In one of my recent blog posts, I said I would like to read David Aaker and Kevin Lane Keller and I am glad to say that I have just finished reading Aaker’s Building Strong Brands that I ordered from Amazon. A lot of it was familiar territory to a seasoned advertising professional like me, though I must say that I didn’t agree with all of it. More about that later.
Reading Building Strong Brands, I was once again reminded of how advertising agencies sell themselves short. As advertising and brand communication agencies, we are required to help our client organisations build their brands. Yes, some of the larger and more established agencies do have blueprints, models and tools to create brand communication strategies for clients. And we help create the communication that turns products into brands.
Where we are probably lacking is in the managing of those brands and measuring them as well. That’s because brand management itself has always been considered a part of marketing and so we leave it to the marketing department in our client firms to manage, measure and track their progress.
However, if we start seeing brands as an invaluable part of a company’s intangible assets, that in turn, impacts a company’s performance and value, we realise what a great distance we still have to travel. Besides, we have never thought of our industry as creators of the intellectual property that our clients earn their profits and their valuations from. This is why I think that brand development should be taken beyond marketing, and made an intrinsic part of a company’s overall business and corporate strategy.
From the diagram I have constructed below, we can see that it is business strategy that leads to brand strategy, for which we in advertising and brand communications create communication. By helping to create brands, we help create and add value to the corporate brand and the overall business. Brand development and leadership is then about moving the corporate and business strategy forward, and it is an ongoing process.
In the current scenario, the advertising and brand communications industry contributes most at the brand communication stage and perhaps some of the better and larger agencies also contribute a little at the brand strategy stage. But we prefer to stay on the sidelines through the rest of the process. Little wonder, the industry is fast losing its value to clients, and management consultants are instead muscling in. They are able to see the larger picture as a business and the impact brands have on the company’s performance, while we focus solely on the communication part.
In this context, let me bring up a few recent corporate decisions that actually have serious ramifications on the companies’ brands. Facebook rebranding itself as Meta, which has already been talked about a lot in media. I will not add to it, except to say that Facebook is trifling with its brand, and therefore with its users, by trying to divert attention from much larger problems that plague the company.
The other is GE’s decision to split its business into three separate public companies, across aviation, healthcare and energy businesses. From what I heard the CEO, Larry Culp, say on CNBC, they have not yet decided on the brand, which means we aren’t sure if any will bear the GE brand name anymore. It is also clear that companies see brand as only the brand name and little else, and therefore comes last in the priority of corporate decisions. The reasons cited for the GE split are primarily sharper capital allocation and greater strategic flexibility. While I can understand the first reason, I don’t see why both goals can’t be achieved under existing circumstances.
It simply means that the company’s leadership has to prioritise areas of future growth and direct investments and resources to those divisions. And if aviation, healthcare and energy are those drivers of growth, then so be it. Speaking of GE, David Aaker makes a reference to the company in Building Strong Brands. In a chapter titled Brand Strategies Over Time, he writes of the General Electric Story and how the company was faced with a big branding issue in the 1970s.
“The increasingly varied businesses of GE created a key branding issue: To what extent should the GE name be the driver behind the business, the brand that would define the identity and drive customer purchase decisions? One option was to allow individual business units to develop their own identities and let the GE name fade to endorser status (much like the role Hewlett-Packard and Ford play for the HP LaserJet and the Ford Taurus). The firm concluded, though, that the development of separate business brands would be diverting, difficult and expensive. Another very different option – to make the GE corporate name the lead, driver brand – was selected.”
While I don’t agree that HP and Ford are merely endorser brands (they are corporate brands), nor do I think that GE could have allowed individual businesses to develop their own identities, I can see that better sense prevailed in allowing GE to function as a single, composite corporate brand across all businesses.
What should determine the splitting of companies and their branding, are the corporate vision and mission as well as the core brand values. David Aaker mentions the “We bring good things to life” campaign for GE, but not the later one which was about “Imagination at work”. I thought that brand positioning captured the spirit of GE beautifully, with its origins in Edison and his inventions. The campaign executions were, unfortunately, very ordinary and prosaic.
This brings me to another discussion around David Aaker’s book. While his Brand Equity System is alright as a way of managing and tracking brands’ growth, his Brand Identity System leaves much to be desired. It is obviously meant to work as a tool to help build brands. It is based on four dimensions of the brand: brand as product, brand as organization, brand as person and brand as symbol. There are a total of 12 parameters under these four dimensions to be considered, from product attributes and scope to visual metaphors and brand heritage.
It is mostly company oriented and has little to do with consumers. Besides, I was rather surprised that in the entire book, Aaker makes no mention of core brand values anywhere. Worse, there seems to be a fundamental problem that goes beyond a mere terminology issue: Aaker writes of Brand Identity as how strategists want the brand to be perceived, and Brand Position as the part of the brand identity and value proposition to be actively communicated to a target audience.
Throughout my entire long career in advertising, I have known brand positioning to be how we want consumers to perceive the brand and it is the crux of strategy. Without brand positioning, there is no strategy. We also know brand identity to be the logo and symbol of a brand. Brand identity, the way Aaker sees it, is an unnecessary distraction I can do without.
I would still like to read his earlier book, Managing Brand Equity, in which he deals with his Brand Equity System in greater detail, but since Amazon India has gone berserk with its pricing of books over the past year, I shall wait until it returns to saner levels. I must add, though, that I am not sure if the book I bought and read is genuinely Aaker’s book, or if the unprofessional mischief-makers at Perfect Relations and BBDO India had anything to do with it, since many sections and passages have their tell-tale signs.
Returning to the discussion on GE, it is true that while the company has a long history, it has also been a somewhat chequered one. In recent years, one has seen GE go into businesses that made little sense, since that is not where GE’s expertise or differentiator lies. From acquiring NBC in Jack Welch’s days, to quitting nuclear energy and entering the oil and gas business in Jeffrey Immelt’s time, only to exit it a few years later and focus on renewables, GE has made several missteps. They have also had very frequent change of leadership in recent years, which is not great for business strategy.
I had put down my thoughts on how GE ought to build its brand some years ago, but lost them to termites, as with so many other thoughts and ideas on brands. I thought GE should stick with “Imagination at work” and take it forward through the thought of taking people into the future. A futuristic dimension, along with the spirit of inventiveness is integral to the GE brand. I was surprised that the company had also diversified into 3-D printing or what they call “additive manufacturing” on their website. It made me wonder if GE should itself be in the business of manufacturing anymore, or should they be the ones devising and providing the technology and equipment to others. It is also a fact that GE is no longer a business-to-consumer company but a business-to-business company.
The GE case, as so many others, are the reason why I think that brand development is part of business strategy and that companies ought to focus much more on it. When it comes to who manages brands and how, David Aaker has a chapter, Organizing for Brand Building, towards the end of his book, where he also talks of agency-client partnerships. Most of what he writes is known to us in the industry, and what we have seen in recent years with the advent of digital communications, has made the brand-building business extremely fragmented and ad hoc. In fact, as I have written before, the digital medium in its current form doesn’t lend itself to brand-building, functioning more as a sales funnel. Besides, with many multinational companies increasingly in-housing digital communications, agencies are under pressure to justify their existence and their remuneration.
I think the advertising and brand communications industry has a future, if it is able to build on its core expertise, which is brand-building, and offer a more complete range of services, where it impacts business and corporate strategy. If we are able to impress upon client organisations that we are the creators of invaluable intangible assets and intellectual property for them, that we will help them manage and leverage through our understanding of our business as well as theirs, in building and growing their businesses over the long-term, then we will be able to truly differentiate ourselves and earn our well-deserved remuneration.
Otherwise, we will simply be running from the proverbial “social” pillar to the “meta” post.