At 22, Derek Handley became the country’s youngest ever managing director of a listed company. Around ten years later, he sold The Hyperfactory to US marketing behemoth Meredith. And now, in between helping create the 'future of reading' with Booktrack, he has announced plans to list his latest venture, mobile media specialist Snakk Media, on New Zealand’s alternative stock exchange. He’s also co-founded an organisation alongside Sir Richard Branson called The B Team that aims to find a new and more sustainable version of capitalism. So what does the future look like to him?
On mobile as media:“The one thing that has been holding [mobile ad revenue] back in New Zealand for years is the cost of accessing the internet and the inability to have an all-you-can eat plan. If consumer adoption is picking up, then, like any new media hoping to get marketers on board, a lot of education and evangelising is required. So who’s doing that in New Zealand at the moment? There are probably enough people promoting and creating applications. But for something to take off someone needs to be championing it.”
On size: “If you look at the current size of the market in New Zealand, it’s around $2 million a year for mobile media advertising, not including all the money spent on building apps. It’s really hard to make a business out of that. In Australia last year it was ten times that amount, this year it’s expected to be $40-50 million and Australian smartphone penetration has gone from bottom of the world three or four years ago to almost top of the world. So that’s where Snakk is focused on from a sales point of view.”
On new challenges: “Snakk Media is the least of my busy-ness at the moment. We just had our first baby six months ago. It’s mental. It’s taken over our lives—in a good way. So it’s a balancing act, but I’m pretty good at balancing things.”
On screens: “For the first world, we’ve hit a plateau [with mobile]. I don’t really want much more out of my phone. It’s got way too much just as it is. So the next few years will be about everyone learning how to use it. I’m interested in the other screens that surround us and are going to emerge. The age-old idea of the watch is changing with the Pebble, a successful Kickstarter idea with iOS built in, as is your in-car navigation system and your TV. I’ve got a Google TV and it has totally changed the way I consume TV … The tablet has also become the new customer service agent, the new brochure instore, the new POS, the new booking system and even the new cash register, so it’s moving into retail fast and those are all screens that Snakk considers part of its future—and the future of mobile.”
On promotion: “We built apps for Kraft and other companies that were used by millions of consumers on a daily basis. But you need to get it out there … Brands might not put media money behind an app for quite some time. But you’d never think about making a TV commercial without a significant media budget behind it. With an app, if you build it they definitely won’t come. It’s incredibly difficult to get an app to shoot up the charts.”
On better business:“I had a kind of epiphany or journey or whatever you want to call it around the recession in 2008/2009. I thought there was definitely more to it [than just making money] and wanted to look at what I was good at and what the world might need and where those two things intersected. I’ve been involved in a lot of things over the years, but The B Team is the first true crystallisation of this. There are a lot of business leaders around the world who, post financial crisis and post-Occupy movement, think business has gone a little bit far in some respects. And there is some validity in that. So it’s about working on significant ideas or problems, trying to create new rules and market solutions and focusing more on what role a company should play for its people, its stakeholders and the community it exists in … Even with the B Team name we’re trying to create a different model. And I want to use Snakk as a small, incubated start-up version of what we’re trying to achieve.”
On true cost: “The environment has become part of the zeitgeist, but the problem is that global warming has overshadowed everything else that’s going wrong, like species extinction, biodiviersity issues, or soil, water and air degradation. And those things are all getting worse and it’s all because of business. Ecological cost is one of the biggest elephants in the room. Economists have created a theory based around externalities that means companies can just plunder the environment. That’s the way the world works at the moment, and that’s one of the things that needs to change. But as the old adage goes, you can only manage what you can measure. So one of the first steps, which will take decades, is deciding how to measure it. Jochen Zeitz, the chairman of Puma [and co-chair of The B Team], has pioneered the measurement of the company’s financial and ecological footprint through the supply chain. And that’s the kind of thing we’re looking at—a solution that will create new paradigms for business … Social problems are becoming business problems. And that comes back to the other stuff like education and water. That’s why people look at The B Team and say ‘what’s happened to Richard and Jochen? Are they turning into hippies?’ But long-term, if these companies are going to have new markets to go to, they have to help build communities that have good livelihoods … It’s a broader brush stroke where a bunch of people think the medium-term future of marketing is brands playing an important, more responsible role in the community they operate in and in terms of how they produce what they produce.”
On New Zealand:“I think it has one of the best opportunities in the world to change and we would love to create a New Zealand version of The B Team, but I also think it has real problems that it needs to address. There was an article about the 100% Pure Middle-earth campaign in The New York Times recently and you can get mad at the professor for blowing our cover, but he’s not wrong. You can only market for so long on something that’s not really true. And if the cover continually gets blown then all those brands that rely on the main brand above will suffer. The problem is the government doesn’t think it’s important, so someone needs to take the initiative.”
On CSR: “Brand is more than advertising. It’s everything that company represents. Values, people, product, and the whole supply chain. You need to think about how those different facets interact with the community. It’s not something that’s separate and sits in the corner. And that’s what’s happened for the past 20 years. Corporate social responsibility has almost been a PR division. But the brands that really understand how this is changing, like Marks & Spencer and Unilever, are the ones that are breaking it apart and inserting environmental and social impact into their businesses. So there’s a vanguard among some big companies who see they have a bigger role to play. It’s quite new, but it’s going to ripple down.”
- This article featured in the Jan/Feb issue of NZ Marketing.