Global media and advertising come with a huge environmental footprint. But imagine a world in which brand communication, in right hands and under strong thinking, can become a regenerative force for cities, a place where the promotion of goods and services is not only more profitable, but also environmentally enriching and socially virtuous.
The urban legend got real…too real
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. As someone working in the marketing, media and advertising space, this is an important insight. If value is created from a need or desire, why aren’t our civic interactions populating journey maps aimed at optimising the CX (customer experience)?
From a strategic standpoint, although cities only occupy 2 per cent of the earth’s landmass, they are where 75 per cent of resource consumption and the majority of 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 per cent of London’s social housing, according to CarbonTrack.
Markets, choice, and competition are not just a consumer’s best friend, but their political representation.
Brands with some level of foresight 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’ve been advocating for a couple of years now, after identifying a distinctively intriguing pattern and the strategic opportunity this may afford.
What urban brand-utility should look (and be) like: useful, profitable and impactful
UBU is about using brands’ touch points as more than mere messengers to supplement public utility services and minimise 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.
NZ beer upcycles its yeast waste
For example, New Zealand beer brand DB Export wanted to communicate its sustainability credentials, and what better way of doing it than by upcycling yeast waste (a by-product of beer) into fuel?
An initial batch of 300,000 litres of Brewtroleum was formulated using 30,000 litres of ethanol, which was extracted from more than 58,000 litres of leftover yeast slurry that would otherwise be discarded.
Sold at all 60 Gull petrol stations across NZ’s North Island, the biofuel has 8 per cent less carbon than traditional petroleum at the same performance, something that compelled ethical consumers to buy into the brand, representing a 10 per cent increase from the 8,6 million bottles sold.
Moreover, New Zealand’s Automobile Association says drivers using 30 litres of biofuel a week would save more than 250 kilograms of CO2 emissions every year. And when 80 per cent of urban diseases are a result of air pollution and the fact that climate change will be one of the biggest costs for business and society in the coming years, it becomes a matter of demonstrating how the private sector can creatively fix what big government is failing to address.
Heineken has not (yet) gone the full length of quantifying the economic value of its brand impact in return for tax rebates or other fiscal incentives, however, its Cities Project may give a hint of things to come. A current initiative is New York’s +Pool, the world’s first floating and filtering pool in the shape of a “plus” symbol, cleaning around 600 thousand litres of water a day.
Despite being surrounded by water, the millions of people in New York are currently unable to enjoy it the way they should. To help revert this situation, Heineken is asking New Yorkers to sign a pledge to swim in the +Pool, offering US$100,000 in support when the goal of 100,000 pledges is reached.
The pool was estimated to cost a total of US$20 million and although the projected return on investment has not been disclosed, one can envisage how this initiative might not only reduce the cost of managing a city but also unlock economic value from under-utilised assets.
From creating a new free public space and strengthening the river’s local economy, through to fuelling tourism it will also alleviate conservation efforts with potential to generate revenue from the licensing of the filtration system that would then fund more public benefits. The +Pool installation also creates a clutter-free, immersive new channel for Heineken.
Citizen-consumers and CMayors – new kids on the block
People are interested in their wellbeing and the factors enabling or blocking it, which could take form in various ways. Bathing on a hot summer day is one but improving your neighbourhood’s overall services and infrastructure is another.
In Moscow, 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 with neighbourhoods becoming more attractive. The city increases tax collection from the new businesses being set up, which also reduces the cost related to dealing 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.
Consumers may not hold the answers for everything, but that does not mean they should be treated merely as individual shoppers in the market. 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, reducing violence in the streets, pollution, unemployment, or enhancing opportunities for entertainment, human connections and so much more is what people are interested in.
Demonstrations of how the private sector can creatively fix what big government is failing to address – through their brand communications – and make a profit, have not yet reached a tipping point but isolated cases keep emerging.
Domino’s Pizza looked beyond the traditional path-to-purchase to permeate people’s life-journeys. 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 USA to save their customers’ pizzas from the bad roads. Obviously, not only Domino’s customers are 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 estimated to be US$185 billion per year for the next 50 years. Today, the nation annually invests about US$68 billion.
Mayors and city managers from the municipalities where “paving for pizza” has taken place have acknowledged the creation of shared value. In this sense, a new breed of mayors with a marking mind, or, as I like calling them…CMayors, are equally empowered to driving the Urban Brand-Utility vision.
According to Bill Scherer, Mayor of Bartonville, TX:
“This unique, innovative partnership allowed the Town of Bartonville to accomplish more potholes repairs.” For the city manager of Milford, DE, Eric Norenberg: “We appreciated the extra Paving for Pizza funds to stretch our street repair budget as we addressed more potholes than usual.”
Towards a new revenue model underpinned by creative urban resilience
To do good, we must also do well. Advertising is the soul of the capitalist system and the best incentive to upgrading it is by creating 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:
- 1. Enabling savings or new earnings for cities
- 2. Creating urban shared value to the cities’ inhabitants, and
- 3. Delivering superior return on media investment (ROMI).
Here’s a hypothetical situation. Let’s assume that Domino’s Paving for Pizza program generates a US$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 per cent of the surplus is retained by the city, 25 per cent is returned to the advertiser and 25 per cent 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 the 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 would 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 products and services go beyond an end user’s finite life-cycle, 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.
Making a brand’s touchpoints become the new AGORAS
To make the model scalable, however, a digitised mechanism is 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 touchpoint 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” 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$500 million in ad revenue for the city as part of a 12-year contract, by unlocking new value from underutilised assets.
Just like the ancient Greek public squares – the Agoras – where direct democracy was born, this emerging participatory media can effectively collect complaints and suggestions for cities’ improvement, in real-time. The next step for this could then be the matching of brands that align with specific urban challenges.
This way, instead of top-down public-private contracts, issues are identified by local constituents informing future UBU programs, as wanted by the people and enabled by advertising media.
This can be done by following six strategic imperatives:
1. Translate the big idea that defines your brand into a big utility that can operationalise its impact
2. Replace interruptive interactions with enhancing ones by delivering a public utility service
3. Turn any existing utility of a communications effort from a stunt into a sustained practice
4. Shift your business focus from short-term sales results to longer-term profitability
5. Broaden your audiences from customers to citizens, expanding paths-to-purchase onto life journeys
6. Diversify revenue from sales to the creation of shared value
As a comparison, Magna Global estimated that in 2018 global media spending in brand communications will reach US$ 551 billion but, according to the Pike Institute, by 2020 investment in smart city infrastructure will not surpass US$108 billion; a ratio of about 5:1 ratio respectively.
Through the UBU approach, the current US$ 551 billion could merge into the much larger pie of global welfare and security spend of US$ 40.5 trillion, a figure obtained by dividing Gross World Product (GWP) by the 30 per cent global average spent on welfare and security as per the International Monetary Fund.
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.
Sérgio Brodsky (L. LM, MBA) is an internationally experienced and awarded marketing professional and recognised thought-leader. He is also a columnist and editorial board advisor at Marketing Magazine, scholar of The Marketing Academy and chairman of its alumni program. Sérgio began his career as an IP lawyer, became a high-tech military consultant before moving into towards brand strategy, media and innovation, internationally.
Follow him on twitter: @brandKzar
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