Umair Haque is Director of the Havas Media Lab. Over at Harvard Business, he has posted on The Shrinking Advantage of Brands.
His POV (my interpretation) questions the value of brand stewardship driven by traditional advertising in a world where the #1 brand is Google which doesn't advertise and the cost of each of us delving into the features and benefits of products and services is quite small. He states that branding as articulated via advertising - slogans, "brand positions," catchy creative - served to distinguish products and services in the industrial age when interaction was expensive - when it took a lot for consumers to compare and understand products.
"How is cheap interaction driving the strategy of branding into decay?
Let's rewind. What is a brand? It's a promise: information from a firm promising you a set of costs and benefits from the consumption of a good or service. Brands shape your expected value.
Now, for the economics of an industrial era, branding made sense. Interaction was expensive - so information about the expected benefits of consumption had to be squeezed into slogans, characters, and logos, which were then compressed into thirty-second TV ads and radio spots. The complex promise of a Corvette, for example, was compressed into shots of cute girls, open roads, and lots of sunshine.
But cheap interaction turns the tables. The cheaper interaction gets, the more connected consumers can talk to each other - and the less time they have to spend listening to the often empty promises of firms."
Brands Must Do It Differently Today
I would argue that brand is more than this. Yes, it is that "promise" between product and buyer. But that promise goes beyond features, benefits, and "information" into story. The story is at the heart of branding. And it cannot be achieved in the same way via brand advertising as it once did. That's really at the heart of Umair's point. "Cheap Interaction" includes information gathering and conversation with peers. In many cases, consumers (like you and me) are telegraphing that we value our peers say-so than the claims of advertising no matter how cleverly and ubiquitously delivered. That word of mouth becomes, of course, the "story" of a brand. That is not new. The brand story that is crafted behind the scenes by marketing and communications specialists pales in comparison to the version of that story which people share with other people. And now, we have a digital network(s) to amplify that WOM and story.
Brands that look beyond traditional marketing towards engaging customers in two-way conversations will have an advantage going forward. Brands that try to be of-use to their customers even if that means expanding the core products and services they provide (look at Nike) will have the advantage. Brands that think innovation is a new delivery channel for advertising will not gain advantage.
Brands versus Advertising
Like Alex Nesbitt over at Digital Podcast, I believe Umair is really talking about traditional advertising and not the broader concept of "brands." In a world of the ever-growing haystack Web, I am not sure that I agree that the soft cost of interaction is all that low. We must really commit time and energy to understand why certain products suit our needs or not. Comparing computers? That's almost easy. Comparing soap, cereal, blenders, dishwashers, mattresses, banks - you name it. Not so easy. Not so "cheap."
Alex has it right when he says:
"The social web is way more powerful than traditional advertising based brand building efforts.
Communities have always been central to building brands as positive word of mouth has always been much more powerful than advertising in building brand strength and value. When our friends speak, we listen.
Google's brand has been built without any paid advertising. It has been built by the world's biggest community - the social web.
We've gone from people telling their physical communities about good stuff to global web based communities where strong positive word of mouth spreads virally across the globe at zero cost.
Brands that don't understand the power of the social web will shrink in advantage, those that do can build even stronger brands and more value."
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