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What happens when the advertising world discovers urban value and smart cities?

Urban brand-utility is the emerging thinking about how to reframe marketing communications from being part of the sustainable development problem to becoming a regenerative force in the economy of smarter cities.

Noisy, ugly and dirty. Advertising has polluted cities, annoyed consumers and jeopardised its own existence. Beyond a mass-media cacophony, brand communications have also contributed to a significant carbon footprint and runaway consumption leading towards severe environmental threats.

But contrary to Jerry Seinfeld’s infamous line at the 2014 Clio Awards calling out the advertising sector to its face – “I think spending your life trying to dupe innocent people out of hard-won earnings to buy useless, low-quality, misrepresented items and services is an excellent use of your energy” – marketers and their brands can (and should) move away from being the problem to becoming part of the solution for sustainable development and the industry’s own sustainability.

Offering a new outlook

The urbanisation megatrend wholly underpins other forces shaping the way we live, now and in the future, as indicated by the UN, the World Bank and CSIRO, to name a few.

Although cities only occupy two per cent of earth’s landmass that is where 75 per cent of consumption and an even higher percentage of marketing communications concentrate. Because of increased demand for ever more comfortable lifestyles, the existing urban infrastructures have been feeling their “growing pains” for over a decade now. From energy to education, health, waste management or safety, city services are struggling to keep up with their larger and “hungrier” populations.

Even though household consumption is directly under our control, it actually accounts for two-thirds of all carbon emissions, which means consumers could do something about it but we actually don’t.

According to recent research led by Diana Ivanova from the Norwegian University of Science and Technology, only around 20 per cent of emissions we are responsible for come from direct usage such as driving a car or running a shower.

The rest is all hidden in the supply chains of what we buy. Therefore, to reduce our environmental footprint, changing what we buy could make a far bigger difference than turning down our house’s thermostat by a degree or two.

Change, however, is just as constant as our resistance to it. Thus, a relentless state of tension really is what defines human behaviour. This can be verified by homeostasis, a physiological property in which living organisms will self-regulate to remain constant.

This is why it is so hard to form new habits and once formed, even harder to break away from those. This is also why smarter marketing should look differently at its most fundamental “P” – people – and shift from momentary behavioural changes to more permanent contextual changes.

From a product standpoint (the next “P” in the marketing mix), an interesting attempt was made by chemist Michael Braungart and architect William McDonough who created the Cradle-to-Cradle quality process, aiming at re-creating safer products to eliminate waste and obsolescence. Through this approach toxic substances are assessed and either eliminated or replaced. The remaining chemical substances of a product can be systemically up-cycled (converted into products of greater value) for either nature’s or industry’s cycles.

For example, Braungart (with Nestlé) chemically restructured the composition of a popsicle stick and packaging so once that glossy wrapping was thrown on the ground (instead of the rubbish bin), it would melt and leave seeds and water as sub-products.

Such logic is able to turn commerce into a regenerative force. It represents an opportunity to redesign whole industries, where the production and consumption of goods is not only safer and more profitable but environmentally enriching and socially virtuous.

In other words, by changing the context it is possible to dramatically change the outputs simultaneous to overcoming behavioural barriers. But, if products can be radically re-designed why can’t overall brand communication initiatives? Channels have greatly fragmented and data plays a much more important role, but promotion – the “P” where advertising prevails – still follows a cradle-to-grave directive.

The marketing communications industry has accumulated a considerable trail of carbon footprints, leaving a hefty price tag for local governments and taxpayers to deal with. A 2006 independent report from the US Energy Information Administration showed that over seven billion metric tons of greenhouse gases associated with print media advertising were emitted into the atmosphere by the United States.

And the idea that digital media is a greener alternative was debunked by a Greenpeace study that projected that, by 2020, US data centres will use more electricity than France, Brazil, Canada and Germany combined.

New York City, the epicentre for the advertising sector, is home to seven of the world’s top eight global agency network headquarters. Although there was not an assessment quantifying how much advertising has contributed towards New York’s carbon footprint, in 2010 a scary animation from environmental communication business Carbon Visuals and the Environmental Defence Fund visualised the 54 million metric tons of carbon dioxide that is annually emitted to the atmosphere, almost equivalent to the total mass of the city itself!

With that in mind, also in 2010, specialist energy, carbon and sustainability consultancy Envido in partnership with Heineken and Honda, publicly unveiled CarbonTrack, the world’s first credible, universal tool designed to calculate the carbon footprint of advertising campaigns.

The ability to measure provides better conditions for management but bringing about meaningful change is the ambition to be pursued.

Therefore, the strategic opportunity is to reframe marketing communications from the promotion of conspicuous consumption to becoming a regenerative force in the economy of cities. That means, using “promotion” as more than a mere messenger, but rather delivering public utility services. I have coined it “urban brand-utility”, an approach that can meaningfully and profitably reconnect people, brands, communications agencies and local government.

When the poison becomes the antidote

The urban brand-utility conceptual framework flips the current advertising model by enhancing, instead of interrupting, moments of brand interaction with relevant experiences. In fact, American Express research from 2013 revealed that 63 per cent of 1600 participants had their heart rates increased when they thought they were receiving great service, and for 53 per cent of those respondents receiving good service prompted the same cerebral reaction as falling in love!

For example, Indian energy company Halonix communicated its brand through LED billboards that lit up at night making streets safer. This campaign supplemented Delhi’s energy grid, the need to bolster its police force and is helping remove the city’s stigma as India’s rape capital.

Following explicit requests from the Indian population, the campaign is rolling out nationally. By creating new meaning in an unprecedented way, Halonix achieved the feat of decommoditising energy, exiting a price war.

That does not mean creativity will be killed by utilitarianism. On the contrary, new paradigms will push it to the edge. Health-wise, in Ekaterinburg, Russia, optical retailer Culturavision designed a brand identity system featuring patterns that help improve or maintain patients’ vision and an online video doubling as an eye test. Danil Golovanov, the creative mind behind this clever branding, says: “As a company that cares for people’s eyes it was important for its branding to be useful.”

In terms of road safety, Uber set up a breathalyser installation outside a Toronto pub where people could test their alcohol intake and when above the permitted limit, a car would be sent for their collection.

A simple, brilliant solution was delivered in Salzburg, by beer Stiegl, by replacing its bottles’ labels with free public transport tickets. Besides self-disruption, helping curb drunk driving would indirectly optimise public health services from less patients in ambulances, emergency rooms and receiving medical aftercare.

When it comes to education, Universidad Columbia, from Asunción, Paraguay, sponsored an entire bus line with educational tours supplementing the population’s low levels of literacy, as well as increasing enrolments in 35 per cent.

Regarding our environment, in 2013, UTEC – the University of Technology of Lima, Peru – deployed billboards able to transform humidity from the air into 96 litres of potable water a day as well as having increased enrolments by 28 per cent. In 2014, UTEC did it again by deploying air-purifying billboards, each claiming to be as effective as 1200 trees.

Much more is required to create a reliable network of creative, urban resiliency. But according to the 2015 World Economic Forum’s Global Agenda Council on the Future of Cities: “Cities will always need large infrastructure projects, but sometimes small-scale infrastructure can also have a big impact on an urban area”.

A case in point was the deployment of smart bins by internet provider Portal Terra across 10 parks in Mexico City. By rewarding dog owners when throwing their doggy bags in the bins with free Wi-Fi connectivity, this micro waste-management infrastructure helped counter the 10,000 tons of dog poo randomly dropped every year, as well as reduce the city’s cleaning costs.

However, the above (and several other similar campaigns that preceded and followed) were all one-off activations, great for consumers’ awareness and advertising award entries but short-sighted in terms of embracing a bigger commercial opportunity while addressing society’s most pressing issues.

Towards an urban brand-utility infrastructure

Urban brand-utility aims at optimising municipal budgets by supplementing public utility services or creating new income streams. Through the mechanisms of Public Private Partnerships and the use of open data, urban media company Sidewalk Labs (an Alphabet Inc subsidiary), harnessed the opportunity by repurposing New York City’s now obsolete pay phones.

Through its LinkNYC totems, a free utility service is now provided to residents and visitors. Besides supplementing New York’s broadband network, LinkNYC also shares its ad revenue as part of the terms of a 12-year contract projected to bring an incremental US$500 million to the city’s pockets.

To enable a virtuous circle, cities would then arrange for tax breaks, rebates, R&D contributions or other types of incentives. Just like the idea of a circular economy where products and services go beyond an end-user’s finite life-cycle, urban brand-utility looks at marketing 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.

As a comparison, PwC estimates that in 2017 global media spending in marketing communications and entertainment combined will reach US$18 trillion but, according to the Pike Institute, by 2020 investment in Smart City infrastructure will not surpass US$108 billion; an 18:1 ratio respectively.

In other words, by slightly repurposing marketing budgets towards urban brand-utility programs, more incentives would be made available – eventually mainstreaming the approach – and accelerating the development of the smart cities industry.

The University of Melbourne already confirmed that the impact assessment of urban brand-utility programs is possible and would inform new revenue models and policy-making efforts.

Dr Savvas Verdis, infrastructure economist at Siemens and senior research fellow at LSE Cities at the London School of Economics, is equally convinced: “I am sure that urban brand-utility will provide some much needed expertise and transformation [in the marketing communications industry] and particularly in generating new business opportunities for infrastructure, development, tech companies and others tendering with cities through an innovative use of media.”

In this more useful and integrated new world, agencies and their clients would partner with cities and media owners via open data, matching brands with specific urban challenges and forming the foundations of a network of creative, urban resiliency.

Radically innovative skills and propositions would emerge from the frictions between marketers and creatives working closer to urban planners, policymakers, landscape architects and many others. Interestingly, in September 2016, the City of Gainsville, Florida, and design firm IDEO, co-created the Department of Doing, aimed at creating a more competitive economy and becoming more citizen-responsive.

According to Sidewalk Labs chief executive Dan Doctoroff : “2017 will be the year when technology and government leaders shift their focus from providing connectivity to imagining how it can radically transform cities and help reduce inequality.”

With one billion people migrating to cities by 2030, a billion-dollar opportunity is emerging for pioneering marketers to make an impact that goes beyond their target audiences and brands’ bottom lines.

For example, Milton Glaser, creator of the seminal “I heart NY” logo and one of the greatest graphic designers in the world, came up with a logo for climate change in 2014. In an awareness effort, Glaser’s logo got amplified through billboards (around New York City) and collectible buttons sold for US$5.

Despite its clear emotional appeal the logo could not effectively be translated into action. In fact, its carbon footprint, alone, may have justified its abandonment.

What if, instead, the logo had a photovoltaic coating able to harness the energy from the sun and cleanly power people’s devices? The technology already exists and brands like 3M or BASF could greatly benefit from partnering with Glaser and the city of New York.

But do brands have the legitimacy to support a cause and make a political stance that is not seen as opportunistic self-promotion? According to a 2014 study entitled “Business and politics, do they mix?” by public affairs and research firm Global Strategy Group, GSG, the answer is “Yes!”, as demonstrated from a few key findings below:

  • 56 per cent of respondents think corporations should “take a stance” on political/cultural issues, even when they’re controversial
  • 89 per cent believe that corporations have the power to influence social change
  • 80 per cent think that these corporations should take action to address our society’s most pressing challenges

The general population does want brands to be more civically engaged, however, between “telling” and “taking action” the latter is what can make people prefer a brand over another. After all, as one of the tribunes asks the crowd in Shakespeare’s Coriolanus: “What is the city but the people?”

Brand City: accelerating a smarter future

Governments worldwide are some of the biggest spenders of marketing communications, which could be reduced if services provided were more effectively designed and deployed. For the sake of perspective, in 2015, Australia spent approximately US$80 million on taxpayer-funded advertisement, the UK US$460 million and the USA over US$1 billion – that is, excluding the actual provision of those services.

Despite heavy communication efforts the overall quality of services (or positive behavioural changes) on those nations and their cities have not necessarily improved.

Governments then resort to behavioural taxation tactics. In Australia, in 2012, the federal government raised more than US$10 billion from alcohol and tobacco taxes and for over a year now has been enforcing strict lockout laws on Sydney’s hospitality venues and general alcohol consumption.

Although violence has decreased by 40 per cent, there is no evidence proving people are drinking less. However, a study from Dr Mikayla Novak from Australia’s Institute of Public Affairs provides evidence that besides removing citizens’ autonomy, behavioural taxes rarely achieve their goals (ie, making people drink less) but they change behaviour in unpredictable ways, encourage black market activities, disproportionately affect the poor and hurt small businesses.

The traditional model of taxpayer-funded government is not going to change any time soon but urban brand-utility could represent the innovation required to reduce public (and, at times, negative) interference over private life, supplement public services and boost cities’ brands.

Seeing is believing. By upgrading its communication efforts onto actions that deliver real-time services, governments would not only reclaim trust but spend people’s fiscal contributions more effectively.

Additionally, cities’ diverse human and natural resources would create urban brand-utility specialism niches, becoming a magnet for the right talent and investment.

An interesting Internet of Things experiment has just started in Dharavi, India’s largest slum. Using 100 beacon devices provided by Google’s IoT Research Award Pilot, a “physical web” is being created to connect different shops in Dharavi’s markets.

Designed to allow any smart device to interact with real-world objects without having to download specific applications, Google’s Beacon platform provides a neutral standard of interoperability between connected devices, letting retailers send timely alerts to nearby shoppers. The greatest urban “upgrade”, however, lies in shifting Dharavi’s image from being Asia’s largest slum to becoming the informal economy’s largest digital hub.

A smarter planet where interconnected systems guide our choices to increase the likelihood of desired outcomes, making urban life more comfortable and efficient is central to South Korea’s attempt to promote an industry around the design of smart cities and accomplish the vision of “The City as a Service”.

The dark side of data

However, there is a darker, Orwellian downside that may see our lives being downgraded into data-sets

Democracy minus privacy are variables that could become part of the urban brand-utility equation and jeopardise its success. As criticised by urbanist Adam Greenfield, author of Against the Smart City, smart cities risk becoming vast, efficient robots where giant technology companies hope to profit from big municipal contracts.

On the other hand, brands in free markets represent a dynamic ecosystem involving individual judgements about what to buy and from whom. Thus, urban brand-utility programs are an opportunity to give back power to the people, beyond transacting, to transform their cities from their shopping decisions.

In this “Brand City” construct, consumers “emancipate” as citizens with every purchase effectively counting as a vote, electing the most useful brands to constitute a more integral part of their individual and communal lives.

Sérgio Brodsky is an internationally experienced brand marketing professional. He is a regular columnist for Marketing Magazine (in Australia) as well as a sought-after speaker and lecturer. He is passionate about cities and culture and the role of brands and technology in society. Sérgio is multilingual and holds a BA in IP law, an MBA in global brand strategy & innovation and is a scholar of The Marketing Academy. Twitter: @brandKzar

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Comments

2 Responses to “What happens when the advertising world discovers urban value and smart cities?”

  • AG says:

    Hi Sérgio. Thanks for the mention of the book. However, as that’s not actually a quotation from it, I’d appreciate your making that clear. Many thanks.

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