Tuesday, September 30, 2008

Morgan Stanley – World Weary

We love the chic logo of Apple. We snap to attention at the name of Harvard and shiver at the mystique of Rock Center. Brands are the landscape of our culture, the marks and the landmarks.

But folks, let’s not forget: Brands represent behavior. They claim our time and invade our psyches not because of their logos and PR, but because they deliver something we want. They do a job, pay us back.

So what happens when companies advertise like cocks and perform like pigeons?

Look at Wachovia’s television advertising – featuring an idiotic image of money floating down onto peoples’ heads. Wachovia asks for our assets to manage?
Well, first Wachovia will be selling itself to a stronger bank because, let's guess, the institution just scatters money around?

Behold the grandiose Morgan Stanley tagline – “World Wise.” Has this company no shame? Can’t they pull their advertising during the current credit crisis in which they are seen as duped victims, not wise leaders? Morgan Stanley recently applied its worldly wisdom to finding foreign partners with money enough to bail it out.

Branding is not about picking colors and taglines. In financial services, a company with a strong brand – e.g. J.P. Morgan Chase – is now buying up distressed assets and delivering services at a profit to shareholders. A company scouring Washington and the world for a rescuer cannot be a respected brand… It’s an embarrassment.

Our advice to Wachovia: Stop scattering money around… and to Morgan Stanley: At least change your tagline.


Friday, September 26, 2008

Darwinian destruction of brands

As banks fail or get bought, the decline of financial value continues: Stock prices plunge, bondholders are wiped out. Hundreds of billions of dollars in portfolio value is no more. “The destruction of money” is how my friend, hedge fund director Dick Furlaud, describes it, as he clenches both fists in front of his chin.

But what about brand value? Its destruction, too, has been colossal. Brand value is an elusive intangible that CPAs struggle to price. But it’s there – or was.

People like Warren Buffett – wait, there are no people like Warren Buffett – understand brand value. Buffett knows it, lives it, feels brand value from his wrinkled brow to his weathered feet. That’s why he poured $5 billion into Goldman Sachs this week. The Goldman Sachs name – that magical franchise – is destined to survive, thanks to Buffett’s nod.

But what of the un-blessed? Twenty years from now they’ll be writing, “Back in the meltdown of 2007-2008, IndyMac collapsed, Bear Stearns disappeared, Lehman failed and WaMu shareholders were zapped.” These brands are the dinosaur skeletons of the future. We witness their demise in sparkling meteoric dust from millions of exploding mortgages.

In The Origin of Brands (2004), Al and Laura Ries described the rise and fall of brands: “Darwin’s description of the endless struggle for life and the survival of the fittest is a good metaphor for what happens in branding wars.”

Will schoolchildren someday flock to the bones of Bear Stearns? “What happened to this one mommy?” Well, kids… um… I guess it ran out of food.


Sunday, September 21, 2008

China brand going south

I was one of the skeptics. But no more. Earlier this year, I doubted that cases of tainted pet food and toys with lead paint would significantly damage the label "Made in China." The problems seemed accidental and aberrant. The sheer volume of Chinese exports and the West's dependency on Chinese factories seemed to insulate "Made in China" from serious damage.

Well, skeptic no more. Now – after last week's revelations of baby's milk deliberately doctored with dangerous chemicals – I think "Made in China" has lost significant brand value. There are grounds for questioning the current Chinese manufacturing culture itself.

Need to boost protein content of watered-down milk? Add a chemical. I think that's taking disregard for the customer to a new low.

The head of the Sanlu Group – maker of the contaminated baby's milk – bowed in public apology. But China itself – recent scene of ghastly Berlin-1936-style Olympic pageantry – seems steeped in disregard for humanity itself – whether for individuals trained by the thousands to dance like robots, or communities driven from ancestral lands for the sake of hydro power, or now babies forced to drink milk that is deliberately contaminated.

"Made in China" can no longer be seen as a valued badge. It is a devalued badge... and dishonored brand.


Wednesday, September 17, 2008

Merrill Lynch brand gone bad

For years Merrill Lynch has defied the cardinal principle of branding: Deliver what you promise.

Regarding the ML commitment to look after clients first?
The firm has sold to clients stocks its own analysts snickered over behind closed doors (dot-com boom disclosures).
Highest standards of integrity? ML helped the infamous leaders of Enron conceal weaknesses in that failing company's balance sheet (see deceptive barge transactions).
Understanding financial risk? Let us gag on the very notion. ML has lost, over the course of 18 months, 25% of total profits accumulated in its 36 years as a publicly traded company. (Foxhall Capital, Global Outlook, Sept. 16)

And yet this brand will survive. Bank of America bought the name – along with the human talent, relationships, financial and other assets. B of A will doubtless keep the name alive for some years. Whether it will be able to transform a culture of – how shall we put this? – unalloyed greed – will be seen.

A friend of mine – financial advisor and dedicated client rep at Merrill – cares for his clients' assets and protects their interests. He believes that if the Old Guard had been in charge – the guys who grew up in the retail business and who could smell a bad risk from 1000 paces – the company would not have wound up on the block. He and thousands of Merrill people are conscientious professionals...

But they work in a culture steeped in selfishness. Bank of America is led by tough, no-nonsense commercial bankers. This clash of cultures will be explosive... and in the end, the likely exit strategy is the final demise of the ML brand and the eventual slaughter of the bull.


Tuesday, September 16, 2008

Political candidates as brands

Yesterday, brandsinger was interviewed by a European radio station re: U.S. candidates as brands. Beforehand I scribbled talking points... which I share for your edification, amusement or scorn.

Any strong brand –
1 Speaks to people’s needs / engages them… is distinctive / different… and truthful / i.e. delivers…

2 Has a distinctive essence / soul – like Disney – imaginative family entertainment with touch of innocence.

3 Strong brands have memorable symbols  – Words... images – compelling emotion!

How political party / candidate brand differ from commercial / corporate brand?
1 One pays off in higher price… the other in more votes.

2 Political brands: Older / deeper in America – 150 – 200 years old – if you read the 1830s – Democrats representing the ordinary guy… Jackson's inauguration party with muddy boots...
Civil War debates you will see Democrats opposition to freeing slaves… Republicans favor.

3 Political brands harder to manage… more fluid… malleable… Bush has re-shaped the Republican Party into a messianic bringer of freedom to the world… big spending, etc. McCain seeks to change that?

4 Symbols are not mere logos / tag lines – but life-and-death imagery – Martin Luther King… JFK… Abu Ghraib prison… (Dem symbols)… Marines fighting and dying / Attack on 9/11 as symbol of evil enemy (Rep symbols)

Republican vs. Democrat both strong brands – like the corporate umbrella… with candidates as the product… Sarah Palin like the iPod to the Apple brand. She is perfect conservative Republican… ag. big government / very religious / and good shot with a rifle. Restores the brand.

Democrat values:
Important #1 Social justice – care for the little guy… fight perceived oppression, discrimination, racism… BIG GOVERNMENT THE TOOL TO HELP
2 Demographic groups – minorities, women, homosexuals – (FDR put together famous coalition of labor, blacks, leftist intellectuals… today the agenda of diversity.)
3 Process – favor focus on legal process… ever notice that both Clintons, Kerry and Obama / Biden all lawyers?…(Gore studied law at Vanderbilt) -- Reagan, Bush, McCain NOT lawyers…

Republican values:
Free individuals / free markets / private sector competition – vs. tariffs, taxes, regulations, govt-run monopolies
2 Strong national military – vs. USSR during Cold War, vs. Islamic Terror today… and this trumps #1 if necessary (i.e. encourage surveillance)
3 Traditional family organization and religious belief in right and wrong

Sarah Palin - Why so popular?
- True to herself – quality of authenticity… the voters smell a fake (like Edwards… that was Kerry’s problem, too… hence the efficacy of the charge of flip-flopping)…
- Her presence does not CHANGE the Republican brand. She revives it… Re-focuses it on Republican brand values.
- Like the iPod did for Apple… company was still not completely sure of itself… still a computer company… but iPod celebrated APPLE brand values: Youth / fun / easy to use / very personal / irreverent / simple technology / cool

Problem of Palin for Democrats:
This is the kind of citizen they are SUPPOSED to help – the husband is a union member! – a real ordinary person… not big corp chieftain… and a woman! Not just appeal to Wal-Mart moms… She IS a Wal-Mart mom. (Authentic) Like an African-American who is not a liberal Democrat – Clarence Thomas! Does not fit their paradigm.

There is snobbery running through both party cultures:
The Democrats ridicule people like Bush and Palin who aren’t polished academics… They are more impressed with degrees and professional expertise.
The Republicans ridicule people who like Biden, Clintons, Obama spend their lives in “public service” – to them being a professional politician is not noble… It’s a parasite.


Sunday, September 14, 2008

Nation brands – Singapore out-ranks USA?

Our friend and brilliant creative designer Jerry Kuyper alerts us to an index of nation brands. Which nation is number one? – the Coke among countries? The Apple of the world’s eye? It’s Singapore, of course! That’s according to East-West Communications' “first ever nation branding index to include all the countries and territories of the world.”

The USA ranks 34th. Here’s the link…

Here’s the problem: This is an index of press mentions. If good things happen chez vous, like cool festivals and warm weather, then your nation ranks high. If you’re a small country like Austria hosting a major sex scandal, then you drop from among the leaders to 147th place.

Let me advise East-West Communications: Media mentions do not equal “brand.” Negative reports (floods, job losses) indicate dramatic events with adverse impact – not a sign of declining brand value. So, please remove the word “brand” from your index. Otherwise, you will have branded yourselves as 100,147th among communications companies that understand the meaning of words.

Where should USA rank? Here was my note to Mr. Kuyper – and his reply.
Let me ask you, Jerry: If someone needed a surgeon, house to live in, jet plane, tomato, university to attend, place to raise your children, T-bone steak or a date for an important court appearance, would anyone in their right mind choose a Singapore thing over an American one? Good luck with that!

Mr. Kuyper’s reply:
I agree this is the best country on earth but...
- People are going to India for surgeries right now.
- A Scottish friend just returned home to have a knee replaced.
- Residential real estate is being bought and sold in Dubai before it can be built.
- Kobe beef is considered the best.
- I wouldn't want to be an innocent in Gitmo.
- The Danes bought our best wind energy companies and now lead the world.
- Most Europeans I know hope and pray their kids go to college in Europe.
- I buy kiwis from NZ and tomatoes from Canada (when their are no local ones).

Okay, well put. You've earned your afternoon of chatting with Europeans and eating brie.


Thursday, September 11, 2008

Nock-down, no-holds-barred in Norway

Shocking news: They fight over logos even in beautiful, civilized Nordic countries! Our gallant Norwegian friend Kevin alerts us to “quite a ruckus” over the new Norway Post re-branding, which spawned TWO logos – one for the parent and one for services offered under the name Bring.

For readers who can’t go to Norway, I will offer a stunningly superficial summary:
1 Norway Post is the old government-owned postal service that has grown, diversified and expanded across Scandinavia.
2 We all know what happens when a company diversifies and grows – It means the company must abandon an ancient symbol and create a modern, stylized logo.
3 And we know what that provokes! Every excitable critic crawls from under a green eye shade to dump massive disdain on the new logo because it’s so sterile, so obvious, so empty, so meaningless, so artificial and so not created by people we know.

Where would the world of branding be without these logo fights! We’d be stuck in daily drudgery – figuring out what color the shiny paper should be… Or quarreling over whether our font should have serifs of not… Or we would be dazzling a client with a strategy that emphasizes (drum roll) customer advocacy! Much more fun to criticize these red and green thingies that, in all honesty, look like a couple of plastic croissants.

To follow the blow by blow, our friends at Brand New have sponsored a roaring debate at:

For me – your poor jaded observer of the branding scene – I will buy a bag of popcorn and surf the net for a good, spiteful argument over the new Wal-Mart logo.


Tuesday, September 9, 2008

Virgin – Now THIS is brand extension

Extending the Brinks brand from armored cars to padlocks seemed a logical stretch. To home entertainment? We thought not...

But now behold the Virgin portfolio! Here is brand extension in all its glory. From swimming fins to fin services, from travel to tracheotomies, from spas to space flights – Virgin offers it all... and all under the Virgin name.

What do you brand marketers think: How the heck does this work? What's the brand glue... the beating heart of Virgin-ness?


Tuesday, September 2, 2008

How far can your brand stretch?

Our wise friend and pesky critic Jay Livingston files this brand-spotters report:
“In the locker room of the gym, I noticed that a nearby padlock bore the Brinks label – that logo with the bars and the thick sanserif letters. I doubt that there's any connection between the ability to make a good padlock and the ability to field secure trucks and delivery teams. Still, it seemed like a good use of the brand to move into a new product… I would have taken a picture for you, but when I pulled out my camera, the guys going to and from the shower gave me these looks…”

Thanks, Jay. No one expects you to risk a locker-room whuppin just to provide evidence for brandsinger… So we grabbed a picture of our own.

How far a brand stretches is complicated, but let’s note three criteria:

1 What your brand represents in the public mind. The Virgin Group – which is notoriously diverse – relies on Richard Branson’s unifying attributes of fun, value and irreverence. The Virgin name shines in leisure but not in laparoscopy. When Coke tried to brand clothing, the company found that a rep for bubbly refreshment had no pull when it came to pullovers.

2 Depends on how well you lay the strategic groundwork and execute (this is painfully obvious). Harley-Davidson eye-wear better be cool and macho. Pink is out.

3 Depends on what you are as a company and strategically want from your brand. Do you hunger to squeeze every nickel of new revenue from a respected name? Or do you see tight focus and specialization as key to long-term value? Yes, this begs the question, but it is central to decision-making. Some companies live and breathe diversification and merchandising. Others fight for brand integrity and control.

The allure of new revenue can be irresistible. A Brinks padlock is a logical extension of the brand. But hey, know what else is sold under the Brinks name?

How about home theater systems. The link to armored cars is murky... though I suppose both feature heavy metal.