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Shaping and Scaling

a Whole New World

Inside the Driving Forces of Disruptive Innovation

549m

WeChat users in China

$53.2bn

7million

Value of wearables
market by 2019

Apple smart watches sold


(Global Equities Research)

(Juniper Research)

$45 billion

Valuation of three year


old Chinese smartphone
maker Xiaomi

Numbers that
define todays
transformative
world

$500m

Ubers annual revenues


in San Francisco

$120
billion

Value of augmented
reality market
by 2020

85m

Views of #LikeAGirl
since June 2014

23.8m

Virtual reality devices


sold by 2018

$7.1 trillion
Worldwide market of
The Internet of Things
by 2020

75%

Of all mobile messaging


traffic by 2018 will be via
messaging apps

450m

People using mobile


payments by 2017

Was there ever a more


exciting or challenging
time in business
than today?

Trudi Harris
Chief Communications Officer,
MSLGROUP

The C-suites topic-du-jour, disruptive


innovation, is leading to thrilling, seismic
shifts across the worlds industries and
markets. At the same time, its sending
shivers down the spines of slow-adapting
players who cling to models from a by-gone
era and live in paralysing fear of being
Netflixed. And its not only the client-side
riding the disruption wave. As technological
change continues apace, creative, media
and PR agencies have had to invest
time and money to meet the challenges
thrown up by disruptive innovation, to
ensure theyre offering clients true marketchanging thinking based on technological
expertise, rich insights, innovative
communications and breakthrough
creative ideas.
Successful marketing in the digital age
has become a magic, heady mix of
inputs such as storytelling, influencer
relationship-building, employee advocacy,
multi-stakeholder messaging, online
community management, amplification
of third party endorsement. These are all
elements that we believe have always been
at the very core of PR. Combine these
inputs with outstanding, heart-stopping
creativity and highly targeted media
buying and, together, its a potent force.
Success for brands today lies in a seamless
amalgam of activities, separated not by
disciplines, but instead bound by a focus
on people, and how best to communicate
with them. There was never more impetus
for greater integration between marketing,
and communications.

At MSLGROUP, we work with a number


of well-recognized disruptive companies
and brands around the world, as well as
companies with rich heritage who are now
retooling for the future. We also work with
dynamic Asian brands taking pole position
on todays global stage and pioneering
tech start-ups who we are increasingly
connecting with many of the global
brands we represent. To all these clients
we promise a deep understanding of how
to build connections between technical
innovation, brand marketing and peoplecentric communications.
In this short publication, we touch upon,
among others, some of these clients
stories and share our perspective on how
disruption plays out as a force within
markets: the creative process, technology
and communications. And to the marketing
communications industry, we lay down the
gauntlet: disruptive innovation offers us
all an opening to embrace the polar shift
towards a greater integration combining
dissimilar currents into explosive ideas,
the chance to help create ever-more
meaningful partnerships for our clients,
and the prospect of delivering insight-fueled
foresight to help companies predict whats
over the horizon. The speed of change has
never been faster. The bar has never been
higher, the opportunity has never been
greater. We hope you enjoy the read.

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 01

The combined forces of techs rapid advance and


our chronic addiction to smartphones have made
it easier for digital challenger brands to transform
our behaviour in fundamental ways. Look at how
platforms like Kickstarter have democratised
investing, enabling anyone to own a stake in
products or projects. Take TV. Its no coincidence
that the term binge-watching entered the Oxford
English Dictionary in 2013, the same year as TV
streaming service Netflix unleashed its incredibly
binge-worthy House of Cards. Think of the range
of accommodation we can select on Airbnb when
we go on holiday. And, in an example of innovative
disruption thats been so phenomenal that its
brand name has become a byword for it, Uber has
transformed how we get around. As Renee Wilson,
chief client officer at MSLGROUP, and chair of the
PR Lions jury in Cannes in 2014 observes: Brands
like Netflix, Uber and Airbnb have completely
changed the game for consumers and the industry
alike through their growth and massive uptake.
Things will never go back to the traditional
marketplaces that they were. Never.

02 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

Market
Disruption

Todays consumer wants


convenience and personalisation
and if they dont get it from your brand,
theyll look elsewhere.

Renee Wilson,
Chief Client Officer, MSLGROUP

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 03

While some industries remain ripe for disruption,


others have already experienced more than their
fair share. The music industry has been repeatedly
disrupted over the last few decades: the decline
of hard copy sales was then succeeded by more
people accessing music via streaming. Apple,
having played a key part in changing our music
consumption habits, is now itself on the receiving
end of innovative disruption from, among others,
Chinese smartphone brand Xiaomi. This threeyear old company is currently valued at $45bn
yes, even more than Uber making it one of the
most valuable private tech companies in the world.
Not content with stealing Apples lunch, Xiaomi
has also launched competitively priced rivals to
GoPro and Jawbone products.

Involving Users
Whether its a Xiaomi smartphone that
resembles an iPhone but costs half the
price or using Uber Rush to ship a parcel
across town, disruptive innovation starts
with the user experience. As Renee Wilson
says: Todays consumer wants convenience
and personalisation and if they dont get it
from your brand, theyll look elsewhere.

Meanwhile, in its native San Francisco,


Ubers revenues are $500 million per year,
making it three times the size of the
taxi market. Never mind disruptive,
thats explosive.

Wilson adds that, by involving users and


handling their data in a way that offers
a more personalised service, disruptive
businesses earn more consumer trust.
That value exchange then evolves into
People are intolerant of poor service and
want reliable, usually app-based convenient a virtuous circle, supplying the consumer
with a trusted service that theyre happy
services. Wilson says: If you make her life
to recommend and assisting the rapid
easier [with services] like finding a taxi,
growth of the disruptor. She says:
getting food for dinner or booking a hotel
room based on smart data points like habits Disruptive companies use data to more
precisely personalise their services
and preferences you will win her over.
which make the consumer feel like the
Some disruptive businesses go further,
company really understands them, and
making their users an integral part of the
encourages trust. Because people trust
brand experience. Uber rates drivers and
the company more, they are more likely to
passengers, so if you misbehave in the
share more data the next time they use the
back of an Uber car, good luck finding
service/product, so the cycle starts again.
a driver to pick you up. Airbnb would be
nothing without its community of guests
and hosts who, once again, rate each other.
And people have welcomed this opportunity
to show off how well behaved they are:
in seven years, Airbnb has established
a presence in 192 countries. Hilton hotel
group, a 96 year old company, is in 78.

04 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

800m

WhatsApp users

100m

Snapchat daily
active users

75%

of all mobile messaging


traffic by 2018

Changing the rules


Many messaging apps have already
been disruptive by building trust through
offering convenient services like organising
transport or seamless purchase and
payment. Japanese messaging app Line
now has 181 million active users across
the globe, and users in certain territories
can use it to order and pay for groceries
and cabs. Globally, messaging app
WhatsApp now has 800 million users
and Snapchat has 100 million active
daily users. Between them, messaging
apps will account for 75% of all mobile
messaging traffic by 2018, according
to Juniper Research. Yet its Tencentowned WeChat which has been the most
disruptive, winning over 549 million
Chinese smartphone owners by morphing
from a messaging app into more of a lifemanagement app, leaving a wealth of
apps with singular functions in its wake.
Alice Hu, deputy Asia digital lead at
MSLGROUP in Shanghai, comments:
WeChat is ingrained in everyday life.
Theres a service component and that
ability to make your life easier has been
a dramatic shift. The barriers are reduced
from jumping from one app to another,
so all your information is in one place
under one log-in which is why its been
so popular.

She continues: Throughout the


day WeChat is the main source of
communications: Asian messaging apps
are how colleagues, friends and clients
talk minute to minute. According to Hu,
WeChats role as a digital companion has
taken a year. And its disrupting traditional
business practices too: whereas the
exchange of business cards used to be an
established part of making connections,
that tradition is being replaced by scanning
a QR code that gives new contacts
your WeChat ID. The apps group chats
feature has become a popular internal
communications platform for Chinese
enterprises. In fact, WeChat became
so integrated so quickly into Chinese
work culture that, in September 2014,
itintroduced an Enterprise Account with
business users in mind. Given WeChats
exponential take-up, it was no surprise
to see Apple vice president Kevin Lynch
accessing it, along with Uber and Twitter,
when he demonstrated the Apple Watch
for the first time.

WeChat is
ingrained in
everyday life.
Theres a service
component and
that ability to
make your life
easier has been
a dramatic shift.

Alice Hu,
Deputy Asia Digital Lead,
MSLGROUP Shanghai

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 05

Communications
Disruption

If you analyse what a brand


or organisation needs to deliver
marketing success in the digital age,
the result is a long list of PR outputs.

James Warren,
Head of Digital, UK and EMEA,
MSLGROUP

06 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

The communications industry has been


far from immune to the forces of innovative
disruption. Its tectonic plates are constantly
shifting in order to represent an evolving
landscape of brands where stalwarts rub
shoulders with startups.

PR is on the
frontline of
disruption;
other agencies
will be able to
get you reach,
impressions
and frequency,
but will people
trust the
message? Is it
credible? Thats
where PR and
communications
comes in...

Jeff Melton,
SVP, Global Technology & Platforms,
MSLGROUP

One of the biggest changes has been the


changing role of PR to become much more
central to a brands business strategy.
As James Warren, head of digital UK and
EMEA at MSLGROUP points out: If you
analyse what a brand or organisation needs
to deliver marketing success in the digital
age, the result is a long list of PR outputs.
Whats more, PR agencies are frequently
the first agency to which a technology
start-up reaches out. As these nascent
companies seek to secure venture funding
and publicise their story, PR agencies are
often guiding them behind the scenes.
That gives PR agencies something
of an edge over other communications
companies in terms of understanding new
tech. PR is on the frontline of disruption,
says Jeff Melton, SVP, global technology
& platforms at MSLGROUP. He explains:
Other agencies will be able to get you
reach, impressions and frequency, but will
people trust the message? Is it credible?
Thats where PR and communications
comes in: we are better at getting peoples
attention. We earn trust because we bring
the message of emerging companies
and its much more credible. And thats
probably going to be the most important
thing that a young emerging disrupting
company needs. They may not need mass
and frequency, but they do need credibility.

Integrated strategy
Historically, PR and other communications
disciplines like advertising used to
collaborate rarely on client business. But
as innovative disruption has presented
more challenges and opportunities, clients
are requiring more integrated strategy
and execution from their communications
partners. Melton points out: Its less about
roles and responsibilities and more about
an agencys ability to put together the
pieces in the smartest way. Thats what
clients are seeking.

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 07

Creative
Disruption

Consumers are taking more control of how


they spend their time and where they let
brands in. Its about making your brand part
of their lifestyles, not the other way around.

Renee Wilson,
Chief Client Officer, MSLGROUP

08 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

Detaching from traditional roles and


responsibilities can spawn incredibly creative
ideas. Reflecting on her chairmanship of the
PR Lions in 2014, Renee Wilson says: Last year
was a real moment in time at the Cannes Lions
International Festival of Creativity as it was clear
there was a blurring of the lines as to what was
PR versus advertising versus digital.

81%

of 16-24-year old
women support Always
in reclaiming like a girl
as an inspiring statement
as opposed to an insult.

1000

online groomers
across 72 countries
were identified by the
computer generated
Sweetie campaign

She makes the point that the campaigns


that really stood out were those that
included elements of disruptive behaviour
or thinking, whether that was the computergenerated Filipino child Sweetie by
Lemz in Amsterdam, an initiative which
helped identify 1,000 paedophiles from
71countries, or the PR Grand Prix winning
Scarecrow for restaurant chain Chipotle
which combined a beautiful film with a
gaming element and a mobile coupon to
drive footfall in-store.
From this years Cannes entrants, the most
prominent example of creative disruption
is the #LikeAGirl campaign for the Procter
& Gamble sanpro brand Always. Rather
than showing the product and extolling its
protective virtues, #LikeAGirl kicked off a
conversation with a powerful piece of video
by director Lauren Greenfield. This social
experiment invited both women and prepubescent girls to undertake certain actions
like run or throw a ball or kick like a girl.
The women initially did it in a ridiculous
way, while the young girls were strong and
serious. When the women got another shot,
having reconsidered the phrase like a girl,
their second take was more confident and
self-assured.
This social experiment has amassed a total
view count of more than 85 million since
#LikeAGirl launched in June 2014. Over
the last year, its reached half the worlds
population, generating 4.58 billion media
impressions in 150 countries. Whats more,
81% of 16-24-year old women support
Always in reclaiming like a girl as an
inspiring statement as opposed to an insult.

With the audience


#LikeAGirl is such a creative tour de
force because it taps into wider current
debates around gender equality and female
empowerment. Brands, with the help of
communications agencies who are plugged
into the zeitgeist, can contribute to these
discussions with a strong and potentially
disruptive point of view. Andthat means
not just judging the tone of the content
correctly but also the context in which
its being received. Pascal Beucler, senior
vice president and chief strategy officer
at MSLGROUP, says: We need to be on
peoples timeline, we need to be in the
kitchen when theyre cooking, or on the
train when theyre travelling. We need to
be where they are and engaging with them,
matching the right content on the right
channel in the right language, creating
a connection and a conversation.
Audience participation characterises a
landscape where disruption is becoming
the norm. Just look at the amount of
information people share on Airbnb
about their home and its environs, or
how an Uber ride can be personalised,
with passengers even able to select the
music they want to soundtrack their
journey. People trust and support these
brands because theyve been created in
an authentic way, says Renee Wilson.
Consumers are taking more control about
how they spend their time and where they
let brands in. Its about making your brand
part of their lifestyles, not the other
way around.

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 09

10 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

Technological
Disruption

If you are a tech company, what makes


people interested and attracted to you is
creativity. You need to connect tech and
people through emotion.

Pascal Beucler,
Chief Strategy Officer, MSLGROUP

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 11

Emerging tech such as wearables, artificial


intelligence and virtual reality will mean new
dynamics in disruption in the coming years.

$53.2 bn

reached in 2019 by
the wearables market

7 million

Apple Watches claimed to


have been sold by Apple

Analyst firm Global Equities Research


claims that Apple has sold seven million
smart watches so far and the wearables
market, according to Juniper Research,
will reach $53.2 billion by 2019. Meanwhile,
2015 sales of virtual reality devices are
forecasted at 5.7m units for 2015, rising
to 23.8m in 2018, according to KZero,
a consulting firm specialising in the
virtual space. At the same time, artificial
intelligence will evolve from Google Now,
Siri or Cortana on your smartphone to nextgeneration systems supplied by companies
such as IBM alongside startups like Scaled
Inference and MetaMind Inc. Facebook,
Google, Baidu and Chinese ecommerce
giant Alibaba are among those investing
in the tech.
Branding, not bandwagon-jumping
For brands, technological disruption
means identifying appropriate partnerships
that help communicate something about
their brand as opposed to jumping on
the latest bandwagon. Oreos Trending
Vending Machine at SXSW Interactive
in 2014, for instance, invited attendees to
create, print, and eat customised Oreos
that were based on trending Twitter
conversations. A vending machine,
created by Maya Design, enabled people
tocustomise their Oreo using a technique
similar to a 3D printer. The Oreo Trending
Vending Lounge says something powerful
about Oreo, that its listening, its interested
in what its audience has to say and is
able to react to it.

12 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

Tangible Disruption
In the coming years, this will happen
when people try a holiday before they
book it using virtual reality headsets like
Facebook-owned Oculus Rift, which will
start shipping in early 2016. Its already
starting to happen in the automotive
industry, with car brands using virtual
reality to help potential buyers get a
sense of a car before taking it for a real
test drive. And brands continue to work
with augmented reality specialists such
as Blippar that enable those whove
downloaded an app to access an additional
layer of content to further engagement.
Blippar, which raised $45m from US
fund Qualcomm Ventures in March, has
apparently been downloaded onto the
screens of more than 25% of the UKs
smartphone-owners. Such companies will
be at the forefront of the augmented reality
market which is predicted to be worth
$120bn by 2020, according to Digi-Capital.
Companies in the virtual/augmented
reality space will undoubtedly disrupt
more conventional brand selection and
purchasing patterns in increasingly
sophisticated ways. Yet some of the most
disruptive tech can also belong to the
Internet of Things. In other words, its a
physical product thats connected to the
internet. The Internet of Things is estimated
to be worth $7.1 trillion by 2020, according
to IDC, and its no surprise to see one of
retails most disruptive forces, Amazon,
at its helm.

25%

of UKs smartphone
owners downloaded
blippar onto their screens

$7.1 trillion

The Internet of Things


estimated worth by 2020

The Amazon Button enables people to


touch a connected branded button (for
instance, for Bounty kitchen towel or Tide
detergent) to re-order it, eliminating the
need for either written or digital shopping
lists and making people brand-loyal at the
same time. Thats every packaged goods
marketers dream and its already here.
And even that tech is likely to be disrupted
as Amazons Dash Replenishment
Service (DRS) will one day be integrated
into household appliances. Amazon is
apparently already working with Whirlpool
on a washer dryer that automatically
orders detergent when supplies run low,
while Brother is building a printer that
can automatically order ink. Amazon is
innovating so rapidly, its disrupting itself
as it goes.
Disrupting the disruptors
One final note, however. While its easy to
get swept up in the tidal wave of love and
affection for the disruptors that make our
lives easier, more enjoyable or entertaining,
its worth remembering that they are at
constant risk of disruption themselves.
Firstly, with a renewed focus on user
experience (and some smart tech hires),
interesting reinventions are underway.
For instance, far from Marriott licking its
wounds as holiday-makers use Airbnb
and business travellers try new services
such as Breather, it is now enabling people

to communicate with hotel staff via a


messaging app prior to and during their
stay. It also invested in a turbo-charged
Oculus Rift experience to sell not just
particular destinations but also a glimpse
of grandeur synonymous with a stay in a
Marriott, reminding people about what they
like about staying in a hotel. Secondly, new
tech will come along which will unnerve
the disruptors. What will happen to Uber
drivers when driverless cars become more
commonplace? And as the most popular
aspect of disruptive dating app Tinder, the
swiping, has now been emulated by a range
of copycats including crowd-funding app
Tendr, the novelty is starting to wane.
We are in the privileged perhaps even
slightly spoilt position of witnessing so
much technological advance that we now
come to expect new types of service and
continuous innovation, and are impatient
when businesses dont understand that.
As Pascal Beucler puts it: Transformation
is no longer an option but an urgent
necessity for clients. Its difficult to believe
that we can still play the game we were
playing a while ago. At some point we
have to transform and change.

Transformation is no longer an
option but an urgent necessity for
clients. Its difficult to believe that
we can still play the game we were
playing a while ago. At some point
we have to transform and change.

Pascal Beucler,
Chief Strategy Officer, MSLGROUP

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 13

14 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

PayPal:
Be The Customer

In a social media age, disruptive ideas,


products and services spread when
trustworthy people recommend them.
Employees are often neglected as power advocates for a brand, but
PayPal grew its business substantially when it realised that many of its
15,000 employees were using cards or other payment options instead of
PayPal. So it invited them to Be The Customer, challenging and urging
them to be active brand advocates PayPal product users.
This long-term commitment saw employees awarded points when
they used PayPal or found bugs and suggested improvements. In just
nine months, nearly 7,000 employees had signed up, generating more
than $22 million in payment volume. PayPal payments at employee
cafeterias, which had accounted for only 13% of sales, had more than
quadrupled to 66% within the first four months. Employees identified
at least 300 product bugs and suggested 75% more ideas for product
improvements than the previous year. In the first nine months
of 2014, the company acted on these, improving the experience
for 95 million customer transactions and resulting in $2.5 billion in
additional revenue. Employees became so passionate about referring
merchants to accept PayPal that 8,600 employees participated in
PayPal It, the merchant referral programme, generating 369,000 leads
and 114 new merchants who generated $6m in payment volume.
Be The Customer helped contribute to 2014 revenue growth of 19%
over the same period in 2013. Be The Customer scooped a 2015
PRWeek Global award for Employee Communications and PRSA
Big Apple Award for Reputation and Brand Management.

7000

PayPal employees
signed up

75%

increase in ideas
suggested by PayPal
employees

95 million

customer transactions
were improved by the
additional ideas put
in place

$2.5 billion

additional revenue from


the customer transactions

Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation 15

Healthcare:
Extreme Transformation

Healthcare will go through extreme transformation. There are


many problems that havent yet been solved and there are now
more companies than ever that are seeing the opportunities to
solve them from a tech standpoint, says Jeff Melton, SVP, global
technology & platforms at MSLGROUP. Melton cites the example
of Apples ResearchKit, launched in March 2015. This open source
software framework is designed for medical and health research
to assist doctors and scientists gather data from participants
using iPhone apps. It has the potential to transform an iPhone
into a powerful tool for medical research and, by launch in March
2015, it had already has already partnered specialists in asthma,
cancer, cardiovascular health and Parkinsons Disease. Partnering
these four incredibly reputable establishments will show how
Apple devices can serve as research tools to gather data to solve
problems, predicts Melton.
But healthcares transformation wont begin and end with Apple.
Other players such as Google, Microsoft and IBM are all keen
to enter the global healthcare industry worth $3.8 trillion,
according to Plunkett Research with software that could disrupt
conventional healthcare practices. Whats more, theyre jostling
with thousands of startups, particularly from Asia.

Bronwen Andrews, MSLGROUPs head of EMEA business


development and healthcare says: Asia didnt used to be a
player in healthcare, but now there is a huge amount of innovation
in healthcare in that region. South Korea in particular is a big
player. That country has a huge government initiative encouraging
research and development within Asia and many companies there
have been enjoying double digit growth over the last five years.
Yet disruption brings with it certain issues, particularly in a
sector as sensitive as health. Firstly, theres a need to balance
the new and the next with respect for processes that keep us
safe. Secondly, concerns over privacy are perhaps even more
prominent in healthcare than in finance. Disruptive companies
are fast moving companies, says Andrews. Yet how those newer
companies fit into ways of working that are trusted by patients
is challenging, particularly when its a company with no proven
track record in Europe or North America.
She says: These companies dont want to wait around. They
want partners who are their eyes and ears in the market who
can offer speed and strategy. We can be influential in helping
them to navigate new markets.

16 Shaping and Scaling a Whole New World / Inside the Driving Forces of Disruptive Innovation

About
MSLGROUP
MSLGROUP is Publicis Groupes strategic
communications and engagement group, advisors
in all aspects of communication strategy: from
consumer PR to financial communications, from
public affairs to reputation management and from
crisis communications to experiential marketing
and events.
With more than 3,000 people across close to
100 offices worldwide, MSLGROUP is also the
largest PR network in Europe, fast-growing China
and India. The group offers strategic planning and
counsel, insight-guided thinking and big, compelling
ideas followed by thorough execution.
www.mslgroup.com

If you would like to talk to MSLGROUP about how we


can support you in your business transformation,
please contact Trudi Harris, Chief Communications Officer,
trudi.harris@mslgroup.com

MSLGROUP.COM