Technology is having a dramatic effect on how people live, not least the way they experience and judge brands. This has profound implications for anyone who works with brands.
Brands remain marks of trust and reputation, acting as shorthand for decision-making. They also remain the sum of all our experiences of, and interactions with, a company, service or product – but in many categories this has changed beyond recognition.
The US music industry has lost 42% of its value since 2000. Apple’s app economy now generates more revenue ($10bn a year) than Hollywood does in US box office sales; the US iOS app industry also sustains more jobs than Hollywood does. WhatsApp has attracted 600m adherents in six years – more than Christianity did in its first 19 centuries.
The works of Andrew Ehrenberg and Byron Sharp have shown us that much ‘classic’ brand thinking is flawed. We must abandon old concepts of positioning, personality, targeting, segmentation, loyalty and differentiation, but this alone is not enough to address technology’s impact. Consumers now drive markets. Spotify addresses people’s desire to rent, not own, music; Uber reflects the demand for simple, easy transport.
More broadly, we are seeing the impact of the digital transformation of businesses. It changes brands’ context and role. Many sectors have embarked on transformational journeys to a world where the internet of everything turns appliances, automobiles, homes – even our bodies – into transmitters and receivers of information to support better decisions, often in real-time. Organisations will transform or be replaced.
The latest Interbrand Best Global Brands study’s top 10 contains seven technology brands, compared with three in 2000. And Apple, Amazon, Google et al are becoming the gateway to our experience of other brands.
In the face of the above, brands face four big challenges:
- The ‘always now’ consumer. People expect whatever they want right now. Real-time feedback means that campaigns can die on social media before they have launched.
- Redundancy of linear brand narratives. People care far less about the ‘story’ of their supermarket than this week’s best offers. They’ll share a picture of a meal on social media ahead of the ad campaign for a brand they used in making it.
- Nowhere to hide. Through social commentary and ratings, people can see through froth and identify rational, tangible benefits. Utility and performance matter more when it’s easy to switch. Brands must consistently deliver function alongside emotion.
- Data is the new oil. Among its many possibilities, it enables brands to be active. Tesla software upgrades the car without a tiresome trip to the dealer. Nike’s ‘Outdo you’ turned data from 100,000 Nike+ users into customised, animated videos.
Strategists have to deal with the new way that brands (and consumers) work. The ‘big idea’ and set-piece campaign look obsolete. Successful brands will depend on a series of multi-faceted interactions and experiences, lots of little ideas, with less-obvious executional continuity, more responsiveness, fuelled by instant feedback and constant iteration. A broader sense of purpose will provide the ‘guide rails’ to hold multiple interactions together.
In a relentlessly short-term business culture, tech-driven disruption and the growing importance of data means agility is on the rise at the expense of ‘static’ approaches to marketing and campaign planning. Kraft Foods recently announced that, in its quest for "agile and addressable" marketing, its infrastructure investment would be driven by three priorities: listening tools, data-management platforms and analytics.
Brands today are like algorithms – rules and processes for the creation of meaning – driving brand behaviours, and so consumer experience, by constantly evolving and responding to feedback. Brand purpose guides this, making it proprietary and distinctive in experience and meaning.