Powerful brands aren’t as strong as they used to be

A fragmenting TV advertising environment and increasing national competition make it almost impossible for brands to establish themselves as generic.

The media’s uncritical coverage of last week’s Interbrand “Best Global Brands survey” was unsurprising. But the fact that a magazine like Business Week had been suckered into lending its name to such a useless piece of research was astounding.

How brands like AT&T, Tiffany, Citibank and Starbucks featured on the list escapes me. But that is only a minor point. Americans think that the baseball World Series is global.

The major point about the survey is that it does not deliver what it promises, which is to provide an objective standard of measurement based upon isolating economic, social and cultural factors. It does not because it cannot.

The problem begins with the methodology. According to BusinessWeek, Interbrand, which has conducted this research for a number of years, begins by calculating “what percentage of overall revenues are accounted for by the brand”. Well that’s easy.

Interbrand later “winnow(s) the earnings generated by the brand from the earnings generated by other intangibles. For instance, are people buying Shell gas because of the brand name or because the gas station is conveniently located?” I wish I knew why I bought Shell petrol.

Then, “Interbrand uses market research and interviews with industry executives to sift through those variables.” Ah, so, it is the opinion of the consumers, companies and commentators that puts this value on it. In other words it is people’s opinion of the brand that ultimately decides its monetary value. Well why didn’t you say that in the first place instead of shrouding it in all this pseudo-science?

The relative power of brands cannot be objectively measured. They all come down to opinion, and these are mine, for what they are worth.

What makes a powerful brand is obviously a very important question, especially in the current environment of high brand mortality rates and low brand life expectancy.

Some brands are obviously more powerful than others. One of the reasons for this is that the more powerful brands were launched in a particular historical era.

Kellogg, Wrigley’s, Heinz, Hoover, Coca-Cola, Gillette and Ford were all launched in the UK in the interwar years, but became immensely powerful brands with the advent of commercial TV in the Fifties. These brands were able to grow at a time when there was only one commercial TV station, and access to markets via the media was, though never cheap, simple and effective.

However, the distinguishing mark of these brands is not only that they came to prominence in the “golden age” of television, but the fact that they became true generic brands in their sector.

If you thought cereal, you thought Kellogg, if you thought car, you thought Ford, and if you thought vacuum cleaners you thought Hoover. This ownership of the product/service sector has also been characterised in more recent brand launches such as McDonald’s, which came to “own” the burger sector; Nike, which came to “own” the sports shoes market; Sony, which “owned” the personal stereo market and Microsoft, which came to “own” computer software.

This contradicts the assertion made by Naomi Klein and others, that powerful superbrands have become separated from their product areas. Such brands, where they exist, are incredibly weak.

Some “generic” brands have been very competent at destroying their reputation, by failing to research, innovate and differentiate their brands sufficiently. Marks & Spencer (M&S), for instance, managed to undermine its ownership of women’s clothes retailing through an arrogant refusal to research its core market’s needs, a refusal to accept credit and debit cards for years and a refusal to promote itself. M&S had lost its way so much that by the time it eventually did get around to repairing the damage, it tried to woo back customers to its stores by spending millions of pounds on a TV ad campaign featuring a naked woman with a fat arse running up a hill. Nice one.

However, the fact remains that generic brands, unlike new brands, do have the ability to revive their fortunes. Levi’s for instance had stopped innovating for 15 years and had given up researching its core market. New brands like Diesel managed to get a strong hold on the core youth market. However, Levi’s revival with the Twisted campaign shows just how easy it is for generic brands to revive their fortunes.

New brands that have not become the generic brand in their markets are less valuable and far more vulnerable to closure than established ones. Brands that have launched in recent years, and which have not managed to establish themselves as the generic brand, have to face the problems of a fragmented media environment and competition from powerful retailers, which makes the establishing of brands all but impossible.

In the past, entry into a market was assisted by a uniform mass media – now, because of media fragmentation, entry to market is virtually impossible to achieve in a comprehensive way. The new brands are inherently unstable.

It is surprising therefore that the Interbrand survey includes brands such as AOL, Yahoo! and Amazon.com in its survey.

Interbrand is not alone. The last edition of Superbrands included Lastminute.com, Ask Jeeves, AOL, easyJet.com, Pret A Manger and Goldfish among its number. The same has to be said for other brands such as Dyson, Diesel, Reebok, Vodafone, New Look, Virgin, One 2 One, Egg, Cahoot, Orange and First Direct.

These are all significant brands, but they are not, and are never likely to become, the generic in their sector. They will become increasingly expensive to maintain and are destined to be niche players in the long term.

Sean Brierley is a former deputy editor of Marketing Week and author of the Advertising Handbook

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