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.

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.

i told you so?

More than a month ago, I said that Google+ will fail. Mind you, this was in Google+'s heyday (and, honestly, it's golden era was pretty much a day). At the time, pundits were calling Google+ the next greatest thing in social media. It was the 'sliced bread' of the Internet, and soared to 25 million users quicker than Michele Bachmann can down a footlong corn dog.

However, being the skeptic that I am, I said:

Google+ has opted for a “me too” brand, just as Google Buzz was a me-too clone of Twitter. There is nothing revolutionary about Google+. There is nothing worthwhile about it. It may be signing up subscribers by the millions, but how many of those will be active in a month, or even a week? People have stated that they’ll drop Facebook once their friends start using Google+, but if everybody is waiting on the sidelines, who will jump in the game? My guess is very few.

Commenters on the article said stuff things like, "Whoa. Quite the statement here," and "In today's tech word switching from one social network to the other is like having multiple email accounts."

But, today, those commenters now must stand and listen to the Google+ eulogy delivered by Forbes' Paul Tassi.

Yes, the die hard hipsters on the internet might flock to G+ to be the first kids on the block embracing the new network, and might even have their own little Google Plus cliques, but most of those who have gone there have found it to be an empty room. They’ve left one party at Facebook, which yes, may have been going on a bit too long, and could be starting to wind down, but arrived at a new one where simply no one has shown up.

Tassi adds:

Google just should have known better. No one is going to scrap a social network they’ve spent 8 years building up to start over from scratch for one that offers only a few minor improvements. To compete there needs to be something put forward that’s truly revolutionary, and tech companies half-heartedly copying each other is not going to cut it and can’t masquerade as true innovation.

Ahhh...to be right. Read Tassi's full eulogy here. It's awesome, mainly because it echoes my sentiments a month earlier. And, well, I have an ego to stroke.

google+ will fail

Google+ will fail. That’s a pretty bold position to take given that Google+ is in beta testing, and, after all…it’s Google we’re talking about here. However, despite the flurry of chatter, and the soaring subscriber numbers, Google+ will not be all that it is heralded to be. It will not be the Facebook Killer.

Google+ was launched with the typical fanfare that would be expected of an announcement that Google was getting into the social media business (again). These are the guys that revolutionized search and built a tech empire that has swiftly become the world’s second most valuable brand. The common logic goes that if Google can do what it did for search, they should be able to do the same thing for social media. And, since everybody loves a good fight, the “rivalry” aspect with Facebook is helping to fuel the buzz.

As of July 12, 2011, Google+ had added approximately 7.3 million subscribers, and was up to 10 million by July 14. According to one statistician, the service is expected to hit 20 million if kept at its current pace. When invites were limited during its initial launch, some even turned to eBay to get in on the action.

So, with the all the hype, interest, and backing of an online titan like Google, why will Google+ fail? It all comes down to the value proposition. The reason Google+ will fail is that there is no reason; that is, no reason for consumers to leave Facebook.

“In the high-tech field a new product or system is considered worthless without a ‘killer application,’” writes branding expert Al Reis in his book The Origin of Brands. “Take the Internet, which was something of a high-tech curiosity until the killer app came along. That application was email.” As of yet, Google+ features no “killer application” that would make it the assassin of Facebook. It may do most of what Facebook can do. And, in some instances, it may do it better.

However, in unseating a brand leader like Facebook — especially one that dominates the Social Networking category (even the word “dominating” falls short of describing how entrenched Facebook is as the category leader) — better isn’t good enough. If Google+ wanted to kill Facebook, as should be its goal, it needed to reinvent the Social Media category, and branch off into something completely new. Something so new, and so groundbreaking, that it would make Facebook obsolete.

But it hasn’t.

Instead, Google+ has opted for a “me too” brand, just as Google Buzz was a me-too clone of Twitter. There is nothing revolutionary about Google+. There is nothing worthwhile about it. It may be signing up subscribers by the millions, but how many of those will be active in a month, or even a week? People have stated that they’ll drop Facebook once their friends start using Google+, but if everybody is waiting on the sidelines, who will jump in the game? My guess is very few. The end result will be that Google+ has millions of barely active subscribers who will post on their Facebook wall about how lame Google+ is.

why apple can get away with murder

Last week, Apple moved ahead of Google as the world’s top brand, according to research group MillwardBrown, who tracks the top 100 global brands at BrandZ.com. “It earned an 84 percent increase in brand value with successful iterations of existing products,” such as the iPhone and iPad, as well as future anticipation of Apple’s product and service development.

Also making it into BrandZ’s Top 100 list for the first time was social media network Facebook. Facebook’s brand value jumped 246 percent in the last year, earning it the number 35 spot on the list.

Despite the tremendous gains of Apple and Facebook, and the continual brand-dominance of Google, 2010 was not exactly a banner year for these brands in the news. Google is facing challenges across the world to its “Street View” option in Google Maps. And, the company faced the wrath of the Federal Trade Commission after its Google Buzz application was shown to have severe privacy flaws. Facebook also had a litany of privacy flaps as it continued to develop commercial applications, which exposed sensitive user data to third parties.

Apple also recently experienced its own privacy headache, as reports emerged that the popular iPhone was tracking user location. While Apple denied the report, saying that it was merely keeping a log of WiFi hot spots and cell towers around the users location, Congress is now putting the company (and, its rival Google) under the privacy microscope. Apple also had an embarrassing quality issue with the release of the iPhone 4. An engineering flaw with the placement of the antenna caused the device to lose its signal if it was held incorrectly.

Yet, even with quality issues, privacy woes, and sometimes questionable relationships with Federal intelligence agencies (Julian Assange, the infamous founder of the WikiLeaks organization, called Facebook “the most appalling spy machine that has ever been invented”), these are some of the world’s top brands.

How, then, can they seemingly get away with murder? The answer is simple: branding.

Apple, Google, and Facebook have all developed such entrenched brand identities with consumers that it gives them a Teflon-like exterior that protects them from controversies that would mortally wound lesser brands. They didn’t do it through flawless quality, or even building a solid level of trust with consumers. These brands did it through creating products that consumers can’t live without.

Consumers know that Facebook has issues with leaking (accidently, or on purpose) the plethora of personal information uploaded to the site. But, does that stop people from using their account? No, just as people will line up for hours to be the first to buy the next generation of iPhone despite previous quality issues. For better, or worse, consumers are hopelessly addicted.

No matter what happens, Facebook users will not terminate their accounts, owners of the iPhone 4 are future owners of the iPhone 5, and Gmail account holders will not be switching over to Yahoo!.

The sheer power of these brands is a testament to product differentiation, and the predominant role differentiation plays in establishing brands. The products produced by these brands aren’t just different than their competitors; they’re different in ways that consumers consider to be invaluable. Consumers value these brands so much that they have become too deeply imbued in their day-to-day lives to use an alternative, or give up. Differentiation, above any other branding element, has elevated these brands to immortal status.

Brands looking to increase their value in the minds of consumers should focus on the difference that makes them more significant than their competitors. It is unquestionably the “secret sauce” to a lasting brand.

The difference doesn’t necessarily mean “higher quality.” There are thousands of brands that produce a higher-quality product than the brand leader. It’s just that the brand leader has done a more effective job of demonstrating to the consumer how their product will make their life better. A quirky commercial isn’t going to get a consumer to change from one brand to another, but showing them how their life could be improved will.