One obvious example is Open Source software. This transcends the subject of branding - but touches it as well.

Umair,

First...I admire your work.

However, I disagree with your definition of a brand -- it's a bit naive and doesn't reflect reality. Instead, I would pose this definition: "A brand is what exists in the minds of ourselves, customers and other stakeholders. It’s the aggregate of associations that people have about product and organization. Branding is the aggregate of actions that signal these associations. The result over the long haul is reputation and equity."

That said, I do agree with your point about "cheap interaction" but would simplify the concept this way: In a digitally connected world where truth and experience travels fast and fierce, brands tend to be defined more by the very experiences stakeholders have with them. In such a world, successful branding becomes an infatuation with the reputation that actual experiences create.

The truth is that brands are more important than ever before, but the practice of branding now has less to do with promoting an image of what you'd like the brand to be, versus acknowledging that product and service experiences manifest as the brand. Branding is the result of the total experiences associated with product or service, so you better manage those experiences well!

Cheers,
Max

Word of mouth sparked by unexpected gestures, killer (helpful) applications, listening!, and good will is quickly replacing the "pound-the-logos-down-the-throat-of-the-lemmings" approach big ugly corps have been using for decades. The bigger they are....

Brands and a brand identity have all become relative. The smartest brand strategists know how to make a brand sizzle, relevant...In today's Web-based society, getting your brand out there takes more than hiring a firm to make it happen, it takes hiring strategic minds, who know how to position a brand - successfully, effortlessly - in a matter similar to good ole' fashioned word-of-mouth marketing...
As a trend theorists, I'm always looking for the next, hot way to get out a message. Smell-a-vision or smell-a-net may be the next big thing...But, who knows...

I agree with your argument, but do you really mean that brand advantage is shrinking as the title of your post states - or do you mean that advertising as a mechanism for building brands is becoming seriously disadvantaged when compared to the power of the social web?

Brands remain powerful sources of competitive advantage - but traditional advertising as we have known it is being destroyed and if it is not reinvented as something that delivers relevance and value to the conversation it will be a be obsolete.

It seems to me that by not advertising, and (most importantly) working extremely well for a wide variety of consumers, Google frees itself from committing to a single "brand promise".

Then, by staying, um, "dynamically inert" (inclusive?), Google is able to maintain huge brand equity with a hugely wide audience.

"Google" can mean anything to anyone...

So, is deliberately making a specific "brand promise" inherently exclusionary? It feels like it, after thinking about Umair's post.

Anyways, across all industries, I think the way that this plays out is that investing in quality and research beats investing in marketing. (thankfully...)

"The Looming Brand Meritocracy" is another way of putting it, I suppose...

At least, that's how it feels like in the music/media business...but I see it in others (electronics, cars).

"How do you think cheap interaction affects other sources of advantage, like scale and relationships?"

- This may be obvious, but in my experience cheap interaction makes it easier to make business connections...as long as you're transparent and on your game.

Google's pre-eminence is surely more to do with providing a product/service that worked better and easier than all the competition in a space that was about to experience meteoric growth rather than anything else. Insinuating yourself into the DNA of a user experience by that method will always be more effective than trying to imprint yourself tattoo-like via "branding".

Umair,

Thanks. This should be a fun path. On first read, I the hairs on the back of neck stood up and I wanted to shout, "Watch out! You're confusing Branding with Advertising." But then I decided to shut the hell up and wait to see where this leads. Just know that I'm ready to pounce on that one. Oh, and for a minute there, it felt like your logic was suggesting that because they don't advertise as you are defining it, Google is not branding.

Looking forward to more.

S

P.S. -- I forgot, I wanted to comend you on the closing line of your video clip. Amen!

I disagree with regards to Google. By default, the most popular search engine on the Internet will be a top brand. As long as they serve as the primary gateway for all that "cheap, ubiquitous", interaction they will be a top brand.

Think back to the days of "expensive, isolated" interaction at 1200 baud on Darpa-Net or BBSes. The "brand kings" in those communities were the Fido-net nexuses. The same was true of AOL & Compuserve in the early dail-up era. If you limit the scope of your thesis to the gateway providers in each connected age, the theory works, but its scope is far too limited.

This reminds me of the Taniyama-Shimura conjecture in proving Fermat. By itself, it's too specialized a hypothesis to be substantial, but it could perhaps serve as a supporting role in the scope of a larger analysis.

I think the key to your argument is the word "TRADITIONAL".

Traditional branding
Traditional advertising

is undergoing a seismic change. Everything has changed since digital except how advertising agencies build brands.

Building networked brands and finding new ways to build equities that can be demonstrated vs. sizzle (the word sizzle needs to be stricken from brand vocabulary) will become the nucleus.

Brands create customers &
Customers create brands...

Operationalizing it across the organization will become the proof.

Look forward to reading your next piece bc the last time you spoke about brand on bubblegeneration I disagreed with you.

:)

Great website. I just don't have much to say lately. So it goes. I've just been hanging out doing nothing. I guess it doesn't bother me. Listen, there’s more. Lots more.
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Hey Umair

For a business student in Pakistan, a very informative reading i must say...
looking forward to your next article

Hey Umair

For a business student in Pakistan, a very informative reading i must say...
looking forward to your next article

I like your "cheap, ubiquitous interactions" concept because it locates brand interactions in the demotic ferment where brands can grow, mutate and evolve. I'm not sure, though, if it's just these interactions that are pushing aside old brand approaches. We're in an age of new brand models, and new customer models. Google is a revolutionary brand because it delivers revolutionary new brand value, and because it creates a new customer that conventional brand approaches can't reach---as other commenters have noted.

As I see it, we're on the verge of an epic transition in brand models: from the conventional media model of brands to a new model of brands as customer enablers. The old model uses media saturation and persuasion techniques to influence customer behavior. The new model teams with customers to discover and create new realms of mutual value. Very different indeed!

The perspective I use is that brands are now entering phase three of a three part arc: from mark, to media, to means. Brands originated as marks: symbols of provenance and authenticity burnt into casks and hides. In the industrial age they became mostly media artifacts, the classic brands of advertising, owing much of their power to asymmetric information flow. That era is ending. Brands are now (viz. Google) emerging as means, i.e., as direct enablers that allow customers to be more and to do more along creative and proactive dimensions. Brands as enablers are extremely rich in potential customer interactions---assuming that a company has a clear vision of the (whole) customer it intends to create.

The media era of brands was a time of top-down brand models and brand approaches, geared to a definite customer model. They assumed legions of childlike, passive "consumers" willing to be "shaped" by streams of messaging. Hence an age of brands-as-communications: promises, symbols, stories, myths, illusions, make-believe, cartoon characters, etc. In 2008, though, it's doubtful how much longer brands can exist as a media layer. In the digital world, a brand (like Google) delivers immediate results that customers can use. One could argue that it's the media model of brands that's finished, being replaced by an "immediate" brand model closer to a set of personal brand applications. Rather than existing as media tropes in a media layer, these new brands will be social connectors, opportunity creators and value drivers in the palms and pockets and bones of customers. As "enablers," they thrive in an era of cheap, ubiquitous interactions. And they invoke a proactive customer model that stands to add value back to the brand.

Ad agencies themselves are due for drastic change as the old media model of brands winds down. They'll have to reinvent themselves as innovation agencies, helping companies design and build creative and collaborative brands that carry customers forward. Or, they can watch from the sidelines as Google---or someone else---does this for them.

Umair, first off I am really enjoying this series. A very interesting read and some very insightful comments as well. I particularly found a few key points very important to highlight; experience is as powerful, if not more, than any means of traditional branding or advertising. Secondly, Brian points out that brands should be enablers and a key facet of this is knowing the user. I think this is were ethnography and design strategy play a key role. Branding to date has been tremendously top-down, whereas players like google approach things much more bottom up. google labs is a great case study, as their "products" become more popular they develop them further, responding to the user. this is a key aspect of their success in my opinion.

Interaction = Links. And the marginal cost of creating those links has fallen though the floor. The history of Content Management Systems is a good way to view this because they are, among other things, link machines. In 2000, Broadvision/Vignette CMS were one way to get online but at a cost of $1m+ to license and integrate - they were strictly for MegaCorps. In the following 5 years mini-CMS appeared in the shape of blogs - at no cost. Which meant the world of LinkLove was a realistic option for individuals. Traditional branding techniques have never recovered from this development. Whereas Google, the biggest link-machine in the world, created a new SuperBrand on the back of the changes.

I like the article, he distills quite nicely what is happening and draws out some key questions.

I think I knew the points about Google in the back of my mind, but to read them in context really brought it home - pretty amazing what they have done, and really interesting to watch how it evolves.

The video linked on the page however, I found inane, a touch 1999 and slightly confused and contradictory.

We start with a brand as a source of advantage and an idea is 'kind of' in decay, we then move to the idea of a brand being 'fundamentally' out of tune with the nature of a global economy (a ballsy and baseless statement), and finish up with a question - is there a next level of branding that can also be a source of advantage?

So which is it? Is the brand dying? or is it evolving?

Also, I'm not a fan of conversations based in the negative without punctuation of positive suggestion or the offer of at least a sniff of an answer to the questions asked.

It is ballsy to suggest the brand is dying, also ballsy to suggest a brand has been wrapped up in a 30 second spot or logo then jumped right over into Google and what is essentially word-of-mouth.

Leo Burnett was doing product placement in I Love Lucy. There are also quite a few people gainfully employed in the Direct Marketing industry, and Word-of-Mouth has been around since the beginning of time.

In fact word-of-mouth was a major ingredient in the very inception of the idea of a brand. The fact that the method of word-of-mouth is changing does not prove to me that the brand itself is dying.

The comments made here lead the unfamiliar down a path that before the 30 second spot there was no brand, and that perhaps after the 30 second spot there will be no brand again.

I am surprised to find this in a Harvard Business video.

I do however realise there are more videos to come, and that we are teased with those answers or suggestions to come... so I look forward to hearing more as I'm sure this can't be the full picture of the discussion.

I would suggest however that a brand is far from dying. The cost of communication is definitely cheaper and that is dramatically changing the way brands talk to consumers and that consumers are more active in their engagements with brands.

In my mind however this simply means that brands are just as important as ever, and that marketers need to be broad minded in their approach managing their brands.

Consumers are more aware marketing efforts and more conscious of the brands that they choose as extensions of their current self, and that which they want to become.

This might actually mean that brands are more important.

A similar argument was made in an article in Sloan Management Review about 4 years ago (titled, What Are Brands Good For?). But brands have only become stronger since then. The key fallacy in this argument is that it ignores why consumers use brands. Consumers use brands so they don't have to process large amounts of marketplace information. As the amount of information multiplies, so does consumers' use of brands.
- Nick

Umair,

I think you make some very provocative points but, really, is it fair to mention a digital service and a physical product like Coke in the same breath? Google falls a bit too neatly into your thesis. If there ever was a case that the "medium is the message," it's here. Who needs to pay for, say, print advertising when your service is it's own advertisement--and is transmitted by your own medium? Sure, on-line services have rewritten the rules ....but, mostly for in-line services. The word still needs to go out for new physical products, maybe electronically amongst other mediums, but that old hoary brand promise, boring and creaky as it seems, still gets you a listen.

Dear umair,
I feel that the aticle is based on the premise that sercices and physical products can be treated on par when considering the brand experience. There is a huge experience. As one who has spent over 35 years in marketing and has seen many commodities move into branded products I find your analogy rather simplistic. Brand still accepts the classical meaning as an experience in the mind of a consumer over a period of time. Googles value as a brand will be known when new technoloiges for search engines evolve over time and deliver newer and better experiences. If your hypothesis were right there should not be some century old brands in the world. As an Indian marketing professional I found your article intersting but would wait for some more time to accept this as the holy grail about branding.

Looking for more
Vijayan

Dear umair,
I feel that the aticle is based on the premise that sercices and physical products can be treated on par when considering the brand experience. There is a huge experience. As one who has spent over 35 years in marketing and has seen many commodities move into branded products I find your analogy rather simplistic. Brand still accepts the classical meaning as an experience in the mind of a consumer over a period of time. Googles value as a brand will be known when new technoloiges for search engines evolve over time and deliver newer and better experiences. If your hypothesis were right there should not be some century old brands in the world. As an Indian marketing professional I found your article intersting but would wait for some more time to accept this as the holy grail about branding.

Looking for more
Vijayan

I agree with Max Kalehoff.

How is a brand built? By its advertising, or our entire experience with it? Definitely the latter, and so, in this day and age, Google's rise is obvious!

But to discount Coke might be stretching things a bit far. If Coke or Google were to change hands overnight (eg swap managements), which is the one you'd put your money on? One that's a stock exchange / media favourite or one that has real revenues coming in regularly?

Of course, the question about the validity of conventional advertising remains! Again, a function of the way information is spread and consumed.Too bad for those who work in ad agencies, but good news for those focused on building brands, within or without!

Just look at Google's 10k to see that the theory above is based in fallacy - Google spend $1.4B - 9% of revenues - last year alone on "sales and marketing" - you think that's not brand building?

Also in the 10k: "Sales and marketing expenses consist primarily of ... promotional and advertising expenditures."

What a crock.

I would refine the basic premise of the article from "The Shrinking Advantage of Brands" to "Evolution of Brand Identity definition in the Online World". Google is a great example of leveraging excellence and differentiation in the online world to build a brand in record time without conventional advertising. Ironically, Google doesn't spend money on advertising, but is arguably the heaviest user of advertising globally because that online advertising is its very core competency - its logo displays and reinforces its brand through "unpaid advertising" on the approximate 4 billion online searches conducted using its search engine every month. I would therefore argue that a significant percentage of the $1.2 bn and $1.6 bn that it spends annually on R&D and SG&A is actually an implicit cost of advertising.

The retail and real world is still heavily dependent on brand differentiation - I will always need to use an actual physical pair of shoes to go running and Nike and Reebok are my two favorite brands for that. An online upstart is not going to change my brand loyalty overnight. I would use similar examples for consumer packaged goods and various other retail industries. The Internet and cheap interaction disintermediates and commoditizes certain products and services, but I think that the online world creates a new paradigm for certain subsets of products, but it sure doesn't reduce or eliminate the importance of brand identity.

Just for the record: the brand its not guilty...its the way that we are "branding"...maybe the frenzy way that we mix marketing with strategy its causing this new "mistakingtrend". Before spend with marketing topics, we must think in the strategy that applies...
Strategic marketing???...eeehhh...I think its another misconception. One thing its marketing (a strategic tool), another its the Strategy.

Interesting post. Those of us that don't have the most powerful, popular search engine in the world may be better off to create interesting and valuable content to our customers to help generate the "cheap interactions" you talk about.

Much of the new online power of branding will result in how companies can help make their customers more intelligent through ongoing, consistent online interactions.

Cheers,
Joe

To suggest that Google does not advertize is a false premise. They pay to have their brand (Google search engine links) imbeded in software, hardware, and on websites.

This is no different than advertizings product placements or purchasing of 30second spots on Television and Radio. The media channel may be different, the method is essentially the same. Access the consumer with Brand image at a time that they are a captive audience. Either through the use of your product (Nike logo on your shoe) or through your use of media (TV or internet use)

Business and investors would be better served if they describe differences in new vs old media in more subtle terms. They have much more in common than most discuss.

I don't know much about brands. I dearly love google, but latest issue of BusinessWeek says Googling "Google sucks" scores twice against "GE sucks" or "IBM sucks". Nobody denies Google is great, but it seems Umair still has a point in that Google got there *lot* faster than GE or P&G has.

The outset information depicted is clear and good. This should have been more better if you have reiterated the further statements as "Advertising as one of the medium to support branding along with others and this ..." rather than advertisements as the base/necessity for branding.

In this case, Google came in the very necessity of every need/want. There are lots of stuff which are in the 'want' list and they need the support of ads in making their brand informative and to sustain. Eg. How will one know that there is a car called Benz or BMW which is more comfortable and prestigious thing, than the felt need was a just a car.

Finally. The recognition that branding does not have to be about massive campaigns and extraordinary expenditures of capital. The world is not what it was ten years ago. Traditional forms of marketing are becoming less effective as VRM takes the stage… for more information on that, keep track of Doc Searls and Jay Deragon. Watch Jay Deragon’ blog at www.relationship-economy.com

Visibility and usefulness are the drivers. Google has both. How did they get there? They got there by listening and responding to their customers with speed and efficiency! Stay tuned as the Fortune 500 become companies whose “branding” includes social media exposure and positive receptivity by e-consumers, whether the product is gasoline or a search engine.

I agree with Max and Umair; brands are as important as they were. Brands are defined by the relationships that consumers share with them; the difference between yesterday and today is that the relationships are now being defined by consumers. Consumers are pulling the brand value, as opposed to the value being pushed at them.

Which begs the question(s): what have we learned from Google? What is the most effective way in today's cheap-interaction enabled world for a corporation to create "brand value"?

Great thought - but clearly you are referring to advertising and other 'promise' marketing vehicles, not brand.

The cheapening in the value of interactions surely makes the overall quality of a whole (or the remaining) 'brand experience' much more important - as you point out making a marketing promise is fast becoming irrelevant, but a short-cut to the front door of an organization doesn't make all that follows (and it's quality) any less important.

I see the trend emerging from the cheaper cost of interaction as evolution in communication.What we had when the cost of interaction was expensive was a monolog from the brands telling the whole world how good they were but this has now evolve to an era of two way communication in which the consumer now has a medium to express himself. The consumer is now empowered but that should and does not suggest that branding,which I dare say is not a promise but an experience over a period or a promise backed up by a record of performance has become less relevant today than previously.Agreed that "consumers can now debate and discuss the costs and benefits of a brand in incredibly rich detail" as pointed out by Umair they do so to show brand knowledge as a result of brand loyalty rather than the process of choice. Moreover the debate itsef is infflunced by the power of brands.When it comes to making a choice between product with similar offers, consumers have the tendency to look for shortcuts hence they are likely to prefer word of mouth to digging out detailed information during the selection process. personal experience and then the experience of the other consumer

google has just positioned itself as the "path" to all information. So its actually not different. I'd liken this to Corvette buying all the roads leading to las vegas... So if you want thrills,fun and entertainment ....well take the "Corvette Road" This is assuming uncle sam and the folks building the Corvette actually end up doing this.
Seriously for a brand, building value is all about presence, relevance, performance which leads finally to bonding....(in that order)
In this case you can actually see what google is doing...its present ubiquitiously and is relevant to all who see it... Usually you would see relevance as a subset of presence.
Also Google has bettered its performance consistently thereby staying relevant to all those who percieve its presence.

Pursuit of Brand Happiness
By Todd Baker

Not long ago, a few companies realized something profound about the human spirit in its pursuit of meaning and purpose. Then they quietly began to reinvent their reason for being in order to bring “meaning” to the lives of the people who buy their products.

From that point, through masterful imagery and tricks of the advertising trade, new promises were made about fulfillment in life. Their marketing shifted from merely attempting to get people to think and feel a certain way, to a proclamation of a better way to live by way of a “brand experience,” thereby creating loyalty through the brand and not simply to the brand.

These are big promises to make, and even bigger to keep.

When I drink soda, for example, the only experience I encounter is sluggishness and an increase in my waistline — not the refreshing euphoria promised by one particular cola. But the pursuit of brand happiness presses onward from presentations of product features to portrayals of product/human interaction.

Brand marketing self-indulgence might appear to be the right path to bliss but, I promise you, it only leads people to a shallow existence. For example, “It’s everywhere you want to be” typically ends up translating to something like a $400 blender from Bed, Bath & Beyond. True significance comes through self-discovery — helping people do more and be more. Companies that matter in people’s lives empower them to see and act outwardly.

Enter nonprofit organizations

Nonprofit organizations are beginning to realize this more than anyone else. Their brand experiences are unsurpassed. Saving a life, curing a disease, fighting poverty and ending hunger all are roads that lead to true worth. With that in mind, some organizations understand their constituents are, in fact, “co-creators” of their brand promise. So much so that these nonprofits boldly are declaring that their wonderful acts of compassion will go undone unless purposeful and like-minded individuals step forward.

These top charities focus their marketing on inspiring passion — not only to change the world for now, but for all time. In doing so, they offer the highest calling to anyone who seeks such an endeavor. As a result, their brand promise becomes the core message to attract and bond people to their cause.

But too many organizations focus their core message on their internal processes, such as distributing, coordinating, managing, constructing and facilitating, while the most powerful thing they have to say is left unspoken. People become inspired to join causes because of the impact of nonprofit processes, not the processes themselves.

When nonprofits speak about their own processes, it’s similar to when profit-driven companies speak about their product features. It’s interesting, but why should I, as a consumer, care?

For some organizations, the idea of allowing constituents and donors to become equal partners in the marketing equation is too risky. Unfortunately, at some point their perspective became distorted in terms of whose responsibility it is to steward our culture and strive to make it better.

People who become involved with nonprofits see the world in a certain way; they’re looking to become a part of something larger than themselves. They have a desire to join others who value and want the same things they do. This is why some organizations constantly remind their constituents/donors of their vision, the big idea that everyone (organization, constituents/donors) is working toward together.

The more nonprofits present a clear, concise, consistent message and invite people to stand side by side with them to realize their brand promise, the more effective they will be at positioning themselves for the future.

Once organizations realize their most powerful approaches to brand marketing, they must focus their communication efforts on the five audiences of a brand. For nonprofits these audiences are internal (staff, board members, volunteers); external (donors, whether individuals, foundations or corporations); public (potential staff and donors); media (the press, both online and off); and beneficiary (those entities that are helped by the nonprofit).

My defining moment as a donor came with little fanfare one cold and rainy morning at a local high-school running track. However, the event was certainly spectacular, as the person in whom I decided to invest crossed the finish line. During our celebratory embrace, he whispered in my ear, “I did something important.” Suddenly I discovered the true meaning behind the name “Special Olympics,” and I was never the same from that day onward.

Later that night, before closing my eyes on a very good day, I said to myself, “Today, I mattered.”

Few things in life are more important, or more powerful, than leading people to such remarkable moments of self-discovery.

In doing so, you will create brand loyalty beyond your dreams. And our world certainly will be better for it.

Advertising is confused with branding, when they are in fact two different disciplines. That said, we like this column, as it leads with a demonstration of the differences and surfaces a number of real world questions. And, we agree with your definition of brand.

Steve Cranford
CEO | Whisper