Three of the top five global brands listed by Forbes — Google, Amazon and Facebook — are brands of the digital era. Even more significantly, these brands grew not by using conventional mass media advertising, but with the help of incrementally accretive digital engagement.
Impressively, while the revenues of these brands are dwarfed by some of the more enduring businesses of the 20th century, their brand values often surpass the revenues of the 20th century titans, as the Chart (sourced from Forbes magazine) shows.
Apple and Microsoft, though important, are not germane to this discussion, and our focus is on the remaining brands.
Let us look at the Chart from the perspective of legacy brands (Coca Cola, Samsung, Disney, Toyota and AT&T) and the new kids on the block (Google, Amazon and Facebook).
Revenue vis-à-vis brand value
As is apparent from the Chart, the revenues (orange bars) of the legacy brands, excepting Coca Cola, dwarf the revenues of the newcomers. However, the brand values (the blue bars) of the newcomers are substantially higher than that of all the legacy brands.
Many factors have contributed to the valuation of these brands. However, in the context of brand-building, it is striking that the newcomers relied mainly on digital channels to grow their brands, with minimal use of conventional media, and even that sparingly and in later stages of their development. Obviously, these brands are on to something, that legacy brands are missing.
What this is and how they have achieved it can, in large part, be explained by their digital origins and the rise of digital media, some of it spawned by the players themselves. How they achieved their brand valuation is an object lesson on the opportunities for brand building that the digital eco-system offers.
Brand building – a recap
Just as a reminder:
~ A brand is the relationship a manufacturer has with a consumer and is the sum total of the consumers’ experiences, stories, myths and endorsements about the brand. These are built by usage experience, personal interactions (customer service interaction; airline agent behaviour, and so on), hearsay, press reports and advertising, among other things. Mass-media advertising, as we know it is the most visible and accelerated component in building a brand.
~ Brands fade away not because consumers are fickle, but because actions taken by the manufacturer cause the trust reposed by the consumers to diminish over time. This erosion of trust allows room for disruption.
~ Brands are not built overnight, but through a systematic process of winning the consumers’ confidence.
Consumer purchase of the brand at a profitable price and its continued usage is the enduring result of the brand building process.
Brand building in traditional media
To build brands it helps to start with a model of how consumers learn and establish a relationship with a brand. There are many brand building models. The simplest of them is popularly referred to as AIDA for Awareness, Interest, Desire and Action. Quite simply, the model postulates that adoption of brands by consumers follows a linear process, beginning with Awareness and ending with purchase and use of the brand.
With traditional media, the workhorse of brand building is a television commercial with or without a larger-than-life print advertisement, supplemented by supporting roles from radio and other incremental media. Given its nature, the fulcrum of advertising in traditional media is built around intrusive impact and memorability — both, designed to break through the sea of communications that the consumer is inundated by.
Despite the limitations of the environment, advertising in traditional media played a stellar role in its heyday. However, with increasing competition, more nuanced consumer expectations and the democratisation of information, the role of advertising itself had to evolve. Traditional media is equipped to address these only minimally, while digital media is built around this changing environment, and in some cases has been the engine of this change.
Consider awareness as the building block of brand building. The context for awareness can be many — solving a problem, source from which it can be got, tangible benefits, comparative products, etc. Conventional advertising cannot cater to these multifarious dimensions of consumer awareness.
In the concluding part of this article, we will see how digital players tap into a whole new ecosystem to convey the power of their brands effectively to consumers.