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A lesson in unintended consequences
Judie Lannon, Editor, Market Leader
Judie Lannon

Not being an economist by trade but, like everyone these days, forced to absorb at least a superficial grasp of financial ideas, I've come to see that Shareholder Value theory seems to have gone badly wrong. So when Hugh Davidson asked if I'd like a piece for Market Leader) summing up his thesis that Shareholder Value is bad for marketing, I thought, here's my chance.

Fortunately Hugh is a clear and succinct writer as well as an eminent marketer. But it's obvious isn't it? Shareholders, usually in the form of huge pension funds, are wholly disconnected from the company and while they may, indeed, provide the money, it's the employees and customers who create the value. (I've always like Tim Ambler's crack that the trouble with finance directors is that they spend far too much time counting their money and far too little trying to understand where it comes from.) It's an idea whose time has finally come. Abstract ideas are hard to illustrate but Simon Cooper's design showing a Janus head representing the CEO smiling at clone-like shareholders and frowning at normal looking employees and customers captures the (wrong) order of priorities perfectly.

Still on the subject of brands and intangible value is the startling analysis by John Gerzema and Edward Lebar, authors of 'The Brand Bubble: the looming crisis in brand value'. Just as Wall St and the City have fallen in love with brands, hyping their value and ramping up prices, consumers appear to be falling out of love with them. With the exception of stars like Apple, Google, BMW and many others, shedloads of data from both sides of the Atlantic show consumers more critical, less loyal and less trusting. Of brands. Is it any wonder? Too many brands, too samey, too badly positioned, too badly advertised. A business problem, not just a marketing problem.

The book itself is rather a curate's egg. The first part, the origin of this analysis, is intriguing and well documented. But the second half is a rather ponderous description of Y&R's philosophy of brand differentiation. Simon Silvester's piece from the same data in an earlier Market Leader was much snappier and more creative.

Subjects: Brands, Consumers

28 September 2009 16:09

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