The first real challenge in brand building is not how much you can spend. It's "What's the basic value you are going to offer prospective customers? The next question is: "In what form or format are you going to present your offer so that prospective customers can give you money to get it?" Then, and only then, do you come to the question of "How are you going to communicate that specific value to the specific groups of people who need or want that value?"
So, no, it doesn't necessarily take a sack of money to build a brand, but it does take a sack of understanding to know when you have invented...or perhaps "created"...or maybe just stumbled onto a brand. And, of course, the key element is what to do with it once the brand exists.
(In the Beginning...) Branding worked in those days, because the marketing organization controlled the system, i.e., everything about the product, the brand, and the marketplace. Young product managers in Cincinnati and their ilk in Minneapolis, White Plans, London, and other marketing centers, determined what would be put in the box or bottle based on their design. They determined the price, the channels, and, most of all, they controlled the communication describing the product and the associated dreams and rewards it could or would or should provide. The marketer created the brand, then transferred those ingredients and images to the customer through communication, primarily through the exciting new medium of television.
Customers took in the brand imagery, bought and used the product. That allowed them to relate it to their own experiences, perceptions, desires, and needs. Thus, a brand was born. The brand manager was the guide, and the consumers were the followers and, in some cases, they even became the brand apostles and disciples.
The brand transported the purchaser into the magic land of success and happiness and adoration. The success as a mother, as a wife, as a homemaker - came from happiness that came in a box or bottle. Plus, the adoration that came from a loving family and spouse.
Or, alternatively, the man was transported to the land of ongoing business success simply because he smoked the right cigarette, wore the right hat, or drank the right whiskey. That's what dreams are made of, and that's what marketers were selling.
Savvy marketers extended their impact by giving unique identities to their brands, often based on products with few, if any distinctive physical attributes. Thus, P&G was able to introduce Tide, Cheer, and Oxydol, each with a distinctive brand identity and perceived purpose, in the same product category through the magic of mass media advertising.
This same brand magic worked in other categories as well. For example, cosmetics companies supported brand lines ranging from the high-end department store variety to those found in drug stores and supermarkets. Even today women would be shocked to know how little product difference there is between the $25.00 department store eye shadow and one sold for $4.00 in the local mass merchandiser. But the brand owner sure knows. Big bucks.
When Dreams Went Wrong
Marketers today have much less latitude in creating a brand. While there is still the possibility of dream-making through advertising, the marketplace is radically different, as is the consumer. Today, there are simply too many competitive consumer choices. Too many alternatives. Too many things to buy, ways to buy, methods to buy and ways to experience. In short, too much marketing and too much communication make branding a totally different game in the 21st century.
This excess has changed the nature of the marketplace and how a brand is built and maintained. Today, the consumer doesn't want to "own the brand." That's too much of a commitment. They just want to "borrow the brand," use it, and then, in many cases, trade it off for something else. Or, at worse, return it to the marketer for another model. That's why, if you, as the brand owner don't understand the 21st-century process, you could spend millions and end up with a handful of recycled rejects.
Today, the marketing scene is radically different. Moving from a product-dominated marketplace to one that is increasingly reliant on services has changed the entire approach to branding - dramatically. The problem is: The babblers haven't caught onto this so they keep pushing the same old Cincinnati models as if it's still in the 1950s.
That's where most branding gurus, experts, and pundits fall short. they try to take time-worn fmcg (fast moving consumer goods) approaches - as if it's still the mid-20th century - and apply them will-nilly to every branding situation for every type of company around the world. One model. One approach. One system. in spite of the fact that the products are different, the market is different, the consumers are different, and the media is different. In short, they're pushing applications for concepts that are no longer relevant. That's why so many of them fail, so often. But, the brander only knows this once the money has been spent.
The Heart of the Matter: The Brand Starts Inside Today, there's no question about what's important if you want to make money in branding. In a people-dominated marketplace, the brand starts inside and radiates outward. it doesn't start with nifty external concepts and work back in.
So, if your company can deliver on the right brand experience consistently, and customers and prospects find that appealing, then the brand will grow and prosper and you will continually put money in the bank.
If, however, your company and your brand have no heart, no soul, or no personality that define it and provide cohesion and energy for your employees, the brand will be the same way. Bland, feeble, and far more subject to pricing pressure, customer churn, and declining margins.
The simple truth: Today, branding must start with employees, channels, distributors, wholesalers, suppliers and work its way out. The brand is what the company is. Nothing more. Nothing less. If the folks who deliver the brand experience aren't sold on the brand and don't "live the brand," why expect a customer to do so?
In short, the key ingredients in branding are:
1. Make sure your "to be branded" product or service is based on a solid business model and a sound business proposition.
2. Confirm that your product or service differentiates itself from competition with a meaningful value proposition. Slogans and jingles are fine, but, they generally won't pay the rent.
3. Make sure the brand delivers what is truly important to customers and doesn't run counter to common sense.
But, brands aren't built with tools and techniques and slogans and sayings and posters and light-up buttons. Brands are built through the development of value propositions that are exchanged between buyers and sellers, between people and organizations, between maker companies and buyer companies.
Girding most "advertising models" (we'll use the term advertising here to cover the entire gamut of marketing communication theory) are two research streams. One is the work of Pavlov, who demonstrated dogs could be trained to react to certain continuously reinforced stimuli and Skinner, who demonstrated that repetition had a big impact on pigeons. In short, if the same stimuli were used often enough, dogs and pigeons would learn and respond to various cues. Surely the same thing would work with people. That's where much of our "advertising theory" comes from: People learn like dogs and pigeons.
Of course, the researchers threw in some of Freud's work to get to "underlying motives," the personal psyche, hopes and dreams, and the like.
Those are the underpinnings of modern day advertising, marketing and branding. Stimulus response models with a bit of inner-self and sex thrown in for good measure.
The only problem is: The model may well be wrong. Thus, many, if not most, of our research techniques may be wrong as well.
A Logical Disconnect (or an Illogical Connect) in 1961
One would think that advertising has always been about sales. That started back when man first began to draw crude pictures. If you advertise, sales were supposed to go up. if you didn't advertise, nobody knew you or trusted your product. Sales didn't grow. Your company went bankrupt and your children went without shoes. That was the common understanding about advertising up until 1961. Then it changed.
Having digested the psychological work on how people were supposed to behave, advertising people determined a more sophisticated approach was needed. True, there were reasons. Multilevel distribution channels were developing. Mass media was emerging. Consumers were moving towards discretionary spending. in short, the old "cause and effect" model of advertising was increasingly harder to develop and considerably harder to prove.
In 1961 two "advertising" models emerged. They have driven advertising thinking ever since, and they have had a major influence on brands and branding as well. One, called the "Hierarchy of Effects," was a hypothetical model of how "advertising was supposed to work." Developed by Lavidge and Steiner ("A Model for Predictive Measurements Advertising Effectiveness," Journal of Marketing, October 1961.), it underlies all advertising today. The other, by consultant Russell Colley, suggested essentially the same model. He developed it for the Association of National Advertisers and called it DAGMAR (Designing Advertising Goals for Measured Advertising Response).
Both of these models assumed some type of identifiable attitudinal change occurred among people as they moved or were moved toward the purchase of a product or service. Thus, the hypothesis was that people followed a certain path in deciding what they needed or wanted and how they might identify the product or service that would fill their needs.
The Hierarchy of Effects and DAGMAR models both assumed that if the advertiser knew these consumer paths, he or she could influence the direction and speed of consumer movement and, therefore, consumer purchases. Therefore, with the right advertising investment at the right time, marketers could "manipulate" consumers and influence their purchases. See the connection now between dogs and pigeons and people?
The Hierarchy is clearly a linear model. Consumers are always moving forward toward some purchase behavior. The advertiser, in effect, pushes them through the process with advertising. Thus, the more advertising toward customers or prospects, the faster they moved toward purchase, and the more likely it is the purchase decision will favor the advertiser.
The Hierarchy's appeal is that the marketer controls the system. The more money the advertiser puts against the people through advertising, the faster they move through the process and the faster they purchase the product or service. That's the premise, although the model has never been proven in the marketplace.
What marketers like is that the people can't get off or change or regress once the advertiser starts communicating with them. It assumes that people are like the Pavlovian dogs and the Skinnerian pigeons, being trained to perform as the advertiser wants them to perform. Marketers like this idea. It gives them control over seemingly uncontrollable customers.
Fig. 1 Hierarchy of Effects, Lavidge & Steiner, 1961
Ignoring a Critical Step
Strangely enough, although the Hierarchy and DAGMAR look like performance-based models, they aren't. Using this model, researchers in 1961 successfully disconnected advertising from sales. They argued advertising should be judged on attitudinal change, not sales. In other words, while the model goal was "Purchase Behavior," advertising measures always stopped short of that influential step.
Most advertising managers argue, therefore, they can only be responsible for "communication effects," i.e., movement along the attitudinal chain up to the point of actual behavior. The rationale they offered for this "advertising interruptus," is that too many "intervening variables" occur to take on sales responsibility. Too many product stocking problems, competitive marketplace offers, misaligned pricing, and a multitude of other things not under their control. That prevents them from "closing the loop" on sales. Thus advertising managers take credit for "communication movement" along the Hierarchy but have avoided any responsibility for sales.
How Everyone Learned to Love the Hierarchy Model
Every marketing communication executive loved the Hierarchy model. Advertising managers, because they were now responsible for only "communication effects," not sales. Academicians because they could now bring in sociology, diffusion theory, anthropology, and other esoteric approaches. Researchers because they could fool around the measures of awareness, preference, and recall using statistical tools few lay people understood. Everybody got something from the Hierarchy model except the brand owner. He or she spent money and got recall, intent, liking and a host of other "effects" but no connection to sales and profits.
Remember: Brands are supposed to create sales and profits, but not just of the researcher. For the brand owner!
Agencies and media loved the Hierarchy of Effects model, too, because it was essentially a "tonnage model." It assumed that the more money the advertiser spent, i.e., buying space or time or messages, the greater or faster the movement along the Hierarchy scale. Thus the advertiser was encouraged to increase spending to improve results: A neat equation, for the agencies focused on media commissions, and the media focused on frequency purchases of advertising.
Again, lots of sales and profits for the agency and the media. Questionable returns for the brand owner.
And, everyone else loved the Hierarchy of Effects model because it solved one of the most basic advertising problems: How to measure some kind of effect without becoming committed to sales.
With the Hierarchy, advertisers and marketers could move to various forms of statistical analysis and modeling based on questionnaires, population sampling and marketplace projections. Small numbers of people could be asked relatively simple questions and heroic assumptions could be made about the potential impact and results of the advertising program. What a great, statistically supportable, graph and chart-filled addition to presentations the Hierarchy made! And, what a neat bundle of expensive and easy-to-conduct research packages for the advertising and marketing research community!
Again, money for the researchers. Undefinable returns for the brand owner.
That's where we are today: Advertising research techniques based on models of awareness, recall, and supposed preference, and measurement of movement along a hypothetical scale. But, only to an endpoint that keeps moving further off into the horizon as you begin to approach it. Research based on samples and projections using attitudinal questionnaires among the relevant populations. It's a neat package for measuring communication effects and ignoring sales. And selling research studies.
The only problem? There is not, and there never has been, any valid proof that the Hierarchy of Effects exists or can be measured...Sadly, for the past fifty years, researchers have been unable to verify the Hierarchy. William Weilbacher, writing in the Journal of Advertising Research in 2001 said: "Hierarchy models of advertising effects are little more than rationally and intuitively sensible." (William Weilbacher, "Does Advertising Cause A 'Hierarchy of Effects'?" Journal of Advertising Research, November/December 2001.)
Static Models, Dynamic People
The basic problem is: The models are static and people and the marketplace are dynamic. Thus, getting accurate predictions about future purchases or uses or even attitudes is not just incredibly difficult, it's often wrong. People don't really know what they will do in the future. Asking them a number of hypothetical questions certainly doesn't improve their predictive qualifications one whit.
Because advertising was used to build brands fifty years ago doesn't mean it's the most efficient or effective way to build them today. Unfortunately, in this case, experience isn't the best teacher in brand building. Building brands is the twenty-first century is nothing like building them in the twentieth century was. And, that's important to know when wading through the brand babble.
The Tailspin and Death Spiral of the P&G Branding Model
Probably no organization was better at building brands in the twentieth century than P&G. Taking what were essentially commodity products, differentiating them slightly and then hammering home "dream-building" brand messages through massive repetition with "slice-of-life" television commercials, helped generate huge sales and created incredibly powerful brands. And made P&G tons of money along the way. Most marketers can cite chapter and verse on the P&G successes simply because they're now household words...Tide, Cheer, Charmin, Jif, Pringles, Bounce, Crest, and on and on.
The problem that developed was that everyone believed the P&G model was "the brand-building model and that it was replicable. And it was. But only for consumer package goods products and only during the 1950s to 1970s. Unfortunately, the babblers only got half the story. That's why today the model often fails more than it succeeds.
The reason P&G and the other FMCGs were successful with their "brand-building" model was that they controlled the entire marketing and branding system from start to finish...If you have control of your marketplace, you might be able to replicate the model. But, if you don't, don't believe the babble that goes with the package goods approach to branding.
...P&G built their model and succeeded during a time when all the stars were aligned just right. A post-World War II population boom. Incredible developments in technology. Radically changing distribution systems. Increasing consumer disposable income. Big changes in consumer transportation. But, most of all, the development of audience-aggregating mass communication systems featuring the addictive communication narcotic called television - something the world had never seen before.
Thinking back, its easy to see how the P&G model of brand building, built on psychological concepts introduced by Pavlov, Skinner, Maslow, and others, worked. Consumers were trained to buy P&G products much like Skinner trained his pigeons to respond to food. Repetition and reward. Show them a demonstration commercial over and over again on television or repeat the same message, continuously on "soap opera" radio. Promise them a reward of "cleaner" or "whiter" or "brighter" and American consumers were ready and happy to buy and re-buy.
...Today we know the "stimulus-response" model of Pavlov and the others is not really how the human mind works, at least not when there are alternatives and variables. Controlled experiments in restricted surroundings is not the same arena in which today's customers operate.
Today, brands must stand for something - something inherently relevant and compelling to the customer. Not something borrowed or stolen from a competitor.
Beware the Explanation
Too many times, branding and brand communication are sold by creatives to brand managers and owners through some type of "explanation." The creatives "explain": "You won't really understand what we re doing so let us explain it a bit." Then they take you through the process, the symbolism, the most current "new wave" or "new era" or "new whatever" design or technique, patiently explaining how hip or hop or mod or clever what they have done is...
Two things are generally going on here.
One, if you are so out of touch with your brand audience that the "creative" must be explained to you, then you can't make a reasonable decision anyway. So abdicate the responsibility. Give them the money. Set up a meeting with your banker in case it doesn't work and move on.
Or, second, if the brand communication really requires an explanation, ask the simple question: "Who is going to explain this to our brand audience?" Given today's short attention spans, interactive and networked audiences that have grown up on sound bites and electronic bytes won't wait for the explanation. They'll be gone...
In short, brand messages must be incredibly short. Incredibly clear. Incredibly easy to understand. Take a look at Evian: mountains and clear sparkling water. Take a look at Altoids: curiously strong. Backed up by the product. Take a look at UPS: "What can Brown do for you today?" Or their competitor, FedEx: "When it absolutely, positively has to be there." All of these are clear, concise, with no explanation needed.
And, no creative tagging along to "explain what the brand is" or "what the brand message is" or "what the brand meaning is" either...
There's no time for it in today's world.
"Why do you think people should buy or use or enjoy our brand?"..."What do you think is the underlying value proposition of our brand to customers and prospects?"..."What type of financial returns will this 'creative effort' return to us?"
The product brand view, widely practiced and promulgated by the fast-moving-consumer-goods (fmcg) guys, has often subsumed the corporate brand. That view is changing. For example, both P&G and Unilever have been rationalizing their brand holdings. Selling off or closing long-term products. Why? They've learned that media proliferation, audience fragmentation, and retail consolidation and concentration have raised the cost of multi-brand marketing to a level that even their deep pockets cannot afford. Few, if any marketers today or tomorrow, can afford to offer an individual brand for every consumer desire.
How do we know there is so much babble going on? Just look at the success rate of new consumer products and brands in the US. A longstanding industry rule of thumb says that fewer than 20 percent of the new products will succeed. The truth today may be far worse, as recent research conducted by Copernicus Marketing and Ernst & Young, as well as that conducted by Neilsen BASES, indicates. Those results indicate the success rate may in fact be as low as only 10 to 15 percent. (Kevin J. Clancy and Peter C. Kreig, "Surviving Innovation, Marketing Management, March/April 2003.) Yet, almost every one of those "brand bombs" generally went through what their managers considered to be a "rigorous screening, testing and development process."
But, if the system is so "rigorous," why do so many of those brands fail? Better yet, why do so few succeed?
Here's something else to ponder. If flawed research is so poor at predicting what launches will succeed, maybe they are just as bad at predicting which products will fail. How many aborted product ideas might have gone on to be financially successful but for the fact that their development did not get through a poorly conducted concept testing stage or an ill-conceived conjoint analysis?
How far can the brand stretch and what products would customers accept under the brand offered? Some of this makes sense. Can or would you believe that the fine folks at Dunkin' Donuts could make a cereal? Or that Campbell Soup could make a tomato sauce? Sure, the companies can make the products, but will people accept them? As it turned out, these companies learned the hard way that customers put limitations on what they will accept from the brand regardless of their manufacturing capabilities. Or, their brand and branding budgets.
Pick up any trade publication. You'll see headline after headline such as "Dove Flies off with $40M" Or "Astra Readies Rival to Phizer Blockbuster: Crestor Get $60M Backing" or "$300 million Intel Campaign Touts Centrino Technology Intro." And on and on. Big bucks in any league but tossed around like it was chickenfeed in the brand and branding arena.
The question is, of course, does it really take mega-spending of your dollars to build, support, or revamp a brand?
Even the most rarified of elite consulting firms apparently think so. KPMG spent an estimated $35 million to change their name to BearingPoint, Inc. Deloitte Consulting "invested approximately $70 million so people would call them Braxton. And Anderson Consulting spend an estimated $170 million to change over to Accenture.
Those are big sums in any industry. But, they're especially big coming from consulting companies who supposedly know, or at least tell their clients that they know, all there is know about branding. So, maybe it does take a giant stack of dollars to play the branding game.
Or maybe it doesn't.
The question, of course, is: What did these consulting firms get in return? It's clear for one. PricewaterhouseCoopers changed the name of its consulting unit to "Monday," sold itself to IBM, which, then, promptly scuttled the new Monday moniker, kit and caboodle.
Who profited? Obviously the brand babblers who convinced PwC to take on a name with connotations that most everybody hates. But it lasted only long enough for the new owners to bailout of it.
But, it's not just the consulting companies that spend it up on brands. Citibank was reported to have spent over $1 billion to change its name to Citi.(Tim Teran, "From Global to Icon: Tales of Evolution at Citi," Presentation at Marketing Science Institute, Milan, Italy, June 20-21, 2000.) a couple of years ago. Somehow, it seems they could have cut the "bank" off their logo for less than that.
One of the major problems with marketing, advertising, and brand promotion today is: We glorify spending. We ignore returns.
It's exciting to learn a :30 second commercial in the Super Bowl cost $2 million. If that is too rich for your blood, how about $1.4 million for the Academy Awards? We get excited about the "upfront" television market that runs into the billions. Yet, the TV network's share of audience continues to decline and estimated returns are plummeting as well. Is a TV schedule of commercials really worth about as much as the Gross Domestic Product of many emerging nations?
How do we rate advertisers and their importance? By how much they spend. General Motors has been one of the top measured media spenders for decades. Advertising Age reported that the company spend over $3,652,000,000.00 on measured advertising in 2002. Yet, in the first six months of that year, the company's share dipped almost 25 percent.("Age Leading Advertisers, Advertising Age, July 17, 2003.)
Chevrolet, a GM brand, is one of the top spending auto name plates at over $800 million annually.(Advertising Age, July 24, 2002.) Does it really require that much to keep Chevrolet in the consideration set of prospective buyers? Do people really need to have "Like a rock" beaten into their heads day after day so they'll remember a tune focused on a product they will likely never buy?
So, start with returns. When asked your brand budget, say: "I need a 7 percent return on this investment" or "I need this to pay out in 24 months or whatever." Then ask: "How much will it take to get this level of return leverage on my branding investment?"
Watch how fast the brand babblers start to retreat into "Brands are a long-term investment" or "We can't really measure the financial returns on brands and branding." Or, the mother of all branding responses: "Trust us, this will work. We can't prove it, but we've got a lot of experience." The experience, of course, is in buying branding stuff, not in generating financial returns from brand investments.
The media planning and buying models used today have been codified and verified and lionized to the point that no one even questions them anymore. For example, terms such as reach, frequency, coverage, duplication, and audience accumulation are tossed around willy-nilly. Few, if any, people bother to look under the hood and see what those terms mean or meant or even if they're are relevant today. We just "buy into them" and move on. Generally to the detriment of our branding ROI.
For example, the concept of frequency of three as the ideal number of advertising exposure, is based on a hypothesis developed in 1965. Although widely accepted, it has never been proven in the marketplace. Yet every media model that exists uses this 3x approach with no real basis or reason for being. It's just part of the lore of historical branding. Look at any media plan. What do you see: attempts to reach the magic "three. Why? Just because it has become a media maxim.
That's right. Most of our media planning concepts are holdovers from a bygone era. They assume audiences are made up of families similar to "Ozzie and Harriet and the boys sitting in front of a scratchy image, 17-inch B&W television set, breathlessly waiting for the next episode of "Gunsmoke...and, your brand's :60 second commercial.
It just ain't like that anymore.
So, when the media babblers come knocking with their statistics-filled overheads, asking for big bucks to support a "brand-building campaign," ask them to explain a few simple concepts.
* What's the basis for the frequency of three in media planning. (Note: don't let them shift into Effective Frequency. That has the same problems.)
* How can unduplicated audiences exist in today's media pervasive, interactive marketplace?
* Is there really any such thing as a "media continuity" when audiences ebb and flow on an almost minute-by-minute basis?
And, if you really want to throw down the gauntlet, ask: "Network television ratings and viewerships are going down. Prices are going up. Is television really the best way to build a brand today? And, if you think so, why?"
Media people don't really know how many people will actually see your brand message. Everything they do is based on "estimated audiences," and the primary measure is "opportunities to see or hear," not those who actually see or hear. So, we don't really know if anyone saw our advertising. All we really know is that we sent it out.
And that was fine in the 1950s. Statistical analysis in terms of sampling and projections were pretty solid then. Few media. Interested audiences. Limited commercialization. Remember when we used to broadcast :60 commercials? Now they're often :10s or :15s at the most. The same old tune in advertising: Pay more, get less.
A few years ago, there was a television media concept called "road-blocking," which meant that you bought a commercial on all three networks at the same time. People watching television couldn't miss your message - and the couldn't see your competitors' because you had taken all the available space. Try that today, when many homes receive 150-200 channels. See the problem? The media landscape has changed. Media planning and buying hasn't. And, media buying and planning to build and manage brands is about the same as it was in 1970. Is your product or service or your customer the same as it was 35 years ago?
Having railed against present-day media planning and buying systems, what proof is there that these time-honored systems are obsolete?
Easy, look around you. What do you see? People multi-tasking. For example, people using multiple media systems all at the same time. It's called simultaneous media exposure, and it is rampant around the world. This is one of the major challenges of media in this decade, yet, it is the one that continues to be ignored.
What happened? For one, the media spectrum is vastly different than it was in the 1960s. More media forms. More pervasive. More continuous.
Media consumers are different, too. The live in an interactive, networked, mobile, "sound-bite world of telephones, computers, DVD players, Sony Walkmen, and, yes, newspapers and magazines and over-the-air television.
Today, the consumer's exposure to media is through multiple systems and channels and it is simultaneous and almost continuous. They're online, watching TV, and looking at a magazine, all at the same time. They're reading the newspaper, listening to the radio, and talking on the mobile telephone...all at the same time. It's quite clearly simultaneous media usage.
In a research study conducted fall, 2002, in the US, Schultz and Pilots found over 50 percent of the study's respondents reported they were multi-tasking with various forms of media during the prime evening 7 to 11 p.m. time period.(Paper presented at the Advertising Research Foundation, "Marketing and Media Effectiveness Workshop," October 10, 2002.)