Jez Frampton – The Future of Brand Building?

Jez Frampton, Global CEO, Interbrand

The context

The last 5 years have been marked by economic crises, sending businesses both running for cover, and searching for answers.  The immediate answer for many was to attack the ‘supply-side’; trim the supply chain, seek internal efficiency, attack costs, but the brutal truth is that in recessionary times competition becomes even more intense, and this strategy has diminishing returns.  Five years in, the mantra is shifting towards the ‘demand’ side of the equation.

Driven by ever more demanding customers, ‘emerging market’ competitors, and inspired by companies like Apple, many businesses are re-discovering the power of creativity and design, increasing investment in innovation and trying to better understand how brands drive their business.  In short, we are entering a new age of ‘demand’; no longer about latent, passive, consumption, but about dynamic, connected and ‘active’ markets which drive competition and ultimately, success.

Within this context, we believe brands will play an increasingly important role.  Over a decade ago the Financial Times classed brands as the ultimate source of sustainable, competitive advantage.  Recently, the Economist (4th August, 2012) stated that branded businesses enjoy margins double that of their counterparts, with greater levels of loyalty.  It’s clear that in this increasingly competitive world, well managed brands drive profits, so it’s logical to expect greater degrees of innovation, sophistication, creativity, understanding, and, of course, accountability to a forensic level of sensitivity.

The rise of the conversation

One of the biggest challenges facing the marketing world over the next 10 years will be the increasing importance of the conversation.  ‘The Cluetrain Manifesto’ (Levine, Locke, Searls & Weinberger, 2000) defined markets as conversations between companies and customers.  The nature of that conversation has expanded within web 2.0 to include the conversation between customers and the rules have changed.

At Interbrand, we talk of ‘B2B and B2C’ being replaced by ‘B&B and B&C’; the interactivity and collaboration between customers and businesses. This shift presents infinite new possibilities for brand building via product and service innovation, interactive experiences, and communication both inside and out.

The increasing importance of social activity truly changes communications making it much more dynamic, and the potential for ‘one-on-one’ customer interactions will finally become possible by combining ‘big data’ with the significant developments in artificial intelligence (AI).  This lifts the already increasingly dynamic nature of advertising on the web, (which is dictated according to the users preferences and history), to the point whereby a conversation is ‘managed’ via a combination of AI and human inputs.

The end of ‘image’ building?

But do all these conversations mean the end of ‘image’ building? Recently, a high profile ‘tech’ CMO asked me if we needed brand positioning in a world where opinion shifted from minute to minute?  My answer pointed to the importance of context. Every message from a brand is viewed in the context of that brand: its market position, personality, values, competitive stance etc.  In other words, it shapes the way we interpret the message, and in a world where our communication with brands is increasing exponentially, a clearly articulated and defined brand becomes even more important.

Choice is changing

Recent papers published by McKinsey in the Harvard Business Review, and by Interbrand in Fast Company, illustrate that the two key drivers of brand value; choice (role of brand) and loyalty (brand strength) are both significantly affected by the post-digital world. Purchase decisions are becoming more fluid, better informed and dynamic (there is always someone a ‘step ahead’ of you), and easy access to other user experiences and long term opinions, affect the assumptions of loyalty.  Both of these trends provide significant opportunities for marketers, and brand experience provides the key to maximizing the opportunities.

Holistic – the new mantra

We believe that great brands are ‘business strategy brought to life’ and deliver a seamless experience across product and service, physical spaces and places, internal culture and communications.  Companies like Apple have already set customer expectations and it doesn’t matter if you are a bank, a business consultancy, a retailer or a hotel chain, the message is simple: join up!

Whilst the solution may seem simple, sadly, the barrier frequently comes from within: ‘silo’ mentalities, and politics.  The opportunity is to deliver seamless experiences ‘across’ the silos, combined with creative ‘curation’ to ensure high quality, and innovative, expression.  The role of digital experiences within this ‘holistic’ world cannot be underestimated and it seems clear that the potential of ‘digital’ to augment, extend and create whole new interactions will continue to shape companies.

The primary role for ‘digital’ is to act as the glue, both joining together the many fragmented elements of an experience chain and providing a basis for on-going communications and interactions with customers.  Despite the fact that digital should become central to building relationships with customers, many businesses still treat it as a promotional or idea generating tool, rather than a means to enhance, augment or create new ways to interact.  Adidas’s ‘Originals’ sneakers were each embedded with a digital key to a gaming environment, and Tesco recently turned a subway station in Seoul into a virtual grocery store.

Digital permission

Seth Godin pioneered ‘Permission Marketing’, a short-hand for understanding the boundaries for brands, in a world where customers are in control.  We believe the next step along this curve will be the notion of ‘digital permission’: the granting of rights by customers within the digital world.

Back in 1999, Levis created a fitting process involving a laser body-scan to create ‘personalized’ jeans.  In truth, the process involved significant smoke and mirrors, but the thought has stayed with me ever since; that I could have a truly digital self.  My digital me, if you like!

A perfect scan of my physical being, fused with attitudes, purchasing behavior, likes, dislikes, interests, even connected to my ever-expanding social network.

These ‘aggregated images’ (made possible by big data, superfast networks and artificial intelligence), could create a whole new world of marketing for us to explore, where my digital me would browse for me, bring things for me to see, explore social opportunities, and save me from ever having to go and buy socks again!

This may well still be a leap, but the cost/benefits are worth considering, consumer trends point to greater reliance on the web, and we all have busy lives nowadays!  Why not delegate a little (or a lot) to a digital self? The technology is already in existence and the possibilities for marketing are endless!

Are we ready?

Certainly all of the above trends and conjectures point to incredible opportunities for those building brands, through communications or otherwise.  They also pose significant threats: Can brand owners change their structures and behavior towards faster, flexible, more holistic ways of working; reducing silos, and increasing innovation? Can agencies and consultancies adapt their skills to personalized, dynamic, demand management, with a heavy emphasis on digital, crowd sourcing, and creative curation?

One thing is for sure, within this complex world the focus provided by a well defined and executed brand will become ever more important as internal/external beacons of direction, purpose, value-creation and experience.