The pendulum swings

Do brands have a future – or are we returning to a more product-centric world?

When you have been in the marketing business as long as I have, you realize that there’s some truth in the old adage that what goes around comes around.

I’ve watched companies centralize their marketing before returning to a more localized approach, and seen some yo-yo between the two. I’ve watched companies build a portfolio of highly distinctive sub-brands, then decide to focus on fewer brands, with any sub-brand more closely aligned with the master brand (take a bow, Amazon).

I’ve watched new brands move from simple, short names, which are either descriptive or evocative of a desired association or meaning, to more light-hearted, longer names (such as the margarine brand, I Can’t Believe It’s Not Butter!) – then back to shorter ones.

Yet the more critical shift lies in how the fundamental importance of the brand is perceived. Working in an ad agency at the start of my career, I was told that you couldn’t talk to consumers about brands, because they wouldn’t know what you meant. That changed as the understanding of brands, and belief in their value, steadily grew.

I watched the development of Interbrand’s 100 Most Valuable Brands ranking, sparking debate about whether brand value could be put on the balance sheet. I remember reports that Britney Spears would only play venues that were ‘on brand’ for her, and watching a contestant on The Apprentice label himself as ‘The Brand’. Branding arguably peaked with the 2006 tome Lovemarks by Saatchi & Saatchi’s worldwide CEO, Kevin Roberts.

Underlying this was a swing of what I call the ‘emo-func pendulum’. Marketing people had long known that brands’ appeal was a mixture of the functional and the emotional: of what a product does – the objective and tangible elements – and the more subjective and intangible elements that flow from the brand’s commitment to understanding its customers’ values, hopes and aspirations.

For many years, the pendulum has tilted toward the emotional, reinforced by surveys that find consumers prefer brands whose values match their own. Interest in brand purpose has soared. Yet I now see signs of the pendulum swinging back towards the functional – and away from brand altogether.

A recent PwC study found that what people really value is their customer experience. It is a deciding factor in their brand choices. And it is product or service performance – not brand image or emotional attachment – that drives people’s perception of the value they get from a brand.

At many of the new generation of brands, the chief marketing officer doesn’t have a seat on the board. Instead, they answer to a chief customer officer, a chief growth officer or a chief customer experience officer. Furthermore, innovation is often led by R&D, rather than following the consumer insight-led approach of recent years – particularly in hi-tech, platform-based firms.

These businesses increasingly favor ‘performance marketing’, where the focus is more on sales or business acquisition than on brand building – important aims, certainly, especially for startups. Performance marketing is more easily measurable, and the focus on growth and short-term returns makes it the darling of finance directors. But let’s be clear: it is not about building brand love.

FMCG giant Unilever is a bellwether for the shift away from brand purpose. In 2019, its then-CEO, Alan Jope, said he wanted Unilever brands to “stand for something more important than just making your hair shiny, your skin soft, your clothes whiter or your food tastier.” But his successor, Hein Schumacher, now argues that giving certain brands a social or environmental purpose “simply won’t be relevant or it will be an unwelcome distraction”.

The world of branding may be undergoing a fundamental shift.

The obvious question is: should your approach to marketing and branding be changing too?

Giles Lury is a senior director at brand consultancy The Value Engineers.