by Ralph Cummins
Writing in the New Yorker last month, James Suroweicki submits that despite the widely held belief that a company's brand is its most important asset, brands have never been more fragile. The culprit? The internet. In the age of information, everything is knowable by the consumer. Name your category, and there is an easily accessible, objective resource such as Consumer Reports or JD Power to reveal the truth. Consumer access to this type of information can dramatically negate the traditional value of brands ― historically, brands served as proxies for quality in an information poor environment, as argued by Itamar Simonson and Emanuel Rosen in their book, Absolute Value.
To add to the brand owner's misery, social media can spread news – good or bad – across the globe overnight. As Mr. Suroweicki points out, loyalty is elusive, even for an established brand. A brand or product "can become a laughingstock in a matter of hours.” The cautionary tale he highlights is Lululemon Athletic, which went from yoga brand sensation to "downward dog" in a blink, as negative customer sentiments regarding a few product quality issues spread rapidly online.
However, before you cut the marketing budget, consider the counterpoint. Mr. Suroweicki cites Interbrand. They argue that, in the age of information, brands are even more valuable. Brands provide clarity and reassurance among the clutter and noise caused by the inevitable information overload from so many voices. My own personal experience suggests that there is some truth to this. Brands continue to proliferate, and consumers continue to state preferences for brands despite their ability to make more discerning choices as a result of their technology-enabled empowerment. Yet Simonson argues that consumers process information more efficiently than most marketers realize. A recent Ernst & Young study found that only 25% of Americans profess to being brand loyal ― of course, Americans have historically understated their reliance on brands.
It is a provocative dilemma raised by Mr. Suroweicki ― one that should have all brand marketers on their toes and in listening mode, if not actually losing sleep. While unfettered access to information and social media has radically changed the game of brand development and management forever, we believe it is a bit premature to predict its demise. If you take a long view, the dramatic increase in new and different types of information made available by the radio age, the television age, and the digital age have only served to increase the choices consumers have. In that context, it is hard to imagine that brands won't continue to matter.
EMM Group's Marketing for Growth blog is authored by several of our in-house marketing leaders and consultants. To learn more about Ralph Cummins click here.