of location, and being touched by actors. Pure immersion.

And there is a lot to say about it, that this miracle of ‘presence’ passes, that it is a phenomenon of the pioneer phase. It does not lack the experience of recipients or the rules of form. Both producers and recipients are still experimenting. It is an exploration of the grammar of the medium, the conventions made possible.

This shows in a wide variety of forms, leading to an explosion of ideas. Currently, it seems VR can be anything: theatre, film, documentary, e-learning, horror-trip, and yes, even video conference. One of the founders of the US production firm Wevr, Anthony Batt, describes it perfectly [‘Studio 360’, New Yorker, 25. April 2016]:

‘Does that mean our stuff is always perfect? Fuck no! It means we start with no idea of how we´re gonna make a project work, and we make it work. Or we don´t, and the whole thing turns to jello, and we learn.’

It is a great opportunity for brand communication, to take part in the development of this grammar. Two features help in the process: first, today short formats are best suited for VR and second, are comparatively cost-effective, feasible productions.

Let’s face it: 90% of brand communication is more or less friendly circumvention. Re-targeting is no fun for the audience. With VR, an ad may finally be a spectacle. Well done, it allows your audience to have a (spectacular, enlightening, shocking) experience. To take part in this entirely new medium is an opportunity, that will not so quickly come again.

 

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Join the VR experience live with our Roadshow “Reality by Virtuality” in Hamburg, Cologne, Munich and Berlin.

“Innovation as a USP in China” – how German companies are staying in the fast lane despite fierce Chinese competition.

When President Xi Jinping visited Germany last year he proposed to make 2015 the “year of innovation cooperation between Germany and China.” Back then no one could have foreseen that China would be facing a deepening economic crisis in 2015 but in highlighting innovation I feel that China’s president has highlighted a factor that will be pivotal to the success of German companies over the coming years when it comes to increasing profit and market strategies for China. This applies equally to producers of branded food items and consumer goods and mechanical engineering sector companies.

There are now around 5,000 German companies active in the Chinese market. And innovation can become their new USP. It’s no longer enough for German companies to “just” convince with their quality and experience. For a great deal has also changed in China in recent years – Chinese companies are no longer production service providers and manufacturers of cheap mass products. They have learnt from Europe and the West, copied a great deal in impressively painstaking detail and are ultimately producing at a substantially lower cost. In terms of price and product, more and more Chinese companies are becoming serious rivals. In order to avoid ceding pole position to forward-looking Chinese companies, German firms must strike out in new directions. And be prepared to develop new business models. In this context, unexpected moves are increasingly being considered, including “out-of-the-box” expansion and innovation – some of these are extremely audacious moves that do not even provide synergies with the company’s core business but which are demanded in China.

For example, a company is prepared to add a completely new product to its portfolio that doesn’t yet exist in this form but is perfectly tailored to the needs of consumers in the Chinese market.

Such as the “lunchbox for women.” This was designed for an entirely new type of woman in China – the “woman@work” target group. The modern Chinese woman is proud to work and illustrates this with a trendy insulated mini handbag in which pretty little nutrition snacks in eye-catching packaging and a mini cola light bottle are carried to the office. This product not only satisfies young Chinese women’s need for a fashionable accessory but also ticks the calorie awareness and healthy eating boxes. For part of the box is also a healthy muesli bar for the office. So the manufacturer of this box has done everything correctly: they have recognised the trend and the fact that millions of working, fashion- and figure-conscious women regard such a stylish, low-calorie accessory as a must-have.

The Chinese are often ahead of us in consumer research and are faster to reconsider their position and strike out in pioneering new directions: for example, the Chinese domestic appliance manufacturer Haier recognised that China’s most important food, potatoes (for some time now China has accounted for one in four potatoes grown worldwide), must be washed prior to sale in the local market if they are to sate the hunger of 1.3 billion people. Some farmers had been doing this in their washing machines. Haier spotted the gap in the market and reacted quickly. In western China a market for washing potatoes AND clothing was launched, sales of which swiftly hit the million mark. An example of an innovative approach by a Chinese company which illustrates how easy it is to offer alternatives to what is currently on offer by identifying the market’s needs. When a company conducts consumer-oriented research, this is perfectly executed application innovation.

Another Chinese company achieved similar success with the marketing of a “portable cooking station” – for what could be more obvious than offering China’s estimated 350 million migrant workers the opportunity to prepare meals whilst on the go. A prime example of target group innovation and the perfect demonstration of how a company can successfully innovate in its own country. “Disruptive ideas” is the name given to such pioneering and ultimately profitable concepts which bring innovative ideas to fruition.

However, German companies should also be seeking niches in sectors in which the Chinese have long been market leaders such as wind energy. China may be in the process of becoming world champion in the production of offshore wind power but it has huge maintenance needs – and this is precisely where German companies can take advantage: by identifying where China has technology gaps and helping to fill them. When major companies pinpoint the potential in maintenance and technical support, a German company can swiftly become an indispensable knowledge partner. Do the Chinese have modern helicopters and offshore vessels for maintaining their installed capacity offshore? Definitely not. And these are precisely the interfaces where action must be taken and innovative approaches adopted to create new, successful business models.

The boss of a German consumer goods company remains relaxed in the face of China’s economic woes, stating recently: “China is and will remain the engine room of the global economy.” The company’s cosmetics unit is continuing to achieve double-digit growth rates in China. But here again inventiveness is required and a reconsideration of the purchasing behaviour of Chinese consumers. In China cosmetic products are increasingly being bought online rather than in supermarkets or pharmacies. And naturally the needs of the digital consumer are completely different to those of the customer in a store. How do you reach the “digital native consumer”, who until now has been able to smell the shampoo bottles in a store or test hand creams and body lotions for consistency and fragrance? Here a great deal will depend on brand presence and packaging – both need to be so effective and convincing that the online buyer feels no need to test it.

This is where the empathy and know-how of package designers and marketing pros really come to the fore while trends and patterns in China must also be constantly taken into account and approaches adapted in order to fully satisfy the needs of the Chinese online consumer and increase sales. The European cosmetics company will then be well placed to achieve its sales goals.

In addition to product innovation and opportunities for differentiation from the Chinese competition, local requirements must naturally also be taken into account in operational execution – particular characteristics in the Chinese R&D departments of German companies but also the demands of Chinese companies with regard to localisation.

The balance between “innovation as a USP” and the commitment to “R&D localisation” needs to be maintained and stable. This will ultimately determine whether German companies enjoy long-term success in China.

About our guest author: For more than 20 years Daniela Bartscher-Herold, EAC Consulting, is advising German companies in China. Her lecture at the “International Roadshow China” (Serviceplan, Munich – 17. November 2015) will deepen your knowledge about the value of innovation for German companies acting in China.