In his post “The Shrinking Advantage of Brands,” Umair Haque proposes that “investing in traditional brands is yielding fast diminishing returns, and leading more and more players directly into value destruction.”
He asserts that branding is in decay today because it is the cheap, ubiquitous interaction between connected consumers, not traditional marketing, that is validating brands and their promises. As Umair explains in his video, the result of this online interaction is that “we don’t need to compress the expected value of goods and services into this tiny little logo or 30-second TV spot.”
I beg to differ.
I caught up with Umair’s fascinating series of posts because of Google Alerts, which directed me to this post on Antony Hopkins blog.
Why did I receive the alert? Because I am vain enough to assume that people might say something about me, and I want to know about it when they do. Antony referenced an earlier post of mine and mentioned me by name. Presto! Thanks to Google, I’m in the loop.
Superficially, this example would seem to support Umair’s case. Without Google Alerts, I probably would not have seen Antony’s post simply because there are millions of new posts going up every day and I cannot possibly read them all. Umair makes the point in his video that if we want to learn more about a brand, we can simply search for it and find “scads, reams, thousands of pages of information on it.”
And therein lies the fundamental problem with his argument. Just as I cannot possibly read every new blog post to identify relevant content, neither can I sensibly digest all the information and opinions relevant to a brand. It would not be an economic use of my time. The cost to me in terms of time far outweighs the benefit of making the right brand choice. Even with Google Alerts, I would not be able to keep up with every new post on marketing, never mind all the brands I might be interested in.
In many cases I may not even know what I am searching for. Umair mentions looking for a tennis racquet. Type that into Google and you get 1,530,000 hits plus all the associated sponsored links, all of which are branded in some way, e.g. Wilson Tennis Racquets. A few, like “Prince Shark OS Prestrung Tennis Racquet $69.99 - Dick’s Sporting Goods” are dual branded. Looks to me like brands are alive and well in this new economy. The only problem is that they are condensed down to a name, not even a logo. So how do people choose among this vast array of options and names?
The answer is they pick what looks familiar, credible and relevant based on their prior experience. So I might choose to conduct a further search on Wilson tennis racquets, reducing the number of hits to 188,000. But I still need to identify the links that are relevant to me. Time is passing. What do I do? Call a friend or ask the audience? Let’s hope I have a friend who knows something about tennis, because I have no clue who is offering the advice at many of the social sites out there. How do I know if their advice is unbiased and trustworthy? Far from making it easier to find what we need to know, the digital economy sometimes makes decision making overwhelming.
I think the fundamental problem with Umair’s proposition is that it ignores human nature and the way people make decisions.
Gerd Gigerenzer and Peter M. Todd at the Max Planck Institute for Human Development in Berlin propose that all human decisions use what they call “fast and frugal heuristics” to reach conclusions that are satisfactory if not always optimal. These heuristics are fast in the sense that they facilitate quick decision making. They are frugal in the sense that they allow decisions to be taken based on limited information. Critical to this discussion is that fast and frugal heuristics helps us make choices in spite of the fact that we lack perfect knowledge and unlimited time.
Early in their book, Simple Heuristics That Make Us Smart, they describe a very simple decision tree, comprising three yes/no questions, used by doctors to classify incoming heart attack patients. Importantly, the decision tree has clear stopping points that determine what action is to be taken. If a patient’s blood pressure is greater than 91 and the patient is less than 62.5 years old, that patient is at low risk. If the patient is older, another question is asked to assess his or her risk level. This simple step-by-step approach allows doctors to make critical decisions simply and quickly when time is of the essence. It is far easier to apply under stress than alternative systems which rely on more complex systems of interlocking predictors that reach the same conclusions. Gigerenzer and Todd propose that this is how humans make all decisions.
The concept of heuristics helps explain why strong brands are important and will remain so. Brands, like heuristics, provide convenient shortcuts and, most important, clear stopping points for decision making.
Time is the most expensive commodity in today’s economy. Few people will invest significant amounts of time researching all the possible options for a brand purchase. Usually the risk of making a bad purchase is relatively low and there are too many other things vying for those precious, irreplaceable minutes. So the stronger your brand, the more likely it is that people will click on its link instead of some other one.
Many brands are destined to fail in the digital economy, but it will be because of poor execution, not because branding is out of tune with it. I believe that strong brands are more important than ever. I also believe that in the digital economy, the need to condense meaning is even greater. No longer can you rely on a logo. The name alone must conjure all the positive associations that signal the brand’s value. That’s why Umair references Google and Apple in his subsequent post; they are strong brands and their very names speak volumes.
I will return to Umair’s interesting thoughts on Google in a separate post but for now let’s hear your thoughts on this basic proposition. Is branding in decay? Are brands out of tune with the digital economy? I would love to hear your opinions. Oh, and to save me another evening of fruitless searching, can anyone recommend a good, all-mountain ski for an advanced East Coast skier? Thanks.
(1 votes, average: 5 out of 5)
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March 14th, 2008 at 2:44 pm
I think this is one of the best arguments I’ve heard for brands. And I completely agree.
It also seems to me that all facets of marketing should work together. So the question is, are ad agencies set up to work in digital channels? Can they do a Google adwords campaign while working in the ‘traditional’ brand channels?
And if they can’t (or won’t), if you have someone else doing the parts traditional agencies won’t do, then how will that impact the brand?
March 14th, 2008 at 3:47 pm
The idea of minimizing mental effort conforms to the theories of Kahneman and Tversky. Kahneman won the Nobel prize for economics in 2002 http://www.apa.org/monitor/dec02/nobel.html . They believed that people minimize cognitive effort as much as possible. Hence brands are an important heuristic. Everyone in MR should read Kahnemans work.
andrew
March 15th, 2008 at 11:07 am
Umair Haque is suffering from classic means/ends confusion. Because classic brand building tools are in decline does NOT mean that brand power is in decline. The way to build brands is changing, but the power of branding is not.
Nigel, you must have numerous examples from BRANDZ where successful brands have been built through completely different marketing channels.
But the idea that consumers are loosing patience with sitting through 30 TV stops built for another age, is a valid point. TiVo data indicate that consumers are least likely to skip high production value “entertaining” spots or DRTV spots that are information dense. Consumers skip the rest unless they are personally relevant. Even people working in the marketing industrial complex pay only enough attention to ads to determine whether they want to look into a brand in more detail via website visits, on-line searches, talking about it with friends, or just becoming alter to future brand communications for news stories about the brand. These industry insiders ignore most of advertising (like most consumers) unless it provides competitive intelligence for their business clients.
We are in the middle of another major media transition, much like the one that occurred when TV entered the market in the middle of last century. Claiming that brands are in decline is like say that human personality is in decline, because how we discover each others peronsality has changed with the advent of email, SMS, mobile phones and blogs.
Nigel, in your blogs you continue to come across the same way that you do in person. Is your personality in decline? Cheers
March 15th, 2008 at 11:43 am
Thanks for the comments, guys.
To answer the last question first, no, Bill, I don’t think my personality is in decline. This blog just gives me another means to shoot my mouth off!
I think that the need to attach even more meaning to a brand name today demands that we examine how different communication channels work together, as Matt suggests. If you do not have a good understanding of the path to purchase and how various touch points influence perceptions and actions, e.g. search and comparison shopping, then coordinating execution across different agencies will be difficult. It could also potentially weaken the brand because the communications seem inconsistent.
March 17th, 2008 at 4:02 am
Perhaps the debate would be advanced by reference to Millward Brown’s ‘pawprint’, which suggests that great brands are built on a combination of factors including ‘business basics’. In other words, a brand can stand for something and be way ahead of its peers, but if poor internal processes (or changing external circumstances) mean that it can’t get the numbers to add up it has no future.
March 18th, 2008 at 10:28 pm
Nigel,
I usually don’t agree with you, but I agree with you 100% here. I admire Umair tremendously — seriously a lot, the guy’s brilliant. But sometimes his thinking is clouded by academia and theory, and his assumptions suffer from a lack of real-world application. I left the following response/comment on his post:
I would pose this definition: “A brand is what exists in the minds of ourselves, customers and other stakeholders. It’s the aggregate of associations that people have about product and organization. Branding is the aggregate of actions that signal these associations. The result over the long haul is reputation and equity.”
That said, I do agree with his point about “cheap interaction” but would simplify the concept this way: In a digitally connected world where truth and experience travels fast and fierce, brands tend to be defined more by the very experiences stakeholders have with them. In such a world, successful branding becomes an infatuation with the reputation that actual experiences create.
The truth is that brands are more important than ever before, but the practice of branding now has less to do with promoting an image of what you’d like the brand to be, versus acknowledging that product and service experiences manifest as the brand. Branding is the result of the total experiences associated with product or service, so you better manage those experiences well!
Nigel, what do you think?
Finally, please remove me from your email distribution list. I didn’t sign up but somehow found my way on your (Dede’s) list. I already receive all your updates via RSS subscription. Thanks!
March 19th, 2008 at 7:48 am
Hi Max,
Thanks for this. I think your definition hits the spot with one minor adaptation - that the brand associations motivate people in some way. After all, the whole point is to get people to do something, buy a brand, quit smoking, visit a site.
I totally agree with you that brands need to manage all touch points and experiences in order to ensure clarity of what they stand for in the face of “consumer control.” Otherwise the brand will be hostage to desires and whims which will not be in the best interest of the owner. There is an important trade-off between what consumers want and what a brand can afford to give and still remain successful and profitable.
Thanks for the note about the e-mail notifications. Will do.
Cheers,
Nigel