We need to talk about brand

It’s a terrible irony. At precisely the point in economic history where intangible assets (like IP) displaced tangible assets (like factories) as the primary driver of company valuation, ‘brand’ became something of a dirty word.

This pathology isn’t universal, of course. There are still great brand-building companies out there, and there’s still some great brand-building advertising out there too…and the IPA is proud to represent the agencies that do the bulk of it.

But the era of measurement (of immediate return, that is, from harvesting demand rather than total return of creating it) has managed somehow to eclipse the very mechanism by which much, if not most, advertising still works: in the indirect priming of future demand, not just the direct response to media and message. It works by building the brand.

We know this stuff.

Why so shy about what we know works?

We’ve known about the power of brands for centuries, even if we typically venture back only as far as the late 19^th Century for its modern roots, to Bass Brewery’s red triangle’ trademark and to Quaker Chairman John Stuart’s declaration that: "If this business were to be split up, I would be glad to take the brands, trademarks and goodwill and you could have all the bricks and mortar - and I would fare better than you."

And we’ve known about how markets work, how brands grow and how advertising really works for at least 50 years thanks to everyone from Ehrenberg Bass to the IPA. Our town criers (chiefly, Mark Ritson and Andrew Tindall) are all over this.

Only last week – and based on no less a dataset than 1.2 million customer journeys – WPP Media and Saïd Business School concluded in their report, ‘How Humans Decide’ that: “on average, 84% of purchases involve people choosing brands they’re already biased towards. This leaves just 16% of sales open to influence through lower-funnel marketing, making long-term brand building more crucial than ever.”

So when – and more importantly, why? – did we become so coy about using ‘brand’ as proud shorthand for what we do and the lasting impact we make? 

Having lived through the ascent of intangibles but also of brand’s subtle degradation as marketing MO, I humbly submit two potential explanations. (There may of course be more.)

Where we went wrong (or were led there)

The first is something that happened to us (where ‘us’ means brand-builders) and a tide that may be slowly receding; the second lies at our door and is in our power to change.

First up: the re-branding of ‘direct’ as performance. Industrialised and then weaponised by the tech platforms and their mighty ecosystems, performance is a perfectly worthy goal in its own right, albeit with efficiency rather than effectiveness as its underlying religion: it measures “how well you did with what you had” as Rob Beevers recently put it. But ‘performance’ is also a brilliant piece of positioning, a masterclass indeed in repositioning your competitor: brand as ‘not performance’.

(We pause here only to note that brand and performance are of course complements rather than competitors. And that brand drives superior performance, but that the reverse is not true.)

The second explanation lies closer to home and our own tendency to frame ‘brand’ as something soft, not hard: a consequence of ideas rather than a business advantage borne of investment; as consumer attitude rather than corporate asset. 

Learn from the world’s most famous investor in brands

Brands are ideas, of course, or at least start out life that way…and they do live in our audience’s brains rather than within the physical curtilage of the corporation, much to the auditor’s frustration. But the case for brand in the boardroom – the room where it happens – is in competitive advantage and asset appreciation: on the P&L and on the balance sheet (outmoded accounting practice notwithstanding).

In his recent WARC article, Nick Kendall channelled the perspective and practice of the world’s most famous investor - ‘The Sage of Omaha’, Warren Buffett – in a spirited attempt to redraw how the advertising industry understands and talks about ‘brand’. (It’s that last bit we don’t do enough.)

“He [Buffett] saw brands as guarantors of future cash flow: surety against the volatilities of the world and of markets. As a result, he talked of brands as competitive moats long before the tech bros and start-ups made the phrase popular. In particular, he argued that the defining commercial indicator for a strong brand was its ability to command pricing power:

“The single most important decision in evaluating a business is pricing power. If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before raising the price by 10%, then you've got a terrible business.”

In short, Buffett loved brands: not for what they told us about people and human choices, but because they made money long-term, made more money and made ‘safer’ money.”

Most CEOs and CFOs will take at best a passing interest in your advertising (the CFO of Money Supermarket once told me that all he knew about advertising was that “offline drives online”, and he was writing some pretty big cheques). But they are all ears for everything from cash flow to pricing power: the very benefits of branding.

History teaches us, perhaps a little excitably, that Theodore Levitt transformed the world of marketing when he pointed out: “People don't want a quarter-inch drill bit; they want a quarter-inch hole.”

It seems we are due a similar revolution in our thinking and our habits. With the exception of a handful of outliers – and setting aside the mad claims that the future belongs to unbranded products bought on our behalf by agents – our clients don’t want adverts; they want a stronger brand: one that pays back short and long. 

With so much advertising money flowing short (and with so much advertising, per se) it’s time for us to be unapologetic in making the case for brand-building, and for our collective capability in doing so. 

‘Brand’ isn’t colouring in. ‘Brand’ is powering up.

Laurence Green is Director of Effectiveness at the IPA.

The opinions expressed here are those of the authors and were submitted in accordance with the IPA terms and conditions regarding the uploading and contribution of content to the IPA newsletters, IPA website, or other IPA media, and should not be interpreted as representing the opinion of the IPA.