Finding a new brand balance
Airbnb is tapping into the power of traditional brand-building tools with its TV campaign, strengthening its reputation following some negative stories about user discrimination on the platform.
Brands matter more in the digital economy. But how you build a brand today has changed. In a partnership project, Longitude Research and Dentsu Aegis Network (DAN) talked to leading marketing and communications experts to determine how they are embracing disruption in the search for enduring brand value. You may agree that marketing of the recent past is unassuming and foreseeable versus now, where everything has morphed, as digital disruption turns the practice on its head. There are three key reasons why brands matter more today:
First, brand value accounts for a significant part of the balance sheets of the world’s top companies. This might be difficult to quantify, but any loss in brand value would therefore have major implications for the valuation of businesses, individually and collectively. This in turn could have a negative impact on the ability of businesses to raise capital as well as realize opportunities for growth and synergy through mergers and acquisitions.
Second, many of today’s consumers crave empathy. This is on top of their other cravings: convenience, prices offered and user experience that digital disruptors give. They want to align themselves with brands that fit their sense of self and reflect their identity. And, in a world of near-perfect competition where platforms have the data, scale and financial muscle to compete and win almost anywhere, competing on emotions like empathy and trust is perhaps the only sustainable source of competitive advantage and differentiation.
Third, the disruptors are catching up by adopting more tried and tested methods. This happens while it could be argued that established companies have a valuable head start over digital disruptors when it comes to building (and rebuilding) trust in brands. Airbnb, for example, is tapping into the power of traditional brand-building tools with its TV campaign, helping to strengthen its reputation for trust following some negative stories about user discrimination on the platform.
The study also revealed an increasing focus on measurable, short-term performance and return on investment (ROI):
Thinking fast — and faster. As people increasingly consume media online and through mobile, advertising technology platforms are a key part of the Chief Marketing Officer’s (CMO’s) marketing strategy, providing a new source of real-time optimization. However, the instantaneous nature of this new landscape has created new complexities and uncertainties. Indeed, it has really speeded up expectations and reactions, good and bad.
Filling the funnel. The focus on the bottom end of the funnel is not wrong. DAN US chief strategy officer Dirk Herbert describes this as developing a “performance engine,” which is great at efficiently harvesting the low-hanging fruit — identifying and converting prospects that already have a propensity for the brand.
Race to the bottom. To operate successfully at the bottom of the funnel, marketers must have the best customer intelligence, the best data analysis, and the ability to react quickly. Some established brands are most vulnerable there because they will struggle to be better at this than the likes of Amazon or Facebook. They need to compete with digital disruptors at the top of the funnel, where the focus is on building emotional engagement with consumers to influence their choice at the point of purchase, especially if those brands start selling their products.
The changing brand-building landscape. The digital economy has delivered marketers a toolkit that offers greater insight into consumer behavior, while digital disruptors are discovering that the pillars of traditional brand-building — beliefs, purpose, behavior, reputation, trust and emotion — are still very much in place. Marketing continues to work. It just works differently from before.
Getting personal. Gone are the days when brands could secure a voice on all the prime communication channels. Now, technology has lowered the barriers to entry and those channels have been atomized. Faced with so much content across so many channels, consumers are becoming increasingly discerning about what they choose to watch or read. Alarmingly, for brands that spend millions on advertising, the use of ad-blocking software is on the rise. When marketers earn consumers’ attention, it’s no longer by approaching them as a passive, unconditionally receptive audience. Rather than purely pushing messages, marketers are now in a two-way conversation with consumers that is often initiated — and largely controlled — by the consumer.
Experience is all. In the past, brand value was shaped by what brands said (communications), whereas today it is increasingly shaped by what brands do and how they act (customer experience). In a recent Accenture study, 41 percent of consumers said they switched from one brand to another because the old brand didn’t take the time to learn about them and reflect that in its interactions with them. The digital economy has made this switching process easier thanks to an increased choice of product and service providers, access to better information about these providers and lower costs of switching.
Make marketing matter. When Nike chose American football player Colin Kaepernick as the face of its latest “Just Do It” campaign, online sales jumped 31 percent in response and its share price hit a record high of $83.90. Admittedly, the positive numbers were a spike — the share price was down to around $75 at the time of writing (well below the pre-campaign level) — and commentators have been quick to remind the public of Nike’s ultimate profit motive. But what Nike’s experience tells you is that consumers, and investors, will buy into a company, or at least a campaign, that stands for something beyond the product alone.
This attitude is increasingly evident among younger consumers. According to research from global public relations firm MSL Group, 83 percent of millennials believe businesses should be involved in societal issues, while 69 percent want businesses to make it easier for consumers to get involved in societal issues. And in the Dentsu Aegis CMO Survey 2018, nearly 70 percent of CMOs say connecting their brand proposition to positive societal impact is an important way to engage with consumers over the next two to three years.
There are several strategic questions that brands can use to gauge their readiness to take advantage of the opportunities offered by the changing marketing landscape:
Who are your brand champions? While CMOs need to own responsibility for brand building, CEOs should champion the brand, internally and externally. The role the CEO plays will depend on the company. Within single-brand companies, where the brand is the company and the company is the brand, the CEO’s involvement will be essential. In multiple-brand companies, the CEO will need to be involved in championing the corporate brand but may take a smaller role in building product brands. Either way, the CEO’s support will help to win long-term investment for brand building. In the digital economy, employees and consumers also have a role to play in championing a brand. Ashley George goes so far as to say responsibility for long-term brand building doesn’t lie solely with the CMO or CEO. “It lies in the social amplification of the employees and consumers themselves — how they rave, represent and talk about the brand.”
Is your C-suite on board with investment in brand building? As the marketing function has become more complex, it has broken down into separate teams that may include investor relations, corporate social responsibility, public affairs and corporate communications. As marketers, you have increasingly found yourselves focusing on performance marketing, while responsibility for building the brand may straddle many different parts of the business.
Is your business model built around the consumer? The digital economy is largely demand-led. Consumers themselves now initiate most contact with brands, and their expectations of those brands are also high. Within this context, building an innovative brand requires businesses to reorganize around the consumer, not just push messages to them. That requires transformation across all elements of culture, organization and technology.
Are you measuring what matters? When you understand what matters to customers and you have the metrics dashboard in place that tells you how well you are serving your customers, you can start to identify what will drive the greatest impact for them, like removing an existing pain point or delivering above and beyond the customer’s expectation.
Building a brand, as the study espouses, is a fluid and iterative process. The report is part of an ongoing program of research into brand value in the digital economy. The proponents of the research hope it will encourage business leaders to pause for thought and rediscover the value of strong brands. All businesses can unlock new value in their brands, but it will take different keys depending on their specific context. Embarking on this journey will help businesses embrace the potential of disruption and find a new brand balance.
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