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Online brand building - the emperor's new clothes
 
Left Field
 
Left Field

At a US conference on the future of communications a week ago I heard those oft-repeated words that increasingly lead me to froth at the mouth, but generally get heads nodding in autonomic acquiescence: "the internet changes everything".

Surely I can't be the only person to regard this as deluded nonsense - or am I? I do not doubt for a moment the huge impact the internet (in a general sense) has had on the marketing of brands, but it most certainly has not changed everything.

And I don't think I'm being pedantic here - this kind of simplistic mantra is precisely what leads to huge brands like Pepsi abandoning conventional off-line communications in favour of a massive commitment to social networks (the optimistically named 'refresh project'). The extent of the commercial damage this has done to them is only now beginning to become clear.

Some argue that you shouldn't judge social networks by this failure: that this is a failure of execution not of strategy. But, in many ways, Pepsi appears to have been very successful at engaging Pepsi fans - unfortunately it desperately needed to attract Coke drinkers to succeed commercially.

All brands need to do this because their competitors are constantly stealing their users. So Pepsi's campaign to recruit fans ends up looking suspiciously like a loyalty campaign that tries to turn existing users into more loyal ones. We know this doesn't work - anyone who doubts this should read Byron Sharp's recent book, 'How Brand's Grow'.

The mistake is to allow yourself to be hood-winked into believing that suddenly, because of the new capabilities of online, the laws of the market no longer apply. We remain the same human beings, making the same irrational decisions, using the same lazy mental shortcuts. Fundamentally, nothing has changed.

Another fallacy of the on-line era is that eliminating communications 'waste' is a good idea. The notion that technology can identify when a prospect is ripe for purchase and only then seek to persuade them in favour of brand X, denies decades of learning about how brand decisions are made and the value of perceived popular approval in influencing those decisions.

It matters to people that a brand is widely respected - only 'wasteful' mass-market communications can build this kind of saliency. Traditional broadcast channels - particularly TV - turn out to be very good at this, and partly for that reason remain very effective.

But the idolisation of online has also fuelled a much more damaging trend in marketing: the focus on short-term sales - and, at best, this quarter's sales. The most effective brand marketing promotes growth over a two to three year time frame - but anyone targeting immediate sales growth is unlikely to see this. This is not just because they won't be measuring it, but also because the kinds of strategies that are favoured by short-term objectives (those 'buy now' messages) tend to be much less effective over the longer term.

They may generate more impressive immediate effects but over a longer timeframe lose out because they do little to enhance the enduring attractiveness of the brand. This loss manifests itself in terms of volume growth and, more importantly, in terms of value growth - because they don't create the popular esteem that helps to reduce price sensitivity.

Business in general has been too narrowly focussed on volume growth in recent years. This didn't make sense even in an era of healthy economic growth, and it makes much less sense in the current era of low growth. Brands will need to work harder to extract greater revenue from consumers without necessarily selling them greater volume.

The answer, of course, is to develop value-building ideas for brands and then allow the idea to dictate the most appropriate communications channels to use - not vice versa as so often happens when we start to idolise certain channels, which just results in marketing froth.



Subjects: Brands, Digital

06 April 2011 09:07
 

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