It’s time to rebrand “branding.” Let’s admit it, the term has become so overused, warped and misapplied by marketing theorists that financial executives no longer credit it with much. Even top brand consultancies cannot agree on its value.
So let’s call branding what it really is: future response.
This new name will bring clarity and unity to the debates over what branding does. Trout & Reis said branding grabs a rung on the invisible mental ladder for each product category inside consumers’ minds. Peppers & Rogers said brands establish personal relationships by extending customized offers through customer relationship management systems. Byron Sharp calls branding mass-media communications. Meanwhile, agencies and marketers routinely call branding everything from an organizing principle to an opportunity to change the world.
What’s more, while Kantar and Interbrand try to tabulate the financial impact of branding, there’s a gulf between their estimates. Kantar valued the top 100 global brands at $7.1 trillion in 2021, while Interbrand totaled up $2.6 trillion – a $4.5 trillion discrepancy.
No wonder CEOs and CFOs cringe at the term. So let’s make things simpler: Branding builds future demand, so should be called future response.
Advertising exists to stimulate demand and drive sales, and like any investment, advertising seeds returns over time. Our industry already has a moniker for ads that drive short-term results: direct-response media. Branding, by comparison, builds longer-term demand, but eventually those consumers buy, too, in the act of future response. This shift will bring clarity to marketing measurement and investment decisions.
Future response will bring focus to measurement. Scan industry trades and you can sense marketers shaking at the analytics systems shifting under their feet. Digital cookies are fading away, threatening the click-tracking mania of the past decade; meanwhile, $70 billion for U.S. television ad buys, $11 billion forradio and $7 billion in out-of-home are rapidly merging with programmatic digital buying systems. Future response brings cross-channel measurement into a business context.
Next, consider investment. Marketers don’t print money; they need budget approvals for millions of dollars from their CFO, CEO and board. The future response clarity will help financial executives understand the need to invest forward in marketing as the economy lurches toward recession.
Future response connotes a specific economic value from branding -- and one that can be measured. Graham Staplehurst, director of thought leadership at Kantar BrandZ, calculates the sale of more products at higher prices, more efficiently over time as [(volume x price) – costs] * time. This model can be tuned with other future response effects, including lifts in near-term direct response channels such as paid search, as well as mitigation of customer losses via defense against competitors. Stack up the algebra and you can model specific future response investment impact.
Which conversation would you rather have with a skeptical financial exec? “Hi, can we have $20 million next year to build our Acme brand?” or “Hi, we’d like to invest $20 million to increase Acme’s future response by $60 million in incremental sales”?
Some will argue that CFOs will automatically forego future for immediate response, but fiduciary responsibility actually keeps them focused on sustainable revenue. Creative-agency theorists will complain that future response discards the many nuanced psychological values of branding. Yet by sinking into people’s complex decision pathways, branding adds up to future response. Tell your smart, nuanced, culturally hip agencies -- thanks for those great insights, but please remember we’re here to sell something.
Branding has become obsolete due to the abundance of its pop-psychology derivatives. Marketers and their agencies help organizations grow by stimulating future response from customers. CFOs and CEOs will invest in that future if they can project those results.
I totally agree with the premise that the concept of branding is being abused and further believe it has been for years. However, I disagree with the definition provided ... I ask you to consider this instead:
"A brand is the total of what consumers think, feel and experience with your entity." Good branding impacts future purchase intent as it can be the reason why consumers want to choose you over competitive options.