marketing may fade, but the brand is forever

Apple’s marketing budget is $5.5 billion. Microsoft’s is $17 billion. Yet, according to BrandZ’s Top 100 global brands chart, Microsoft holds the number five spot, behind brands such as McDonald’s, IBM, Google, and…Apple. Why? According to conventional wisdom, the companies that spend the most on marketing should have the best brand, right?

Not so, according to a recent article at Fast Company's Co. Design, which suggests that the days of marketing are fading. “In an increasingly transparent, digitally empowered economy, where everyone potentially can know everything, companies can no longer use the other three P's (Price, Promotion, and Place) to gain a long-term competitive advantage,” writes Jens Martin Skibsted, founder of design agency Skibsted Ideation, and Rasmus Bech Hansen, London-based strategy director at Venturethree. “These P's, in other words, are becoming strategically less significant; they are still valuable, just less so than they used to be, and they don’t provide any long-term edge.”

Is this true? That’s the ongoing debate, and one that has monumental implications for brands large and small.

Skibsted and Hansen write further:

We, however, still believe that where a company sells and distributes its offerings is becoming less important relative to what it sells. The rise of e-commerce makes it much easier for consumers to buy the best product irrespective of where it is sold. Sites like Yelp, Lonely Planet, and Zagat point consumers to restaurants, hotels, or shops that provide real value and good experiences even if they are off the beaten track. And we think Apple’s retail success has a lot to do with creating an amazing brand experience that is an extension of the product experience by offering a real service (the Genius Bar). If you have an extraordinary product, customers will find it and buy it in a transparent economy.

So, is a brand strategy more important than a marketing strategy? Can a company with a strong brand stay afloat with a small advertising budget? Can a company with a lousy brand make it by pumping money into marketing? Or, are they both necessary?

Leave your thoughts in the comment section below.

yes, consistency in your brand is still important

If you're not already following Kaitlin Gallucci at BeneathTheBrand.com, you really should. She has a post everyday, and they're all branding gems that you shouldn't miss. Hers today on "consistency" in branding is especially relevant because, as she explains in the article, people seem to think the days of consistency are over.

Wrong.

According to Hunt, “research shows that businesses with well-managed, consistent brands are worth up to 20% [more] than those who aren’t.”

Gallucci continues:

Branding consistency is a primary means of brand recognition. Imagine if a company didn’t maintain a consistent brand name; not only would it probably go virtually unknown, it would appear unreliable, not to be trusted.

Bingo. If there are two things you should remember about branding, it's that consistency and singularity are the building blocks to brands with staying power. Change your brand, or junk it up with line extensions or silly bells and whistles, and you lose value -- or, kill your brand altogether.

how apple and google came to dominate the world

Apple and Google. They are respectively the number-one and number-two brands in the world, according to BrandZ’s ranking of the Top 100 Most Valuable Global Brands of 2011. Compared to other brands in the top-10 — such as IBM (1911), McDonald’s (1940), Coca-Cola (1886), and Marlboro (1924) — Apple (1976) and Google (1998) are relatively new brands. So, how did they come to dominate the world?

At the center of brand building is creating an idea in the mind of a consumer that his life will be improved should they buy your brand. This is what industry jargon terms as the “value proposition.” However, Apple and Google have gone beyond simple value proposition and have built products that consumers feel they can’t live without. They reinforce this “life-altering” benefit through simple, yet powerful, advertising.

See for yourself with one of Apple’s advertisements for the iPhone 4S and Google’s “Dear Sophie” campaign. Both commercials are simple in their execution, which allows them to masterfully drive home the value proposition built into their brands. The truly genius aspect of the brand advertising is that it injects their products into the consumer's life through the timeless technique of “demonstrations.”

As I wrote in “Why Apple Can Get Away With Murder,” Apple and Google didn’t build their brands through things like product quality or the exclusion-factor inherent in luxury goods. Google offers many of their products for free, and there isn’t an Apple product launch that isn’t followed by days of consumer gripes about build quality or battery life. Apple and Google built their brands on the idea that their products were not like anything else, and that your life is made significantly better by their use.

Small-business owners with struggling brands may look to Apple and Google and say, “Well I could never do that. They have the most brilliant minds in marketing, and a massive advertising budget, to help them stay at the top.” While this may be true now, it wasn’t always like that. Apple began in the family garage of Steve Jobs, and Google started out as a PhD research project.

Brands with larger advertising budgets than most companies gross in an entire year, who hire the best and brightest from Madison Avenue, have failed miserably in launching new products or even keeping their current brand alive.

The key to Apple and Google’s success was building products that set themselves apart from all other competitors and provided benefits to consumers that they cannot now ever live without. Does your brand do that? If not, focus on how you can get it there, then align your entire organization behind that idea.

for online brands, play to the niche

In his book Meatball Sundae: Is Your Marketing out of Sync?,marketer Seth Godin defines two eras of marketing: old and new. Godin describes the era of “Old Marketing” as "interrupting masses of people with ads about average products." This type of marketing would be non-targeted advertisements for products designed for non-targeted demographics. Essentially, a product designed for the masses, advertised to the masses.

However, Godin describers “New Marketing” as that which “leverages scarce attention and creates interactions among communities with similar interests." This would essentially be advertising to targeted audiences with products designed for a target demographic.

Old marketing was for the masses. New marketing is for the niche.

In the era of old marketing, microtargeting was hard to accomplish, at least relative to what is possible today. Therefore, products were created with mass appeal, and advertisements were broadcast to the masses in order to reach the most people. "Masses of people could be processed quickly and cheaply, and some would respond to your message and become customers," writes Godin. "The key drivers of this approach were a scarcity of choice and a large resource of cheap attention."

As a result of this style of old marketing, brands weren’t focused, but built for the masses.

The rise of microtargeting, especially with online mediums of advertisement, has completely changed the game. No longer do brands have to sacrifice a narrow focus in order to have a broader range of appeal. In fact, the ability of brands to microtarget audiences amplifies the strength of narrowly focused brands.

For online brands, this means playing to the niche. One of the keys to brand strength is keeping it narrowly focused, simple, and consistent. Online advertising now makes it easier than ever to find new customers, and let them find you. Even the most narrow of brands is able to ring-up sales, which would have been impossible in the era of old marketing.

In the era of new marketing, the niche is no longer the trap that it once was. In fact, it is now a positive because it allows brands to stay on the narrow track. As some brands continue to play to the masses, play to the niche. You don’t have to appeal to the 99% if your customer base is the 1% you want to reach.

a conversation about branding with stanley hainsworth

Advertising is very much a learning experience. Even the advertising greats received valuable knowledge from their predecessors. Before today’s advertising legends, there was David Ogilvy. And, before Ogilvy, there was Claude Hopkins. Each generation gives the next lessons from which they can draw upon in creating better advertisements, and stronger brands.

Over at Fast Company, Debbie Millman, president of Sterling Brands, sits down with a man who helped build Starbucks into one of the world’s most powerful brands. Stanley Hainsworth, who has served as the creative director at Nike, Lego, and Starbucks before leaving to start his own agency, knows something about branding, and making brands superpowers in the marketplace.

The whole interview (available here) is full of expert wisdom worth an entire read, the following excerpt is the most valuable for those seeking to build a brand with staying power. Hainsworth describes how Howard Schultz took a coffee shop in a crowded marketplace, and turned it into a global icon [parts bolded for emphasis]:

When Howard Schultz first came to Starbucks, he wasn't the owner of the company. He joined a couple guys that had started the company. He went over to Milan and saw the coffee culture and espresso bars where people met in the morning. He saw how people caught up on the news while they sat or stood and drank their little cups of espresso. That inspired the vision he crafted from the beginning--to design a social environment where people not only came for great coffee, but also to connect to a certain culture.

Howard was very wise in knowing that Starbucks was not the only company in the world to make great coffee. On the contrary, there are hundreds of other companies that can make great coffee. So what's the great differentiator? The answer is the distinction that most great brands create.There are other companies that make great running shoes or great toys or great detergent or soap, but what is the real differentiator that people keep coming back for? For Starbucks, it was creating a community, a "third place." It was a very conscious attribute of the brand all along and impacted every decision about the experience: who the furniture was chosen for, what artwork would be on the walls, what music was going to be played, and how it would be played.

Differentiation. That’s the key.

Starbucks didn’t just make coffee. Starbucks made an “environment” for coffee. It was this differentiating factor — a conscious decision, executed to perfection down to the very art that was hung on the walls — that moved Starbucks beyond its competitors and into branding glory.

What differentiates your brand from your competitors? How are you creating an emotional connection with your consumers? Read the interview, and take a lesson from one of the masters of branding.

ugh...

Need to get better about remembering to update this. My advance apologies for the onslaught of posts about to happen.