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Augmented reality: what comes after the smartphone?

Augmented reality has been one of the great innovation topics of the technology industry for years now. The sector is currently focusing primarily on smartphone cameras, which allow users to project a digital content layer onto their environment.

However, the areas of application are much more diverse: with shopping apps, you can try on glasses or trainers before buying them virtually and project furniture into your own home. Google Maps has most recently started guiding the way not only with arrows on a map, but by augmented reality. In Pokemon Go, too, the Pokemons now sit in a real meadow and not just in the rendered game environment.

One common feature of the numerous augmented reality applications so far has been that virtually all of them have been limited to the visual aspect of augmented reality and were usually the smartphone platform of choice. At least as exciting, however, are the current developments that shift augmented reality from smartphones and integrate it into other wearables.

The sound comes from the glasses

The US audio manufacturer Bose, for example, is a pioneer in this area: at the SXSW 2018, Bose presented the first prototypes of its augmented audio sunglasses, nine months later in December the first two models came to the market. In contrast to other devices, such as the recently released OptiShokz Revvez, the sound from the Bose glasses is not projected directly into the ear via bone conduction and the skull, but via micro-loudspeakers.

Bose is marketing its glasses under the buzzword of augmented audio and not only supplies the hardware, but has also announced a comprehensive software development kit that will be launched at SXSW in March 2019 to encourage app developers to bring innovative and exciting hardware applications to market. This is where the whole topic becomes interesting, because a mere headphone replacement may be nice, but it isn’t really ground-breaking.

Augmented audio applications

Audio feedback, based on GPS location and the orientation of the glasses, allows information to be passed on relating to objects in the direct field of vision: information about places of interest or about bars and restaurants as well as directions. For example, navigation apps or city guides become possible without a smartphone screen.

In future versions of the glasses, gesture control by head movement can probably also be implemented, for example to accept calls or control media players. Location-based services that do without screen interaction and feed services or offers directly into the user’s ears depending on their position are also conceivable. Obviously, the integration of digital assistants with voice control such as Google Assistant and Amazon’s Alexa would also make sense in the future.

Augmented audio: just the beginning of the digitisation of everyday objects

Products such as the Bose Frames are just another step towards a world where all the everyday objects we carry with us become digital and smart. The device evolution has already brought digital services from the study (desktop PC) into the shoulder bag (laptop) and from there into the trouser pocket (smartphone) and to the wrist (smart watch). The head is only the next logical step in this development. In my opinion, the development in the smart glasses segment has not yet come to an end, despite some failures.

However, wearables that use audio as a transport medium are significantly more discreet and less invasive than spectacles or contact lenses projected directly in front of the eye lens and should therefore benefit from higher user acceptance.

So, what does the future have in store?

Will we soon be wandering cities dressed in smart devices from head to toe? Probably not. Although Nike and Under Armor, two major sports goods brands, are already developing smart trainers and Levi’s and Google have launched a touch-controlled denim jacket, all of these technologies will only become established when the services offered provide consumers with a truly concrete benefit.

Digitisation has undoubtedly created great new opportunities in recent years. Opportunities that have brought us closer to our customers and that help us tailor our products and services even more closely to them. Yet even though we can now calculate every marketing campaign and every sales figure down to the smallest detail, one thing should not fall by the wayside: our intuition.

Because as colourful and diverse as our beautiful new world may be, mankind has basically remained who we always were: a sentient, empathetic being who longs for real contacts, wants to understand and be understood, who questions and participates and who still trusts in his very own – completely analogous – instincts: feeling, seeing, hearing, tasting, smelling.

For 2018, the challenge is to combine the many opportunities of the digital with our empathic and intuitive capabilities – and to get the best out of both worlds, both for the customer and for our own employees.

Many questions will be raised when carmakers present their solutions and concepts for mobility of the future at IAA in Frankfurt in just a few days’ time: What do we do in the car if the car can soon drive itself? If the dashboard and side windows consist of screens in future, which contents do we use during the journey? What data does a fully connected vehicle supply and who uses it for what purpose? Manfred Klaus believes that achieving reduced emissions is just one aspect of what the car of the future will have to deliver. Writing in a guest article, the Plan.Net boss sees cars becoming their own communication platform in future – with new business models.

It is a mere coincidence that elections to the next German Bundestag are taking place on the final day of this year’s International Motor Show (IAA) in Frankfurt (24 September 2017). Fitting at the same time however, since Germany’s motorists suddenly find themselves in the middle of the election campaign. The debate revolving around banning diesel vehicles, electric mobility, software updates and hardware retrofits is dominating the media as well as political discussions.

There is no question but that the emissions from private vehicles are a key issue for the public at large – especially in the larger cities. Yet electric mobility is currently lacking the infrastructure and the reach to seamlessly replace the combustion engine on a grand scale. The same applies for the topic of autonomous driving. Just because studies indicate success, failure would still be the result in mass operation at present. As soon as the discussion on the diesel front becomes de-emotionalised, a different topic will raise its head for carmakers: with progressive vehicle digitisation and connectivity, the cars themselves will increasingly evolve into independent communication platforms – so a type of smartphone on wheels.

Many aspects of this development are grouped presently under the catch phrase “connected car”, which essentially encompasses three main feature areas. Firstly “general features” such as seamless Internet connection, WLAN hotspot in the vehicle or personal driver registration. Then there are the “vehicle-related features”, which include information on the vehicle condition, its position or additional on-demand features (brighter headlights, 4-wheel drive, and such like). Finally the “infotainment and entertainment features” provide real-time information on traffic as well as location-based services and content offers. Digital technologies can therefore already be found today in an entire range of car features – even aside from autonomous driving.

It’s just that most Germans have barely noticed it yet. Digital features have been advertised slightly cautiously to date by the manufacturers. According to a study on behalf of Motor Presse Stuttgart, only ten percent of Germans are acquainted with the terms “connected car” or “connectivity”. And even among Generation Y, the key target group for connected car offers, only one in every two is familiar with the term according to Deloitte. To add to this, the terms are also interpreted completely differently by motorists: from automatic parking assistance to the emergency call feature through to WLAN hotspot or a music playlist on the driver’s smartphone.

Initial studies by manufacturers, as demonstrated at the Consumer Electronic Show (CES) in Las Vegas, illustrate what could be conceivable in the near future: smart windscreens that offer more than just a pure head-up display, dashboards that simply consist of touchscreens and on which key features are processed like in apps or side windows that can be used via touchscreen to surf the Internet or call up apps. And when it comes to defensive driving, apps already exist in abundance. The latest offer however rebukes young people in an unusual way: if the novice driver exceeds the specified maximum speed limit, the app plays their parents’ favourite music. Now that should be punishment enough for most!

The Plan.Net Group is turning 20 and celebrates its anniversary with a tribute to two decades of Internet. Plan.Net was founded in 1997 and today is one of the largest independent digital agencies in Europe and in more than 25 locations worldwide.

Florian Haller, CEO of the Serviceplan Group, explains in an interview with Marketing Review St. Gallen on how the agency group is positioned and on current developments in marketing. He was interviewed by Sven Reinecke, Director of the Institute for Marketing at the University of St. Gallen and Friedrich M. Kirn, CEO of MIM Marken Institut München GmbH.

At the University of St Gallen (HSG) we teach students marketing and management. However, many of the people employed by agencies have not studied these subjects. You are a rare example of someone who has. Do you think that your training was helpful or would you choose a different approach now?

I benefited greatly from my time at HSG. And that’s because the advertising agency business has undergone some extreme changes over the last 20 years. Our core business used to be driven by gut instinct and was primarily creative;   I suspect a technical angle would not have been at all useful then. That’s all completely different now. Advertising agencies operate in a much more strategic and complex way. Advertising used to run on four or five channels; now we’re faced with twenty to thirty.  Not only that, these channels are also supposed to be interconnected. Apart from that, numerous new careers in the sector have developed over the years and now we can’t even imagine the advertising landscape without them:  just consider the digital forms of advertising. Business models have also developed enormously. It is nowadays essential that the management of a company the size of ours is based on strategic and theoretical principles. In this respect, I have no doubt that my course at the University of St. Gallen provided me with fundamental knowledge of great value. I think it’s a shame that so few high-achieving graduates from prestigious universities choose to work for large communication agencies.  However, maybe we should take it upon ourselves to put out a stronger message about the jobs and promotion prospects we can offer.

What were the events in your career so far that you would consider particularly “critical” and which have brought you insight?  

Each of the key points in my career was a real “aha moment”. Starting, obviously, with the course in St. Gallen and the “St. Gallen Management Model”. The most crucial thing I learnt was that managers should not settle for a superficial approach, but must recognise structures. The understanding and development of structures result in the design of successful strategies. Contact with businesses was strongly encouraged at St. Gallen: we gave presentations and contributed to manager seminars early on in the course. Even though we were quite young, it was quite normal for us to come into contact with senior management from Swiss and European companies. As a matter of course, this resulted in contacts which have endured now for decades. While I was at university, I realised how fantastic advertising can be. Incidentally, it was not clear at the time whether I would go to work in my father’s agency at some point.

Starting at Procter & Gamble after I graduated was an important time for me.  Going to Brussels and working for a pan-European brand in an international team was great fun.  The management helped us young marketing professionals feel personally responsible for our brands and we related very strongly to them. Over the six and half years at Procter & Gamble, I gradually realised that I would eventually want to work more independently so I joined my father’s agency.

How do agencies differentiate themselves from the others? Positioning, vision and principles at most PR agencies are very similar with little room for individuality, the focus is on brand management and creativity.

That’s true.  It is really difficult for an agency to set itself apart from the others in public perception. That is simply because agencies must live up to certain values. Customers expect agencies to be highly creative and not to damage their brands. It’s in their nature. There are no uncreative agencies.

We distinguish ourselves on the market with our four ‘i’s: innovative, international, independent and integrated. We are independent and partner-led.  We have an integrated structure, which, it should be noted, is not just theoretical, but actively part of our practice in the Houses of Communication. In our agency, traditional PR people work closely with media planners, data analysts and market researchers. Each agency within the group is a standalone unit. We have depth of specialisation but also integration. We achieve this by giving the teams geographical proximity and grouping them into customer teams. The other values that distinguish us are innovation and internationality.

Companies are increasingly pursuing a “one-brand” philosophy. Serviceplan operates as a group, but maintains very many “subbrands” and regional links. Is that not contradictory at some level?  Is it still necessary to maintain such a pronounced national presence in these global times?

There is a distinction between the service level and the brand level. At the service level, we do have separate agencies for specialist areas. For example, one undertakes nothing other than business intelligence. Another specialises in search engine optimisation. We see these specialist agencies as tools which customers can buy individually. Very specific expertise is developing in the specialist units.   Creatives look for other creatives and people working with technology need technology enthusiasts. As a group of agencies, we need to create the right environments and find employees that fit into the various areas. On the other hand, we are trying to cut back on the brand level. We don’t want each service area to have its own brand. That is not sustainable on the market. That’s why we have a brand for the creative product in the broadest sense:  Serviceplan. We have a brand for the ability to deal with channels – Mediaplus. The Plan.Net brand represents the digital segment, Facit covers market research and our newest brand, Solutions, deals with the realisation side of the business. The service areas are organised under these brands.

Does it make any sense at all now to maintain a regional presence in so many countries and on so many continents or should agencies rather look for synergies in the individual markets?

The Serviceplan Group is the first German agency to have a significant international presence.  We have either our own offices or partnerships in other countries. We currently have a presence in more than 35 countries, ranging from France to Dubai to China. Although Germany is so export-oriented, no German agency has ever  operated on such an international level as Serviceplan. This is unusual because German companies are valued for their reliability and technology-oriented thinking, amongst other qualities.  Global players such as BMW want to work with partners who can design international advertising campaigns and localize them for the country in question, so a company needs different expertise in the various markets. Anyone planning a campaign for the BMW 7-series must understand the Chinese market where many more cars are sold than in Germany, for example. In a nutshell: our customers are adamant that internationalisation is essential. I must point out that internationalisation is hugely enriching for the Serviceplan Group. Kick-off events at which teams from China, Europe and the USA get together and jointly develop a vision are memorable experiences for me. Internationalisation is unquestionably also an emotive matter for us. It is clear that our expansion concentrates on hubs which are economically significant. It is important to us that the agencies in the different countries are independent and look after their customers.    Synergies are created between countries, of course.

Serviceplan’s “House of Communication” model has integration at its heart. I don’t want to ask you about your favourite campaign – no one likes to rank their customers –  but which Serviceplan campaign best showcases integration?

(He laughs) We provide every customer with the service that is right for them. I am proud of that. Our day-to-day operations produce real flagship projects, of course.   I am proud of much of the work we do for BMW in which we combine creativity, media and the digital approach. A good example is the launch campaign for the i8. It is quite simply a fantastic product and developing the campaign for it was a pleasure. And then there’s the global aspect and the roll-out on every channel. This is a challenge even for a large agency. Everyone likes to see a satisfied customer. However, there are also less high-profile cases which I find really exciting. For example, we developed a campaign for the German Bar Association that worked mainly on a viral basis. Innovative thinking is paramount in a case like that.

360-degree communication is frequently called for – however, SMEs with modest budgets prefer an 80:20 approach.  Can you give examples of when “integrated PR” might not be the aim and what the importance of branding is?

In my view, the term 360-degree communication is not very helpful. The primary aim today can’t be to advertise on every single possible channel. Firstly, there probably is not enough money in most cases and there is also the question of the logic behind it. Innovative concepts do take careful account of the channels available, but try to find an intelligent way of linking that makes sense sequentially.

The current trend towards digitalisation presents us with more than one issue. Increasing digitalisation has the effect of bring the competition closer together. I think this makes the brand more significant. There used to be high barriers to entry. Customers had to go into a shop for advice before deciding on a new jacket. Nowadays we have the Internet and it is normal to carry out the comparison with a series of mouseclicks. It is therefore easy to defend the proposition that brand work today is as important as never before.

Research is currently examining the subject of “sponsor activation”. Why is sponsorship in many cases, despite the high costs of rights, insufficiently used and integrated in brand management?  Are there any examples of best practice?

The Serviceplan Group has a small business unit which is concerned specifically with sponsorship. This is an exciting subject and sponsorship can be enormously effective advertising. At the same time, sponsorship will never occupy a central place in agency operations.  Sponsorship decisions are often made with a great deal of emotion and caution is advised especially in planning a budget. Anyone who invests in a sponsorship, which usually involves a considerable sum of money, must ensure that enough remains in the budget to follow up with advertising.  Only this approach makes sponsorship efficient.

The communication landscape is diverging into many parts; it’s almost impossible to keep track of it.  The digital advertising sector is dominated by two major players. What will communication and advertising look like in 2015? How are corporate budgets changing, what is happening to the work done at agencies and by other market players such as market researchers

I’m not at all concerned about this. There are many subjects not discussed in the current hype surrounding digitalisation. Going forward, companies will still need partners who can develop creative ideas. Even in digital advertising, there is a huge need for consultancy. Agencies which rely on their purchasing power in the media will disappear, because computers will take on this work. There are still no answers to the questions of which customer data I can have, what price do I pay for it and how do I segment the available data? The need for consultancy will grow, not diminish. When I translate my channel strategy to Google or Facebook, it is probably  quite clear which channels my budgets are being used for. That is not something that advertising customers will want. Our future opportunities will lie in using different sources and putting together efficient offers for our customers.

Looking ahead: what will Serviceplan look like in 15 years time?

Let’s be happy if Serviceplan gets through the next five years successfully. Joking apart,  whatever happens, we will be even more digital in 15 years time. The proportion of digital services at our company is already over 50%. Today, 30% on average of our customers’ advertising budgets is spent in the digital area. The topic of data will be important in the future. Serviceplan will be doing more content marketing than is currently the case and will be even more international. Despite the justified scepticism concerning the frantic collection of data and the analysis of big data in many countries on this earth, we in Europe must be careful that we are not left behind. I am a committed defender of data protection and the controlled use of data, but the future will be to a great extent digital and the business models developing from this future are also digital. If we want to participate in this massive trend, we must remain open to the digital world. Particularly in advertising, we must ensure that it is not only companies in the USA in their safe harbour that do everything that is not allowed here and earn good money with it.  It is therefore important to stop people being afraid of Big Data.

Finally, can we have a few words on your commitment to Switzerland, where Serviceplan of course has a branch?

Happily. My father is Swiss and so am I. I did my military service in Switzerland and I’ve studied and worked there and I have many reasons to be grateful to the country. All things considered, we are the largest Swiss agency in the world.  Switzerland is also an important market for us, because it is a hub for companies with international operations.  For example, we work for ABB international global, which is based in Zurich. I feel very at home in Switzerland.

This interview was published in Marketing Review St. Gallen.