Use Common Sense in Branding

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Everyone knows the power of a good brand. But brand loyalty rarely comes cheaply and, in a downward-spiraling economy littered with failing dot-coms, it has become the scapegoat for venture capitalists and media alike.


Just ask a "prized" market analyst why most dot-coms failed, and he will cite $100 million Super Bowl commercials. Ask a venture capitalist what is the first thing he would like to cut out of any business plan, and he will say, "The marketing budget."


The truth is that plenty of established brands, such as Coke, Mercedes, Nike, Intel and McDonald's, spend huge amounts on marketing their brands, and they benefit immensely from brand-name recognition. Most emerging brands fail for one simple reason - they lack a working business model - and most of them fail while spending a whole lot less than $100 million. They got money while it was cheap and tried to buy mind share in hopes that it would lead to market share and, ultimately, profitability. These companies never even got to break even, let alone reach profitability.


Just ask Mr. Sock Puppet from doomed Pets.com, which figured out it could sell some pet-related items online but never looked at how to distribute a 50-pound bag of cat chow when it launched its site and started taking all those orders. So what was the No. 1 selling item when the site closed? The sock puppet.


A man once walked into our marketing agency and admitted he knew little about marketing but wanted to spend a few million dollars on an online campaign. When we asked what measurable results he wanted his company to achieve in terms of revenue or qualified leads or the like, he had no idea; he just wanted to buy some "mind share" - and therein lies the problem. Somebody sold these people a bill of goods that the new economy was changing old-school business rules, and that companies no longer needed to focus on generating revenue, being cost effective or profitable. We persuaded this man to save his money.


Most marketing agencies are agency-centric and focus on spending media dollars, regardless of the success of any particular campaign. After all, they are in business to make money, and it makes little difference for most to learn that one of their $10 million campaigns just flopped - other than to figure out, afterward, that they will need to focus on getting a replacement client - not to mention whether the original client is even still in business.


Most companies fail not because they do something wrong, but because they do not do anything right. So it does not help to have one of these traditional agencies try to put a spin on a failing business model. It only prolongs the inevitable and needlessly costs the company millions of dollars to market something that should have been tweaked anyway.


This is not to say money should not be spent on marketing or branding, or that a good launch will not cost $10 million. It just may not have to. A good launch is about reaching the right people with the right message at the right time, in the most cost-effective way. And a good brand is about doing all that over time. After all, good branding does not usually occur overnight, and the real power of a brand is the intangible value that compels the consumer to become more loyal, think more favorably or pay more than its true value.


Success is driven largely by testing a model thoroughly before it launches, making sure the model and the brand positioning are tweaked before the full-blown launch and enjoying a smart, fast and fun approach to shellacking the competition. In a tough market, there is no need to panic if you are prepared, and there is no substitute for sound experience, smart thinking and a little common sense.


• Blair Harsh is chief marketing brain at eBrains inc., Alexandria, VA. Reach him at bharsh@ebrainsinc.com.
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