Tuesday, October 28, 2008
The Importance Of Brand
By Joe Marchese Given that we can't see the bottom of our current economic crisis, the last thing we want to hear is talk of another bubble that has yet to burst. But John Gerzema and Ed Lebar have put together compelling research that argues we're in the midst of a "brand bubble" in their book " The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It." The basis of this bubble is that while key brand metrics (consumers' opinions of the value of a brand) have been steadily decreasing, corporations have continued to see an increase in the total value attributed to brand (investors' opinions of the value of a brand). The implications are significant, to the tune of trillions of dollars in market wealth.
Why aren't brands worth what they once were? In essence, the key brand attributes that gave brands competitive advantages decades ago, the most basic being awareness, are simply not as powerful an indicator of brand strength. That's mostly because consumers have become increasingly picky about brands they will be loyal to. Gerzema and Lebar argue that consumers don't simply look at the current or past state of a brand, but are aware of a brand's direction and "energy." The best way to think about this, they say, is that consumers "now select brands based on the same principles investors use to select stocks." But even though the reality of brand loyalty is changing, many brands, and investors, are failing to adjust to the new reality. Most brands have failed to continue effective brand building now that the bar has been reset, in large part because most brands haven't changed the way they approach the market in decades.
What brand really means to a corporation is a promise of future value: the ability to drive future sales, to win consumer loyalty, and, most importantly, not being forced to commoditize your offering. This is why performance advertising on the Internet is not for brands. As soon as you begin to compete for transactions, you begin to "teach" consumers to value your brand on the discounts your brand is willing to provide.
What I truly loved about the book is its systematic demonstration of the enormous and increasing percentage of value that is attributed to brand. The question is, are you, your company, or your client on a brand bubble that can burst, or have you truly built a competitive advantage for your brand that will drive future value? Achieving differentiation through branding today means understanding the challenges and opportunities presented by a new media and consumer landscape. The key is first identifying what elements create a competitive advantage for a brand, then figuring out how to capture those elements' essence -- and finally, getting that message out to people. It's research, execution and messaging: the more things change, the more they stay the same. The difference in today's media is that you should be looking for all three simultaneously, rather than in some linear fashion.
Want to avoid being a brand bubble casualty? Figure out what it is that gives your brand energy and use new media formats to start a conversation with your consumers. This will simultaneously build constant innovation into your offering through market feedback. and deliver your brand's message to consumers in a highly authentic fashion. Did that? Okay, now do it at scale.
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Joe Marchese is President of socialvibe.
Online Spin for Tuesday, October 28, 2008: