Inside Philips’ digital transformation strategy
Philips is a case study of the type of company facing the innovator’s dilemma: 125 years old, the Amsterdam-based conglomerate generates $25 billion in sales with 108,000 employees spread across 60 countries. Change — and consistency — don’t come easily at that size.
But Philips is all too familiar with change. It has morphed several times in its history, with a current focus on using the Internet of things. The company has created a central 60-person digital center of expertise, which numerous digital-focused sub-centers focused on specific disciplines like search and social marketing, real-time content marketing, and media optimization.
Philips’ global head of digital, Blake Cahill, joined the business 26 months ago with a single goal in mind: create digital harmony between Philips’ 10 businesses and get all staff and markets to the same level in digital. That has meant that while Philips uses agencies, it is bringing more capabilities in-house.
“It’s not that we weren’t doing digital before,” he said. “We were; we were just writing a lot of checks to agencies, but digital marketing is now in our brand DNA.”
“I’m trying to create one highway with all the cars going in the same direction, at approximately the same speed. If you looked at it two years ago across the 10 businesses we have, some weren’t even inside the car on the highway, let alone driving on it. Some parts of the business, or certain markets, had adopted digital faster, and others were still on horseback. Now we have everyone on the same page.”
Cahill also doesn’t believe in having expertise scattered across the business, with no easy way to track or measure its effectiveness. That’s why he pooled 60 people into one digital center of expertise and created what he refers to as “centers of gravity” around key digital topics. Each of these is manned by four or five people.
“In a large company, you’ll at times get pockets of excellence and then closets of darkness: some people doing great stuff and others doing nothing,” he said.
Philips is also trying to create common measurement standards for its marketing. It now has global performance dashboards that each country the business operates in can access and compare their own performance against their peers in other markets.
“Before we had vignettes of case studies but no harmonized [key performance indicators]. Now this means we all speak a common language, and it’s by far one of the biggest step ups we’ve made. If you can’t compare data, you can’t see what’s scaling and what isn’t. People can really have a sense for which market is excelling, which is lagging.”
Building that performance and data-driven culture map is helping Philips define its next battleground: real-time media optimization. Philips ran pilots last year to test its own ability at improving digital marketing performance. Although he wouldn’t give exact details, Cahill said it improved overall efficiency of its spending by 20 percent.
“It provided a platform of saying we need to pull more media in-house, and do media optimization in parallel with our agencies,” he added.
‘The data strategies of these companies aren’t progressive enough’: 10 Confessions on the pivot to privacy
An inside view of how privacy changes are having big consequences throughout advertising.
Why companies are using virtual concerts to introduce their users to the metaverse
Music is a spectacle, but it’s also a deeply social experience, a pairing of traits that experts believe make virtual concerts a perfect fit for companies looking to showcase the metaverse to skeptical users.
Member ExclusiveMarketing Briefing: ‘Not a hypothetical problem’: ANA CEO Bob Liodice on why there needs to be a unified effort to combat hate speech
This week, GARM and the ANA announced they are working with Pernod Ricard to scale that initiative working with brands and social platforms as well as small and medium-sized businesses.
SponsoredHow retailers can be ready for holiday shoppers this year
Suchi Sastri, managing director and partner, Boston Consulting Group As the holiday season approaches and the pandemic continues to evolve, retailers want to know what to expect. Will e-commerce continue to grow at the rate it did last year? How big of a role will in-store shopping play in holiday shopping? While it’s still early, […]
As non-endemic brands eye the gaming space, a lack of industry standards is delaying their arrival
The caution with which some brands still approach the gaming industry -- and the need for better industry standards to help brands feel more informed -- were recurring themes at last week’s Digiday Gaming Advertising Forum.
Cheat Sheet: How Apple’s ATT is giving it more influence over ad dollars
The signs that Apple is building an ads business is there — here is what we actually know.