Are Brands Becoming Less Relevant?
Over on the Customer Experience Matters blog, Bruce Temkin explains why he has declared the death of brands.
“It’s simple: Companies have let profits replace purpose. As firms optimize left-brain management techniques for squeezing out additional profits, they’ve lost something very important — their raison d’être. True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause.”
While I think it’s a far stretch to say brands are going to die, I do think that brands have become less relevant in the current environment. The DVR and the internet have changed the way people are consuming television media which has traditionally been the main brand builder for large cap companies. According to MediaPost: “In 2008, Nielsen estimated penetration of DVRs at 25% of U.S. households. This percentage is expected to climb to 41% of homes by 2012, according to research conducted by MAGNA Global Research.” The internet has also changed how people find information on products. Consumer’s don’t have to rely as much on brands to estimate value before they buy. They can read comprehensive reviews online or find out the aggregate customer ratings of a product.
In addition the emergence of social media like Facebook, blogs, and Twitter, has accelerated the spread of word of mouth. A brand’s reputation is much more volatile, as bad PR or rave reviews can spread through online communities like wildfire.
One of the most successful brands of late is Zappos which has been able to grow to a billion dollars in sales with no television advertising. Instead they have used social media like Twitter to help spread of the word of their world class service. Like Seth Godin likes to say, the TV Industrial Complex, in which companies like P&G would rely on television ads to build a brand, is no longer a viable strategy. Companies that are best able to adapt to the new media landscape will have the best chance of sustaining their brands and stay relevant with consumers.
