BRAND SPOTLIGHT / NEST - DOUG_SWEENY

Brand Spotlight / Nest80 / 81Nest’s thermostat, on the other hand, is a sleekcircle, rimmed in stainless steel with a colour LCDface that calls out for interaction. It’s quite literallya circle in a sea of faceless squares.Starting staticIn the early days, Nest presented its productsprimarily in static, visual media – print andout of home. Constrained by the marketingbudget of an unproven startup, but aware thatradio ads wouldn’t be the ticket to disruptingthe thermostat market, Nest went for qualityover quantity, targeting premium publicationsand high-visibility outdoor locations, aiming forwealthy early adopters.‘Beauty is our core asset. It’s the way to pullpeople into that rational story of why to buy,’says Oenning. The thermostat’s appearance isso striking that the brand team internally playedaround with a billboard simply showing the deviceand proclaiming: ‘Not Ugly’. Eventually, though,they opted for a different tack. ‘We preferred headlines like: “From now on, this is a thermostat”,’say Oenning and Vianello, finishing each other’ssentences. ‘This sense of disruption in a space thatnobody thinks about. We used the visual to grabattention and then we said, “Pays for itself ” or,“Go ahead, forget to turn it off ”.’Who would havethought that athermostat wouldbe something thatyou would gift atthe holidays or fora baby shower?Doug Sweeny, Nestfoundation of its brand and the blueprint for itsfuture. Reading Nest’s 2011 internal documentation is like looking into a crystal ball: first comesa thermostat, then a broader mission to build amore conscious home by taking unloved productsand making them magical.‘The brand strategy was laid out before thecompany even introduced its first product,’ saysSweeny. ‘We knew we were going to be launchinga smoke alarm and other products, and there wasclarity about the stair-stepping into the idea ofthe thoughtful home.’Fittingly, Nest has looked in-house to make itsmission a reality. Oenning, previously the director of global marketing for Logitech, oversees ateam of around 50 marketers who specialise onparticular products within the Nest line. ‘Myremit is to make sure that the brand strategy forNest remains true and evolves as our productportfolio grows,’ says Oenning. Since the earlydays of Nest, he has followed co-founder Fadell’smantra to ‘never outsource the brand’, takingon everything in-house – from commercials topackaging to ecommerce to point-of-sale. Theteam even produced the instructions for how towire your new thermostat.‘Imagine me, a marketing guy, and Matteo, acreative director, in a huge empty room with sheetsof paper taped to the wall, each one with a wiringdiagram – red, green, blue, white wiring – goingthrough the logic of what wires feed what functionality for a thermostat,’ Oenning recalls. Theadvertising side of things, he says, is the cherryon top of a heaping pile of work.Nest’s in-house crew does occasionally pairup with agencies like Goodby Silverstein &Partners and BBH, looking to them as soundingboards for ideas. But Oenning is careful to protectNest’s identity. ‘[Agency partners are] incrediblyimportant for opening doors that we haven’tlooked behind before,’ he says. ‘On the flip side,though, it’s very hard to have them understandwho we are. It’s easy for them to come out withan amazing spot, but you could then put any logoon it and it could be a Samsung SmartThingsspot. That’s the hard part – getting the brandDNA right.’Competing with complacencyBefore it even launched its first product, theNest team recognised that to succeed it didn’t haveto go head to head with category leaders. Insteadit had to change the way people thought aboutthe bland, boring objects tacked to their wallsand ceilings. Says Vianello: ‘We’re not competing with [thermostat manufacturer] Honeywell,we’re competing with people not caring aboutthe category.’So how do you rewrite the book on entireproduct categories? Start with the cover.Quick, picture a non-Nest thermostat. Chancesare you’re envisioning an ugly white box, with asimple LED screen if you’re lucky, tacked onto awall somewhere, forgotten. That’s the status quo.Outdoor impact: Nesttargeted high-visibilitylocations and cherrypicked billboards toget its message tothe massesNest ran full spread ads and back covers inmagazines such as Wired, Dwell and VanityFair. The team mirrored that approach without-of-home placements, driving around SanFrancisco and cherry-picking the billboards andbus stops where Nest’s ads would be placed. ‘Itwas, as most things are at Nest, a very meticulousprocess,’ says Oenning.It worked. The print ads drove huge presscoverage at the time of the thermostat’s launch,which in turn drove interest from channelpartners like Lowe’s, Home Depot, Best Buyand European retailers such as John Lewis andB&Q. Early adopters saw Nest as a Silicon Valleystatus symbol, forking out more than 249 for athermostat they had to install themselves, andthe brand was on its way.From early adopters to early massThough its product-first strategy hasn’t changed,Nest has evolved the way it comes to market asit has grown, moving away from targeting earlyadopters in tech-savvy areas to hitting an audienceit calls ‘early mass’ with strategically placed television spots that complement digital, out-of-homeand print placements.‘ We hit a point where we felt that togrow, we needed to show the benefit to thebroader audience,’ says Vianello. ‘There was nomore efficient tool than broadcast TV to reachthose guys.’For Oenning, it was a turning point. ‘Out ofhome gives you a great impression, but what doesit feel like living with that brand in your home?These commercials brought the brand and theproducts to life for the first time for people. Ithas given us a much broader palette to work with,in terms of letting people know what we’re aboutand how our products work.’The brand’s most recent spots tell the Neststory from the perspective of houses themselves,each narrating their history of enduring remodelling projects to watching the actions of peopleinside – and culminating with the arrival of ahelpful Nest product that makes the home morethoughtful. ‘The home is a very personal, privateplace, and you’re inviting this brand in to do alot of important things,’ says Oenning. ‘I thinkthe spots do a wonderful job of asking for thatpermission and getting it.’It’s an opportunity for the brand to bring itscomplex products to life simply and visually,using what Oenning calls a ‘broader palette’ ofvisual imagery. ‘It’s that magic – what Antondescribes as the pixie dust – the memories andthe experiences that you have in the home,’ adds

Brand Spotlight / Nest82 / 83Beauty is our coreasset. It’s the wayto pull people intothat rational storyof why to buyNo smoke without fireDuring National Fire Prevention Week inthe US, Nest enlisted The New York Times’T Brand Studio to create In A Flash, abranded content execution to promote itssmoke alarm by highlighting the dangers of amodern house fire. ‘Fires have changed,’ saysCMO Doug Sweeny. ‘The speed at whichthey move through homes was an importantpoint of Nest Protect’s development.’Thanks to new building techniques andfurniture materials, modern homes can goup in flames in less than three minutes,more than five times faster than houses 30years ago. To highlight this, T Brand Studioplaced a three-minute countdown timer onthe page, which ticked away as more than300,000 people read about a family savedby their Nest Protect alarm, watched videosof fire departments in action and learnedabout flammable materials in modern homes.Average engagement time with the contentwas almost exactly three minutes – aneternity in online attention-span terms.Nest also partnered with T Brand Studioto put In A Flash in people’s hands. ‘Nestdid something we call a reverse paid post,taking the digital experience and publishingit in print,’ says Lindsay Howard, an accountmanager at The New York Times. A spreadin one issue of the paper’s Sunday magazinedrove readers to the site like moths to aflame, providing a 28% traffic bump for thebranded content.Anton Oenning, NestVianello. ‘We enhance that. We want to make surethe technology doesn’t feel foreign to the home.The houses are the spokespeople for this product.’Experience NestElsewhere, the brand takes an even more playfulapproach to bringing its products to life, creating experiential campaigns that allow for morehands-on learning. Last winter, Nest converteda gondola at Squaw Valley ski resort in Californiainto a Nest home, bringing some warmth to thosehitting the slopes and proclaiming a mission to‘reinvent neglected things’. In New York’s HeraldSquare, the brand placed a 6 x 6-foot see-throughcube to signify the invisible danger posed bycarbon monoxide, stating that ‘Nest Protect cansee the carbon monoxide you can’t.’ The brandalso ran a mostly blank two-page spread in TheNew York Times, warning of the poisonous gas’sinvisible threat. And in what may be the brand’smost successful experiential campaign, Nestbought and rebranded a fire truck to promotethe Protect (see box, right). ‘We believe in earnedexperiences where people will talk about thebrand, and it’s not just us talking to them,’ saysSweeny. ‘The point of all of these is bringing theproducts and the magical experiences into theconsumer conversation.’Nest’s most recent fun comes via its acquisitionof Dropcam, the streaming security camera nowrebranded as the Nest Cam. On YouTube, thebrand has been soliciting videos from Nest Camowners, tagged with the hashtag #caughtonnestcam. Think of it as a GoPro without the ‘go’– short, sweet, funny and sometimes scary clipsthat capture the oft-missed moments of home.Spend a few minutes looking through the videosand you’ll likely see a child’s first steps, a cat’shijinks and a break-in. One Nest Cam owner evenshared a video of a grizzly bear walking throughtheir living room.‘It’s an area of our business and our marketingthat will really be important as we move forwardwith that product,’ says CMO Sweeny of thevideos. ‘Creating conversations around the brandPimp my truckTo launch the Nest Protect, Nest’s marketing team wrote a wide-openbrief: ‘How can we do creative that is as disruptive as the product isin the categories we entered?’ The only logical answer? Let’s buy afire truck. 15,000 and a few Craigslist searches later (yes, they reallybought it on the classified ads site), Nest found itself in possessionof a shiny, red fire engine. But it didn’t stop there. ‘We figured, “whynot bring it to West Coast Custom?”,’ says Vianello, referencing theautomotive modification shop made famous a decade ago by the TVshow Pimp My Ride. An episode of the auto shop’s new Fox Sportsshow, West Coast Customs, showed the truck’s transformation froma well-worn warrior to a baby-blue touring vehicle.A smoke alarm advert on wheels, the truck has travelled acrossthe US, UK and France, making stops at retail channel partners,local events and festivals such as SXSW. Oenning calls it ‘a totalSwiss Army knife’ of an idea, garnering attention at events, withpartners, on TV, in PR and more.and creating experiences where there’s earnedmedia is really important to us.’Unvarnished conversation can have downsides,of course. In January, Nest found itself in somehot water when New York Times columnist NickBilton recounted an issue with his Nest thermostatthat caused it to go offline. ‘This points to a largerproblem with so-called smart devices that we areinviting into our lives: Small glitches can causehuge problems,’ wrote Bilton. Nest acknowledgedthat it was ‘aware of a software bug impactinga very small percentage of Nest Thermostatowners’ and pushed out a software update thatfixed the problem. But the event raised concernsfor some that relying on internet-connecteddevices for important tasks could come withsome major drawbacks. Those critics may havea point. But would they swap their smartphonefor a rotary dial phone – which guarantees a goodconnection and never suffers dead batteries? Anynew technology will suffer speed bumps on theroad to new capabilities.Plays well with othersAnd speaking of capabilities, Nest has beenworking hard behind the scenes to make sureits products can do more than ever, investingin everything from connection protocols topartnership programmes. Although the brand iscareful to avoid pitching its products as pieces of a‘connected’ home, Nest is increasingly committedto making that reality possible, hoping to cementits place at the top of the smart home hierarchy.‘Nest is basically leading the entire effort in termsof developing the smart home market from theconnectivity layer to the software layer to theend devices themselves,’ says Adarsh Krishnan, asenior analyst who studies the smart home marketat ABI Research. He points to Nest’s leadershipof the Thread Group, a consortium of companiesworking on low-power mesh networking protocols, as a sign that the brand is thinking abouthow connected products can work together tocreate a connected home.Nest is connecting with other devices as well.Via the Works With Nest programme, the brandpartners with big-name connected home brandsincluding Philips Hue, Whirlpool and Augustto enable interoperability. Users simply connectnon-Nest products to their existing Nest accountand can then control those devices directly throughthe Nest app. Essentially, the programme positions Nest as the brain of the house, controllingthe various extremities – whether they weredesigned by Nest or not. Nest can even connectto things like garage door openers, overhead fansand Mercedes vehicles, giving the brand domain

Brand Spotlight / Nest04 /05Brand Spotlight 3.2bn 10-12% 200Price paid by Google toacquire Nest in 2014The idea of theconscious homehas been ourNorth Star sincethe very beginningMatteo Vianello, Nesteven in product categories it might never considerentering. Already, one in eight Nest householdsruns a Works With Nest integration.Nest has also pursued partnerships outside thehouse, striking deals with insurance companies,home security firms and energy providers tohelp reduce the end cost of its sometimes-priceyproducts for consumers. Depending on location,insurers give away free Nest Protect alarms to newcustomers, utilities give rebates to people who buyNest thermostats and home security companiesgive price breaks to customers with Nest Camsinstalled in their house. Sweeny calls it a ‘win-winwin’ situation. Customers win by paying less, Nestwins by selling more, and partners win by gettingvaluable customers signed up for their services.Next for NestThe battle for the smart home customer – whetheracquired one product at a time or in one fell swoop– is getting fiercer every day, as the categoriesNest helped reshape are seeing new entrantsfrom all angles. Apple’s HomeKit seeks to usurpGoogle’s Nest as the preferred luxury home hubas it emerges over the coming months and years.Samsung’s line of SmartThings products includesa video camera system, clearly competing withthe Nest Cam. AT&T, Insteon, Lowe’s and morehave committed big money to getting their ownsmart home platforms off the ground. And on thelower price point side of things, nifty add-ons likelittleBits Cloud Modules and the internet-enabledbattery Roost promise to bring consciousness toeven the dumbest of household objects.But Nest shouldn’t worry about being put outof business any time soon. ABI’s Krishnan seescompetition heating up beyond legacy and luxuryplayers, but maintains that no single ecosystemwill ever have a monopoly. ‘It will take a littlewhile for the market to mature, but even whenit does, you’ll see multiple winners. You’ll havedifferent ecosystems catering to different people.’For Nest’s part, the brand seems focused on itsown mission – ‘to create a home that cares for thepeople inside it and the world around it’ – workingtowards the same North Star it defined five yearsago. And additional connectivity seems inevitable. Says Oenning: ‘We’re looking at a productroadmap that is exciting because it introducesproducts that will create this notion of a trulythoughtful home, where these products actuallyspeak to each other. That’s why we’re still all here.At the core, it’s the products.’Will Nest’s next five years be as transformativeas its first? Only time will tell. But Vianello notesthat the rules of time don’t seem to apply the sameway within Nest’s walls. ‘Five earth years,’ he says.‘Twenty Nest years.’Average amount saved onheating bills by Nest Thermostatowners (third-party research)Countries in which Nestproducts have been installed4bnKilowatt hours of energy savedby Nest homes, comparedwith leaving a thermostat at aconsistent temperatureNestin numbers1 in 862Nest homes running a WorksWith Nest integrationIntegrations currently availablevia the Works With Nestprogramme25% 14,000Percentage of Nest owners whouse the app every dayDevelopers who have joined theWorks With Nest programme

launch of the 249 Nest Learning Thermostat, the brand more or less single-handedly created the luxury consumer thermostat market. Then, in 2013, the Nest Protect smoke and carbon monoxide alarm did the same thing for smoke detectors. In 2014, Nest established itself as a leader in the ho