Monthly Archives: February 2005

What is a Brand? Redux

I’m humbled. Exactly a week after pondering the slippery meaning of the word "brand", I picked up a copy of Marketing Management–a peer-reviewed journal put out by the American Marketing Association, and found Heidi Schultz’s clear, concise and imminently practical definition of the brand concept. In two pages she manages to nail down the scope of the word, clear the confusion of "brand ownership" between company and consumer, and take the marketing profession to task for failing to wisely discern the true meaning of customer-centricity.

The article is well worth the cost of the magazine–but getting a copy isn’t easy. The AMA site provides the archives online, but while they let you register for free (with lots of personal information), they don’t tell you until after you’re registered that you need to have a subscription. So, I’m going to try and find a way to get a copy to post without running afoul of the AMA.

The crux of Heidi’s argument is that a brand should be understood as a fairly concrete thing–comprising names, terms, signs, symbols, designs, or combinations of these things, intended to identify the goods and services of one seller and differentiate them from another. There are clear laws that govern the intellectual property rights of a brand owner, bestowing upon the owner the right to sell and license a brand, and protecting those rights against infringement.

Heidi argues that this concrete definition of a brand should not be confused with the associations a consumer attaches to the brand based on their consumer experience. She distinguishes that concept as "brand image", including all the intangibles associated with it: what the brand promises, what it represents, how it makes consumers feel, etc. Clearly a company has an interest in influencing the brand image, but they can’t control it. They can, however, control the brand–their tangible, protected property–and they are empowered by the law to do so.

Her argument takes the concept of brand out of the realm of fuzzy logic and, in so doing, exposes what she sees is a resistance on the part of marketers to submit to this level of clarity because of the accountability such clarity brings:

"Why subject brand budgets to such scrutiny when it’s easier to obscure the issue and state that the brand belongs to the customer and we are simply the stewards? Isn’t it just easier to say we want to measure brand success in communication terms, such as customer awareness, perceptions, and preference–not in actual financial value creation?"

I wish the rest of the Marketing Management magazine were as clear and incisive as this article. Unfortunately, a companion piece on the death of the 4 Ps seems rooted in exactly the kind of muddled marketing Ms. Schultz is arguing against. I’ll be taking that on next week in Business Week.

What Exactly Is A Brand?

I’ve been writing in my column for Business Week about the changing nature of business valuation and its impact on the practice of marketing. In my discussions with Jonathan Knowles from Brand Finance, we got into an interesting sidetrack on the slippery meanings of "brand".

The branding meme has had a major revival over the past few years, due in part to the rise of the Internet and the entirely new medium in which brands can be built. There have been endless pontifications on the importance of brands, the meaning of brands, the value of brands. Some of it is enlightening; too much of it is snake oil. Everyone needs a brand. Everyone is a brand. Brand… Is.

The whole dialog is as close as marketers come to a philosophy about their work–the meaning of marketing as an endeavor–and I think they get a little light headed. Yes, marketing has a fascinating psycho-social component, but in the end, marketers are paid to create value. What they forget is that value in business has a bottom-line metric–ie: I’m glad you find your work culturally significant, but what are you doing for my cashflow?

What I appreciate about Knowles is that he is both insightful and grounded in pragmatics. Knowles asserts that the goal of a brand is to create more successful businesses. Somehow I think that point is too often missed in actual practice. Specfically, he says, the creation of customer value is what gives brands the opportunity to create financial value–or what marketers call the price premium that well-branded products can command. But what does that tell us about what the word "brand" really means?

Historically, marketers have often defined brand as a promise of quality–something created by a company and handed over to the customer. Advertisers came along and tweaked that idea, calling brand a set of associations in the mind of the consumer–something owned by the consumer and shaped through manipulation. When the Internet took off, we started hearing about brand as an experience, something more than just a promise or a set of associations, something more alive. But when you push on any one of these concepts they get a little squishy.

Okay, brand is a promise, an association, an experience, a reputation even. But how do you invest a million dollars in a promise? How do you measure the equity of an experience? The truth is, you’re investing in something that implies a promise, or builds a reputation, and all of those things–whether you’re talking about customer service, or equipment, or intellectual property–those things have their own names; you wouldn’t call them brands. And, as Knowles is showing in his work on brand valuation, you don’t directly measure a brand as much as you measure the effects of a brand–how much you invest in activities that build brand, for example, or how much of a premium people are willing to pay. The actual thing itself, brand, is still slipping out of our grasp.

If you start with the earliest meanings of the concept, its advent is the notion of ownership. "I own this." But even here there are some interesting shadings. Why be so interested in asserting ownership? It could be a statement of territory, "this is mine", or of creation; "I made this", or even of responsibility "I am accountable for this". In the simplest terms, when you go back to cowboys burning a mark on their cattle, it’s really a clerical purpose. When the big cattle drives inevitibly mixed together, you had to be able to tell which animals were yours.

The point is that the brand is not the creator, and it is not the created. It’s a tangible symbol of the relationship between the creator and the created. Okay, that’s easy enough, if a little pedantic. What’s interesting to me is how the meaning evolves once you move away from the utility of the concept to the ripples of effect that mark any transaction between a creator and a consumer by way of an object. Now it is the experience of the consumer that adds a new layer of meaning to the concept of brand. In a sense, the product is now a proxy for the relationship between the creator and the consumer–"this product is the distillation of my value to you"–and the brand is… What?

Well, the product isn’t the brand, the creator isn’t the brand, and the brand is no longer just a tangible symbol of the relationship between the creator and the created, it’s now a "container" for the experience of the consumer. And this is pretty much where I sit at this point. This is a really clunky way to say it, and I need to work on this, but to me, a brand is a conceptual container that emanates, planned or not, from the creation of something of value that is transferred from its creator to a consumer. The container is shaped by the creator, but the contents of the container are created by the consumer. And at the end of the day, the value of the container is a function of both its shape–it’s ability to invite, suggest, contain and label the experience of the consumer, especially as unique from other experiences–and its contents, which is the experiences and associations consumers actually accrue to the container. The container must be created in a way to maximize its potential contents, as well as the ability to transfer contents from one consumer to other–ie: providing a container that’s already partially filled.

Is this a penetrating glimpse into the mundane, or does it have any incisive value? You tell me. I’ll say one thing, I wish I could take this grammar school class today. It might resolve a lot of my questions.

Customer Data Stolen

Hackers broke into ChoicePoint, a company that aggregates consumer data and resells it to the government and businesses, and stole thousands of private records with sensitive data like credit records and Social Security numbers. About 35,000 customers in California have been notified that their records were compromised.

The story is scary enough on its face–enough to make any Californian monitor their credit reports even if they haven’t been notified. But what is mind-boggling is the deliberate mis- and dis-information that ChoicePoint is putting out about the whole debacle.

In the first place, ChoicePoint, which aggregates records all across the U.S., is trying to claim that the problem is limited to California. What some of the articles covering this story fail to mention is that the only reason Californians were notified, is that there is a state law requiring companies to notify customers whose computerized data has been compromised. So according to ChoicePoint, the problem is limited to California, simply because that’s the only state where they actually have to admit they left the door open to hackers. I’m sure the hackers, while pillaging the database, were doing geographic selects on California. Don’t worry if you live in Ohio. They don’ t have to report there, so there’s no problem. Trust me.

Second, a spokesperson for ChoicePoint claims they’re not even really sure that any data was compromised. That’s comforting. You mean, you’re collecting sensitive data on hundreds of thousands of customers, and you don’t even know when those records have been hacked? So, um, if you can’t tell whether data has *actually* been compromised, how are you able to say the problem is limited to California?

I’m one of those people who believes that sharing consumer information is a necessary part of an information economy. I’m also one of those people who believes regulation is not the best first line of defense. But when I see companies like ChoicePoint, I really start to question my judgement. If it weren’t for a California law requiring them to come clean or face open-ended damages for their security lapse, no consumers would even know they were at risk for having their identity stolen.

But this is the really scary part. On the day they are being flogged for failing to secure the crown jewels, on the day they are openly, shall we say, equivocating about the scope of the problem… wait for it… THEIR STOCK IS CLIMBING.

Why Marketonomy?

Main Entry: -nomy
Etymology: Middle English -nomie, from Old French, from Latin -nomia, from Greek, from nomos
: system of laws governing or sum of knowledge regarding a (specified) field <agronomy>

We live in the age of information. We call ourselves knowledge workers no less. And yet we are surprisingly ignorant. Then again, maybe it’s not so surprising. We’ve been swept away in such a flood of information that we no longer have any grounding in principles. Intelligence now means "new information", or "insider information", but it rarely means "good information". What, after all, is "good information"? How can you tell?

The answer today is that you bob on the surface of the flood: when enough of a current is moving in one direction, you go in that direction too. In our society, the earlier you point in the "right direction", the smarter you are. So, "good information" is news that gives you a jump on moving where everyone else is bound to go. The trouble is, the current on the surface often moves in one direction while the tide is moving in another. If you don’t know how to read the deeper water, if you don’t have the tools and the skills to move against the current, you’re bound to wind up lost. Nowhere have I seen those tools and skills more lacking than in my own profession.

I won’t mince words. I think the state of the marketing profession today is pathetic. In what should be one of the most exciting ages of a century-long evolution of marketing as a discipline, the profession is struggling for crediblity. While technologies like databases, networks and the internet have revolutionized marketing channels, too many marketers still seem awed and perplexed. While business operations and finance have focused on quality and process improvements for decades, marketers treat accountability initiatives as some new affront to creative freedom. Instead of trying to understand what’s shaping the business environment, marketers adopt the language of the latest trend, like Marketing ROI, while simultaneously disparaging those who demand accountability for failing to "get" what marketing is really about.

Marketing needs new direction. If there’s any way I can contribute, it’s by sparking a dialog for rediscovering and reinventing the fundamentals. That is absurdly ambitious, especially in a world that’s already overflowing with gurus. So instead of trying to be another guru–always angling to have a unique and authoritative spin on the latest trend–my goal is only to explore the relevance of marketing as thoroughly, as publicly and as honestly as possible. What is marketing’s real contribution to the value of a business? How can it be measured and improved? What skills and what tools do marketers need to be effective in today’s business environment? How should marketing be judged as a profession? How should it be scrutinized? In short, how can the practice of marketing be elevated to produce the value to both businesses and customers that is its responsibility to provide?

That is the absurd ambition of Marketonomy: to dig through the mud and find the solid foundations of this profession. Like any blog, it’ll be a running dialog and commentary, sometimes boring and pedantic but hopefully, more often, brilliant. That will depend on the quality of conversation and debate, so please don’t hesitate to add your own ideas and your own voice.

In the next few days, you’ll find some broken links and unfinished pages if you poke around. I’m just getting ramped up, so please excuse the dust.

Microsoft Valentine

I just spent 50 hours bowing down to Microsoft’s Internet Explorer. Why? Because there’s an obscure bug in IE 6.0 that makes cascading style sheets blow up if you don’t sprinkle salt over your left shoulder, spin around three times, and sing, "I Love Bill, I really, really do."

I couldn’t figure out why a site I was building kept "disappearing" content whenever you adjusted the size of the IE browser window. Entire blocks of content would just disappear. Not in any other browser, just IE. I went on a wild goose chase over the course of two weeks, tracking down possible culprits–and reminding myself in the process why I don’t program for a living. I don’t know who the patron saint is of programming, but you could probably recognize him by the missing tufts of hair and the vice hold he’s got on a cigarette.

The bug was what is known in CSS circles as the floating div bug. Essentially, if you have an element on your page that floats, it can’t touch the edge of the container it’s in or the page will blow up. I know, that’s obscure. Think of it like this: Don’t touch the crack or you’ll break your mother’s back. In the world of Internet Explorer, that’s actually a real threat.

I don’t know about you, but I switched to Firefox and haven’t looked back. If you haven’t, please, please switch. If everyone switches away from IE, Microsoft will have to update it with a quality initiative, and I won’t have to bow down anymore to a browser that is no longer worth the code it’s written in. </rant>

Silent Green

This is weird. I was scanning radio stations while stuck in traffic, and heard just the tail end of a call-in conversation about the NFL and some environmental project they supposedly undertook during the Super Bowl. All I heard was the caller claim that the NFL had planted a forest to offset the amount of CO2 it was estimated the Super Bowl activities would produce. To my ears that sounded about as likely as a NASCAR fundraiser to save spotted owls. But when I got home I looked it up online, and found… nothing.

I Googled "Super Bowl CO2", "Super Bowl trees", "NFL environment", and came up with lots of rat holes but no good hits. I searched the Super Bowl site, the NFL site, and then through some permutation of search terms on Google I came up with a Sierra Club link that referenced the planting of 1,000 trees by the city of Jacksonville. So it wasn’t the NFL after all. But wait, after searching on "1,000 trees" and "Superbowl", I finally found my way to a local Jacksonville site with the lowdown on the event.

Not only was the NFL involved, it was the NFL Environmental Program. And it gets better. This environmental project, officially titled the Super Bowl XXXIX Carbon Neutral initiative, saw the NFL teaming up "with climate and biological scientists across the country to determine the amount of greenhouse gas produced by Super Bowl events". To offset the output of gas, they worked with local volunteers to plant 1,000 trees.

This isn’t a joke. This was a real event, so quiet that you have to jump through endless search engine hoops to find any mention of it, unless you know exactly where to look. Not only does no mention appear on the NFL site, they don’t even have a reference to an "NFL Environmental Program".

Why would the NFL, no stranger to the art of promotion, take on an activity that shows deep community values, and offer not so much as a press release about it? What kind of an impact would it have had if one of those crappy 30-second commercials had been replaced with a simple clip of NFL-backed volunteers planting trees to make the Super Bowl a little greener? Don’t get me wrong–if the NFL is fulfilling its values with actions instead of words, that’s admirable. But unless I’m missing something, there’s a more likely scenario, and it’s a disturbing one.

Maybe the NFL has determined that being green isn’t good for its brand.

Keeping Up With Demand

Every time I’m tempted to short Google’s stock, they do something that impresses me.  I’m not talking about their new map, which is cool technology, or their library project, which is certainly ambitious. I’m talking about the kind of stuff that’s happening in the bowels of the company that you don’t hear about in the news. Management stuff. The stuff that actually helps a company generate revenue.

A lot of my clients are involved in some level of search engine positioning. 80% of all Web traffic begins at a search engine. If your company appears on the first page of results for a search phrase relevant to your business, it can drive your sales through the roof. But keeping your company’s raw listing prominently ranked is a big investment in time and money.

Not too long ago, Google added paid search listings. The idea is that you buy the rights to certain key phrases in an auction scheme. When those key words are searched, you get a small advertisment listed on the results page, guaranteeing that you’ll serve up an impression without all the hassle of SEO. Without getting into the ROI comparison between paid listings and raw rankings, this was a great move for Google. They created an economy around search engine results–one that nets them a lot of revenue. But there was a problem.

Google’s AdWords were so popular that demand skyrocketed (I wonder-how much of the demand had to do with eliminating the confusion of SEO). And what happens when demand goes through the roof? So does the price. For some really popular search phrases, you could spend $1, $10, even $20 or more for *every click*, driving the cost-per-lead up to the point where many companies started to curb their enthusiasm–not to mention pop a few tums over the notion of competitors or cynical customers clicking their ads just to drill them for a few bucks. But that’s just the dynamics of a rapidly evolving market. The real problem was something else.

One of my colleagues is the VP of Marketing at a mid-size retail software company that sells their product online. As you can imagine, driving Web traffic has an immediate impact on their sales revenue, so they keep pretty current on SEO and paid search. But a few months back, when she called Google to place a $30,000 order for paid search, she got the cold shoulder. No one would return her phone calls. It seems that demand was so high, as well as orders, that my colleague wasn’t a big enough fish for Google to bother with. Her frustration made me start wondering if they were growing too fast. Hearing a customer with 30k to drop saying: "They won’t take my money," doesn’t sound very good to an investor.

But today I got a phone call from Google. A sales rep in New York saw Cymbic online, checked our search rankings for various phrases and found us lacking, and called to offer a helpful program to improve our performance. For my company, search engines aren’t the best use of money. We have a highly targeted clientele that we reach directly; I really don’t need another RFP from Qatar, or Poland, or India. But I was impressed because obviously Google is taking the pulse of its operations and making adjustments. That may not be the basis for a $200 stock valuation, but it says a lot to me about the health of the company. 

Scare Tactics

I consider myself fairly balanced on privacy issues. I keep my firewall on stealth mode; I register with a fake name on sites that I don’t want spamming me; I even take the time to keep up with the opt-out policies of my credit card companies. But I willingly disclose personal information to a company I trust enough to
do business with, because I understand there is a reasonable potential that such information will
improve the products and services available to me.

There’s good reason to be careful about who gets hold of your private information, but to hear the ACLU tell it, Big Business and Big Government are joining forces to harrass, embarrass and terrorize you with all the dirty details of your daily life. Check out this campaign posted on the ACLU Web site. Make sure you watch carefully. That’s right, according to the ACLU, the brave new world of eliminated privacy means that the pizza joint down the street will know as much about you as the FBI. Why? Because businesses are part of the evil conspiracy connected to "The System", of course.

It’s not that I expect the ACLU to be balanced, but doesn’t anyone there have the IQ to understand that going over the top on the scare tactics eliminates their credibility? There are serious issues regarding privacy and  access to personal information–issues I’m interested in as a consumer and a marketer–but this is ridiculous. And ironic. They’re utilizing the same tactics of fear and misinformation they claim to be fighting–they’re just not doing it well. 

Wormhole Superbowl

What’s more pathetic: 

  1. The fact that watching the Superbowl primarily for the ads has lost its irony?
  2. The fact that more Monday morning quarterbacking focuses on the ad industry than the teams that played the game?
  3. The fact that the ad that "won" the Superbowl was itself an ironic analysis of Superbowl advertising?

It’s a wormhole of self-reference. It’s like Zsa Zsa Gabor being famous for being famous. We’re running on fumes here.

The only place to go next is to have the Superbowl feature NFL players acting as football players playing in the real Superbowl. Or maybe "working at" playing in the Superbowl, like some kind of reality TV show. Someone call Mark Burnett.