Why Branding Is An Artifact Of The Past



A short while ago, I wrote an article on FastCo suggesting that you can’t build a brand simply by setting out to build a brand. And in fact, thinking too much about brands can actually get in the way of the real business of your company. I suggested that you try an experiment: Stop talking about brands for a month, and see what happens. The article got a lot of attention on Twitter, and provoked a lively debate in the post’s comments section.

Almost all of the remarks were smart, good-humored, and well argued; the rest were mainly mine. The objections seemed to fall into a few broad themes, and Co.Design editor Belinda Lanks asked me to write a follow-up to expand on my answers.

Point #1: Brands are important. So you have to think about the a lot.

In Mary Poppins, we learn about Mr. Banks, the children’s father, and what he does for a living.

“He sat on a large chair in front of a large desk and made money. All day long he worked, cutting out pennies and shillings and half-crowns and threepenny-bits. And he brought them home with him in his little black bag.”

It’s a charming way to describe something that only a small child, and possibly Robert Mugabe, could ever believe: That you can make money by literally making money.

Yet many people seem happy to apply this Mary Poppins logic to branding: Brands are valuable, so you need to go to work to make brands. There’s a category mistake at work here. Money isn’t valuable because the paper it’s made of is valuable. It’s valuable because we all agree it’s valuable. Society creates that value, not the printing presses or the mints or the chaps in storybooks who cut pound notes out with scissors.

So we go to work to make things and do stuff that people value, and are willing to pay money for. Similarly, to build a brand your organization needs to do and say things that people find valuable.

But it’s consumers who create the value intrinsic in brands: We all judge companies by the things they say, the things they do, and how those two things match up. If they match well (iPads do seem quite magical), then their worth goes up in our minds. If they don’t (BP has a flowery logo and little windmills on its petrol stations but destroyed a load of the Eastern seaboard of the U.S.), then we like – and value – them less.

Point #2: This doesn’t take into account behavioural economics, psychology, or the value of brand tracking.

The things that I consciously think about a brand belong to me. I’m also quite happy with the idea that I make a lot of unconscious decisions about brands, possibly far more than I make unconscious ones. And at Sense Worldwide, we frequently work with clients to understand the psychological cues and behavioral economics behind consumers’ choices.

But the more we understand about the way that consumers make choices, the less brand thinking and traditional brand-tracking research make sense. Brand tracking often makes artificial distinctions for consumers that really don’t model the way we make a buying decision. They ask things like: Does A wash whites better than B? Which performs best on coloured clothes? They rarely give consumers an option that says, Meh. I just don’t care.

Good tracking studies need to be accompanied by research to understand the latent needs of consumers: Done in isolation, they can end up focusing marketers on solving the wrong problems.

Point #3: Why do companies buy brands for millions of dollars if they’re valueless?

Why did investment companies plow your pensions into subprime mortgages? Because they had a model that showed that they were valuable and another model that showed that their value would increase. Remember how that ended? Brand valuations make those models look positively scientific and precise. WPP’s Brandz tracker values Apple at $183 billion. Omnicom’s Interbrand values it at $77 billion. Any models that are so absurdly divergent are worse than useless. As some physicists say about string theory, it’s “not even wrong.”

Brand equity measuring dates to the late ’90s, when companies became obsessed with delivering “shareholder value.” It was in the interests of marketers and marketing networks to show how brands contributed to shareholder value and to put a tangible figure on something that had previously only been abstract. The companies that restructured around delivering “shareholder value” failed to do just that–and spectacularly. It’s time to move on.

Point #4: Your arguments are old-fashioned.

This was the most puzzling group of objections, but it was a fairly large one, so I’ll answer it as best I can. I wouldn’t have written this article 10 years ago, when large corporations had a great deal more control over the conversation between themselves and consumers. It was a pretty one-way kind of a chat, with the brands doing much of the talking through above-the-line advertising, sponsorship, and so on.

So the classic simplified branding model, where you make a promise, deliver on the promise, and then repeat the process, actually worked pretty well. Now the situation is a lot more complicated. Consumers don’t just form opinions in their own minds any more. Instead, we have conversations. And one vociferous consumer who, say, writes a song about your airline can earn a louder voice than the biggest brand can buy. So brands are even less of a property than they used to be.

That also goes for the brands that I don’t really think about. Marketers often talk about low-interest categories. But the stuff that doesn’t interest me may be fascinating to you. I couldn’t give a hoot whose name is on my batteries. But if you have a pacemaker, or you explore caves for fun, batteries are going to be really, really interesting to you. And now it’s easy for me to access your thoughts about those categories. That process means that it’s harder to shift poor-quality goods with great image building. General Motors did it for years. Aston Martin, the same. How’s that working out for them now?

If you read I’m Feeling Lucky by Douglas Edwards you’ll get a full account of the early experience of marketers at Google. They were largely ignored by the wider company. Top Googlers showed a frank disdain for any kind of brand building. By any measure, Google became one of the most valuable companies on Earth. Think how many dotcoms went bust in the same era, shoveling huge amounts of venture-capital cash into advertising campaigns right up until the minute they hit the ground.

The selling of products is only going to get more social, and the value of brands is only going to get more volatile and nebulous. The only “old school” concept is really going to be brand valuation models like WPP’s Brandz and Interbrand/Businessweek’s Top 100.

Are brands a flat-earth theory? I still think that they’ve become so, but I’d love to know your thoughts. Please tell me what you think below.

The original post on FastCo with more comments is here

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