I absolutely love the conversation that Umair has started over at his new HBS blog on the Economics of Brands. Umair and I have had numerous discussions on this topic as we are both pretty passionate about the subject and working on the challenges and issues from related spaces. He even mentions P&G in the discussion - [perhaps a veiled allusion to the Social Media Lab I am developing with P&G...;) ]
What I love about this discussion is that it puts the topic in logical economic terms. At the core of why brands do not control the message is the fact that they no longer control the medium - as the world flattens and the cost of communication disintegrates it is indeed the customer who can increasingly compare notes and attitudes and create the value.
As Umair points out:
In fact, when interaction is cheap, the very economic rationale for orthodox brands actually begins to implode: information about expected costs and benefits doesn’t have to be compressed into logos, slogans, ad-spots or column-inches – instead, consumers can debate and discuss expected costs and benefits in incredibly rich detail.
I love to quote Scott Cook on this one:
“A brand is no longer what we tell the consumer it is - it is what consumers tell each other it is.”
I would even argue that was to a certain degree - always the case - it is just that today we are all connected - you can't snow me anymore. This is SO much bigger than mere branding - it lies at the core of your business model.
So what are the new brand building models? I think many of them have yet to be worked out but I know it is NOT traditional advertising. I also know that what it DOES involve is empowering your customers, listening to them and putting the aggregated feedback into action.
The larger questions of scale and financial models that work are the tough nuts to crack,the large advertising industry with its vested interests and deeply entrenched silos is gonna need some prying apart.
What is the culture of your company? [copy paste wrong window]
Deb:
This discussion is the central point behind the role of experience in today's corporate world. It's no longer about what you say, it's about what you do. And while there have always been examples out there for people to see (I mean, Disney changed the entire amusement industry with his parks by creating a compelling, authentic and relevant experience), it's taken a long time for the economic elements to come into play. I mean, Joe Pine & Jim Gilmore kicked off the economic impact back in '99 with "The Experience Economy."
But I will disagree somewhat with Scott Cook. After all, the discussion starts with what the brand says it is. The consumer might tell you if you're a good product or bad, but do they really define the brand? I mean, if consumers thought that P&G should be in the car business, would that make P&G become an auto manufacturer?
But, where I also think many people miss the mark is that all of the "traditional" channels and any channels we create in the future will remain important, as long as you're delivering a consistent and exceptional experience. It's not enough to be OK as a brand today. You might survive, but you won't thrive.
So the new brand building models are exactly as they've always been. Make a great product, tell a great story. Use the channels that are appropriate for who you are and who your audience is. Remember the neighborhood butcher shop of long ago thrived or failed on these principals. We've worked on brand projects where the audience was 55+ and lower income and I'm telling you, that audience -- and it's a big audience -- isn't twittering or playing on social networks. There's still value in "old" media for that audience!
The advertising industry faces problems because like so many other industries (think record labels), we've become focused on specific distribution channels and we've forgotten that it's about telling great stories and delivering great experiences. Too many times we get enamored by a tactic without knowing how it becomes a part of the brand story. That's why so many companies have failed at things like blogs and Second Life. Not because those channels don't work, but because they've been used as a tactics.
OK, probably going on to long! Just my probably 10 cents! Holler when you're out eat again!
Posted by: David Polinchock | March 07, 2008 at 08:03 PM
Deb:
This discussion is the central point behind the role of experience in today's corporate world. It's no longer about what you say, it's about what you do. And while there have always been examples out there for people to see (I mean, Disney changed the entire amusement industry with his parks by creating a compelling, authentic and relevant experience), it's taken a long time for the economic elements to come into play. I mean, Joe Pine & Jim Gilmore kicked off the economic impact back in '99 with "The Experience Economy."
But I will disagree somewhat with Scott Cook. After all, the discussion starts with what the brand says it is. The consumer might tell you if you're a good product or bad, but do they really define the brand? I mean, if consumers thought that P&G should be in the car business, would that make P&G become an auto manufacturer?
But, where I also think many people miss the mark is that all of the "traditional" channels and any channels we create in the future will remain important, as long as you're delivering a consistent and exceptional experience. It's not enough to be OK as a brand today. You might survive, but you won't thrive.
So the new brand building models are exactly as they've always been. Make a great product, tell a great story. Use the channels that are appropriate for who you are and who your audience is. Remember the neighborhood butcher shop of long ago thrived or failed on these principals. We've worked on brand projects where the audience was 55+ and lower income and I'm telling you, that audience -- and it's a big audience -- isn't twittering or playing on social networks. There's still value in "old" media for that audience!
The advertising industry faces problems because like so many other industries (think record labels), we've become focused on specific distribution channels and we've forgotten that it's about telling great stories and delivering great experiences. Too many times we get enamored by a tactic without knowing how it becomes a part of the brand story. That's why so many companies have failed at things like blogs and Second Life. Not because those channels don't work, but because they've been used as a tactics.
OK, probably going on to long! Just my probably 10 cents! Holler when you're out eat again!
Posted by: David Polinchock | March 07, 2008 at 08:03 PM
Deb:
Can I agree with you more strongly than you agreed with yourself? ;) I don't think you need any qualifiers on the statement that a brand has always been defined by the consumer. The fact that advertisers used to feel more in control of the conversation was just because of their a) heavy presence in the information distribution channel (as you mentioned), and b) the old model's single direction-ness (is that a word?). But, most importantly, just cause corporations couldn't hear consumers doesn't mean they weren't talking.
Our answer to one component of the new branding models is here: here. Love to get your feedback.
Posted by: Hillel | March 09, 2008 at 09:35 PM