Is the power of “the brand” a myth?

Branding
Is branding dead?

I hate the word ‘brand’ and what it stands for.” 

– Fernando Polo, Good Rebels 2020

In marketing, the word ‘brand’ is part of the lingua franca. We talk about brands all the time: the brands we work for, the brands we love (which sometimes are the same thing!), their awareness, equity and value.

So it’s clear that branding has power, but why? Why do CMOs rank ‘brand strategy’ as 2020’s ”most vital marketing capability”? What makes it relevant in a marketing landscape that is so different from the heyday of branding and advertising in the late 20th Century?

From brand to ‘value’

As most readers know, brands first emerged out of the concept of ownership: the process of branding livestock dates back to the ancient Egyptians. Then, in the nineteenth century, out of the need for trust, brands were a quality mark that ensured the sugar, flour, mustard or gin, you were buying wouldn’t kill you. 

From the 1950s onwards, branding took off and 20th century branding evolved into something else. Stephen King’s 1971 paper, “What is a brand?” addresses the economic value of brands, and how similar products can differentiate and increase market share by focussing on the brand.

“The key to it must be, as before, the link with the consumer. In the current situation, the only leverage the manufacturer can apply to the retailer is his relationship with the consumer. And the main element in profit growth is going to have to lie in making his brand more valuable to the retailer, through its being more valuable to the consumer. And that means his brand must be unique, it must have no adequate direct substitutes – because it is in this, after all, that value lies. Sustained profit growth will only come if his brand has unique added values.” 

– Stephen King, JWT,  “What is a brand?”, 1971

King surmises that you persuade consumers to pay a premium by creating this uniqueness, this value, using advertising. Convincing the consumer that, when faced with similar products (he uses toilet paper as an example) one is better than the other. King’s writing was one factor in the revolution of advertising, leading to the invention of account and brand planning, and a focus on developing brand ‘equity’.

“Brand equity is a set of assets or liabilities in the form of brand visibility, brand associations and customer loyalty that add or subtract from the value of a current or potential product or service driven by the brand. It is a key construct in the management of not only marketing, but also business strategy.”

– David Aaker, Prophet, “Brand Equity vs. Brand Value.” 2016

Brand strategy became the process of defining how you pull the levers of brand visibility, brand associations and customer loyalty to create equity in your brand, and increase its brand value.

These concepts are particularly important for branding and advertising agencies because they justify high fees for branding exercises (the work of establishing a brand position and designing logos, typography, colour palettes etc.), and creative and dramatic ad campaigns. 

Without the belief that branding increases value, how else do you persuade a company like BP to spend over £132 million on the design and implementation of a new logo and visual identity intended to convince the world that a global petroleum company wanted to save the planet?

Here’s the rub: it worked, or at least seemed to. The products of companies that invested in expensive branding exercises and slick ad campaigns did well, they grew and increased their value.

The power of the brand became a ‘holy cow’, one that reached its peak in the late 90s and early 2000s (BP’s rebrand was in 2000), and it’s still a hubris that exists today.

“If you don’t fucking invest in your brand, how the hell are you going to charge a premium for it.” 

Peter Field, Contagious Magazine 2018

A nice juicy Apple

Many marketers (me included) love Apple. We wouldn’t entertain a different brand for our phone, computer and often, watch. Steve Jobs’ incredible attention to minute details was part of what made Apple great. And Jobs was a true believer in the power of brand and advertising; Apple invested millions in creating truly dramatic ads made by the world’s greatest directors. 

Was it the power of the brand that turned Apple into the world’s most valuable company

The 1984 campaign for the launch of the Macintosh, didn’t turn Apple into the world’s largest or most valuable computer company. In fact, in the 80s Apple’s sales languished some way behind IBM and other PC manufacturers (the clones). 

Source: Arstechnica

Apple was pulling all the right brand levers, creating visibility through a strong identity and great advertising campaigns and building positive associations through great product experience and a charismatic founder. In turn, it was also nurturing a loyal and passionate, maybe even fanatical, customer base.

Of course, identity and advertising played a part, but the real story of Apple’s success is product and technology innovation, and brilliant user experience. If you look at Apple’s share price from 1980 to 2010, you can track the increase in value against the release of a series of blockbuster products from the late 90s onwards. First the iMac, then the iPod and iTunes then the iPhone and iPad. Apple doesn’t need to ‘build’ its brand value, the products sell themselves.

And BP? 

Take a look at BP’s share price in the decade after the rebrand in 2000. The most significant change to the value of the company wasn’t as a result of what the brand ‘looked and felt’ like, it was the result of the massive Deepwater Horizon oil spill into the Mexican Gulf in 2010.

BP share price (GBP), 2000 to 2010: BP, 2020

Why is Deepwater Horizon so significant? Because it’s not what you say, it’s what you do. Brands don’t have values, companies do; brands don’t have reputations to protect, companies do. In the age of social media, when companies act negligently, selfishly, thoughtlessly, no amount of brand management can save them. 

All hail the challenger

In 2009 Adam Morgan, in his book “Eating the Big Fish”, identified a new type of brand and brand behaviour; start-ups that challenge an existing market (like Brewdog), or established companies that reinvent themselves and the way they operate (like Oatly). Brands that make great products, have compelling founder stories and do things differently. They have found new ways to grab attention that don’t involve expensive brand identities or advertising campaigns. These brands are called ‘challenger’ brands exactly because they challenge their market’s status quo and, often in so doing, the norms of 20th century branding and advertising.

“A challenger brand is defined, primarily, by a mindset – it has business ambitions bigger than its conventional resources, and is prepared to do something bold, usually against the existing conventions or codes of the category, to break through.”

– Adam Morgan, What is a challenger brand?

Fit for purpose?

Is the conception of brands and brand strategy still fit for purpose? The answer is no.

The evolution of brands and branding has led to a lack of precision. Not only are we hazy about what the words themselves mean, there is also uncertainty about the scope and breadth of a brand and the levers we need to pull to increase equity and value. Furthermore, digital and social media means that these levers are both multiplying and falling increasingly outside of the control of marketing departments and agencies.

“Advertising was previously the most important vector of brand for a simple reason. Most people are not the customers of most brands (or are very occasional customers) – but everyone saw the same mass advertising at the same time. This balance began to shift for lots of digital reasons, such as online reviews allowing individual product experiences to scale and social media helping customer services nightmares make the national news.”

– Faris Yakob, Genius Steals, “Brand is a strategy” 2020

What’s needed is a new approach, a model that has clarity and purpose, that strips away the baggage of brand management and allows marketers to see clearly how they will promote, sell and increase the success of the products and services they represent.

This is the challenge, it’s time to free ourselves from the constraints and assumptions of a discipline past its sell-by date. As a smart brand once said, it’s time to Think Different.

Menu