Monday, 16 May 2011

If you ever have the good fortune to create a great advertising campaign, you will soon see another agency steal it. This is irritating, but don’t let it worry you; nobody has ever built a brand by imitating somebody else’s advertising.

Advertising and the brands which are built on its foundations, for those who do not know this, is a very tricky business. As David Ogilvy rightly said, “I have a theory that the best ads come from personal experience. Some of the good ones I have done have really come out of the real experience of my life, and somehow this has come over as true and valid and persuasive.”

Today’s social media world is a place to share your successes and failures, be yourself, and let your own personal voice come out. Brands, like people, have a “voice”. The world of the brand has become such a specific and exclusive field that it has its own mechanics of operations, its own experts to seek advice from and its own distinct significance not just in the arena of marketing but also in the entire dimension of branding the product.

Great companies are investing a great deal in their advertising fully aware of the manifold benefits and returns that it brings back to their brand and the role it plays in entrenching and extending brand equity. The value of business, and the returns for shareholders, are at their highest expression when brands are properly constructed. For that purpose, many successful organisations are now seeking the succor of brand experts to engineer the brand platform and its attendant constituent parts.

Dean Crutchfield wrote an excellent piece this week in Advertising Age called ‘Brands Fuel Democracy’

As the wee bald man from Glasgow's West End said, "The efficient half eats the less efficient half and grows stronger. War is just a violent way of doing what half the people do calmly in peacetime: using the other half for food, heat, machinery and sexual pleasure. Man is the pie that bakes and eats himself, and the recipe is separation."

The 'good' or 'well-meaning' brand, is a distraction from the product, from what we buy, and deflects attention on to more esoteric levels of the exchange process. It's more about who we are. That's not just self-image. It's a question of values. And, it makes you feel better about the purchase, it's supplementing an emotional reaction to buying the product for an emotional reaction around the purchase. More social responsibility in the purchase is only desirable if it helps sell the product. If brands are a symbol of the 'West' then what do McDonald's, Coca Cola and Malboro say about the superpower Brand America? The ultimate brand for "fueling freedom and democracy" is the country brand of the United States itself, based on a 'dream' of prosperity tied to America still holding the brand position as the world’s land of opportunity. With the recession, America’s promise that “the future is what you make it” has been diluted.

Perception, as they say, is everything in this context. Last year's Greek debt crisis resulted in an almost 20 percent global equity market correction even though the small economy of Greece accounted for only 3 percent of the combined Eurozone GDP. By contrast, the recent rise in oil prices of almost 20 percent (since end 2010) as a result of the ongoing Middle East unrest has resulted in a 2-3 percent negative impact on the global equity market so far. Greece has a weak country brand, and suffers accordingly at the hands of the markets.

The fact is that brand reach is still heavily concentrated, and the primary focus for the 'good' brand is in the United States itself. About 300 million Americans consume US$10 trillion a year and 1.3 billion Chinese consumed only around US$1.5 trillion a year. Add another billion Indian consumers, many of whom are in the rising middle class, and we have an additional US$500 billion in consumption – not nearly enough to offset US demand. Brand's values appeal most to those that spend with them. Brands have been the key to increase domestic consumption share as a proportion of GDP in the US and this phenomena has its own set of dangers, look at the credit card debt and personal bankruptcy rate. This engineering of the brand to face the market is not necessarily in the best interests of the consumer, no matter how skillfully the value bundle is packaged, nor the fact that a portion of the sale goes to worthy causes.

My take is that the 'West' has to hang onto brands, and can do so only by making the entry level for the non-brand owner prohibitively high. Contract manufacturers in Asia enjoy 10% or less of the profits arising from strong Western brands. Western brand owners are able to walk away with vast sums, simply through leveraging the power of brand. The illusions of freedom that accompany brands are simply that, illusions. There is no freedom in 10%, but a lot of potential freedom in enjoying 90% of the profits. I understand that on an ideological level this is not where you are putting emphasis, but keeping a leadership on brand thinking is crucial for the West, as it is a key economic differentiator being able to manage brands and the process of branding versus the rise of Asia as an economic centre. If sustainability and social marketing tie-ins keep the $10 trillion growing, then that is the price of brand leadership.

Asian brands must find a voice that is authentic to consumers around the world. Until they do, it will be a case of knocking-off cheap imitations of brands that have already won the hearts and minds of millions. As Mr. Ogilvy clearly stated in the headline above, copying does not do the business. Although places like Korea are doing well in creating a regional music industry with Hollywood-like production values for their videos and other spin-offs from that industry, it is a means to en end, to secure corporate sponsorship (aka advertising dollars) for the music celebrities being cloned in Korea. Deeply driven by the advertising process David Ogilvy’s thinking has helped his agency to bill billions of dollars of communication services to clients in pursuit of memorability, originality, long-lasting impact and strong business results. This is also probably why Ogilvy sounded disdainful of creative 'for creative's sake' (“if it doesn’t sell it isn’t creative”), because he had long perfected a scientific way of determining a brand's X and Y axes. It worked for his agency and his clients.

Ogilvy, the BBC of the branding business, enjoys a strong brand in the business of branding. His vision of Ogilvy&Mather as a creative powerhouse is very much alive today. Whatever the trends in brand engineering, there will always be space for winning hearts and minds anew using advertising. Advertising is still driving the financial performances of many businesses around the world, which is why some half a trillion dollars of wise money was invested in it during 2010.

Edwin Ward