Digital Agility Key To Philips’ Future

Blake Cahill, global head of digital and social marketing at Philips, discusses the changes the organization has been making to become faster in its deployment of new technologies.

Digital Agility Key To Philips’ Future

Philips’ global head of digital and social marketing, Blake Cahill, is a man with a mission: to transform the way the technology giant approaches digital and create a system that allows it to be more agile.

Last year he talked to about Philips’ global digital transformation programme, intended to harmonise ways of working across a business that employs 105,000 people in more than 60 countries. The aim, he said, was to enable the business to move faster and not take two years to roll out new technology.

I caught up with him recently to discuss the programme’s progress, but first we talked about how global changes in the past 12 months have affected Philips and the way it’s moving forward.

Cahill: One of the macro themes is the incredible shift to mobile. Last year we saw markets where we moved from 20% or 30% of the access to our dotcom and social platforms coming from mobile, to 50% or 60%. That had significant impacts in terms of us wanting people to be able to find the content they’re looking for in the least amount of clicks, and to have the most frictionless experience.

We did a lot of work last year to redeploy our website from a mobile-first perspective. We did navigation testing in the U.S, China, Germany, and the U.K, looking at people’s behaviours. For example, people in Asia don’t go to your dot-com site first, they go to third-party platforms like Alibaba first to check out a product, then they go to your website. In the west they go to your website first, then they go to an e-commerce platform.

Everything we’re doing now, from a digital marketing perspective, is mobile-first. That was a major shift last year, and it radically changed a lot of our projects and ways of working from a digital marketing perspective. Last year we discussed the different levels of digital maturity across different markets. Are the mature mobile markets different from those that are mature in desktop?

Cahill: Mobile maturity has significantly increased in most markets. We made a global change because we anticipate the other markets catching up.

The changes were certainly more dominated by Asia and the more mature economies where mobile penetration is higher: the Nordics, Western Europe, the U.S., but also Latin America. But we also see the mobile trend in emerging economies where people come to the internet mobile-first.

The main thing we looked for in our testing was behavioural differences, so our navigation and asset mix is different for Asia versus the west. That’s the first time we’ve taken conscious decisions about the navigation and the content journey for a lot of our products and categories being different in Asia to the west. We’re continuing that work this year, especially within China, where the journeys are entirely different. What other macro trends have affected your thinking?

Cahill: Like any brand investing in digital marketing, we have the ability to do a lot more real-time optimisation. Last year we started the piloting, but we’ve gone from there into global deployment around digital return on investment.

Traditionally brands write their media plan and their cheque to their big media agency and wait to get results back. Last year we pulled all the data in-house and analysed it daily—and in some cases hourly—during our big campaigns in North America, Germany, and the U.K. We were able to ask things like: is this ad unit performing best? If we change this piece of content, what happens to the results on Amazon? If we amplify with a piece of social content, what changes in the ecosystem? We couldn’t do that in the past, because we didn’t have access to the data.

We did a tremendous amount of piloting and investment to prove that, through real-time optimisation, we can significantly improve the return on our media investment. In both the German and the North American pilots, we saw a 20% return on media efficiency, and higher sales, which is why we do it.

It was a very manual, and to be quite frank, painful process. But it’s led us to invest in a global ad serving tool this year where we’ll be pulling all our media data in-house from our media agencies. That will allow our media people and digital marketers in every market to have access to campaign performance on a daily basis. They can do optimisation in order to be more efficient with media investment, but ultimately to change creative, to change search results, to amplify social content. It’s a big change, and you can’t do it unless you have the foundations in place.

So a lot of last year was about foundation setting; getting digital people, basic digital technologies, and ways of working in place. In our more advanced markets we can really turn up the dial and be much sharper and our manual pilots proved the success of this last year. We’ve moved full force into trying to do this from an automated perspective and then deploying to all of our markets this year.

It’s generated a lot of internal interest. Some people are like, “Wow, we can save money,” but I’m saying it’s not about that; it’s actually about taking that same money and extending it into always-on campaigns so you’re not just launching a campaign and walking away from it. And at the end of the day, it’s about the sales results and the most effective use of the media on the platforms that are delivering the results.

It’s also a bit of a DNA thing. Everybody talks about big data and analytics, but where do you start? You have to take baby steps in driving behavioural change among people who used to run ATL campaigns and looked at weekly results. You’re shifting behaviour and making people more data-driven, so that’s the overall benefit we’re getting out of this. What does this mean for your relationship with agencies?

Cahill: We continue to use a lot of partners on media and creative, but there is something about the core DNA in capability that you should have in-house. We pulled a lot of the search know-how inside, we pulled all of the social platform management in 90% of our markets in-house. The same with CRM; completely in-house. We do that because we want that DNA inside the company and in more than just the digital marketing specialists or teams.

On the media front, that means we lift a veil of transparency. We do it completely in partnership with the agencies; there’s been no resistance. If we can make the media more efficient with them, then they have a really great story. We can stand there together with them to say, “We did this together, we shifted where the media investment was working.”

It’s a collaboration, it’s absolutely not, “We will make the media agencies go away.” We want to keep experimenting with them on new ad formats.

It’s also about lifting the capability of our own people to have that same level of expertise and to make sure that we’re doing the right thing for both sides, to be the most effective and efficient. How does that fit with the training initiatives that we talked about last year?

Cahill: We have the big foundational program, which is about 85% done. We have one or two additional capabilities on the B2B side that were tried out this year, as well as a new social publishing tool. We’ll be deploying that this year to all of our markets.

The third macro trend that we’ve seen is the shift to online commerce, which is happening pretty much everywhere at different rates. We have a bit of a bowl of spaghetti in terms of our different ecommerce platforms, environments, and backbones, as well as the way in which we are working with a lot of our etail partners. We have a couple of really big ecommerce and etailing partner projects that we’re driving out to ensure that any time a customer wants to buy something, it’s available, either from us or from the broadest portfolio of online or bricks-to-clicks retailers anywhere in the world.

Again, penetration rates vary wildly, but we want to ensure that we’re benchmarking our online sales growth rate against that of the markets. It’s another really big push this year, and what’s interesting is that it’s not all a digital marketing initiative. Parts of it are digital marketing, but a lot of it impacts the transformation of our sales and commercial organisation, building what we call a better digital marketing and commercial triangle, and transforming how that operates in our markets.

There are also a couple of really interesting executions where brands that traditionally pushed product have transformed their marketing approach, as well as their digital execution approach, to highlight a non-product-specific push.

We have a Breathless Choir where people who have Chronic Obstructive Pulmonary Disease are able to perform in a choir using our devices. The video has gone viral and had tens of millions of views. Then our male grooming business supports a barber in New York who on the weekend takes his Philips shaver and goes around and cleans up homeless people.

We have a lot more of the businesses trying to move away from shifting products into emotionally engaging content, which is what you need to do in the digital era to hold peoples’ attention. Those things are all starting to come together from our business groups down into our markets, and that’s where the power of scale comes in. If everybody has the same capabilities, they can take a global template and make that investment go farther.

Then again, it isn’t all global to local, it’s also about local to global. We pull a lot of things out of China and Latin America, especially around IM strategies like WeChat. We pilot in Asia and then make that a common practice for everybody else. It isn’t all top-down, it’s actually shifting to even more bottom-up. At the end of the day, for me, it’s about the people and you need strong local people to carry the behavioural change and land everything we’re bringing them.

It’s about adaptation, because the external world is going to continue to shift at a higher rate, and if you don’t have the internal engine that can adapt, you’re always going to be behind. Three years ago it would have taken us two or three years to move to a mobile-first strategy; now we’re able to accomplish that nearly in real time. The same thing with digital return on investment. That probably would have taken about three years to make happen. Now we’re doing it in about a year and a half, globally. We’re getting that speed because at global level we can move faster, but also locally we can deploy and change behaviour because the people are in place. And that in itself is a huge accomplishment.

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