A Short History of Branding
In this Q&A, Rivia co-founder and partner, Dr. Claudia Fisher, offers her insights on the evolution of branding over the last century or so and the shift to “living the brand inside out” in today’s hyper-connected and transparent world.
How has branding evolved?
Branding has evolved through a number of stages over its relatively short history, each reflecting the economic, social and political environment at the time.
So take us back to the end of the 19th century.
In the late 1890s with the advent of railways and long-distance product distribution, branding emerged as a way to identify the manufacturer and was largely limited to the use of logos. For the first time, consumers were able to choose from a wider selection of goods from companies outside of their local economy. To cope with this great choice (and risk), logos were used to not only indicate the manufacturer, but to also signal quality.
The industrialization that followed brought an extraordinary wave of life-changing innovation, introducing new products like the car, the vacuum cleaner, and the electric iron. At this point, it was widely believed that good products sold themselves and advertising’s primary role was to make sure everyone knew the product existed.
There was another major shift in branding after World War II. What happened?
In contrast, the proliferation of consumer goods in post-war USA brought an explosion in consumer choice, but with only incremental innovation. This led to the need to differentiate products, and the focus of branding shifted again, to the communication of superior features, unique ingredients, and their functional benefits.
But as real product differences increasingly eroded, companies started to shift their focus from what a product could do towards how a brand made the consumer feel (emotional benefits), attempting to build emotional bonds with customers primarily through advertising. This sparked a creative revolution in advertising which itself became synonymous with branding.
But, with the proliferation of media in the 1950s and 1960s, advertising became ubiquitous, turning consumer excitement into consumer fatigue. Companies had to find new ways to engage with the customer. With the arrival of the Internet, a new possibility emerged: a shift from a one-way communication (company to consumer) towards an interactive dialogue with the consumer and between consumers.
You note that branding has shifted again in recent years, and again this is being driven by economic, social and political trends.
The unprecedented wave of corporate scandals in recent history, the financial crisis with its global repercussions, the sustained crisis engulfing the Euro zone, the political instability of the Middle East and the shifting of economic powers towards Asia have all contributed to an environment of distrust. Meanwhile, the globalisation of the economy has led to increasing pressures to outsource business processes in order to take advantage of lower labour and manufacturing costs, particularly in emerging markets. The resulting complex and global supply chains have proven difficult to control, causing more scandals from massive product recalls to the exposure of child labour. To add further pressure to this dynamic, Web 2.0 or social networking has turned the Internet into a giant megaphone that makes it impossible for companies to control information or contain a crisis, further amplifying both distrust and vulnerability. Increasing expectations towards businesses to be environmentally, socially, and ethically responsible create further pressure points and additional control issues, feeding into the cycle.
Why is this lack of control significant for branding?
Brands represent a promise to their stakeholders and can only thrive when this promise is kept, every time. If companies lose control over parts of their supply chain, they also lose the ability to consistently deliver on this promise, thereby exposing the brand to huge potential for damage or even failure.
Why is the breakdown of trust so significant?
The breakdown of trust in the many authorities we assumed infallible is attacking one of the fundamental principles of branding. Brands are built on trust, without trust they cannot operate and survive. However, if trust is no longer a given, brands need to go back to the basics and start to rebuild this trust. Rebuilding trust is not possible through advertising or any other means of image creation alone, but requires that the brand is lived inside out. This means that a small set of values that drive the brand are embedded into every action and decision the company takes.
What is the link between CSR and branding?
Corporate Social Responsibility has emerged as a new standard of doing business in the 21st century and therefore needs to be addressed by every brand. However, there is considerable concern that a non-strategic approach to CSR does not sufficiently benefit either the company or society. Equally, there is great danger that companies feel pressured to jump on the bandwagon without proper consideration of brand impact, thereby setting themselves up for creating expectations the brand cannot deliver.
How do increased transparency and instant amplification impact branding?
As brands struggle to deliver on their promises to their stakeholders, any empty claims, exaggerations, misbehaviors and inconsistencies will most likely be spotted and shared with a large number of people, potentially destroying brand equity very quickly. It also becomes more difficult to contain information and to effectively separate audiences. As more information and more diverse points of view are shared with large audiences very quickly, greater transparency will result, ultimately forcing companies to take the brand promise beyond a communications exercise and to embed it into their every action.
You say that today more than ever brand values need to be lived inside out. How so?
In successful organizations the brand evolves around a small set of values that are experienced by the entire organisation and radiate outwards to all key stakeholders. This goes far beyond the creation of a favourable image through communications activities and requires the anchoring of brand values in every part of the organisation.
While customers are still the single most important brand audience, they are no longer the only one. Brands must address multiple audiences. Inside the company, greater emphasis needs to be placed on employees’ willingness and ability to enact the brand; more collaboration is required from a number of functions that regularly interact with key stakeholders and touch the brand (in particular, corporate reputation, human resources and sustainability functions), and brand ownership no longer rests with middle management, but with the CEO. Other external stakeholders like suppliers, shareholders, governments, the press, NGOs, etc., will increasingly come into contact with the brand; however, segregation of audiences and "stories" told is no longer possible because the Internet allows for an instant spread of information worldwide. Therefore, a coherent brand message and approach are required more than ever.
Further insights can be found in Connective Branding: Building Brand Equity in a Demanding World by Dr. Claudia Fisher and Christine Vallaster. Used by permission of Wiley.