Invisible Brand

The communications industry is guilty of misleading services businesses about the cost of entry to the branding game, argues Lucian Camp.

A QUICK QUESTION: HOW MUCH DOES IT COST TO BUILD A BRAND? Yes, all right, I know, you need more information.What market are we in? Who is the target audience?What’s the competitive environment? Tough. No further information is available. Just very roughly, on average, generally speaking, as a rule of thumb, what does it cost to build a brand? Rather unkindly, I asked exactly the same impossibly vague and difficult thing in an email to 30 friends, clients and colleagues. And along with the grumpy comments about the stupidity of the question, I got back a range of estimates which average out at almost exactly £10 million a year. Which, oddly enough, is more or less exactly where I expected – or feared – that they’d be. Because the point of this article is to suggest that over the years, those of us who work in the agency and brand development field have created a fantastically inflated impression of what it costs to build a brand – and that this has had the ruinous consequence of frightening off hundreds of perfectly good prospects who believe they simply don’t have the price of a ticket to play.

In the business model
So before we go any further, let’s put the record straight. Once again, I ask: how much does it cost to build a brand? But this time, I’ll give you my answer. Look at a whole bunch of brands such as Coutts, and Body Shop, and Ryanair, and John Lewis, and Disney, and Chateau d’Yquem, and Rolls-Royce, and it’s clear that building a brand costs nothing, or next to nothing. Or, to be more accurate, it costs nothing or next to nothing over and above the costs that are inherent in operating those businesses’ particular models. In other words, it’s inherent in, say, Disney’s business model that it needs to make films, operate theme parks and sell merchandise, and all of these things need to be promoted. But the Disney brand has been created through the undertaking of these activities in a consistent and Disney-brand-minded way, not through the application of any budget specifically and separately intended to build the Disney brand. The fact is that the way you build a brand is, very simply, by visibly behaving in a brand-minded way. For products and services which are inherently visible – like retailers with lots of shops, or entertainment companies with lots of films and theme parks, or manufacturers of luxury goods with high public profiles – it is not essential to spend any additional money at all on buying extra visibility.

It is, of course, optional. If you’re in a hurry, spending money will get you there quicker. I mentioned Coutts: in financial services, Coutts is one of the strongest brands there is (and, incidentally, probably the one that it’s most intriguing to think about stretching into other markets). Leaving aside a few silly and pointless ads that have appeared in the last couple of years, Coutts has spent little or no money on building its brand. The bad news, though, is that the whole process has taken over 310 years. Not many organisations, or brand managers, can afford to wait this long.

Routes to visibility
Still, elsewhere in the market, the financial advice brand Charcol (formerly John Charcol) is now the leader in mortgage advice, despite being about a tenth of Coutts’ age and having only once spent money on a short-lived brand advertising campaign. (In the years when I wrote Charcol’s ads, we spent about £500,000 a year on advertising, but even though we tried to write the ads in a brand-minded way, it certainly wasn’t a brand campaign: they were evaluated first and foremost on their ability to make the phone ring.)

And one of Coutts’ most successful rivals in the wealth management market, St. James’s Place, has built one of the strongest brands in the niche without any brand expenditure at all, even though the company is only twelve years old and was obliged, for various complicated reasons, to undergo a painful and involuntary rebranding from J. Rothschild Assurance a few years ago.

This kind of achievement does, as I’ve said, depend upon the business in question having some kind of inherent visibility to its marketplace. For Charcol, the sharp end of this is a high PR profile and a direct response advertising campaign. For St. James’s Place, its several million items of direct mail to the high net worth market, and a thousand-strong sales force actively networking amongst them.

Over-cooked pizza
The situation is, clearly, very different in mass-market packaged goods. A pizza, for example, which does no more than sit among many other pizzas on a supermarket shelf may have no inherent visibility at all. In this situation, throwing money at, say, a television advertising campaign may be the best way to give the brand the visibility it needs.And of course, once one pizza brand takes this step, there’s a danger of an escalating battle for visibility, with advertising budgets across the sector spiralling upwards as each brand tries to avoid being pushed into the shadows. If you’re a brand manager in pizza, it may be necessary to play this game – and, as the competition hots up in the sector, it’ll be expensive.

These musings on brand development in the pizza market may not seem hugely relevant, but actually they are.The problem is that as in so many other respects, the core marketing and communication concepts that people apply in service markets have been lifted across more or less wholesale from the packaged goods arena in which they were originally developed. Many of these concepts made good sense in packaged goods, but turn out to have very little relevance or value when transferred to services.The belief that you build brands primarily by means of brand communications, paid for out of a specific brand development budget, is one of the most damaging and expensive mistakes of this sort.

The greater cost
But just how damaging and expensive, I strongly suspect, is still not fully understood.These days, at least as far as financial services are concerned, it’s gradually becoming commonplace to acknowledge how much money has been wasted on disconnected brand advertising campaigns that achieved nothing except a transfer of funds from clients’ pockets to those of the media industry. But the opportunity cost – among organisations who believed, quite wrongly, that since this was the only brand development game in town and they couldn’t afford to play, they’d have to remain on the sidelines – has been immeasurably higher.

There’s a collective responsibility thing here. Insofar as CCHM itself is part of an industry which has promoted this foolish thinking, there are two things we need to say to everyone who’s been influenced by it. First, we’re really sorry.And second, if you’d like to play the brand development game, we’d love to hear from you even if you haven’t got any money.Well, even if you haven’t got very much.