I promised in my last post that I would discuss another article by Umair Haque from his Harvard Business blog. In his post “The New Economics of Brands,” Umair proposes that “the future of communications as advantage lies in talking less, and listening more,” and praises Google as a “living example” of this “deeper truth.”
I’m not going to argue with the idea that brands should listen to what people say about them, but I am going to take issue with another part of Umair’s analysis.
Umair attributes the success of Google to two bold strategic decisions taken by the company. These decisions, which, according to Umair, fly in the face of conventional branding, are
- To eschew traditional advertising
- To invest in consumers
That Google decided not to invest in advertising is well known, but that decision should really not be surprising. Unlike most new brands, Google did not need to advertise, because it had three things going for it:
- It offered a demonstrably better product.
- Trial of the product was free and easy.
- Dissemination via the Internet was fast and allowed the brand to benefit greatly from word of mouth recommendation.
In light of these three basic advantages, I am fed up with hearing that Google is the new model for branding. A brand with such powerful advantages ought to be successful – but even if they have a great product, most traditional brands are denied the free and easy trial.
The second decision cited by Umair requires more explanation. If I understand his premise correctly, Umair believes that Google’s decision not to advertise on its homepage represents an investment in consumers. He actually quantifies this “investment” when he says “Google is foregoing revenues so consumers aren’t forced to view costly ads on its homepage. From an economic point of view, in fact, the amount of revenue Google foregoes is the amount Google is investing in consumers, every second of every day.”
Really? I’m not sure I see it that way. Rather, I tend to agree with Richard Foxworthy who comments:
For Google, any content whatsoever on that front page - be it advertising or editorial - is risky. It cannot hope to be of interest to every user, so the best strategy for Google is to have lots of empty white space - it is equally useless for all consumers, but at least it is inoffensive, refreshing and simple.… After the user has signaled their interest by inputting a search term, Google can (and of course does) serve up ads deemed relevant. Just like traditional publishers have always done to self-selected consumers.
While I don’t believe that Google’s decision to keep the homepage simple is a matter of investment, I do see that decision as a sign of respect. Google understands that people visit the site with their own specific needs in mind. And, like any good brand, Google sets out to deliver on those needs as quickly and effectively as possible. In a complex and crowded world, Google offers simplicity and a means to find what you are looking for. In return people accept (and occasionally benefit from) the relevance of the links and advertising on subsequent pages of the site.
Umair, if you want an example of investment, let’s talk about Google Alerts, Gmail, Picassa, Blogger, Google Earth and all the other fun stuff that has been developed to attract our eyeballs.
But is investment in free stuff really different from a traditional brand’s investment in an engaging TV ad or advergame? The traditional brand offers entertainment for your time and attention. That 30 seconds of TV ad alone probably cost $1 million to produce and, on average, $5 million to air. That’s not an investment?
Google wants to get as much of your time and attention as it can, so it has upped the ante. I dread to think how much money is invested in all its free applications, never mind the amount of time employees spend on playing around with stuff that may never see the light of day.
People have always been willing to pay attention to advertising that provides entertainment or information, whether it is on TV, in print or online. Google is actually the new-age embodiment of the age-old exchange of time and attention for personally relevant content. By contrast, one of the reasons that Facebook’s Beacon created such outrage is that users did not see what value it had for them.
I suspect another commentator, Gregory, had something similar in mind when he stated:
In short, no economic activity of any kind, branding, advertising, manufacturing, investing, can be based on selfishness, and expect to survive in the ‘edge economy.’ If you are not doing something for people, rather than trying to get something from people, you can not survive.
In other words, a fair exchange is no robbery. Now tell me, is Google really turning the tables on traditional branding, or does it just have a couple of advantages that traditional brands don’t? Is its investment in people really different from traditional brands or just a heck of a lot bigger? Please let me know your thoughts.
(4 votes, average: 3.75 out of 5)
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March 18th, 2008 at 11:54 pm
Google’s success reveals what remains true about markets and behavior, what has always been true but is now critical, and what is truly transformative.
Google’s business model met the unfulfilled needs of a new market: the long tail of small businesses lacking effective communication channels to reach rpospective customers in real-time. This is classic business strategy.
Google’s value proposition, as Nigel observes, is based on a superior product that improves with usage through network effects. This demonstrates that value must be defined along both individual and social dimensions.
Google’s brand is defined by the experience it delivers to consumer and advertiser. That is why the experience remains ‘clean’ and ‘fast’. This demonstrates what is truly transformative about today’s marketplace which is that brands are defined by the experiences they deliver to individuals and networks, and can no longer be created by advertising.
Name a brand created by traditional advertising in the last 10 years!
March 19th, 2008 at 3:49 am
I do think traditional advertisers have something to learn from Google. Picasa is certainly of more value to me than the entertainment or information I’ve received from any TV ad I’ve seen in the past year. Now, clearly not all ‘traditional’ brand advertisers are in the position to develop apps like Picasa. But they can invest in useful and relevant free stuff in other ways: a great example in the UK is Orange who have established the successful ‘Orange Wednesdays’ free cinema tickets offer, clearly demonstrating there are added benefits to being an Orange mobile phone customer.
March 19th, 2008 at 7:36 am
Thanks for the comments, guys, much appreciated.
So to Scot’s point are we saying that traditional advertising is not part of the brand experience or simply a diminishing part of it?
New brands created by traditional advertising in the last ten years? Suggestions anyone? What about P&G’s Swiffer? Does that count?
March 19th, 2008 at 11:55 am
One thing I have to disagree with. Nothing that Google creates is free. Today real marketing gold is information. Google tools appear free to the consumer, but the consumer is paying in personal data which is then accessible to advertisers. GMail is the perfect example of this. Receive an email with keywords like “wedding” or “marriage” and you will receive ads about dating sites, male enlargement, and infidelity detectives.
March 20th, 2008 at 12:01 pm
I think Google left its front page blank in order to say: we are about performance first, advertising second. It demonstrates focus on user-experience. The irony is that although they look anti-advertising (on its front page, not running its own ads), they are in fact one of the largest advertising companies in the world today. They are not anti-advertising, they were against older forms of advertising…until lately. They want to be in display (Doubleclick). They want to be in print, TV, radio too. But they want advertising on their main site to be one type, and use other types where already established as “accepted.” The other thing about that clean white page is it makes it seem simple, like there is not a lot going on behind the scenes. Yet imagine if that were a transparent pane of glass - what you would see would blow people’s minds in terms of the advertising apparatus being built…so maybe their brand is simple, trust-worthy, performace based even though their business is a bit more expansive than that.
March 20th, 2008 at 12:27 pm
Interesting comments from SF SEO and Nick. So do you think people would really care that Google is not the “friend” it appears to be but is using their personal information to make money or do they regard it as a fair exchange for the tools they get to use?
March 20th, 2008 at 4:01 pm
I think many people would care. The problem is most people do not know the level of privacy that is being invaded every day. Google is slowly starting to irritate webmasters who will continue the message down the line to the consumer. Check out Google Search Sucks for some interesting reading.
March 25th, 2008 at 4:36 am
[...] on Umair Haque’s HBR blog on how new age brands like Google talk less and listen more, which was rejoined by Millward Brown’s Nigel Hollis. In fact Nigel’s post tells us how brands like Google can actually show and not tell the world [...]
March 26th, 2008 at 5:42 am
Well I said this on Umair’s page as well, and I’m saying it again.
A brand’s value is generated as it goes through levels of presence, relevance, performance and branding; in that order.
Traditionally you would have relevance as a subset of presence, In the case of Google, there is no subset thing..being a search engine, its relevant to all for whom its “present”. This is the one thing which has pushed its valuation really high
March 26th, 2008 at 7:50 am
Hi Udaya, interesting comment. I take your point that Google is relevant to far more people than the normal brand because it is likely to meet their search needs and definitely fits their budget but I am not sure that relevance equals presence for everyone. I am sure that people who use Baidu in China might suggest it does not appeal to them or they would not want to be seen using Google?
March 27th, 2008 at 12:02 am
point taken about baidu, I was a bit myopic there; but relevance as a % of presence would still be huge fr google.
March 27th, 2008 at 4:43 am
Im sorry for my English, I didnt use it since several years.
All this discussion, to this toppic, is based on own positions of every “analyst”, with their own communication goals, the same is yours. But did’nt even touch, what happends in users mind, how they create their attitudes in connection to google, search engines, information resources, advertising etc. And whats more important, how succesfully and why (quality and quantity) the common users than in a fact realise their attitudes. (what we (people) say, is not the same, what we think, and what we really do :-)) How is working their mind decision system, which is the essentiell for creating (learning process) and changing their attitudes.
Than, if you have measured the users mind processes according to the google topic, you will find out, whats really!!! behind the google success. You will be able to understand, why the Nr.1 is Google and not MSN or Yahoo!. and even much more,, you will find out, what the Nr. 2, 3, has to do, to change the users attitudes and push them for realisation.
In next few days, I will present such a system for Mind processes measurement to Mrs.Prusova, from Millward Czech office. She can provide You than with more detailed informations, whats behind my comment.
Best Regards from Prague
March 27th, 2008 at 6:16 am
Hi Udaya,
I checked out your hypothesis using BRANDZ data from the the US in 2007. As you suggest, there is almost total conversion from Presence to Relevance for Google. Interestingly the same is true of Yahoo!
In fact, the real point of differentiation comes at the Advantage level where Google converts far more people than Yahoo! does. People believe Google has the advantage on most criteria - particularly speed of search - and Yahoo! has a slight edge on being easy to customize to your needs.
I think this points to the fact that any search engine is easy and free to use, the real issue is whether people find one is better than another in some way.
Nigel
March 27th, 2008 at 6:26 am
Hi Milan,
You are correct. We have been looking at the macro-level not delving into what happens in peoples brains to make them “bond” with Google or determine how they respond to different stimuli.
I look forward to hearing more on your approach from Petra but my key questions will be as follows:
Can your measurement predict behavior more accurately than existing techniques?
Can it diagnose behavior better?
And can it be applied easily and cost effectively?
We are still looking for something that meets those criteria or, at least, can help improve the questions we already ask.
Cheers, Nigel
March 27th, 2008 at 8:20 am
Hi, Nigel
I would allow me, to answer with a near bussines prediction, this measurement will be a future basis of every social, marketing, and communication survey or research.
To your questions
Yes, this measurement, is much more accurately and purposeful as every quantitative and qualitative technique worldwide used or even their combination. It doesnt predict behaviour, it measures WHY the behaviour (of some individual, small group or big social groups) is how it is, What it is influencing more and what less and in which way. The time prediction of some behaviour or for a change of some behaviour, how stable the behaviour (realisation power of particular attitudes) is, how it can be “changed” in a time for example based on some intervention activity (communication campaign - advertising) and how succesfull.
Let say, that the bahaviour is diagnosed at the level of brain mind processes influenced by (peoples somatic, emotional, rational and social subsytems), which together forms our mind decision system. It stands for individual and aswell in groupped form for big social groups.
About the effectivity and speed - the respondents mind processes are scanned via application running in web browser. In your speach CAWI system. Than this mind processes are automatically by the system analysed, evaluated, and sent in the researcher understanding form (graphs, correlations and matrixs) back. (the whole process is runing automatically and on-line) The scanning takes respondent from 20 - 30 minutes based on survey or research topic.
In this point of view, your “makro -level” , will became for me the micro position of individuals,, against the “makro level” group forms of behaving based on group mind processes of millions of users.
Now I´m looking for one bussines partner, to cooperate on comercial project survey and research realisations. Thats I have contacted aswell Mrs. Prusova, and some other European research Groups.
PS: To understand, some theoretical informations on what is this system based you can find in a book from Daniel C. Dennett, Kinds of Minds, Towards an Understanding of Consciousness… The difference is, that here we have allready a running aproved system (developed since 25 years) in commercial use in other areas.
Cheers, Milan
March 27th, 2008 at 8:30 am
Thanks Milan, that is a big prediction! I will get a copy of the book and will expect to hear more from you after your meeting. Cheers, Nigel
March 31st, 2008 at 6:39 am
Hi, Nigel. You are right. I have followed up the article of yours Graham Page the NeuroSciencePOV, according m-b research on the field of “neuromarketing” by applying the fMRI and EEG in research projects. The measurement system I use eliminates all the disadvantages described by your GDI (insufficient of information complexity, costs, availability for respondents, insufficient additional value for most research projects). The system measures the respondents brain associacions processes in their mindset in regarding to the particular research projects. So I measure the complex informations, how the respondents create their attitudes (dynamic asssociacion processes - basis for attitude building) to the particular research topics. Im able to follow up their procedure in a time, compare between different target groups, or even create new target groups based on the synergism of their dynamic associaton processes. (this is just in short, the complex of usefull informations is much wider). Cheers, Milan