Yes, JC or Jonathan Oliver, is every bit as crazy as he looks in the picture and as we got to witness up close during his talk at the first ever Festival of Media MENA held in Dubai this April. It’s the good kind of crazy; the kind that is good for a company like Microsoft, which isn’t really seen as innovative – something that really annoys Oliver. “We were the first people to come up with wearable technology, the first people with the tablet and the first people with the e-book,” he stresses. Although he does admit that nothing is really innovative until you apply it and hence, Microsoft has been innovative in its thinking, but “we didn’t have the foresight to apply it.”
On innovation, Apple and Microsoft
Oliver says that when he walks into his office, his first thought is “We have come a long way” but then, he wonders why Microsoft didn’t move into the consumer space before Apple. “The reason why technology is so prevalent in everything we do is because it went from being a technology trend to being a consumer trend,” he says. That’s what it takes to become innovative – leading the charge from being a tech brand to being a consumer brand. Microsoft probably wasn’t wrong in not venturing down this path, but it simply didn’t foresee it. Apple had Steve Jobs guiding it and the company innovated in a way that helped its products become desirable above and beyond their utility. Microsoft, however, continued doing what it was good at, but now, as technology catches up, it’s adapting to the new trends and part of that is its new branding, which makes sure there’s no “robot speak”.
Oliver says that Microsoft Office is the company’s strongest product, going so far as to say, “we probably would sell more computers just because Office is so strong”. In effect, this means that Office alone can be used to reel in consumers toward other Microsoft products too. Considering that some of the company’s offerings are not as strong as other competitors, “it’s better to get people using it on other platforms than not using it all if they’re not within our ecosystem,” he explains.
While Microsoft might be better known for Office and Windows, which are primarily looked at as work-related or productivity enhancing offerings, it’s also behind two wildly popular brands: Skype and Xbox. “Xbox is cool; Microsoft needs more X-box cool,” exclaims Oliver.
On the new cool
People look at Google, Facebook and Snapchat as “cool” brands they want to spend money on but Oliver insists that Microsoft’s distribution products – MSN, Skype and Xbox – should be on a brand’s media plan as well. He says that these products cater to more than a billion people across the world and only two other companies have that kind of reach: Google and Facebook. So far, the Microsoft brand has lacked the energy in the advertising space that other brands have – “even if the numbers don’t back it up,” points out Oliver. It’s kind of like being the cool kid in college whose “energy draws you in and people want to hang out with you and spend money with you,” whereas Microsoft is more like the classy, mature graduate who’s patiently waiting but with whom no one wants to come hang out. It’s as if Microsoft is the boring father and Xbox is the cool kid and that’s why Microsoft has “started to bring the family together” through a consistent visual identity across verticals, and product integration that allows the same code to be run on multiple devices. Simply put, “we’re starting to do things that people want and making it easy for people to get back into our products. We’ve always been [cool], but we’re bringing [it] back – to the audience,” says Oliver. This means a big change and a hard journey for Microsoft to change its impression in the minds of consumers. A cynic would even say it’s too late. A brand that starts in the consumer space is one that’s helping solve people’s problems in their everyday lives, but Microsoft is something that people largely use for work. “So it’s difficult to transform the brand in people’s mind from being a productive workplace brand into a consumer brand,” says Oliver. On the contrary, a brand moving from the consumer space to the business space is cool – like Google and Facebook. Luckily for Microsoft, being smart has always been cool. As Oliver says: “We might not be the biggest guy on the block in search or social, but we’ve got a huge amount of other things that we can bring together and make exciting for brands.”
On what innovation and disruption really mean
During his talk at the Festival of Media MENA, Oliver said that brands are going wrong with innovation because they aren’t defining it. We wondered whether the bigger problem with innovation is the ambiguity of the term or the expense associated with it. Oliver explains that innovation is considered expensive is because “radical innovation only succeeds from big companies. They’re the only ones that can make a big investment.” He further explained that radical innovation has to be based on something that’s proved wrong before it can be proven right. If it were already proven right, then it wouldn’t be new or innovative. So, if a brand is investing in something that could potentially fail, it could mean that “you’re pouring your money down the drain” – except you’re not, because you’re learning from the failure, says Oliver. Also, this is a risk only big companies can take. Oliver touts the Kinect Camera as a piece of pure radical in- novation, because “all of that technology never existed before”. He elaborates that realistically, the technology might have cost $1,000, although the camera is being retailed for $400 just so people would use it. Developing this kind of technology costs huge amounts of money, which means only huge companies can achieve it.
This is what creates an opportunity for disruptive innovation, which tends to come from startups – something that is not well defined at the start, like Netflix, Spotify and Facebook. “They start to target the lowest strata of customers and then they build it up from there,” explains Oliver. Even then, only a few succeed simply because innovations needs a huge amount of failure, which startups can’t afford. While this disruption generates great energy for the industry, big companies simply don’t do it because “Why would you fix something that’s not broken?” However, big companies do need to defend themselves against disruption so they can maintain their status as big companies. According to Oliver, the reason some companies can’t do this is merely because they don’t really know why they’re so successful. He cites Blockbuster and Netflix as an example of this somewhat lucky success. Reed Hastings, Netflix’s co-founder and CEO, made a lot of money from his previous job and he thought he could disrupt the business by offering DVDs via mail and that’s how Netflix started. By the time Blockbuster knew what hit it, it was too late.
On how a lot of innovation really depends on technology
Oliver says that the problem with innovation today is that technology has taken over businesses and this technology can be both good and bad. On one end of the spectrum, technology has automated media buying through programmatic media, which will grow exponentially. On the other end, technology is changing the way marketing occurs by using data analytics to drive marketing solutions. This is why in the next few years, as per Oliver, the chief marketing officer (CMO) will be spending more money on technology than the chief information officer (CIO) “because marketing is becoming a technology business”. Oliver adds that there’s more money in marketing than there is in Information Technology (IT) and that brands need IT to power ideas. However, technology is also the enabler to coming up with these ideas “and the last time I checked, the CIO was not coming up with great ideas,” which means that IT and marketing have to get on the same team.
This is probably also why Microsoft has been evolving from an IT company to a sort of marketing consultancy. “We’ve got all the tech stacked, we’ve got people who understand marketing and technology,” he says, indicating that Microsoft has the capabilities, the potential to advise brands and agencies and now, it also has a distribution network. He does admit, though, that “I’m not going to say we do it well yet, because it’s still a growth area for us.”
On some funky terms
Oliver mentioned some terms that we could barely pronounce at the Festival of Media so we asked him to elaborate a bit on his tongue twisters. One of them was “desertotically innovative”. He had come up with this on his flight – or so he said: “I wanted to prove to people in the Middle East that this place is innovative,” more than just sand dunes and camels because “What’s innovative about a sand dune?” He adds that the region needs to brand itself in an interesting way.
The other term – and this one’s not made up – is fungibility. He explains that in economics it means something “totally interchangeable”. Now when it comes to creative fungibility, he says that companies need to be creatively fungible in order to be successful. “Facebook is very creatively fungible in ad-tech, but it can’t take that creativity into the enterprise space and try and solve big technology stack issues, so its creativity is not necessarily fungible across a brand’s business,” he explains. Whereas, Microsoft can take its creativity on the technology side of things because “it’s creatively fungible across all of our products”.
On innovation in the MENA
While Oliver says that it depends on the definition of innovation, he does see two things shaping up when talking to brands in the Middle East: they’re thinking ahead to see what kind of “cool stuff” they can do, and they’re going to support the region. However, the big challenge is culture. From an innovation standpoint, “people in the Middle East don’t like to fail because it makes them lose face.” The other challenge is the cultural restriction. Since there are things that can’t be spoken about in the region, “you can’t be irreverent and to me, irreverence in advertising is huge,” he says. However, the cultural restriction and lack of irreverence aren’t as big challenges in themselves as the need to find creative solutions in other ways, which is what makes the challenge more difficult and time consuming.
Eventually, when it comes to innovation and disruption, one has to be bold and smart, and yet stupid enough to try something disruptive “because most of the time, it’s going to fail,” shrugs Oliver. But for him, intent is what’s most important; if a brand places ads on a platform where it disrupts a consumer’s experience, it’s bad. But if a brand does something – however stupid – to help the end consumer, then it’s all good. At the end of the day, “it all comes down to intent – in life, business and advertising,” he quips.
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