The death of the global traditional brand is nigh. (We think).

The death of brands as we know them, is nigh.
We think.

A product brand is something which consumers are prepared to pay a higher price (a premium) for, largely, because they know what to expect in terms of taste, packaging, quality, cleanliness and so on. Brands come with a global standard.

You trust it.

So when you buy Persil, you know what you're getting, or Guinness. Anytime, everytime, anywhere in the world. You pay more for that standard (and so you should because it costs more to achieve). So brands demand a premium price.

A 'personal' brand is similar, but one endorsed by a person (obviously) but more of a celeb - like a perfume from Kim Kardashian - so you're buying into her recommendation, her lifestyle.

But of course, all brands reflect your lifestyle.

And because you're different to me, with different outlooks on life, we buy different brands. If you're an Outdoor type, you smoked Marlboro. If you were a creative type, you smoked Camel.

And brands were built on Advertising. 

You saw them on TV, heard their story, you recognised them in-store and you felt happy about buying them. You kept buying them too, because they worked, you felt comfortable with them and therefore, you had loyalty to them. 

That brand loyalty at least, has definitely changed and that's the key to this.

Consumers are now far more promiscuous and will try new brands, new products for new reasons and be more prepared to switch easier.

Prepared to switch for Functionality/Purpose and value reasons and hence for example, the rise of discount grocery retailers who sell products, brands you don't really know, you've never heard of - but you buy them largely because they're cheaper and they 'do the job'.

Or at least, you try them. You switch without really thinking. Whereas in the past, you'd have stuck by your loyal favourite brand.

Craft beers another example. In fact, you'll move away from the traditional brewery brands and try a craft beer because it's different, it's cheaper. It serves its purpose and probably, costs you less.

Because of digital too you switch.

You've tried new services that have been able to be created over the last 10 years - Iphone, Amazon, Facebook, Twitter, Netflix - which will become brands in their own right..... if they're not already....but they're more services than products. However, they've accelerated your promiscuity.

So the consumer (you) is more prepared to switch away from traditional, global brands than ever before.

Digital too, has also opened up a revolution in advertising which is outside of the manner in which we've promoted brands for the last 70 years anyway. That's also having an impact.

Because.... the most effective Ad is recommendation (always has been) and digital allows you to get personal, instant recommendation. Word of mouth.

For example, a Facebook friend tells you about a new beer and how great it is, so you try it. On Twitter, a pal has told you about a new healthy Soya milk or warned you about the dangers of sugar. So you switch on their say-so.

And therefore, traditional brands lose loyalty on which the brand was based because of another recommendation.

Advertising only really works once - it's an attempt to get you to try a product once because if you like it, you'll stick with it and they'll get repeat purchases. That's the essence of brand loyalty. The essence of brand revenues. Repeat business.

But if you keep switching.....brands cannot depend on those repeat purchases.

We've got used to farmers markets and artisan suppliers. We use sites that we didn't know before. We download new Apps. We've got happy with a new beer or a new washing powder and we'd rather support those smaller businesses, than the global, big brand giants.

We'd even rather get our news from outside the norm media players despite the 'trust' issues.

Because that's what digital does. It encourages you to try new things.

It's the great 'brand-leveller'.

Hence we've opted to buy from sites that are cooler, better, more like us and not the global sellers. Boo Hoo, Asos, Misguided, Ebay.....(If you look at the top 50 Fashion brands in the UK, not one is a traditional high street name). To try new things, to try new brands.

So there's more of a generational shift happening away from the traditional big global household brand name. Or, should we say, brands don't work they way they used to.

They no longer can depend on the repeat purchase of brand loyalty.

And that impacts on Advertising and notably, Ad Agencies who used to manage these brands. 

Like for example, the way AOL have set up their own in-house Ad Agency just to deal with their AOL digital clients (called 'Partner Studios'). Because no one understands how to produce creative work for AOL, than, AOL.

More of that will happen as Ad Agencies have been slow, defensive, about digital over a long time and because, the old brand rules have changed. So their old skills are becoming redundant unless they're prepared to tool up.

Traditional Advertising is even possibly becoming wallpaper as viewers leave to other media and have a new Ad cynicism.

Media too has changed. Despite huge audience shifts to all things digital, most of the Ad dollars remain with traditional media. Programmatic buying will disrupt that.

As for brands? Well, it's a long road to reposition a global brand into something new even if it could be done. Diageo's move into craft beers under totally new branding, is one way, but it might be seen for what it is.

The only real way is to go back to purpose. Go back to trust and go back to the reason the brand originated from. Give the consumer knowledge to make the choice rather than song-and-dance glamour. The days of 'aspirational' advertising to create desire, create demand are over. Advertising needs to be stripped back.

Tell the story that relates to consumers and don't cynically exploit things like sports sponsorship, csr or charity - it's seen through. So too, copy platforms built around fickle, unbelievable concepts like "we believe in friendship".

And therefore, don't behave like a global brand player of old. 

Go back to the reason you exist. If it get clothes whiter, say it. If it tastes good, tell it. If it's quick to make, show it. And use online to tell that story.

And if your brand doesn't have that defining USP (unique proposition), drop it. Move on.

The global brand aspirational days are over.
And the heavy impact of TV Advertising is dwindling.

We think.

Smell like a Man at the top of the page. There's honesty for you. Trust, like these at the bottom of the page.

The world just changed.

                             

What is a Brand? And why they might be dying.

Ad men and Advertising is driven by Brands. 
Marketeers are driven by brands. 
Company Balance sheets are driven by the values of those brands.

And yet, we may be seeing the end of them.

A brand is something a consumer is prepared to pay more for, a premium price. "Prepared" is the key word.

Largely, how Brands started, was with Sugar believe it or not when it was a hugely valuable commodity.

In the old days...you went into a grocer's store and asked for sugar which he kept in a large, open, hessian sack, behind the counter. 

If you had a jar,  the grocer filled it, weighed it and handed it back to you and you paid him. If not, the grocer had some sort of a container that he'd fill and sell to you.

But there were problems. 

The amount of sugar you got every time you went in, was different. The hessian sack wasn't always clean and the sugar not always hygienic, as flies circled it. The quality was different because the grocer bought it in bulk from different suppliers so it was never consistent. The taste varied. And so on.

So the grocer decided to bag the sugar. 

In doing so, standardising the weight, the quality, the hygiene and the named it something - they branded it.

What that meant was the customers knew what they were buying consistently and they were prepared more for it in return. That's the essence of a brand.

When I go into McDonald's for example, I get the same burger in Dublin as I do in LA. Or Coke tastes exactly the same in Jamaica as in Norway. That's a brand.

However, because of all that preparation in developing consistency as well as the advertising costs, brands demand a premium price. You trust it more than the hessian sack of sugar and so you pay more for it.

Straightforward.

Also, you'll develop loyalty to that brand for one reason or another. Maybe it makes you feel better buying a branded coat. Or perhaps you like the taste of a brand of sausages and are loyal for that. Or the packaging you feel, makes you look cool. And so on.

Loyalty to brands is a cornerstone of marketing because advertising can only get you to try a brand once. And if you like it having seen the Ad and tried it, you'll stay with it and so hence the long return on that advertising/marketing investment.

All good. 
Until that is, a recession hits.

What we're seeing now in Ireland and the UK certainly, is a pull back on brands. A major break in that loyalty.

The main reason is of course affordability but what's totally shocking is the quick reaction of consumers to switch to lower cost products. They're leaving established life-long brands and buying products they know nothing about, because they're cheaper. They're doing so without as much as a thought.

In retail for example, they're flocking to the discounters and buying products that they're unfamiliar with. In a lot of cases, brand names they've never heard of nor know nothing about that brand's heritage. It could have been produced in a shed.

In other retail, they're opting for lower cost products rather than the brand they trust and buying 'off deal'. Bogof and twofors (Buy one get one free, two for the price of one).

They're not prepared to pay the premium. And it's obvious even in my fridge. 

Established brands are reacting by reducing their prices, reducing in other words, their 'premium'. It's understandable - they have to sell - but it will kill them ultimately.

How many years did friends of mine develop Sony as the top end brand? How much money was spent on building that premium brand? And then I walk into Tesco on Saturday and lo and behold, there's Sony on the shelves. Any wonder Sony shares are graded at 'junk status'?

You see, as I said, if a company loses the value of their brands, they lose the Balance Sheet. As they trade their brands down in price, their brands have lower sale value should anyone want to buy them. And consequently, the company who owns the brand, eventually has a lower sale value in turn.

I looked after BMW when it had exclusive brand status. Now I see the BMW One series cheap version, at every traffic light. My 3 year old BMW car was then 80,000 euro new, and it's now 45,000 euro new. I do understand the short term gain in reducing prices, but understand too, the long term brand loss. I won't buy BMW or Sony again.... and I was a long term brand loyalist.

Consumers ultimately decide whether a brand survives. And right now I get a sense, they don't want them anymore. Shocking but we need to get our heads around it.

Brands aren't dead. 
But they might be dying.