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BONIN BOUGH: Thank you.
Thank you guys.
Thank you.
Hello London.
For some reason, this morning I thought that was going to be
a good intro.
But apparently it's not.
Hopefully you guys will be a better crowd.
I just want to say you saved Evan by the way, because I was
going to come up here and say, all the slides you showed that
had our logo, and the one company you
didn't mention was us.
But you did save him, so he did mention it so, sorry, you
stole my thunder more than you thought.
I will talk about the Foursquare integration that we
did a little bit later and actually show some slides.
And I'll actually talk about how at a local level it's
allowed us to transform the loyalty relationship that we
have with consumers at the point of purchase, in a way
that we've never been able to before.
So it's super exciting.
And hopefully, we will be able to break some ground with you
guys here as well.
So, what I'm going to talk about is two things.
I'm going to talk about digital fitness, and then I'm
going to talk about how global brands can be local.
And where I want to start my talk is kind of where he--
where Evan talked about too, which is evolution.
But what I want to talk about is the
evolution of us as clients.
And I would argue that most organizations are pretty much
in the Jurassic period right now when it comes to their
understanding of digital.
So let's take a quick look at evolution.
So, here's a quick snapshot of the last 20 million years of
human evolution.
But what's interesting is only in the last 20 years has man
had access to computers.
But in those 20 years, we've seen innovation at a pace that
we never have before.
How many people in the room remember a time before the
iPad, raise your hand.
It was only a year ago.
It was less.
So don't pat yourself on the back yet.
But what we've seen since that was 79 new evolutions, or
transformations, or different tablets-- and they show the
Samsung up here--
evolutions of the iPad.
And it's not just the fact that the pace of innovation
has changed, but in fact, the pace of consumer consumption
has changed.
So in March, Apple announced that more apps had been
downloaded from the app store than songs were downloaded
from iTunes.
So if at one point music was this beacon of culture,
clearly, digital has become that.
And it's so crazy that more people have access to cell
phones in Africa than they do running water
But what's interesting is that when you look back at society,
society was actually slow adopters.
And so the first time you interacted with a computer was
probably inside of some type of
organization, probably a business.
The first time you came in contact with the evil that is
Microsoft--
hopefully there's no Microsoft folks here--
that was probably inside of some organization.
The first time I got email, for example, was in
university.
But the moment technology became mobile, social, and
local, it started to take off.
And we've adopted into every single aspect of our life--
dating, finance, shopping, banking, and you heard them
talk about how big of a proportion of GDP that
e-commerce represents in the Uk--
I was blown away when I read, 7.2%, it's crazy--
every single aspect of our lives are being changed.
And it's a generational thing.
I saw this little girl in the airport when I was on my way
here and she--
I'm sorry, in Brazil--
and she went to go up to a CRT screen, and she
tried to touch it.
Because to her, every single screen
should be a touch screen.
That's the world that they're growing up in.
And so the younger generation are approaching digital from a
point where it's been with them for their entire life.
David Pogue wrote an interesting post, and he
talked about--
he was afraid that his son is addicted to the iPad, which is
funny and it's cute, if it wasn't true.
And when we look at societies like Korea, which are 98%
connected to the internet, they've announced that
internet addiction is a real addiction.
They believe it's so bad that 10% of
their kids are at risk--
I'm sorry, are addicted--
and 30% are at risk.
They actually sings songs in classrooms about how to use
the internet responsibly.
They have banners posted around classrooms. It reminds
me of growing up with the Ad Council advertisements about
your brain on drugs.
That's what it's come to.
And even my 84-year-old dad.
The only way he connects with me via text message.
He gets a new iPhone, he's like, oh, instead of calling
me, I got a new iPhone, text me, this is coming
from my iPhone 4.
I was like, OK, That's great.
I don't know if it's because he doesn't like me or what the
case is, but, many grandparents will probably see
their grandkids for the first time over FaceTime or Skype.
And they'll probably watch those children
grow up over Facebook.
And even in death, digital technology is
affecting who we are.
I have a good friend whose father passed away, but, they
were playing Scrabble on Facebook.
Until this day, the game asks her to remind her
dad to play his turn.
And what this is, is it's a notion called digital death,
which asks us as a society, what do we do with big
issues-- as we approach 100% digital-- what do we do with
big issues such as mortality?
What does it mean to have your data live on beyond you?
There are things called death vaults, which will send you an
email each week and if you don't respond, it'll go
through and it'll erase you from Facebook.
What do we do when Facebook pages become memorials?
What does this mean to society?
I don't have to saying anything, right?
First, IBM beat us in chess, and now
they beat us in Jeopardy.
This is all the Americans had left, was Jeopardy, that's it.
You know, [SINGING JEOPARDY THEME SONG]
that's all we had left.
But what's interesting is that IBM didn't beat us because it
out-calculated us or out-processed us.
In fact, they set out to build Watson to think just like us.
So the computer actually out thought us.
There's a great article written by Nicholas Carr which
says, "Is Google making us stupid?" I have so waited to
say that on a Google stage, no.
Is Google making us stupid?
And what he talks about is, he says, every single technology
that has transformed society has done so without us knowing
that we were being transformed.
And he talks about the clock.
And he says before the clock, I woke up when I wanted to, I
went to sleep when I want to.
After the clock, I woke up at a certain time, it ate at
certain time, people walk around said, I
operate like clockwork.
And he suggests that Google is doing the same thing to us.
That he can no longer digest long form content, because the
act of searching has created him into somebody who's
looking for short, quick clips.
And he says that he believes society is being transformed
in ways that we're not even prepared for.
When you actually look at studies that show brain scans,
you see that we're actually using a lot more percentage of
our brain when doing a Google search versus reading.
Or recent studies show that, multitasking and using mobile
devices is as addictive as ***--
as ***.
And so, when you think about it, we might be being drugged
into being a participatory society, and Google-- sorry--
and Facebook and Twitter are gateway drugs.
And there's some guy on the corner like, I just need 140
characters, just give me a status update,
give me a plus 1.
And while we're strung out on technology, Google's making us
stupid, computers are becoming smarter, to the point where
they're approaching what people are calling the
singularity.
The one moment in time when there is a rupture in the
fabric of human evolution, and computers become
smarter than humans.
Now for me I think that Galaxy tab turned off might be
smarter than me, so it might be sooner than 2045.
But what they're talking about is the time and a pace of
innovation that's unprecedented.
So what we have to ask ourselves, are our
organizations prepared for this change?
How do we prepare our organizations to play in a
world where digital innovation happens at this rate?
So, if there's anybody who knows about surviving, it's
our man Chuck.
And what Chuck tells us, he says, it's not the strongest
of the species that survive, nor the most intelligent, it's
the ones that are the most adaptable to change.
And so as we look at our organizations we have to ask,
are we adaptable to change?
And so what does that look like?
Well, here's Darwin's finch, Bluetooth, Android platform.
You see these people, too, walking down the street--
are you talking to me, are you talk-- what's going on here?
But that's the question, is, are we ready to adapt?
Because if we fail to adapt, we might fail to survive, or
cease to survive.
And if you don't believe me let's play a little game I
like to call digital survivor.
So on left, the most intelligent security
agency in the world.
On the right, a Brit, and a few coders.
And they were able to bring down the most sophisticated
intelligence agency in the world, right.
What's interesting is, out of the 200,000 documents that
were unearthed, one of the document said, and I quote, "I
know that Google is doing some evil somewhere." "Some evil
somewhere," this is the CIA, it's not me--
I'm sorry, I apologize.
On the right, a regime that has been in power for years.
On the left, a hashtag, that started a movement, changed
the world, and transformed an entire region.
On the right, iTunes.
On the left, music stores.
On the top, Amazon.
On the bottom, Borders.
On the top, Amazon.
On the bottom, Borders.
It's not just written on the walls anymore, it's written on
the balance sheets of organizations.
Countless organizations that have failed to adapt have
failed to survive.
Whoever would have thought that they would see the day
when more ebooks were down-- were bought from Amazon than
traditional books?
And how many people remember a company called Blockbuster?
How many people, even better, remember as
Netflix started emailing--
or sending DVDs--
and we're saying, Blockbuster, please, just send a DVD.
I will come to your offices, I'll put a stamp on it, I will
help you, but just, please, read the writing on the wall.
Failure to adapt means failure to survive.
So let's go back.
Because, while society was slow to adopt organizations
were actually early adopters.
But for some reason, the moment technology became
mobile and social, the moment it began to
look more like society--
and probably the biggest opportunity to unlock value
became apparent--
they became closed.
They became stagnant.
For some reason, they were afraid of Twitter because of
litigation.
Or, how many people in here have a better browser version
at home than they do at work?
Raise your hand.
The UK is a lot better.
I've asked our IT team [UNINTELLIGIBLE] like, you
can't raise your hand, you work on IT, that's not fair.
But the point is is that, for some reason, organizations
became closed.
They became paralyzed.
They became afraid of the unlock that digital has.
And, in fact, we are seeing a gap right now, I believe
between where society is digitally and where
organizations are.
And what we have to do is focus on how do
we close that gap.
How do we encourage, what we've been talking about, is
digital fitness.
How do you get organizations prepared for the future?
And we believe digital fitness is about the ability to adapt
to changes in the digital environment.
And how do you get digitally fit?
The same way you get physically fit.
It takes rigor.
It takes commitment.
It takes pushing yourself past the point where
you want to say no.
And that's what we try to do every single day at PepsiCo.
How do we innovate around digital, and I'm going to come
back to local specifically.
But we also believe that every single one of us has to take
on the task of being a digital fitness instructor.
Now some of us look a little better than others.
Some of us have better Photoshop people--
he charges by the pixel, this is a very expensive photo--
but the point is, is that we all have the obligation to
help organizations flex the biggest muscle that
they have right now.
And that is the muscle of digital innovation.
So let's look at a model that we focus on.
So this is the digital innovation model.
It's got five simple steps.
And the first step is, open yourself up to innovation.
How do you invite innovation into your culture?
How do you go to places like South by Southwest, or the
web, or Mobile World Congress, or CES, and go with not just
marketing folks, but entire teams from sales-
supply chain to sales.
How do we start to go to the places where innovation in
this space are happening, events like ThinkLocal.
Challenge convention.
How do I identify the barriers inside of organizations and
push through them?
I'll give you an example.
When I first came in, somebody had a sign over their door,
"Twitter is a fad," and they believe that.
I was like, gotcha, it's not a fad.
Well the New York magazine says otherwise, but we'll see.
How do we identify those barriers?
Experimentation.
Key.
How do we continue to create a culture that's not afraid to
experiment?
Don't let perfect be the enemy of the good.
And this is what I think companies like Google have
gotten so right, is that you have to now
be iterative, right.
Google hasn't released a product that's not in beta.
It's like everything, beta, beta--
maybe we should do that, beta soda, we don't know if it's
going to work, enjoy.
Tell us if there's any bugs, we'll get back to you on that.
Next version, V2.
And then learn, rinse, repeat.
How do you do it time and time again, and also share that
with a global organization, so the entire organization learns
and moves forward.
So what I'm going to do is, I'm going to go through a
couple of examples that fit into each one of these, with
more of a focus on local, since that is the
event that I'm at.
First piece of that is PepsiCo 10.
Anybody familiar with the PepsiCo 10 initiative?
OK, a couple people.
There's an article in the Times today about it.
So what it was, was, we sat back and said, OK, how do we
operationalize the identification of the
technologies that are going to change consumer engagement in
the next six to 18 months?
How do we find the emerging technologies that could be the
next Foursquare, Facebook, and how do we get to them early,
often, and get some real learnings about how they can
impact the business.
So what we did was we created a program called PepsiCo 10.
Open call for emerging technologies.
We chose four critical areas.
So we launched in the US a year ago, and then just in the
UK, and I'll talk about that.
We identified four critical areas that we knew were going
to pressure the business.
So we knew that mobile was a question that-- a big question
mark that everybody has.
Social media, play space, in store, huge, and
then gaming and video.
And from there, we choose 20 companies.
So we had 800 submissions, we chose 20 companies.
Those 20 came in presented to 280 marketers
from across the business.
Again everybody from supply chain to sales, right.
And then we choose 10 of those companies to run pilots with
and over the next year we roll out pilots on various brands
or functional units, so that we can understand the
potential impact that these technologies will have.
There's a bunch of cases if you go to PepsiCo10.com, you
can see more cases from the US one.
Here's one example.
So, what a huge local, digital opportunity for us.
This is TableTop Media, and what they create
is they have a ziosk--
it's a kiosk that sits on the table, hence ziosk--
and it sits in casual dining restaurants.
And what we can do is, first, we can do all types of digital
engagement on it.
But we can also-- it also is tied to sales, so you could
order from offer from the ziosk as well.
So we can make suggestions like, hey, you should probably
have a beverage with that meal.
Or, if we want to sample a new product, we could sample in
new product.
Long story short, 20% increase in beverage purchases in the
stores that this was piloted for a carbonated beverage.
40% for wine, by the way, so, if you're the wine market,
this is your friend.
But that's a huge impact that we can have at a local level
at point of purchase.
And so, huge opportunity for us.
So let's cut to the UK.
So, successful program in the US, we decided to roll
it out in the UK.
And so, two weeks ago, I came out here, and the teams--
all the brand teams and Ruth who is on my team, who is
sitting here, who ran it, and she did a fabulous job, and
she was spectacular.
But they ran--
so we had the selection process.
We brought in 16 of the companies that applied and we
spent two days, which was different from
what we did the US.
And the brand team selected.
And the following day we did a brainstorm where we tried to
identify what types of programs we could run.
First let me say, there were vast differences
from the US to here.
So we saw a lot more local, a lot more
commerce, a lot more mobile.
So, at first, I thought, well, maybe there's a trend.
Maybe what we're seeing is is that because the UK is such a
dominant e-commerce market, that we're seeing more
commerce players emerge here.
And because mobile penetration is pretty
high, more mobile here.
So maybe we're seeing kind of a local--
or a country by country trend.
But in fact, we're probably just seeing a global trend.
Where a year later, there is more mobile and
more focus on commerce.
So can you look at it either way.
We're going to announce Asia and Latin America.
And so when we get more data there, I'll be able to have
kind of a better picture.
But, speaking on that note, if you step back and think about
our organization our size, not only can I tell you what are
the interesting technologies in a marketplace--
because we see hundreds of them come through this
program, so we can see where the resources are, where the
investments are-- but even more than that, I can also
tell you which of those technologies can actually
impact the business.
There are very few organizations that have that
type of insight, or, quite frankly, a program that allows
them to build that type of insight.
So here are the 16 companies, we announced a 10 today, and
I'm going to talk about three of them that were as part of
the announcement.
So Slingshot.
Anybody familiar with Slingshot?
One person.
Super new, these guys were like, out of college, they're
like, Yeah, high five, I was like, oh my
God, this guy is crazy.
Whoa, let's mix it up.
But what's interesting about this--
I think this is, first of all, spectacular, spectacular.
So what's interesting is that, what Slingshot allows you to
do is, it allows you, from a digital action, to put a
product into somebody's basket.
And that could be there on my basket.
It could be Tesco or multiple retailers that
they have access to.
And so, I click something like, yes,
put this in my basket.
I click it or Slingshot it.
I Slingshot it.
I get asked what my password is on Tesco, boom, and it goes
into my basket.
Simple, but if you think about the power of that, why
wouldn't we enable every single digital activity that
we're doing with this, which ties direct to sales?
Why would we not allow you to do that?
Or even better, why would we not enable a bus sign where
you walk by and, oh yeah, I can click or text or whatever,
and buy that product right there.
Huge local level activation with local retailers.
And. what it does is, it's actually closing the loop.
So what's great about digital is you can open the sale and
you can close the sale in one place.
What's tough for FMCG is that we can't do that all the time,
but here, now we can in some respects.
So I think a huge unlock at the local retail level with a
platform like Slingshot.
So, StreetAd.
So what this is, is, these are, local advertisement
platforms. Primarily showing local merchant ads, but
they're building an ad network.
It's a screen it stands-- so it's a digital display screen
that stands about yay high--
but what's more interesting is that they have a camera on it.
And so the camera allows you to do gesture-based engagement
with consumers.
So, if you look at the US, Kinect, which is the Microsoft
gesture, is one of the fastest growing technologies that
they've ever seen.
Gesture-based is coming quick, and people love it and they
engage with it.
Here's the opportunity for us to create gesture-based
engagement, as well as, deliver some type of real
insight on how many people are walking by the ad.
How many are actually engaging with it.
And then because it sits right in front of store, we can
drive you into purchase.
So what was the entire funnel that we were able to create
with this digital signage.
FlyPost. Interesting location play.
What they're doing it is, is, they're basically, as they
say, scrapbooking your city.
And so what they do is they use publicly available
listings of events and activities that are going on.
And they publish those so that you can find anything you
want, a comedy show or whatever, in the
location that you're in.
Now people say, well, great Time Out does that, but the
difference is, is, Time Out only does it for big cities.
This does it for every single locality around--
in UK and the US for now.
What a huge opportunity for us to use a local-driven product
to get super close to the consumer.
So I encourage you to download it from the app
store and look at it.
And look for the stuff that we're going to do.
I'm going to switch quickly to the Foursquare example.
So what we did.
We were actually the first brand to work with Foursquare.
We do a check in for charity with them.
And then we moved over to a pretty expansive location
based test plan, where we looked at a number of
different opportunities.
One, we looked at rewarding endemic behavior.
So with Vons we said, look, if you check into a gym, we're
going to give you a coupon for Gatorade.
If you check in the morning, we're going to give you a
coupon for Quaker.
So rewarding endemic behavior with inside the platform.
But then we said, well, OK, can we also create behaviors.
Can we drive you into store and give you some reward
that'll make you redeem.
And so what we did with [? Brisk ?] and Hess--
is [? Brisk-- ?] is a gas station, about 1,500 gas
stations on the East Coast--
[? Brisk ?]
and our Lay's brand-- we said, look, we are going to give
you, for $1.99 if you buy them together, check in, and redeem
the coupon that you get from Foursquare.
But at the same time we ran a test with the traditional tear
off coupon.
So, first, huge 500% increase in foot traffic that we were
able to drive to Hess.
Hess was like, we love this program, keep doing more of
these things, right.
But for us, versus the test of traditional, a 47% increase in
bundle purchase.
47% is crazy, we couldn't even believe--
we had to go back and check.
But this is the type of power unlock that programs like
Foursquare.
But even more important, we also now built a loyalty
relationship with the consumer inside point of sale, in a way
that we've never been able to before.
We drop the product off and that's it.
So, a huge unlock from a local store to store platform.
How many of you are familiar with Gatorade mission control.
I'm doing such a bad job, we have to get
our stories out more.
So what Gatorade mission control is, is--
the goal of this was to build real time participation--
real time insights and real time participation--
and to build a nerve center of data around one of our largest
brands-- arguably the largest sports brand in the world--
and put digital at the core.
I'm going to show a quick video and then
I'll explain it.
[VIDEO PLAYBACK]
BONIN BOUGH: Gatorade mission control.
So what the goal is, is, it's this glass room in the center
of the Gatorade marketing floor.
But what we wanted to do is, we wanted to understand how do
you transform the way you engage with
consumers in social?
Well we had to rethink, who were the right folks to be
around the table.
So this was less about who owns it-- and I get a question
all time-- this was less about ownership and more about
leadership.
What are the functions that are going to be necessary for
us to lead in this space?
And so, who sits in the room?
There's five people.
We start with insights at the center, and then we have
brand, consumer relations, comms, and media.
And so what's interesting about applying the media
filter is now, we're actually doing real-time marketing.
So we're able to go all the way from the insight point of
view, to the delivery.
We're buying media against conversation.
So you might have a conversation on training and
we're buying media in real time against that.
Nobody's really doing that. what's exciting is that as we
evolve that we're looking at location so can we actually
start delivering localized experiences in real time,
based on our user checking in or providing us with their
location data.
Since I only have a short on time, I'm going to breeze
through these two things.
Here's our compass where with video interviews with
marketers who are doing interesting things around the
globe, so we can learn from each other, that whole learn,
rinse, repeat.
And lastly, we also use scan barcode local technology to
help tell our corporate message.
So performance with purpose is the ethos by which our
organization operates.
It says we have an obligation to perform, but we also have
an obligation to do so in a purposeful way.
And I won't go into too deep, but here's a quick sample of a
technology we use called Sticky Bits.
[VIDEO PLAYBACK]
NARRATOR: Can a bar code tell a story?
We think it can.
In fact, we think it can be a universal purpose code,
revealing how PepsiCo's brands are giving back.
How Pepsi is funding people's brilliant ideas for refreshing
the planet.
How Lay's is partnering with local farmers.
How PepsiCo's dream machines are helping veterans build
their own businesses.
And so much more.
Soon, every time you scan a PepsiCo barcode, you'll be
able to unlock these stories, support these efforts, and
experience the promise of PepsiCo for yourself.
BONIN BOUGH: So this was a nice way to use an emerging
technology to bring to life our business ethos.
So, with that, back to dinosaur, Jurassic period.
Thank you everybody.