The new generation of brands are doing lots well but risk losing their identity.
The latest generation of digitally-native, always-on, direct-to-consumer, tech- and content-driven brands have a lot going for them. But all is not well. On the face of it, the positives – and there are many of them – remain robust. These brands are the darlings of both modern and traditional media worlds for a reason. Their focus on user acquisition and performance marketing is driving growth rates which are the envy of older, traditional brands. Their prioritization of user experience and seamless convenience increasingly has them topping the most-loved and most-valuable brands lists.
In addition, many are building themselves as ecosystems, stretching their brands into new sectors. Brands that started as digital platforms now operate in new sectors such as hardware and content creation. Amazon is an obvious example, having moved long ago beyond its origins in books and DVDs to sell just about everything. It moved into hardware with the Kindle and content creation with Amazon Prime TV. It has achieved what seems to be the aim of the big players: ubiquity.
However, despite the evident strengths of this new generation of brands, there are dangers ahead. The next gen brands have four main issues to consider – all linked to brand building.
The first relates to the fixation of these brands, most being the top online gambling sites not on gamstop, on performance marketing. They may well be addressing the long-held belief of many chief financial officers that marketers don’t really understand the commercial side of the business. However, with the focus on functional performance, there is a real danger that these brands lack the emotional depth of truly long-term brands. They often ignore the importance of building awareness and positive perceptions among potential future audiences: consumers who may not buy the company’s original offering, but might well want things from other parts of the ecosystem.
Linked to this is a second concern. In many ways these brands are reminiscent of brands from the 1980s and 1990s where the key stakeholders were not consumers but the owners and investors. The new generation of brands, in many cases, are backed by huge loans – and sometimes by the egos of their founders. They seem to be reverting to the bad old ways.
Many of the new brands either don’t really stand for anything or, at best, pay lip-service to their broader values.
The next concern was expressed by a colleague when he asked: “If they sell everything, how can they stand for anything?” In a changing societal environment, there is an increasing consumer emphasis on purpose and values – and actually living up to them. Many next gen brands either don’t really stand for anything or, at best, pay lip-service to their broader role and values.
And finally, if you dig into why these next-generation brands are currently so well-liked, their appeal is their functionality. They lack the depth of the older, more emotionally-rich brands. Many of the new brands live in the present (or the future); they aren’t interested in marketing history. However, things don’t always go well. To pose another question these brands might like to consider: “How can you lean on your heritage if you were born yesterday?”
The marketing world is being dominated by a new generation of brands. They are doing a lot of things right – but they do need to consider some of their weaknesses if they are to become generation-spanning brands. They might even learn a thing or two from traditional companies when it comes to building a brand for the long term.
Giles Lury is a senior director at brand consultancy The Value Engineers.