Brave New Branding--in a World of Consumers Who Just Don't Care Anymore

Branding strategist Ted Nelson on brand-building in the era of Web 2.0 -- highlights from the FM Webcast interview, plus link to the video


Loved this reply in the FM Trends Survey to the open-ended question, "What will be the three biggest issues facing business two years from now?":

     "Three issues? Brand, brand and brand.
     "Because even to think about brand I know I'll have to understand half the other trends on the planet. My customers will be everywhere (Globalization), and nowhere (invisible on the internet). They'll be TIVO'ing past my commercials and telling each other stories about me in cyberspace (some of them even true). Commoditization, ubiquitous information, ever-changing competitors providing customers with alternatives that completely erode what we used to call loyalty...talk about a tougher environment. Can my brand keep customers connected to me, keep them caring? Can brand even exist in that world? It better.
     "I know I'm thinking about brand plenty right now. But 2 years from now? I'll really be thinking about it.
     "Or I'll be gone."

The survey turned up lots of other branding-related concerns, and so have a number of discussions in these forums (try this one, and this one). So we invited the celebrated branding strategist Ted Nelson to speak with us on FutureMonitor's first webcast conversation (view the interview here).


Nelson, by way of background, is co-founder of Mechanica and was formerly with Chiat Day and Mullen Advertising. These days he's helping create or renew high profile brands such as Barry Diller's Interactive Corp, Blockbuster Online as it fights back against Netflix, former American Airlines chief Robert Crandall's pioneering light-jet air limo service called Pogo, and NBC as it plots its broadband strategy.

Following are some of the excerpted highlights from the interview.

          The 'New Landscape' of Branding

FUTUREMONITOR: You talk a lot about the "new landscape" of branding -- the environment that's been shaped by new media, new distribution channels, new consumer attitudes. What are the key things to understand about that landscape?

TED NELSON: There are three, I'd say. One: intense competition. Two: an intense splintering of audiences. And three: a recognition of just how good consumers have gotten at avoiding marketing messages.Together they call into question some of the fundamental thinking about what is a brand, and how to create a strong brand.

The world of products and services has become hyper competitive -- very, very cluttered. You know, it used to be a good job to be a brand manager. Your job was to launch a truly differentiated product and milk it for all it was worth and not screw it up. And in fact you had the advantage of actually having a product that was different. That's where notions like the unique selling proposition were invented.  Identify what's unique about your product and hammer that home.  Well today that won't work, because all the clutter and choice have left consumers unpersuaded of anybody's uniqueness anymore; consumers are quite frankly just less interested in sorting out differences than they used to be. So point number one is that the competitive context has changed. It's hard to stand out on your own merits anymore.

Point number two is that the intense splintering of audiences means it's really hard to wrap your brand around one large enough and homogeneous enough that you can overtly target it. The situation we confront now from a segment standpoint is what a cultural anthropologist in Canada, a guy named Grant McCracken, calls culture by commotion or plenitude, which is basically an infinite number of segments that are constantly defining and redefining themselves. You look at the world of MySpace. You look at the world of Friendster. It's awfully hard to identify which specific segment are you going to target in there.

Point number three has to do with how good consumers are getting at avoiding marketing communications. Yankelovich rained on everyone's parade a year or two ago when they showed data revealing skyrocketing consumer resistance and negativity towards advertising and marketing in general. Now as much 70% of the population at large is saying, 'Not only do I like marketing less than I ever did, not only am I getting more and more annoyed at marketing efforts to reach out to me, but thanks to Tivo and other entertainment options in the living room, I'm getting very good at avoiding it. I no longer have to even get up and go to the bathroom to skip ads. I can just switch over to something I'm watching on my laptop online, tune into that, and then tune back to the TV. So the third major element of the new landscape is that it's really hard to reach people.

FM: Where are these 'new' consumers getting the product information they used to get from marketing messages?

NELSON: From a much less formal mix of sources, including the average Google search, which are a rich blend of the official and the unofficial. We all know about the well documented rise of first-person knowledge. Problem is, that blend makes it much harder to predict where someone's going to turn for information, which confounds the challenges of a marketer, because typically you want to align yourself with whatever those established sources are.

FM: Given that these don't want to hear from me, then, what kind of "voice" should I use as a marketer when I speak to buyers? What attitude or approach should I adopt?

NELSON: Well, it's a voice which is fundamentally less about "I know what's best for you," a voice that is less implicitly arrogant and is instead much more flexible and dynamic -- more, "What can I do for you now?" More about questions, less about one-size-fits-all. More dynamic and flexible and even unpredictable instead of slavishly consistent.

You can be boring when you stand you're unique, but when you're not unique, when consumers are offered an infinite number of options and face little or no switching cost, then if you don't surprise and delight someone on a frequent basis, they're going to leave you. A great example of unpredictability and surprise in brand-building is Starbucks, a brand that many of us used to cherish but now find less special in and of itself, it's been around a while. But they continually do things to surprise you. I'm an XM radio listener and all of a sudden Starbucks launched their own channel on XM radio. And it's a great channel, that's surprising. All of a sudden my kids are very excited about the movie Starbucks is launching, that's surprising. They continue to do unexpected things. That's part of their "voice." 

          The Changed Rules of Brand-Building

FM: What are the main principles I have to follow if I'm to take that understanding of the new competitive landscape and use it to rethink how I build my brand?

NELSON:  To answer that question it's useful to look at brands that have been really successful in the new context. Let's take Starbucks, Google, eBay, and Virgin -- two that are dot-com and two that are non dot-com. All of those brands have created a lot of value for their shareholders, and very strong customer relationships. If you spend some time studying them and those kinds of brands, you arrive at a different set of rules if you will. 

First observation is that all of these brands are very vision driven in a time when visions have fallen out of favor. The anti-vision movement perhaps was kicked off by Gerstner when he first took over IBM and said the last thing the world needs is another vision. But when it comes to creating strong contemporary brands you need a CEO who has not just a strategy, but a vision that's defined at an altitude that allows and inspires marketing people and partners to quite frankly experiment. If it's defined broadly enough you can do that. The Virgin brand has a personality, and conveys a sense of being very different, of being a challenger brand -- but it also allows Virgin to be effective as an airline, as a record store, as a cellular phone company.

The second thing is that all of these brand quite happily and willfully disregard traditional boundaries. Starbucks disregards channel boundaries by going on XM radio or selling coffee through someone else's store. Virgin one day is an airline, the next day a record store, the day after that a cellular phone company. Google is being pulled down on your cell phone, or online, and its offerings include search, and maps -- all the time it's really challenging the traditional wisdom of "Oh, you don't want to do that. You're not being consistent. You need to define your turf very, very specifically." These are brands that by design spill over boundaries and invite reconsideration in the minds of consumers.

The third thing is all of these brands have a real emphasis on design. At the same time that we're talking about the importance of inspiration and unpredictability, you still need something that knits the experience together, and what all these brands have done brilliantly is really elevate the role of design. At the same time that they're encouraging experimentation from a functional and channel standpoint, they're bringing to design a tremendous level of consistency.

          The Old Branding Tenets That Have to be Given Up

FM: Are there old-school tenets of brand creation, tried and true over time, that now have to be abandoned?

NELSON: Absolutely. You have to understand that branding today requires more of an empty-vessel approach, where consumers fill the vessel with their own definitions and needs, versus an approach where the marketer imposes a preconfigured idea of how a brand and a customer should interrelate.

"Empty vessel" means everything from having your entire brand be an empty vessel filled and defined by customers, like a MySpace or a Friendster, to the simple example of Starbucks's approach to personalizing coffee, which Schultz credits as one of the bigger reasons for the company's success. What do you mean personalized?  Everyone has their own unique cup of coffee they order, and that's encouraged. No one gives you a bad time for saying double half decaf, half regular, no foam soy whatever -- that's encouraged, it's a very personalized sense of what your cup of coffee is all about.

How will this play out further? I think what you're going to see in future is wireless devices increasingly enabling consumers to interact in a very customized fashion with an offline kind of experience. Think about how you navigate a traditional retail space.  Well imagine if your cell phone knew that you were coming to it, and knew a little bit abut you and was GPS enabled so it could give you a way of navigating that IKEA store that was unique to what you're interested in.

The other tenet you have to keep from stumbling over is the time-honored branding maxim of consistency and focus.

Remember, people don't consume brands, they consume brand experiences. And if you think about what a brand experience is, it's the sum total of the thoughts, feelings, associations, and expectations when someone encounters any aspect of your brand -- another customer, a logo, a thought associated to it, or a blog. And you can't control all of that. You'd drive yourself crazy trying to. 

So you have to flip the relationship and say, you know what, all of those amorphous essences out there about my brand are what create it at the end of the day, and I need to encourage a vigorous ongoing kind of dialogue with these constituencies and not try to control them, which is a really hard thing for traditional brand builders to reckon with. All your instincts that were calibrated from your MBA education to your early successes as a brand strategist are about control, consistency, and focus. But now we have to replace them with openness, experimentation, inspiration and innovation.