Brand still counts

25 September, 2018

There is a nice ad campaign in London at the moment. It’s for a challenger brand called Brewdog that makes beer. It compares itself favourably with other beers based on taste, and uses its rivals’ ad lines to mock the contrast between their brand and – according to Brewdog – the unexciting truth about their product. The ad is interesting because it expresses Brewdog’s solidarity with a large and growing number of consumers who think branding means lying. I want to suggest why brand still matters. First, though, some thoughts on why it has made so many enemies. 

Sticking it to the man

Brewdog’s strategy is not new. Twenty-five years ago Coca-Cola put its weight behind a large-scale attack on capitalism through “OK”, an anti-corporate soft drink brand that laughed at marketing hyperbole. There was a grand launch in 1993 but two years later the brand was killed off because it did not strike a chord with enough consumers and, more importantly, they didn’t like how it tasted. Start-ups borrow from postmodern thinking to attack the market they plan to disrupt, including its marketing practices. It’s a strategy that allows them to define themselves by declaring “That is not what we are.” This is an obvious thing to say when you’re a new arrival, because indeed few know who you are, and it exploits the recognition other brands have built over many years.  Anti-establishment campaigns have been interesting, witty and even successful because they feed off widespread cynicism about brands and branding. But their effect tends to be short-lived because consumers eventually see that all marketers, including the subversive ones, are just looking for ways to differentiate their brands. Your rage against the machine loses some of its edge when you put it in your brand strategy to sell stuff. 

The origins of consumer doubt go way back. Two hundred years ago Germany’s most famous export to London was born, and Karl Marx still influences the study of marketing from his grave in Highgate Cemetery. Consumer choice – the range of choices available – is predetermined, say neo-Marxists. Consumers may think they exercise free will when they choose between the iPhone X or Y or between Apple, Samsung and Huawei. But a network of instant, interconnected “circulating content” makes sure that they never (or rarely) hesitate between a smartphone and no phone at all. Data planners created programmatic to cut through all this circulating content and give people what they really want, but they will never win, say Jodi Dean, Dennis Mumby and other scholars, because we’re all caught in a capitalist web. As for activism, postmodernism, irony: they’re just the latest tools of neoliberal capitalism. They change nothing and only make us feel that we’re independent.

There’s a similarly emancipatory tone within the School of Artificial Intelligence. Consumers will no longer need the je-ne-sais-quoi of brand because technology will bring each of us products that are priced just right and proposed at just the right time. Things brought by algorithm will be so relevant that we will soon be freed from the brand myths that trap us.

Brand is necessary

Back in the marketplace of real things bought and sold, purchase decisions still depend on more than the tangible basics of product features, price and distribution. Brand connects the product to a bigger idea. A logo is the symbol (or signifier) that invokes all the meaning vested over time in the brand (the signified). Over the years, brands have created rather more value than would have been the case if consumers had only compared functional benefits. We wouldn’t care if 74% of the brands we now use disappeared, say Havas in a recent report about meaningful brands, but we increasingly buy from brands that offer not just functional benefits but also improve our personal and collective well-being. Nike recently reminded Americans how powerful brand can be when it’s personal. It promoted a football player called Colin Kaepernick who had divided opinion across the country. Many protestors destroyed their Nike gear in public because they view the football player and therefore Nike as unpatriotic. It’s hard to see the human becoming less emotional, and likely that brands will continue to serve these emotions.

Meanwhile it’s surely not a coincidence that the top 3 global brands in the Havas report (meaningful-brands.com) are Google, Paypal and WhatsApp – all digital, all leaders in the fast-growing intangible economy where physical assets are minimal compared to the value of the assets you can’t touch: research & development, expertise, algorithms, services. The devastating consequences for traditional sectors like hotels and taxis show that consumers have no trouble seeing the value of brands like Airbnb and Uber.

Perhaps the best evidence for the value of a brand is what it offers when things go wrong. A crisis represents the greatest distance between reality and what the brand has promised. It is the moment of lowest credibility and the one the brand sceptic most enjoys. 

KFC/Kentucky Fried Chicken had a big supply problem earlier this year in the UK. None of its stores had chicken. For 24 hours the marketing team agonised with its ad agency about how to respond. The obvious answer was to say “We’re sorry”. But how? It took over a week to cure the supply problem, and just two days to save the brand. The solution was to rearrange its logo on a press ad so that it read FCK. The result – two Cannes Lions golds this summer. The neo-Marxists were unimpressed. The rest of us just smiled. 

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The Brexit Effect

15 March, 2017

The triggering of Article 50 by the government confirms a huge decision by the British people. How will Brexit affect UK Plc? I went and talked to some of its marketers…

Brexit means Brexit, but we can’t agree what No means

English is a Germanic language. It’s also a Romance language following lengthy visits here by the Romans and Normans. The Vikings contributed a layer (Thursday, husband, law, ugly) and so did colonialism (dinghy, trek, pyjamas, jungle). The resulting complexity drives English students mad everywhere, but offers rich possibilities for communication. And non-communication. In English you can talk for days and say nothing, which is very useful for politicians and managers who seek ambiguity. Earlier this year Theresa May gave a speech about a ‘Global Britain’ which offered some clarity about Brexit, but not much. The reaction of Europeans can be summarised as follows: “Nein/Non/Nee/Nej, you will not leave the EU and cherry-pick from the Four Freedoms”. For some in Britain this means No, as Mrs Merkel and others keep trying to tell us. For others, European thinking obeys the rules of English (because it’s the best European language), where No actually means Maybe. This second group is sure Brexit will be a huge success. 

Farage in Brussels, 1 2 17

The outcome of the Brexit negotiations? Absolutely no idea

Long-term thinking is harder than usual, what with uncertainty surrounding the EU and Theresa May’s new best friend in Washington. So marketers are developing two plans in parallel: adapt to the reality they can see outside their window, and prepare for a life after Brexit which will probably start in 2019. And what will this life look like? For now there are no facts; only speculation.

The economy? So far so good

Confidence is fundamental to both customer and marketer, so this question is central. Brexit voters scoff at the pessimists who predicted a recession after last June. It never happened and the Bank of England has now raised its economic forecast three times. The UK will grow by 2% this year and 1.6% in 2018. Last year ad spend grew by 2.1%, more than expected, but will shrink by -0.7% in 2017 and grow modestly (+0.7%) next year (IPA Bellwether report on Q4 2016). 

Rising input costs for UK manufacturing:Markit 1217

The outlook for importers and exporters 

Overall, however, business leaders are worried: 66% think the impact of Brexit will be negative (Ipsos Mori, 5 February). In the short term, rising input costs (what we pay for the goods we have to import) are causing inflation which will slow British domestic demand. The pricing battles have already begun: Unilever recently wanted to raise some of its prices to cover higher costs. Tesco refused because it is anxious not to lose share to competitors like Aldi and Lidl. Exports have risen since the pound devalued, but it is too early to say if higher input costs will remove the advantage our exporters are now enjoying. And Brexit has emboldened our European rivals who sell services to the EU. Irish lawyers are placing ads to remind European clients that they speak English too. Consultancies based in Brussels are claiming that the location of their British competitors is already a handicap. Paris, Frankfurt and other cities are trying to seduce global businesses away from London.

Toblerone

Tired of the fog? Try the frogs!

London as EU HQ? Maybe

Many global firms keep their European headquarters here because we belong to three clubs: European, Transatlantic and Anglophone. What will be the impact of Brexit and can global businesses wait two years to find out? Hard to say, but there is certainly no point keeping a European HQ that cannot sell to the EU. In January HSBC, UBS and JPMorgan Chase all talked at Davos about plans to move from the UK. And then there are the EU entities based here. If, for example, the European Medicines Agency left London, the impact on our pharma industry would be profound.

The rush for certainty

A global trend is giving Online an ever-bigger share of the marketing pie. In the UK last year it was worth 50% or £10 billion, up from £224 million in 2000 (Advertising Association). Google and Facebook are fast building a duopoly, taking 70% of US online spend in 2016 (Advertising Bureau). Changing consumer behaviour is not the only factor. The appeal of a reliable ROI (return on investment) is especially strong when marketing departments can’t see what the future holds. And so adtech firms are promising new levels of sophistication in targeting and measurement. Precision is seductive, but wise marketers know that they must also make sense of the data, which is an art. Not to mention the perennial need for big, bold, creative ideas.

Take back control tweet

The opportunity

There is renewed focus on how brands are perceived, say the marketers I spoke to. Reputation is almost everything, especially in the absence of hard facts about Brexit. Relationships based on trust are the most likely to survive Brexit intact.

What to fix

Marketers also discussed what they need to fix. First, financial waste gets most attention when times are tough, and in 2017 marketers will demand more transparency from programmatic. Procter & Gamble’s Chief Brand Officer believes the media supply chain is “murky at best, fraudulent at worst” (IAB Annual Leadership Meeting, 2017). Last year WPP spent $5 billion and $1.7 billion advertising through Google and Facebook. Its boss, Sir Martin Sorrell, thinks adtech firms will earn trust when they stop “marking their own homework”. Secondly, the growth of ZBB (zero-based budgeting): businesses too often use last year’s spend as their benchmark for what to buy this year. Starting from zero, with no budget guaranteed, can make marketers think much harder about where they will get best value for money. Unilever and Diageo use it and like it. Thirdly, marketers should do much more to understand people who are not like them. New BBC research confirms that those who are most pro-Brexit tend to have the lowest levels of education. Highly educated marketers in big cities everywhere (and not just in the UK) need to understand fast why anti-EU populism works.  

This article first appeared in the German magazine, Marke 41, spring 2017

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Ready for the Silver Rush?

December 1, 2016

The grey market has never been so lucrative. So why is marketing to older consumers so lame? When you reach 100 in the UK you get a message from Her Majesty. Thirty years ago she sent about 3,000 birthday telegrams annually. Today the number is over 14,500, and the team at Buckingham Palace is expanding […]

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Sugar: The new tobacco

March 17, 2016

On 16th March the UK government decided to tax sugary drinks in the face of widespread opposition from the industry. This should be just the start… We lust after sugar like it’s going out of fashion. This is exactly what the anti-sugar lobby hopes to achieve, but the challenge is enormous. Sugary drink is hard […]

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VW: will it contaminate ‘Made in Germany’?

November 5, 2015

It’s too early to understand the consequences of VW’s stupidity, but here – as everywhere – there is much speculation. Some of it is pessimistic: Dieselgate, following the Siemens scandal in 2006, shows that ‘Made in Germany’ isn’t trustworthy. That popular English word Schadenfreude describes many of these comments. Some is more optimistic, predicting a […]

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Inside her pretty little head

September 16, 2015

In August there was a storm in English language newsfeeds worldwide. It was over a tweet by Bic Stationery in South Africa that urged women to ‘look like a girl’ and ‘think like a man’. You may have seen it. It set the twittersphere alight with complaints. At first Bic tried to explain that its […]

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Labour need to complicate themselves

May 14, 2015

The headline story of Labour’s disastrous UK election result last week is that people still didn’t trust the party’s competence, despite its best efforts to show that its manifesto was fiscally responsible. Former Labour big hitters have been swift to say what they think. In January Tony Blair (Labour’s leader 1994-2007) predicted a general election […]

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Do brands make life too easy?

April 1, 2015

Here is a definition of brand: not the first and certainly not the last. By creating powerful ideas, brands help us work out who we are and how we fit into the world we inhabit. They begin as simple propositions, and the successful ones become the IBM or Adidas or Louis Vuitton label we willingly […]

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Why do we trust academics more than CEOs?

January 31, 2014

Last week the new Edelman Trust Barometer confirmed that there is no public figure we trust more than the academic. This has been a pretty consistent finding since the start of the survey in 2001: academics average 65% trustworthiness with little variance between years. Meanwhile, our perceptions of all the other roles featured in the […]

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Don’t say what you’re not. Say what you are.

March 14, 2013

I saw an exciting film this week. It’s called ‘NO’ (see trailer here) and it’s about the advertising campaign that helped to kick General Pinochet from power in 1988. It’s really really good. It reminded me how a big idea can change the world if it’s clear and simple. Also that the best brands tend […]

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