No country for young brands: how a brand can get on Interbrand top 100 list

“The brand is extremely important,” — everybody says on Linkedin. “No shit Sherlock” — of course, the brand is important. The challenge is not that people don’t understand the importance of a brand, but that very few people, if any, know how to build a brand in the hyper-connected world we live in today.

The runaway brand train

Very often, Nike is used as an example to illustrate the importance of a brand. And it is a great example for this purpose. It’s a commodity (sneakers) that is sold mostly because of how strong the brand is. But Nike is a terrible example to illustrate how to BUILD a brand. Why? Let’s take a look at Interbrand’s Top 100 most valuable brands (you can get the free report here), the year they were founded, and how long they have been on the market.

Notice anything interesting? Out of 100 brands, only 7 brands have a history of fewer than twenty years, and only 1 (Sic!) has a history of fewer than ten years. If you try to build a competitor to Nike, your chances to succeed are minuscule. No matter how much you are spending on ads, they will be able to spend more. What are you gonna do? Put happier people on ads? Hire different sports celebrities? Try different slogans? Better messaging? On average, all marketing is “average”: chances to create a breakthrough campaign that will launch a tiny brand in the stratosphere are close to 0. Of course, you can target a niche customer segment, but the big picture is that brands benefit enormously from heritage. The majority of the brands like Coca-Cola have built their brand equity not because they had the unthinkable marketing campaigns, but because they did consistent marketing FOR DECADES. A brand is like a train, and once it gains enough momentum, it is extremely tough to stop. And this is why, unlike products, brands are launched quite rarely, even by almighty corporations. This is the first challenge in building a strong brand: you compete for limited consumer mind space in an extremely cluttered world with established brands.

Lack of modern brand building theory

The second challenge is the lack of modern brand building theory. For example, David Aaker’s “Building Strong Brands” (my favorite book on brand theory) was published in 1996 when the world has been a very different place. Jack Trouts’ “Differentiate or Die” was published in 2000. While there are more recent books, i.e., Philip Kotler’s “Marketing 4.0” published in 2016 (already 4 years old, by the way), by definition vast majority of theory and knowledge is built on what happened in the pre-digital world. While “what is a brand” probably has not changed but “how” you build and manage it has. And this leads us to the 3rd and arguably the most important challenge.

The hyperconnected world

How brands interact with the world has changed dramatically over the last 10 years. To illustrate this, let’s take a look at the brand-building process that many companies have been running for years:

1. Definition. For global corporations, usually, it is done in headquarters in close collaboration with an agency. (In the case of Philip Morris, it used to be Leo Burnette, in the case of Samsung — Cheil Worldwide) All the good stuff, like brand identity, brand book, key visuals, etc., are developed at this step.
2. Execution. Bringing the brand to the market. This was done through various brand building activities such as ATL (TV, OOH, Paid) and BTL (Events, retail promotions, brand activations) campaigns. Usually locally in the markets. Campaigns are budgeted, planned, and executed to deliver brand messages through different touchpoints.
3. Exposure. As a result of campaigns, consumers interact with the brand through various touchpoints and build their perception of a brand. A brand slowly gains consumers’ mind-space.
4. Tracking. This is usually done via various tracking studies executed by research companies such as GFK. They measure how strong the brand is, including brand awareness, brand perception across different dimensions, etc.

Based on the studies’ outcome in step 4, different aspects of steps 1 and 2 are fine-tuned, and the process is repeated. Below is the diagram, how step 3 looked for a long time.

While the core idea has remained the same, there are several critical changes to the process in the hyperconnected world.

The network effects

The most important change in the process is related to step 3. Previously brands communicated with consumers in a very controlled manner through well-defined channels: TV ads, internet ads, OOH, magazine ads, hostesses, etc. As a result, it was fairly easy for a company to build a brand. The only for a customer to perceive a brand was through a well-designed ad. Or maybe talk to one of their friends using the brand. It created a very curated flow of information mostly controlled by the companies.

This has changed completely with the introduction of social networks. Not from the perspective of social ads, but the perspective of information flow between people. Suddenly the social connections have exploded. People see opinions of friends of friends on different brands. They interact with many more people using brands or working for brands than ever before. And this is important because of the halo effect.

The halo effect

In psychology, the halo effect is a type of cognitive bias, when if you like the person, you like other things related to the person (their projects, brands they use, etc.). The importance of the halo effect has increased as a consequence of the network effect. As people interact with many more other people halo effect constantly impacts their perception of brands. If you like a person on Linkedin as a professional, you will likely perceive favorably the company the person is working for. This is especially true for B2B. The key challenge for brands is that the halo effect is totally out of their control. If someone writes on social media that buying Apple products is a waste of money, there is nothing Apple can do about it. And while opinion leaders and celebrities can partially solve the problem, people know that they are bought, unlike their friend Joe, who is honest with his opinion.

Implications for brand building

Summarizing the challenges listed above, any company trying to build a brand from scratch (or mostly from scratch) will face the following challenges:

• Fighting for consumer mind space with much stronger brands with much more resources.
• Lack of best practices and proven track record for building brands in the current environment.
• Uncontrollable halo effect amplified by network effects.

Stating problems without proposing solutions is lame, so as the next step, we will get back to the list of top brands and look at the youngest ones to identify what they have in common and how they could get there.

What do successful young brands have in common?

The 8 brands from the Interbrand top 100 brands list with less than 20 years in history can be categorized in the following way:

• Facebook, Instagram, Linkedin: social networks. Their experience is hardly relevant for anyone who is not building social networks — almost everyone. They grew up not because of the brand but because they became popular social networks. Duh.
• Youtube — media channel. Same as above.
• Spotify and Uber — service companies that have disrupted existing industries. We can classify them as “Disruptor” brands. Their business model is radically different from what incumbents offer. Other brands from the list: Netflix, Salesforce (SaaS), Amazon (books).
• Tesla — this is one of the more typical “Hotshots” brands: a consumer product in a highly competitive industry with very strong incumbent players. They come, kick everyone in the gut, and challenged the status quo. A strong brand with a product and CEO being front and center. Other brands from the list: Apple before it became the incumbent.
• Zoom — a company that has skyrocketed due to the global pandemic along with the whole video-conferencing industry. The wide adoption of its product with great user experience allowed it to dominate the top of mind in the category when the market exploded. That’s why I call the category “Waveriders”. Other brands from the list: Google (When the internet has boomed, everyone used Google mostly for the same reasons).

I skipped the first two categories because their experience is hardly relevant. What Facebook or Youtube practices are you going to apply? Messing with customer data? ;) But if we look at the latter three categories, they have some things in common:

1. Product experience is the core of the brand. Yep. Tesla has created the Electric Vehicle everyone wants. Even Apple has become a super-powerful brand because of iPod and iPhone, not because their ads were perceived better than those of Nokia ads by 1.7pp based on the target audience perception. Zoom, Spotify, Uber, same story.
2. Brand personality is tied to that of visible employees. Elon Musk, Jeff Bezos, Steve Jobs, Tim Cook, Mark Zuckerberg are examples.

Brand as a product experience

Product experience is not just about the features or physical product. It includes everything related to how consumers interact with the brand in their everyday lives:

• The physical product itself, i.e., mobile phone, car, etc.
• Customer support.
• Delivery, i.e., pizza delivery from Dominos, is a part of the product experience.
• Ecosystem, i.e., Apple Store.
• Employees, i.e., if your brand delivers professional services, like Accenture, for example.

If you are building a brand from scratch (or nearly from scratch), the only way to stand out is to offer your customers a differentiated product experience. Nobody can differentiate by talking about emotions, fears, etc., because everyone already does it today. Launching a new unknown beer with the Heineken tagline “Probably the best beer in the world” will get you exactly nowhere.

Product experience is also evident due to network and halo effects. When previously, you might not have friends owning a Dodge (Tesla), today I’d be surprised if you don’t have anyone in one of your social networks with the car. All good and bad experiences are amplified immensely.

Brand as a person

In today’s hyperconnected world, it is almost impossible to create a brand personality detached from the employees’ personality, including the CEO. The reason for this is the network effect mentioned above: everything everyone does and says is visible to everyone else, unlike in the 1990s when no one knew who the CEO’s are. You cant create a different brand personality for Tesla because Tesla IS Elon Musk. And the effect is powerful due to the halo effect described above.

Basically, a brand personality in the modern hyperconnected world is a weighted average of its employees with a higher weighting for CEO and other top management (due to their visibility).

And no, it is not possible to make people behave differently based on a defined brand personality — that’s not how it works :)

Who, Why, What, How

Brand building has always been about the whole organization (at least per theory in the books), but post-2020, it is even more about:

• Who are the people that are creating a product experience (Brand Personality)
• Why are they doing it (Brand Personality)
• What is different about it (Product Experience)
• How are they doing it (Product Experience)

As you can see from the list above, the only way to change your brand is to either make changes to people or the product experience. It might seem that marketing is positioned as unimportant, but of course, it’s important. It’s important from the perspective of communicating the above-mentioned points and amplifying them rather than “creating a brand” detached from them. And good creative marketing is important because it allows a brand to cut through the clutter.

So why is the brand often positioned as a thing-in-itself?

Somehow the brand is often talked about in detachment from product and organization in general. The reason for this is straightforward and can be illustrated by the quote from a comedy movie “Day of the Radio”:

“Friends! We have two problems. We need a contact in the Department of Defense, and I lost a jacket button. Can we find a button? At least theoretically? Yes. But we have no one in the Department of Defense. Conclusion: let’s try to find the button.”

It’s tough to change organization and product experience, but it is much easier to change marketing strategy, so often everyone tries to find the button.