Brand Bubble – John Gerzema and Ed Lebar (By Patrick Collister)

Gerzema and Lebar both work for Y&R and the book is a plug for Y&R’s BrandAsset Valuator, alias BAV. In short, the book argues that consumer “top-of-mind awareness, trust, regard and admiration for not a few but thousands of brands” are dropping. And “in essence, they’re concentrating their passion, devotion and purchasing power on an increasingly smaller portfolio of special brands.” This, they write, is a big problem taking shape. “In 2006 Fortune magazine conducted a survey indicating that 72% of the Dow Jones Market Cap is now intangible. Accenture estimated that intangibles accounted for almost 70% of the value of the S&P 500 in 2007, up from 20% in 1980.”

In other words, brands are of increasing value to stock markets at a time when most are of diminishing value to consumers. The Henley Centre has studied the erosion of brands and in 2007 the Carlson Marketing Group found “in 2000, four in ten consumers showed a genuine preference for…one brand, but that dropped to one in three consumers in 2001 and crashed further in 2007 to less than one in ten consumers feeling committed to a single brand.”

One reason: there’s too much advertising.

James Surowiecki in “Decline of Brands” wrote in 2004: The average American sees 60% more ad messages per day than when the first President Bush left office.”

It’s not that consumers are exhausted by it but that “Brands have blurred into a sea of sameness.” Choice has become overwhelming. So, 160 million phone numbers in the US are on the “do not call” list; 43.6 million households have some form of PVR to edit out the ads.

Furthermore, and crucially, most advertising today is dull and uninteresting because, as the authors put it, “many companies confuse risk avoidance with risk management.” Today, people want to see brands being courageous. They want brands to stand for something other than just making the directors filthy rich.

We can’t trust brands

Meanwhile, the trust we once had in brands has been badly knocked. Naomi Klein’s “No Logo”, Neil Boorman’s “Bonfire of the Brands” and antiadvertisingagency.com all attract big and sympathetic audiences. Brands we love get gobbled up. I used to insure my car with Eagle Star. It is now Zurich. Norwich Union is becoming Aviva. Brands we thought were here forever have gone. Like the Halifax, Bank of Scotland.

Enron was named America’s most innovative company for six years on the trot. Then we found out they were fraudsters. Thomas the Tank Engine, made in China, contained lead which could (and did) harm children. We all know politicians lie and why should marketers and brands be any different?

Firestone made tyres that burst; Ford made cars that crashed; Mercedes made a car that fell over; Nestle conned West African mothers into stopping breast-feeding and buying their milk powder when it was not better for them to do so. In China, they have poisoned milk powder.

And the banks…

Is it any surprise that consumer expectations of (most) brands are so low. The trick, then, is to meet their expectations – and their hopes. To share their values and encourage them to share yours.

Become irresistible

Irresistible brands create “envy, lust and badge value. They are provocative and daring while pleasing and reassuring. They let people feel good about themselves.” They keep refreshing their meaning and they have a point of view that goes beyond profit making.

Irresistible brands rise above categories and redefine their own markets.

Thus:

Axe has 3.6 times the level of ‘energised differentiation’ to other deodorant brand

Dove has 1/6 times the pricing power

eBay has 3.2 times the emotional commitment

iPod has 2.5 times the emotional commitment

Orange has 1.6 times the preference

Management consultants argue that innovation is the key to differentiation and success but they always pitch it as being operational innovation. It’s more than that. Brands “must be constantly moving and shaped by…consumer change.” The search for movement explains “why consumers love blogs, dashboards and widgets – tools that help them track movement and spot winners. They help each other through websites like Tripadvisor.com, where 6 million consumers post reviews…while FlyerTalk posts 4.5 million reviews of the airline industry.”

A brand’s integrity is a critical factor.

So, when Apple dropped the price of their iPhone from its $599 launch, they reimbursed the early purchasers the difference. Incidentally, Apple’s share price went up (while RIM’s – Blackberry – has been going down.)

JetBlue stranded hundreds of passengers in a winter storm and then went public with an apology and refunds and promised to make sure it didn’t happen again. Tesco has a baby club, which is more like an au pair than a supermarket. And when NBA star Stephen Marbury launched Starbury sneakers at $14.98, you couldn’t help noticing that they cost 1/10th what a pair of Nike’s would set you back.

The craving for creativity

Creative invention and creative work are known to be drivers of economies. People have seen old, dead towns brought back to life by creative industries. In the UK, creative businesses are responsible for approaching 10% of the overall economy employing 2 million people. Creativity is inspirational and we admire creative people, and creative brands, because they “produce a positive vision of human existence, which brings added meaning in small or even large ways to our lives.”

People want to get involved because it makes them feel happy…and young. But being playful is becoming more important as “the road to happiness through material; wealth is starting to look like a cul-de-sac.” Creative brands offer people the “perception of a more interesting future.”

Participants

People want to be heard and to be a part of what’s happening. They blog and vlog, podcast and twitter. This is the media of the young.

“If you need proof the old world of media has been turned upside down, note a recent survey of users of Bolt Media, a youth networking site, which found that only one out of three users was able to name even one of the four US TV networks.”

26 million blogs are read by 57 million in the US.

In China, there are 42 million bloggers.

Category blogs are becoming important – and CEOs now have their own blogs while forward-thinking brands seed product samples with bloggers to create buzz.

Brands can emerge and get established via MySpace – the Arctic Monkeys.

Radiohead sell their music from their own site and have a YouTube channel.

Why is this important? Because “consumers trust each other more than they trust brands.” People will, moe often than not, believe a complete stranger. Thus, Kryptonite bike locks were claimed, and believed, to be unpickable until one guy posted a video of him picking a lock with a Bic biro. It took 8 days for the company to respond by which time it was sayonara for Kryptonite.

Participation means “At Nike.id.com our digital strategist, Mike Lundgren, was able to design his own shoes with the “Nike” logo turned into Mike.”

Participation is Doritos getting people to make their ads for them, with the best shown during the Superbowl.

Just as we now have personalised control over our television through Sky+ etc, we want personalised control over our brands.

Social networking

These sites are where people share knowledge and opinions and can alter the fortunes of people, companies and brands.

MySpace, “were it a country, it would be the eleventh largest in the world.” Nearly half its users are over 35. Then there’s Facebook, Cyworld in Korea, Habbo Hotel in Finland, and so on. They allow people to define themselves to the world. To create their own personalities and possibilities.

As Julian Saunders of the Joined Up Company has noted – your Facebook page encourages you to express yourself as a brand.

Brands that can start conversations are the winners here. But, crucially, they must be honest. Stealth marketing and dissembling online can (and will) get brands into big trouble. Remember the outcry when Ask Jeeves tried to put out a supposedly “grassroots” message about Google taking over the world? It rebounded badly.

For agencies, the new landscape is intimidating because, in terms of media planning, only a couple of years ago it would never have occurred to you that iTunes, eBay, YouTube and MySpace would all offer opportunities to engage with people. This speed of change is daunting to all but the brave.

Social media, and the conversational landscape, is changing the rules about where, when and how people engage with advertising and they are not only changing the business models for companies, but also the skill sets required to be a successful marketer. As A.G.Lafley has put it, marketers must “learn to let go.” They must learn to listen, to be fast-paced and to be continuous. They must learn to experiment. “Too much time is spent thinking about what a brand is rather than what it can be.”

For a perfect example of forward thinking, look at Barack Obama, an outsider who ended up in the White House. He used easy-to-create personal pages for social networking, blogging tools, RSS feeds, extensions to Facebook, YouTube, MySpace and Flickr as media not to mention SMS messaging, branded ringtones…

Everything is media

Your business model is media – so the Co-Op is known for its ethics

Happy employees are media – John Lewis

Corporate behaviour is media – IKEA

Your product s media – Louis Vuitton handbags

R&D is media – NikeiD

Creative brands understand this. Brands like LEGO, which for years made plastic bricks for kids. Then the world changed and kids spent less time playing with bricks and more time online. So LEGO created Bionicles, with online videos, books and comic books to enhance the experience of their real toys. Then they created Mindstorms, robots that were connected to your compute, and now there are competitions, and brand fans who constantly talk to each other about what they are doing and what the company is doing.

This new world of marketing is about inviting people to personalise and customise their experiences. “It’s no longer effective to stake a claim to a perpetual territory and defend it through repetition. Instead, the best way for a brand to own a position is to be constantly dynamic within it.” That may mean behaving differently at different times with different customers and collaborating rather than persuading.

So it’s no wonder so many marketers don’t really want to know. The new order means we all need new skills and, like the brands we work for, we need to be constantly changing and learning to adapt just to keep up. But invest that energy and the rewards are potentially huge. 

A copy of this article also appears here