It seems that every page I turn in the business press, I see “brand.” Recent headlines from the New York Times, the Wall Street Journal and MSNBC include “Berkshire Is Still A Brand Name,” Motorola’s Goals Are Modest Given Their Strong Brand Name Recognition,” “U.S. Auto Brands Attract World Of Bidders” and “Republican Party Rebranding Itself.”
Why has the subject of corporate and product branding become so hot? What has caused this particular subject to capture the strong attention of senior management of successful companies, companies that enjoy strong corporate and brand images in the investment world and in their market places?
There are many reasons for this relatively recent phenomenon but I believe that the major reason is that some top executives now see spending on brand development and brand maintenance as not just a cost but rather a business tool – a tool that allows the brand to receive a premium in its market place, and a corporation’s stock to receive a premium in the stock market. “Brand” has become in essence a company’s tool to increase corporate profitability, even though the green eye shade guys don’t (yet) allow asset values of a company’s brands to play a significant role in a company’s balance sheet.
Unfortunately, these perceptive leaders are still flying largely on intuition and personal experience. No financial formulas yet exist that specify appropriate and acceptable brand building and maintenance spending. Still relevant today is what Sam Wanamaker said – the owner and builder of one of the largest and most successful department stores in America in its time (the early 1900’s) – when asked how he could justify spending so much money on advertising. His answer was that he knew that half the money he was spending was wasted – but he didn’t know which half.
Walter Margulies taught me this in the 1970s, and it is still the case: the more branding specialists position their services to management as a driver of increased corporate profits, the more significant the role of professional branding specialists will become to top management.
By Scott Lerman
25 JUL 2009, 0:23 GMT
I guess Walter was channelling Dillinger! Profit is surely a primary motivation for pubic companies and public enemies alike. And our stock as advisors to the C-suite began to rise once we began talking more about what brands could accomplish and less about how they are constructed. Yet while many seek the “holy grail” of directly correlating brand development with dollars–most leaders are content to see brand investment tied to tangible goals like attracting and retaining talent, fostering partnerships, melding acquisitions, and building customer loyalty. All sure paths to profits.
By Andrew Sabatier
25 JUL 2009, 15:43 GMT
The issue lies far deeper than only commercial concerns.
It should come as no surprise that business is more aware of Brand than ever before. Everything a business does describes its brand. Brand and branding are unavoidable.
Any discrete identity can be usefully handled as a brand. What varies between identities is scope, depth and complexity of value. The more articulated an identity the more effortlessly it can be handled (and the richer and more successful it is likely to be). This holds for tangible, intangible, animate and inanimate identities, and includes all possible experiences. Implicit in this notion is perception, which makes the experience of everything to be grasped by this proposition, subjective. Consequently, every thing can be usefully held as an opinion.
Brand = Opinion.
All we can ever hope to handle is opinion. Firing a rocket, driving a car, having a thought, splitting an atom, mapping genomes, eating food, holding hands, banking online or buying shares is the same as handling opinion. What varies between opinion is the effectiveness of the intervention. Some opinions are just more credible, compelling and safer from failure than others. The underlying principle is the same, managing opinion is the same as managing Brand. And vice versa.
Branding is inescapable. Brands enable us to make our way in the world. Everything in existence is subject to branding. The only real issue is how best to manage Brand towards greater efficacy. For many people this only means one thing. Making money.
A.
By Andrew Pourtov
26 JUL 2009, 13:27 GMT
Dear Clive, thank you for your post.
Branding became a mainstream now. In the Russian mass-media of a word “branding” and “rebranding” today meet in hundreds times more often, than still 5 years ago. But journalists still not understand about what they write. The majority of businessmen think only of brand promotion, PR, popularity and sales, but not have understanding about components of a brand and about correct brand development process.
The business press writes about the facts, sums, figures, transactions, citations etc. Today almost all it is anyhow connected with brands. Thus itself branding as process of brands creation almost interests nobody.
By Marius Ursache
27 JUL 2009, 18:25 GMT
Rebrandings have become mainstream also because it’s one of the easiest ways for new management to make a mark and prove they have done something. And they get the deserved attention from the media.
I agree that in some cases, a new management team may use rebranding as a catalyst to change, but the reasons for rebranding should be real organizational problems—from culture/HR issues to market aspects.
Tony, what’s your statistics on this (if you counted)—how many recent rebrandings are also a consequence of new management?
By Tony Spaeth
27 JUL 2009, 23:50 GMT
Marius, I have not specifically tracked “new leader” as a situation factor; but if I went back through my twenty-year data base of Reviews, I bet we could establish a very strong connection. New leaders commonly initiate (or even result from) fundamental strategy reviews. They are less bound by inertia. Many actively seek to express their presence in high-impact ways — and to tell a good story, you can’t beat a good rebranding.
My guess: If we eliminate structural drivers (mergers, spinouts, where there may be a new leader but that’s a secondary factor) and focus on strategic and functional drivers (see the Corporate Brand Matrix), we will find that a leadership change helps us understand the direction and timing of as many as 60% of rebrandings.
Are there any doctoral candidates out there who would like to study the connection between leadership change and identity change?
By Marco Rezende
04 AUG 2009, 20:29 GMT
Clive,
David Ogylvy tell us the story about advertising as a high risk game. For evey dollar spent, only 50 cents will bring a positive return. Well, since that time, the world changed. Now business is looking for a more effective comunication with the market place. And that is Branding by Design answer: effectiveness. I am sure that every one dollar invested in Identity industry will drive susbtantial income.
By Michael Holdren
06 AUG 2009, 18:17 GMT
Another aspect to consider why “brand” is becoming such a phenomenon: in recent years Marty Neumeier has published a book or two on Branding, and Armin and Bryony have launched the Brand New website. With AT&T and UPS getting identity updates, Paul Rand and Saul Bass’s names and legacies have come to the attention of many of today’s designers. These are the same designers who are part of corporate in-house teams, who will now pitch and preach the necessity of “branding” and corporate identity to their superiors either out of professional ambition to move up the ladder, or make themselves look more knowledgeable, or to get an opportunity to do “big” projects. To me, it seems this is what is a larger part of the movement - what goes on behind closed doors from the bottom up. I hesitate to give too much credit to the C-level executives who suddenly have epiphanies on the importance and value of a brand.