The brand communications crisis is not an urban legend, albeit just as scary
Between 2001 and 2002, Brazil went through its largest energy crisis. The lack of infrastructure planning combined with economic growth forced the Government to ration the energy supply from its main urban centres, for intermittent periods of time. Back then, as a student living in São Paulo, I remember streets darkening as the sun went down. In one of those evenings, walking back home from university, two men driving a motorcycle stopped right in front of me. One of them jumped off the bike and before I knew it, he hit me on the head with the back of his gun and stole my backpack.
São Paulo is one of the many existing (and emerging) megacities feeling its ‘growing pains’ due to an increased demand for ever more comfortable lifestyles. From a strategic standpoint, although cities only occupy 2 percent of the earth’s landmass, they are where 75 percent of resource consumption and most brand communications are concentrated.
Moreover, the global media and advertising footprint also comes with a hefty environmental toll. In the UK, for instance, advertising is responsible for two million tonnes of carbon dioxide emissions annually, equivalent to heating 50 percent of London’s social housing, according to CarbonTrack.
Markets, choice and competition are not just a consumers’ best friend, but their political representation. Brands able to broaden their audiences from customers to citizens and their revenue model from sales to the creation of shared value will be the game-changers driving our industry forward. This is the type of thinking required to embrace Urban Brand Utility (UBU), an approach to brand communications I conceived and have been advocating for.
What Urban Brand Utility should look (and be) like: Useful, profitable and impactful
Waste not, want not
Circular business models, products and processes are transforming business into what it should always have been — smart, efficient, forward-thinking and zero waste. Hear the latest in circularity innovations in biomaterials, building, beauty and more at SB'19 Detroit — June 3-6.
UBU is about using brands’ touch points as more than mere messengers to supplementing public utility services and minimising carbon dioxide emissions.
Such logic can turn brand communications into a regenerative force for cities, where the promotion of goods and services is not only more profitable, but also environmentally enriching and socially virtuous.
In Moscow, for example, Sberbank was approached by major Russian real estate developers to collaborate on better infrastructure planning in residential areas. People’s opinions on local needs fuelled targeted campaigns, promoting loans for small businesses. The ‘Neighbourhoods’ campaign generated nine times as many small business responses than traditional loan advertising.
In other words, people had their needs addressed as neighbourhoods became more attractive. The city increases tax collection from the new businesses being set up, which also reduces the cost related from having to deal with derelict areas. As the biggest Russian bank, caring about citizens is not just a nice thing to do but an effective way for Sberbank to positively impact its bottom line.
Citizen-consumers are important players in enabling business to tackle the issues that matter most. As important as it is to reduce the number of clicks on a consumer journey, improving our life journeys will often result in superior returns.
Aware that potholes, cracks and bumps in the road can cause irreversible damage to people’s pizzas during the drive home, Domino’s decided to pave towns across the US (using its branding) and save their customers’ pizzas from the bad roads. Obviously, not only Domino’s customers benefited from this effort, but every single driver going through the few selected roads.
This may sound silly, but according to the National Surface Transportation Policy and Revenue Study Commission of the U.S. Congress, the annual investment required by all levels of government to simply maintain the nation’s highways, roads and bridges is now an estimated $185 billion per year for the next 50 years. Today, the nation annually invests about $68 billion.
Mayors and city managers from the municipalities where “Paving for Pizza” has taken place have acknowledged the creation of shared value.
For Eric Norenberg, the city manager of Milford, DE: “We appreciated the extra Paving for Pizza funds to stretch our street repair budget as we addressed more potholes than usual.”
Towards new revenue models underpinned by creative urban resilience
Advertising is the soul of the capitalist system and the best incentive to upgrade it is to create new revenue streams. For one, a brand that shows itself relevant and useful is more likely to cut through the noise and increase sales. But there’s also a bigger commercial model to be explored. First, by definition, UBU programs have three core objectives:
- Enabling savings or new earnings for cities
- Creating shared value for the cities’ inhabitants, and
- Delivering superior return on media investment (ROMI).
Here’s a hypothetical situation. Let’s assume that Domino’s Paving for Pizza program generates a $10 million surplus to the city of Bartonville by minimising the costs from dealing with potholes. Rather than treating this as a one-off campaign, smart mayors would try and create a virtuous cycle, where 50 percent of the surplus is retained by the city, 25 percent is returned to the advertiser and 25 percent to the agency and media owner — a value only unlocked by repeating the approach.
The more advertisers communicate their messages in a way that benefits brand, people and city, the cheaper it becomes to do more of it — and, the more cities encourage such an approach, the faster societal problems will be addressed. In other words, UBU programs become a catalyst, igniting brand love, smartening cities and improving their economies, as shown on the model below.
As with the idea of a circular economy, where the life cycle of products and services goes beyond end users, UBU looks at brand communications as closed loops by designing a system bigger than fixed campaign periods, target audiences and business-as-usual KPIs. This way, marketing budgets are effectively turned into investment funds with returns in the form of brand cut-through, happier customers, social impact and more effective city management — as Heineken is aiming to achieve through its Cities Project, for example.
Making a brand’s touchpoints become the new Agoras
To make the model scalable, however, a digitised mechanism would be required. An interesting case of civic engagement enabled by outdoor media has recently gone live in New York City.
The Participatory Budgeting campaign invited New Yorkers to decide how to spend US$1 million of the public budget through digital panels spread across the city. This means that the same touch point used to communicate is also used to enable the action it asks audiences to undertake — a paradigm shift where advertising can finally walk its talk.
The company behind the ‘voting outdoor panels,’ Intersection, started up by repurposing New York City’s now-obsolete pay phones as totems offering free broadband Wi-Fi connectivity to residents and visitors, and media space for advertisers.
Besides supplementing New York’s broadband network and now enhancing civic life, the LinkNYC totems have projected an incremental US$500 million in ad revenue for the city as part of a 12-year contract, by unlocking new value from underutilised assets.
Just like the Ancient Greek public squares — the Agoras — where direct democracy was born, this emerging participatory media can effectively collect complaints and suggestions for cities’ improvement, in real time. The next step for this could then be the matching of brands that align with specific urban challenges.
This way, instead of top-down public-private contracts, issues are identified by local constituents informing future UBU programs, as wanted by the people and enabled by advertising media.
This can be done by following six strategic imperatives:
- Translate the big idea that defines your brand into a big utility that can operationalise its impact.
- Replace interruptive interactions with enhancing ones by delivering a public utility service.
- Turn any existing utility of a communications effort from a stunt into a sustained practice.
- Shift your business focus from short-term sales results to longer-term profitability.
- Broaden your audiences from customers to citizens, expanding paths-to-purchase into life journeys.
- Diversify revenue from sales to the creation of shared value.
As a comparison, Magna Global estimated that in 2018, global media spending in brand communications will reach US$551 billion; but, according to the Pike Institute, by 2020 investment in smart city infrastructure will not surpass US$108 billion — an approximate 5:1 ratio, respectively.
Through the UBU approach the current US$ 551 billion could merge into the much larger pie of Global Welfare & Security spend of US$ 40.5 trillion, a figure obtained by dividing Gross World Product (GWP) by the 30 percent global average spent on welfare and security, as per the International Monetary Fund (IMF).
The above, at least in theory, would be plausible as advertisers would then become key players in public-private-partnerships.
Media and advertising have powered a linear economy that is now facing severe challenges. Conversely, urbanisation has fuelled population growth that went from a sign of prosperity to one of alarm. The strategic opportunity is to bend the line and turn the existing real estate and brand communication infrastructure into a network of creative urban resilience that benefits all parties involved and educates everyone in the value chain.
As we've noted, markets, choice and competition are not just consumers’ best friend, but their civic representation. After all, as one of the tribunes asks the crowd in Shakespeare’s Coriolanus: “What is the city but the people?”