RIP: Brands? Hardly

Posted on March 5, 2008
Filed Under Marketing 2.0 |

Hank Williams recently informed the world of the tragic inevitable passing of the brand. After the Oscars pulled in the lowest number of viewers in 39 years, Hank recognized something that seemed to have eluded everybody else:

I think what it really says is something quite significant about the value and role of brands in modern culture. The Oscar failure is is a reflection of the fact that we are inexorably headed towards a day when brands, as a concept, mean absolutely nothing.

I found it amusing that Hank would use the Oscars as a “case study” for his ill-informed argument given that the causes for the poor ratings are fairly well-accepted:

Sunday night’s Oscar telecast, where “No Country for Old Men” took the top prize, was expected to underperform given the lack of movies with broad boxoffice appeal vying for best picture. ABC and producers also were unsure whether the Oscars were going forward with a full production until the writers strike was resolved Feb. 12, resulting in a last-minute scramble to prepare and market the show.

The strike hurt the awards in another way, too. ABC had fewer scripted hits such as “Grey’s Anatomy” and “Desperate Housewives” airing original episodes, so there was less of a promotional platform for running Oscar ads. During the week of Feb. 11-17, ABC’s average ratings were off 36% versus last season among adults 18-49.

Beyond the fact that lower Oscars viewership was predicted and is explainable without nonsensical arguments, arguing that a poor showing of the Oscars is emblematic of the death of brands is like arguing that the decline of the Miss America pageant is the result of beautiful women losing their appeal. In other words, anybody with an iota of common sense knows better.

Hank does his argument no favors by choosing to make it with possibly the worst “case study” possible but it’s even more important to point out that Hank chooses to make his argument in a day and age where, in many markets, the brand has never been more important.

Take, for instance, the market for luxury goods. From handbags to jeans, the amount of money consumers spend purchasing overpriced goods that offer nothing more than a brand with perceived cachet has propelled luxury brands into a formidable investment class of their own. As noted by Fortune in its special “The Business of Luxury” edition:

The investment case for luxury goods and services is indeed compelling. They don’t compete on price, so brands can pretty much charge whatever they want. (How else to explain $3,500 for a handbag?)

The power of the luxury brand has been so strong that it has actually created a “mass versus class” dilemma in which demand for these brands has made it difficult for companies like Louis Vuitton and Gucci to not extend their offerings to the “domain of the global middle class on an ego trip - people from Indiana to India prepared to pay a premium for the thrill of owning something that makes them feel special.”

The power of many of these brands extends online. Stardoll, for instance, a Swedish startup that enables its users to create and dress up virtual dolls, has “a list of 1,200 brands our users have asked us for” and for a premium, already allows its users to dress their dolls up with virtual fashion from brands like DKNY and Sephora. I believe that you can increasingly expect prominent offline brands to play a major role in the $2 billion a year-and-growing virtual goods market, one of the spaces significant opportunity lies for precisely that reason.

The power of the brand is not limited to luxury items either. From automobiles, where technology and innovation are two of the consumer considerations, to beverages, where knowing that you’re drinking Coca-Cola has a significant tangible effect that can be measured, brands still hold considerable sway with mainstream consumers. Just ask the guy who refuses to buy any truck that isn’t a Chevy or who would rather drink cattle urine than Miller Lite when Budweiser isn’t available.

What drives this? It’s something technologists like Hank seem incapable of understanding because a brand’s “market power cannot be attributed to the usual suspects of success: superior business models or cutting edge technology” according to Harvard Business School professor Douglas Holt:

What the most successful brands do differently, he believes, is to target powerful ideological contradictions produced by society. Through popular culture, society paints a picture of its ideals: What is a successful person? What is the good life? People strive for these ideals and experience tensions when how they understand themselves differs from the standards society has set. These contradictions produce potent demands for what Holt terms utopian desires—the desire for imaginative constructions that will resolve the felt tensions.

Brands that successfully respond to these desires are what Holt calls brandtopias. Brandtopias champion resolutions to contradictions through the stories they tell, primarily through advertising. Consumers use these stories as allegories—through ads, for instance, consumers learn different ways of understanding their place in society. When they drink a soft drink or beer, or drive their auto, much of what they’re consuming is the allegory.

The demand that brandtopias sate is based upon the nation’s ideology as expressed in popular culture. So shifts in ideology produce ruptures in the marketplace for utopias. Holt’s model reveals that there comes a point when the best ad in the world won’t make a dent if its message and the cultural moment are not aligned.

Holt goes on to provide an interesting case study of his own: Mountain Dew. The multi-billion-dollar soft drink brand, now owned by PepsiCo, has been successful for more than forty years. This success was not predicated on some sort of innovative business model or technology (the product has remained the same for four decades). Rather, this success was predicated on the fact that Mountain Dew has always been able to align its “brand” with the needs of the culture through “nimble transformation.”

This discussion is particularly interesting to me for two reasons:

At the end of the day, the brand is far from dead because brands satiate part of our base human desires. For those who think primarily in ones and zeros, this may be hard to grasp, but it’s not hard to grasp for the successful brands that have created lots of dollars and cents and will continue to do so because they understand that when their customers make a purchase, they’re buying more than just a product - they’re buying the brand. And in many cases, they’re paying quite a premium for it.

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2 Responses to “RIP: Brands? Hardly”

  1. gregory on March 11th, 2008 3:19 pm

    may people everywhere continue to feel inadequate, so that my business can flourish

    sad, eh? but a world of satisfied people would simply play hell on the economy… so keep the dis-ease contributors flowing

  2. Advertising != Engineering : The Drama 2.0 Show on April 4th, 2008 12:31 am

    […] for people who can’t accept that we’re not entirely rational beings and that there are underlying psychological and sociological dynamics that successful advertising […]

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