Deloitte's Heat: A 'wake-up call' for other creative shops?
When consulting giant Deloitte Digital acquired creative agency Heat in February 2016, distress crept down Madison Ave.
It wasn’t the first acquisition of an agency by a consultancy, but it was the first “where the industry stood up and took notice,” according to Jay Pattisall, Forrester principal analyst covering advertising, media and digital marketing.
“It’s all my fault,” Heat CEO John Elder jokes during a trip to the agency’s New York office last Thursday, where Deloitte Digital employees are housed as well.
During that visit, Heat discussed life-after-acquisition and walked Ad Age through a demo of its most recent innovation that was created thanks to Deloitte Digital.
Heat AI is a new practice created by the agency that uses artificial intelligence to find trends and conversations on social media that are predicted to spike in popularity 72 hours before they peak, with a self-reported 70 percent accuracy rate. Armed with that information three days in advance, the agency says it can create social content around a trending topic (given it makes sense for the brand) and place it where those discussions are taking place as they take off.
Heat AI runs on technology originally developed by Deloitte Digital to assess business risk for companies. (A few government agencies have also used the technology to determine public-safety risk, says Elder).
Now, the creative shop has been testing the technology with certain clients but the agency will officially launch it at an event with Facebook at the Cannes Lions International Festival of Creativity next week.
Jocelyn Lee, head of Heat AI, says that “the great thing” about being at a creative agency under Deloitte is that there is “all this great technology at our fingertips.”
That got her thinking. Why can’t Heat leverage that technology to fuel creative?
Having spent time on the planning and buying side at Digitas, Grey and FCB previously, Lee has a media background—and a pre-existing mindset of figuring out ways to use data and technology to drive better results.
“The media side has been really good at leveraging data and technology and AI to make planning and buying more efficient, impactful and effective,” Lee explains. “We feel that one of the things that’s slightly missing from it is the right messaging, the right emotionally resonating message and creative that really goes with this technology.”
Forrester's Pattisall agrees.
“What Deloitte Digital and Heat are doing is taking advantage of their available tech and data stacks in a way that most agencies have not yet achieved but are trying to,” Pattisall said.
He said “this should be a wake-up call” to independent and holding company-owned creative agencies: According to a recent R3 report, 96 percent of marketers believe tech is "integral" to achieving future business goals and have invested $100 million on solutions around that. Another 44 percent of marketers reported to R3 that they plan to increase those investments within the year.
Behind Heat AI
On the Heat AI platform, each brand gets its own profile. The tech trawls for trends and conversations that relate to the client's target consumers. Those trends, updated every 60 seconds, are displayed in different sized bubbles—the bigger the bubble, the more it’s being discussed at that moment. Hovering over the different trends shows how conversations around it are expected to grow over the next 72 hours. (Don’t count those smaller bubbles out.)
Last Thursday, Ad Age observed the platform’s profile of a shoe retail client, masked by the agency so as not to reveal any potential sensitive information. Jay-Z and Beyoncé were in there, represented by two small bubbles bobbing around inside a larger “game three” (of the NBA finals) bubble. (The platform had already identified that this client’s primary consumer is a sneakerhead who is also interested in sports and music, particularly hip-hop.)
The reason behind the bubbles: ESPN posted a video to Twitter during last Wednesday’s game that showed Jay-Z and Beyoncé sitting courtside. People apparently had taken note of Beyoncé looking annoyed by Nicole Curran, the wife of a Warriors owner, leaning over her to talk to Jay-Z. This social buzz prompted it to appear on the Heat AI platform on Thursday. It wasn’t until Friday, two days later, that the incident broke into mainstream awareness, with Jimmy Kimmel discussing it during last Friday's show.
“There were conversations around ‘will this thing take my job?’” Elder says, noting that the agency has actually bolstered its staff since introducing the technology. Heat has hired analysts, engineers, AI scientists, data interpreters and more to work on the platform.
Since Heat AI claims to predict trends three days in advance, the agency works with its own team, the client’s and the client’s media agencies to identify relevant trends, create the content and distribute the work by 1 p.m. Eastern on the day that the trend goes viral.
“When something starts trending, everyone is trying to bid for the same inventory,” Lee adds, noting the cost efficiency of the media buy as well from knowing where to place content before the competition catches on.
Heat works with its clients’ media partners on strategy using the AI platform but it currently has no plans of introducing a media practice of its own.
For example, Heat AI predicted in February news would go viral that Beyoncé and Jay-Z banned photos at their pre-Oscars party. Heat's unnamed shoe retail client moved quickly, releasing a simple social post where those conversations were happening that featured a sneaker on a couch in front of some exclusive backdrop with the words “no pictures.”
“We’re in your conversation without being explicit,” says Elder. “It’s a little wink and a nod.”
R3 Co-Founder and Principal Analyst Greg Paull called the tech a positive development.
"Any marketer that can work ahead of the curve can only help to optimize their media investment, which for many firms is the largest block of external cost," Paull notes.
Just the start
Lee said Heat plans to use other Deloitte Digital technology, including certain machine learning tools, in its future creative.
“Agencies don’t like change and there’s been a lot of it,” Elder says. “This consulting and creativity coming together, I think [agencies] are right to be nervous about it.”
While Heat kept its brand so as not to confuse the marketplace, Elder said really all of the agency employees are just as much a part of Deloitte Digital. Both the consultancy and agency share clients and can tap into each other’s resources whenever they need.
Elder is excitedly monitoring another agency-consultancy story in the news: Accenture Ineractive’s April acquisition of Droga5. When that deal was announced, Heat sent doughnuts and aspirin to the agency.
“We were like, ‘Here’s the 10 things you’ll hear in your first year,’” Elder says, noting that sometimes those sitting on the consulting side of the business still are bewildered by the process of pitching, in which the agency “gives away ideas to the client before they buy them.”
Still, Elder said the future of agencies relies on them being business partners to clients, and that’s not always about creating a 30-second Super Bowl spot. He argued that agencies “don’t have the scale” that consultancies have to fully understand clients’ businesses.
“You can be an agency that complains about other people getting in,” says Elder. “Or you can be an agency that evolves.”