Davis Thinking } analysis and interpretationDavis Brand Capital, which published the 2009 Davis Brand Capital 25 ranking in December, today announced expanded rankings in five industries: automotive, finance, retail, technology, and telecom.
Migros is Switzerland's largest supermarket chain and one of the 500 largest companies in the world. Known as the big M because of its iconic orange logo, the company employs more than 84,000 people and has recently posted sales of more than $20 billion. Turning 85 years old in 2010, Migros' unique history, business savvy and far-reaching vision make it a noteworthy case study for brands in and outside the category. Migros has been ahead of its time from its inception, and is a prime example of how a company can diligently build brand capital through innovation, social responsibility, thoughtful portfolio strategy and a careful management of brand voice.
GE (NYSE:GE) captures the number two spot in the Davis Brand Capital 25 for 2009. The world's largest company, GE has rebounded from a transition period and one of the most challenging years in its history -- one that saw its stock plunge to record lows. The company's nimble and effective management of its brand capital is helping it tackle new market paradigms and position itself to lead into the future.
As the year ends, we look back at the most read and shared posts from Unbound Edition's contributors, and a few more favorites chosen by our editorial team. We appreciate your continued readership and commentary and look forward to more dialog in 2010.
Microsoft ranks #4 on the Davis Brand Capital 25, besting twelfth-place rival Apple. Despite taking some hits in a year-long advertising tit-for-tat with Mac, Microsoft joins fellow technology brands IBM (#1), HP (#3) and Cisco Systems (#5) at the top of this year's list. The Davis Brand Capital 25 is the only annual list to evaluate brand as an amalgam of intangibles, including brand value, competitive performance, innovation strength, company culture and social impact. Microsoft's top-five ranking is a reflection of the company's successful management of its brand capital across a diverse portfolio of technology products and services.
Cisco's #5 ranking on the 2009 Davis Brand Capital 25 should come as no surprise. Cisco has taken an integrated approach to developing its intangibles for years. The following sections detail Cisco's success in carefully managing its brand value, competitive performance, innovation strength, company culture and social impact.
On Monday Davis Brand Capital released the 2009 Davis Brand Capital 25, and IBM took the top spot. IBM's #1 ranking may surprise some at first glance. After all, brand is typically viewed primarily through a marketing lens, and therefore tends to be more closely associated with consumer-centric - and arguably more glamorous - companies such as Apple or Nike. But the Davis Brand Capital 25 examines brand more holistically: as a collective set of intangibles, including brand value, competitive performance, innovation strength, company culture and social impact. The following commentary and qualitative assessment of top-ranked IBM highlights the company's successful management of these five intangibles that comprise brand capital and provides context for its #1 ranking.
Davis Brand Capital today released the 2009 Davis Brand Capital 25 ranking, which evaluates brand beyond its traditional marketing function and considers it as an amalgam of intangibles creating value in the intellectual economy. The ranking compares the five key intangible categories by which the consultancy defines brand capital: brand value; competitive performance; innovation strength; company culture; and social impact.
Patrick Davis Partners, the brand capital consultancy, today announced an expanded portfolio of services and a name change to Davis Brand Capital.
Ad Age released five new rules for marketing this week and invited emails for other “new rules.” At Patrick Davis Partners, we agree that these times demand new thinking by marketers. We even released our own thoughts about new priorities for a post-agency age last November. So with a nod to the “radical transparency” Ad Age cites, and a sense that one ought to practice what one preaches, we’re responding in an open letter instead of an email.
To expand on the excellent piece The Good Business of Good Citizenship, it is worth looking at some additional data. As Daniel Yankelovich and Isabella Furth observed in 2005, corporations and government have been subject to waves of mistrust reaching as far back as the 1930's Depression. Not surprisingly, we are in the midst of another wave, and consumer trust has eroded severely since last year. Every major industry in the U.S. is affected, with banks and automotive leading. Why does trust matter so much?
For most Americans, the conspicuous consumption of the late 20th century was not just a show of status or an assumed birthright in the land of plenty, it was an act of justified (if not inspired) patriotism. Prospering and buying things proved the American system worked. In our greatest moment of national crisis, George W. Bush called us to arms post-9/11, with the rallying cry of “go shopping” to support our economy and stabilize our nation. Consumption was the way to fight back; it was our role as citizens. Economic policies followed that fueled this citizen-consumer march into battle. But something else happened along the way, too. We didn’t just shop. We reconnected. We found new ways of expressing citizenship, and they can serve us well now as marketers, if we follow a few, new citizen-based rules.
Surgeon and writer Sherwin Nuland makes a brilliant connection between medicine and language. “If there’s one operation for a disease,” he explains, “you know it works. If there are 15 operations, you know that none of them work.” Such it is, he suggests, with the many definitions of the word hope. In this talk, Nuland traces the latest political and cultural buzzword to its IndoEuropean root to find its original meaning. Studying the etymology of this powerful concept, he proposes, is the only way we can hope to make sense of it.
The post-agency age is upon us. With remarkable speed and effectiveness, technologies and consumer preferences have coalesced, forcing a broad and deep cultural demand for direct, honest relationships. The go-between agent is less relevant than ever before, and the global financial crisis is likely the final blow to the inefficient and long-suffering agency structure. Winning in the post-agency age will require these new priorities.
People for the Ethical Treatment of Animals (PETA) yesterday sent a letter to Ben Cohen and Jerry Greenfield of Ben ‘n Jerry’s Ice Cream fame, asking them to replace the cow’s milk they currently use with human breast milk. While I don’t doubt that this moove (sorry) would make some cows very happy, the idea of a dessert made with human breast milk gives me the willies.
While I applaud and, I hope, help advance the “green” movement on a number of fronts, I think it is important also to recognize the functional selfishness of the entire effort. If we are honest, “going green” isn’t really about saving the planet or improving the environment. It’s about saving ourselves. Our broad, cultural hubris may let us forget these are separate things.
This week, Unilever announced a company-wide initiative to ban size zero models from appearing in advertising for any of its products. The company says it “believes in a healthy balanced diet and that both men and women have the right to feel comfortable with their bodies and not suffer from lack of self-esteem brought on by images of excessive slimness."
Thinly veiled PR ploys, corporate-image ads and traditional notions of CSR-as-afterthought are outmoded. As one brand consultant puts it, “corporate sheen is dead.” Unfortunately, most marketers are still hanging out at the wake, too drunk and reminiscing about the good ole days to realize their consumers (and other stakeholders) are light years ahead of them.
Starbucks and other "experience brands" need to evolve into the age of brand meaning quickly. Why? Because the brands that win today are ones that drive social agendas.
What’s wrong with the current preoccupation with all things green? I have friends who say the environmental initiatives sprouting like weeds are the consumer and the market taking control – AT LAST! - of issues the White House would rather ignore. A global, cultural surge towards sustainability. Something to applaud and encourage! Maybe. But I don’t believe everything green is worth celebrating this spring.
If any company seems well-positioned to both influence and profit from a generation of environmentally aware youth, it's Walt Disney Co. And Robert Iger, president and chief executive of Disney, insists the company is doing just that. Mr. Iger sat down with The Wall Street Journal's Alan Murray to talk about the new green strategies the company applies to everything from its theme parks to its movie studios, as well as changes Disney has seen in consumer attitudes. They began the conversation by talking about the company's conservation campaign—Friends for Change—which so far has reached more than a million children, he says.
American Express is using the celebrity-studded Academy Awards TV event on ABC to give one of its new programs a star turn: the company is promoting its cards by urging consumers to "take charge of making a difference." At American Express, card "membership" was long touted for its privileges. Now it comes with responsibilities too.
Judging from its branding and the griping of its competitors, Apple customers are hip, aware, and enlightened, yet its shareholders recently defeated resolutions to make the company more environmentally responsible and affirmed instead their uncool unconcern about anything other than profits. There isn't just a disconnect here, but an entirely topsy-turvy arrangement.
Is it possible to have a coffee, buy a car or go shopping without saving the world? Not these days. And now you can also host a pancake breakfast, send Girl Scout cookies to the troops and shelter stray pets, thanks to a friendly corporate sponsor. In addition to the now-requisite cause marketing, brands such as Quaker, Pepsi, Prilosec and Bisquick are turning to so-called microsponsorships of a few hundred or few thousand dollars that go straight to the consumer to fund their own pet project. The most visible of these is Pepsi Refresh, in which consumers can apply for grants ranging from $5,000 to $250,000.
Richard Saul Wurman is an architect and graphic designer known for sparking debate. In 1984 he founded nonprofit TED and began holding annual events to stir up conversations about technology, entertainment and design. More recently, Wurman is appearing in Web videos to create chatter about a new topic: emissions, cars and the hope for a cleaner environment. Nissan Motor tapped Wurman and other thought leaders in December as part of a year-long marketing effort geared to make more people aware about the impact of emissions on the environment. Wurman and other luminaries, including Swedish designer Marcus Eriksson, appear on in videos a Web site called Journey to Zero that many might miss as being a message from Nissan.
I believe strongly that, rather than business injecting business values onto our communities to business ends, we really need to turn the tides and teach business how to espouse human values again…or as Gary Hamel writes in his excellent column, put soul back into business. It is human beings, after all, that are necessary to the success of any business (whether employees or customers).
PepsiCo ditched the Super Bowl this year to make a major social media play. Instead of spending money for ad time on the Super Bowl, it's relying primarily on digital initiatives to spread the word about its Internet-based Refresh Project contest and charity campaign. The cause-marketing effort is a good one. Word is spreading through traditional media, online networks, social media and celebrity chatter. But I believe Pepsi made a big mistake in giving up its long-held Super Bowl ad real estate. A more integrated media approach--one that included the Super Bowl--would be a savvy play for Pepsi. And such integration is something top marketing executives need to keep in mind in their rush to embrace digital initiatives.
Pepsi's Refresh Project, a first-of-its-kind experiment in social media that invests the brand in community-building projects, won't simply leave a legacy for the recipients of its financial grants. It's also a pivotal test case for other brands trying to navigate an ad-cluttered, cynic-rich marketing landscape.
Today, as the globe struggles with an historic economic decline, it's time for a new revolution. I'd like to advance a hypothesis: Today's great competitive challenge isn't going from Good to Great. For people, companies, and countries, it's going from great to good.
Just days before the Super Bowl, when media outlets are abuzz about all the commercials consumers can expect to see in the big game, the folks of Gastonia, N.C., a small town 25 miles west of Charlotte, are opening their newspapers to find an article about one company that will be sitting on the sidelines this year: Pepsi.
When the going gets tough, costly good intentions can go out the window. Company spending has been squeezed by the global recession and budgets for corporate social responsibility have suffered disproportionately. A survey of U.K. businesses by KPMG and Business In The Community found a third of companies cut their corporate social responsibility budgets in 2009. Corporate philanthropy has also been hit, with a study by the Giving USA Foundation revealing that charitable donations by U.S. companies fell by 8% in inflation-adjusted terms in 2008.
Decades ago, consumers were invited to “be sociable, have a Pepsi.” Now the brand wants to invite consumers to help Pepsi support social causes — and will use social media like Facebook and Twitter to help spread a message. Pepsi-Cola is formally introducing on Monday an ambitious campaign named the Pepsi Refresh Project, aimed at doing well by doing good. The brand is dedicating at least $20 million through the end of the year for donations to local organizations and causes proposed by the public in realms like health, arts and culture, the environment and education.
When the Vancouver Olympic Games kick off on Feb. 12, visitors will find café furniture made from pine-beetle-salvaged wood, drink out of bottles made from 30% plant-based materials, and their beverages will be delivered via hybrid vehicles and electric cart. All are elements of Coca-Cola's first zero-waste, carbon-neutral sponsorship. The effort has been years in the making, beginning with a relatively simple recycling effort for the Athens Olympic Games in 2000. Since then the company has layered in additional elements, like environmentally friendly coolers and shirts made out of plastic bottles.
Public confidence in companies, governments and non-governmental organisations has staged a recovery since last year's "trust Armageddon", but the rebound is patchy and fragile, according to data to be presented at the World Economic Forum tomorrow in Davos. Trust in business has risen from 49 per cent to 53 per cent around the world year-on-year, says the annual "trust barometer" of well-educated, highly paid and engaged "informed publics", conducted by Edelman, a communications consultancy.
According to the 2009 Cone Consumer New Media Study, an online survey by Opinion Research Corporation among a representative U.S. sample of 1,048 adults, comprising "new media users," 44% of American new media users are searching for, sharing or discussing information about corporate responsibility (CR) efforts and programs and are highly confident they can have an effect on business.
U.S. government officials and business leaders were supportive but wary of taking sides in Google Inc.'s battle with China, a sign of the delicate tensions between the growing superpower and the West. The White House said it would wait to comment until China responded to Google's threat to bolt from China, over censorship and alleged cyber spying. Commerce Secretary Gary Locke called Google's charge that it and dozens of companies were hacked "troubling" and encouraged China "to work with Google and other U.S. companies to ensure a climate for secure commercial operations in the Chinese market."
Ford recently wrapped the first chapter of its Fiesta Movement, leaving us distinctly wiser about marketing in the digital space. Ford gave 100 consumers a car for six months and asked them to complete a different mission every month. And away they went. At the direction of Ford and their own imagination, "agents" used their Fiestas to deliver Meals On Wheels. They used them to take Harry And David treats to the National Guard. They went looking for adventure, some to wrestle alligators, others actually to elope. All of these stories were then lovingly documented on YouTube, Flickr, Facebook, and Twitter.
While most CMOs have laid forth their plans for 2010, many are still seeking a way to innovate in a time of uncertainty. Where are the opportunities? With the recent dramatic drops in marketing spending, there has been one category that continues to grow. Throughout 2009 we saw the launch of many national cause-marketing programs (see sidebar: Dawn, H&R Block, Pepsi, Sonic Drive-In) at a time when marketers were watching budgets more closely than ever. With this rise in popularity comes the question: Where is cause marketing headed in 2010? While the rules of a successful cause campaign remain solidified, the category is set to change dramatically in 2010.
The economy may continue its gradual recovery next year, but advertising is expected to show the influence of the recession through 2010. Don't expect a letup in the rough-and-tumble sales pitches that hit the airwaves, Web and magazines this year, as advertisers like Campbell Soup and Verizon Wireless, owned by Verizon Communications and Vodafone Group, took direct aim at their competitors. Advertising executives expect such barbed comparison ads to continue. Other companies, meanwhile, will be showing their softer sides. In the bleak aftermath of the recession, many marketers think consumers will respond to brands they perceive as giving back to the community.
As we begin a one-year celebration of the ANA's 100th anniversary, we have created the Marketers' Constitution, which contains 10 essentials of marketing for the next 100 years. Its purpose is to ensure that our industry continues to thrive and contribute to the growth of the U.S. economy and to the well-being of our society.
It may have been easy to miss if you don't work in the world of corporate led cause related marketing, but Corporate Social Responsibility (or CSR) programs are in the midst of a crisis. The subject of the debate mainly centers around two big issues: brand value and authenticity. On the one hand, CSR programs are attacked by shareholder groups and business investors who argue that they are a needless distraction and remove money (and value) from the investors of a business. CSR programs are also attacked by industry watchdogs and groups who argue that businesses only engage in CSR programs to create an artificial connection with consumers and claim allegiance to causes they don't really care about. On the other side, those who work on these programs make a more idealist argument - that companies can do well and do good at the same time.
The wretched economy has forced many consumers to, well, consume less, or at least less avidly than they did before the bubble — or bubbles, if you count Wall Street and real estate — burst. What, then, has that meant for the cause marketers, which depend on the kindness of shoppers to raise funds for nonprofit organizations, associations and assorted other doers of good deeds?
Every brand makes a promise. But in a marketplace in which consumer confidence is low and budgetary vigilance is high, it's not just making a promise that separates one brand from another, but having a defining purpose. This point and its implications were made clear to me at the recent Association of National Advertisers conference in Phoenix where CMOs from some of the smartest organizations explained why purpose-driven branding is essential to success in this "new normal" environment. While it may sound a bit like Philosophy 101, a company whose employees can answer the question, "Why are we here?" will be the company that makes stronger connections with consumers in search of solutions to life's new normal issues.
What's a megatrend, you ask? It's something big. I'm talking really big. Think of a giant unstoppable tsunami of change transforming society as we know it. Think global warming scale -- then apply it to mass human behavior. Think glaciers carving the grand canyon of consumer sentiment. So what are the new megatrends that I believe will transform society in the coming years? What brands are taking advantage of them? And what can you learn from them?
Around the world, four billion people live in poverty. And Western companies are struggling to turn them into customers. For the past decade, business visionaries have argued that these people, dubbed the Base of the Pyramid, make up an enormous, untapped market. Some of the world's biggest, savviest corporations have aimed to address their basic needs—by selling them everything from clean water to electricity. But, time and again, the initiatives have quietly fizzled out. Why? Because these companies were looking at it all wrong.
In 2007, Self magazine released results from a study titled GOOD, which examined how women react to cause marketing. Its findings encouraged cause-supporting companies to make the move from telling consumers about how the company was giving back, to telling consumers how they were helping the company give back--the consumer feels better about herself when she supports "good" companies. Self recently released GOOD 1.5, which delves deeper into women's responses to cause marketing and is relevant given how different the economy is from 2007. Cynthia Walsh, executive director of marketing for Self, said that while many marketers expect consumers to care less about "good" in this environment, the opposite is actually true.
I happen to think that the folks who were in charge of the Olympics branding strategy in Rio de Janeiro did a phenomenal job of differentiating Rio's promise from the other cities in contention, and then clearly establishing its relevance to the IOC. In other words, the "Brand Rio" team followed a couple of the basic rules of smart brand management and came out the category leader as a result. There is almost no brand category that isn't awash in choices. Whether cars or cosmetics, beverages or baby carriages, there is a lot of stuff out there and most of it is pretty similar. The competition for consumer attention is fierce and it can't be won on table stakes. The only way a decent brand can ever hope of becoming the chosen brand is to make a promise that's completely different from any its competitors' and ensure that this difference is meaningful to its target audience. In an ever-expanding global marketplace, this is getting harder and harder to do.
As the economy shows signs of a recovery, marketers are wondering if consumers will revert to pre-recessionary behavior. Consumers are trying to figure that out too. Many people are reevaluating their spending because they never again want to feel as vulnerable as they have over the past 12 months. But our society is contending with another significant change. For many people, the new determining factor for success is no longer pure profitability, but responsibility. That shift in perspective takes the form of a simple question: Am I doing the right thing--for my family, our nation, the planet?
While Americans have spent the summer seeking new remedies for their financial ailments, attending noisy town-hall meetings on health-care reform and trying to find something to occupy their time besides the travails of Jon and Kate, it was pleasing to read that these issues have not had a completely negative effect on what the rest of the planet thinks of us. This was made known in a recent New York Times op-ed in which the author noted that, over the last several months, the United States' brand has been seen more positively in the eyes of the world. This bit of news was reassuring to me and got me thinking about how the very idea of "good brand, bad brand" has taken on new meaning in this age of renewed thriftiness, environmental consciousness, corporate responsibility (or, flagrant lack thereof) and, most of all, consumer vigilantism arising from our all-digital-all-the-time marketplace.
Marketers caught on early that emotion sells product. "Would your husband marry you again?" screams a Palmolive ad from 1921. (Not unless you scrub with Palmolive soap, honey.) Today, Heineken has promised warmer international relations via handoffs of Premium Light from mountain men to Indians to ballerinas. And, of course, Axe has sold young men on the fantasy of hooking up with deodorant-loving nymphomaniacs. Emotional appeals are ubiquitous. They're also interchangeable. It would be just as easy to pitch Heineken as an aphrodisiac and Axe as a global harmonizer ("Peace starts in the pits"). And that's the problem: It's all stick-on emotion. Sometimes that works brilliantly (see: Corona). Other times, it's as weird and clumsy as an adhesive moustache -- remember Carl's Jr. and Paris Hilton's sexed-up hamburger ad? Fortunately, there's a better and more sustainable way to create emotion: Mean it.
Every so often the vocabulary of business adopts new words that filter into the mainstream business psyche. For example, the language of brands and branding is now commonly used and understood across a range of sectors— from universities to social enterprises to small businesses. Over the past year or two, the new vocabulary has brought in “sustainability,” whether it is to talk about the environment or general business operations, about communities or the future. Google the term and you’ll see that “sustainability” has 28 million definitions—only a few million short of the 34 million entries for “branding." Words that become common business parlance can shift in meaning and, in doing so, become open to a multitude of interpretations.
What's still one of the most important consumer trends out there? Transparency. Of prices, of opinions, of standards. So let’s look at what’s new, happening, upcoming and important, including the inevitable countertrend. There’s no hiding ;-)
Every 90 days, I report to Wall Street and our shareholders on the financial health of our company--called to the carpet when results are bad, receiving a pat on the back (if memory serves) when numbers are good. Many years ago, we put corporate social responsibility on the agenda for these quarterly financial calls, because as a critical component of our effort to be a responsible business--fiscally and socially--it felt not only appropriate, but necessary. Guess how many times I've been called to the carpet by shareholders for not delivering satisfactory CSR results, or how often we've received a comment or question about our CSR programs on these quarterly calls? Never. The silence isn't an indication that we've perfected corporate responsibility--far from it--it's an indication that shareholders don't find CSR performance relevant.
If you couldn’t make it to the Sustainable Brands conference in Monterey last month, you missed a lot of good content, networking and discussion. The big question that came out of the conference for me was, “what does capitalism look like in a dematerialized world?” In other words, is a sustainable brand an oxymoron?
Protecting the natural environment isn’t the whole story: companies must consider their social, economic, and cultural impact as well. Of the world’s 100 largest economic entities, 63 are corporations, not countries. Great power creates great expectations: society increasingly holds global businesses accountable as the only institutions strong enough to meet the huge long-term challenges facing our planet. Coming to grips with them is more than a corporate responsibility. It’s essential for corporate survival.
Years after cracking the very code of the Web to lucrative ends, Google may be in the midst of trying to conjure the most complicated algorithm yet: to wit, can goodness, or at least a stated intention not to be evil, scale along with the enterprise?
There's a growing school of thought that unfettered information about the environmental impacts of our world will smoke out the bad guys and help the good guys win. I wish it were that simple.
Today's reality consists of multiple media channels, new technologies and consumers who have a short attention span. Traditional communications are no longer sufficient for creating loyal fans or bringing the brand to the forefront. This new reality demands a new approach to engaging consumers; this is where corporate social responsibility (CSR) as branded content comes in.
The world of communication and product delivery is changing as the Web evolves and new services are introduced, enabling us to gain faster access to information, download richer media more quickly, and rapidly voice our opinions and feedback near and far in a wide variety of methods, including text, voice, video and imagery. As customers become more savvy and in tune with these new tools, we are also expecting those offering products and services to adapt, and as such, I thought it made sense to put forth what I believe are key tenets of a new consumer manifesto for today's real-time world.
The more transparent a market, economic theory holds, the healthier it will be. Information asymmetry — where sellers know crucial information that buyers cannot access — pollutes the market. Think toxic assets. The movement toward fuller transparency in the financial markets has a direct parallel in the ecological impacts of consumer goods. Signs suggest a trend toward greater marketplace openness about the environmental and health consequences of products — a trend with strong marketing implications.
People expect companies to do more than just sell stuff. They want to know what you stand for, what choices you make as a result and what difference that could make in the world. So when it comes to people making their brand choices, Cause Marketing can be a tiebreaker. Almost 80% of Americans are more likely to switch to the brand supporting a good cause over a competitor with the same price and quality. But Cause Marketing is not just about photo opportunities, oversized checks and warm fuzzies. It can be an opportunity to turn commercial interest into real change.
Blue Thinking is the antidote to Green. It doesn’t go away and it’s not a project with a budget. It is the next generation of thinking emerging from the heart of brands embracing sustainability as business strategy and a driver for innovation. It’s not a green consumer story or marketing idea, not a single product innovation, not one change in the supply chain (but instead many), and nor is it a disconnected concept that should be applied to business because climate change has come upon us. Instead, it is transformational innovation.
The post-agency era is upon us. With staggering speed and efficiency, consumer preferences and digital technologies have coalesced to create a broad and deep cultural demand for direct relationships. In this disintermediated market, do we need go-betweens at all?
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