23 October 2008

Why companies need to rethink rebranding: Research International's new logo.


One of the most important things a global rebrand has to offer a company is the chance to both refocus organisational culture and change market perception.

The effort behind a brand rollout should be commensurate with both the quality of the strategy and the design output behind it, so when global research firm Research International (RI) recently launched a new logo and strapline, it again drew attention to these issues.

This is something I touched on when I looked at Australian supermarket giant Woolworths and the glacial speed of its recent rebranding effort (DIFFUSIONblog 7/9/08). While Woolworths might have some trouble convincing people the new logo looks like either an unpeeling apple or a man with upraised arms but the new RI's logo is so over rationalised as to strip it of any real meaning.

It's yet another example of both poorly differentiated design (think of a hundred other company logo designs that use interwining strands on a globe eg. News Limited), capitalised sans serif type all of it rendered in trusty blue and orange accompanied by an equally generic tagline. The problem with this kind of rebranding is that it challenges the authenticity of a company's brand meaning and restricts the effectiveness of the messages it creates to back rebranding efforts.

That RI even bothered to trademark its new 3I (Insight.Inspiration.Innovation.) sphere logo and strapline seems ironic when you consider, as one of the world's largest research companies, it has built a major value proposition around the kind of insight its research can provide on global brand strategy. From the new website they describe how they are:

Insightful: when a major brand wants to rethink the entire global brand marketing strategy, they come to RI. We've been tying consumer motivations and behaviors to the bottom line for major manufacturers for many years.

But they are so far from it. Even from the press release that accompanied last month's launch, goes on to both deconstruct the meaning of the sphere and then destroy it all in the same breadth:

All this is represented by Research International's new Global Innovation Sphere TM logo, which symbolizes RI's status as a trusted global advisor, particularly in the innovation research sector. It is comprised of three key components: the globe, the interweaving bands, and expanding arrows. The globe symbolizes Research International's belief in the power of global marketing as RI boasts one of the largest research networks in the world. The interweaving bands symbolize RI's belief in the power of teamwork and the sharing of knowledge around the world. It includes RI's dedication to working in tandem with its clients, advising them throughout their marketing processes. The arrows symbolize RI's commitment to growth through innovation for our client's biggest brands. Collectively, the new logo aptly portrays the company's mission and ongoing commitment to helping clients find innovative solutions to their business issues.

Design rationalisation is important and few companies bother to make it public as part of the rebranding process, instead relying on one liners and leaving their agencies and other interpreters to do the explaining. But I mean really, why write this stuff?

How many times can the word "innovation" or any of its derivations be used in a single paragraph? What are RI's proofs for its use of the 3Is? What kind of changes in client motivation and behaviour do they think this will create? Why are they any different to any other of its other competitors who all claim similar innovation in their research methodology, insight into their client's business and who can also provide similar inspiration from their research results?

More than ever companies need differentiated propositions and positioning supported by simple brand messages, distinctive logos and wordmarks that are not restrained by epistolary explanation and an anemic strapline.


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15 October 2008

When brand value turns to zero.


Amidst the escalating world economic turmoil the world's most well known and successful financial brands have stared down possible dissolution, others simply disappeared and most lost substantial economic and subsequent brand value. Is brand value relevant?

On the back of the disappearance of Bear Sterns and Lehman Brothers, the takeovers of Wachovia, Washington Mutual, Northern Rock, Bradford and Bingley there is plenty of evidence there is evidence to suggest that the concept of brand value is being questioned.

Take Lehman Brothers as an example. In 2007 it had an estimated brand value of $8 billion, by September 2008 it had lost close to 78% of its brand value and when it filed for bankruptcy it still had $639 billion in assets under management before it was broken up and sold to UK bank Barclays (who basically bought the building for under $1b!) and Japanese brokerage firm Nomura but little brand value.



While conventional thinking has it that in either a merger or acquisition, brands and their equity come with the entity being bought, the Lehman Brothers example serves to challenge this thinking.

As financial markets have dried up, banks and other financial institutions have had no reference point against which to set the value of their investment assets. Between January and September this year brand valuation agency Brand Finance estimated the brand value of the 100 most valuable globally branded businesses had decreased by 4.2 percent, a drop of US$67 billion. Brand value is going to continue to decline as prices fall and markets become mere ciphers of liquidity.

While brands continue to remain quantifiable assets, their contribution to the equation of a takeover or merger price is now more difficult to extract.

In a takeover or merger brands are among the costs CFOs and their audit firms identify that contribute to any premium paid which exceeds net asset value (NAV) or, what used to be known as goodwill. Under current international accounting standards as much as possible of that margin must be explained by listing, along with their values, such intangibles as can be identified and which meet the standards' criteria. Residual amounts (brand value) that cannot be reliably explained remain goodwill. As such brand value is dumped into a bucket along with a whole lot of other assets that have been subsequently dramatically reduced. And as was the case with Lehmann's, their New York headquarters was worth more than their brand.

So what happens now?

Brands are assets in that they conform to accounting standards. As these standards develop and are refined, it's likely that in the future all brands will need be properly valued on the balance sheet. As far as consumer contribution and preference go towards a contribution to brand value, this is an issue as I pointed out in DIFFUSIONblog 22/9/08 The battle of the brands 2 that is still to be dealt with and that the value and return on marketing investment is required to provide for. And as consumer sentiment and therefore confidence in brands waxes and wanes, we are likely to see continued fluctuations in brand value that take no account of the balance sheet. It is clear that Alan Greenspan's idea of irrational exhubrance cannot exist in a whirpool.


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13 October 2008

It's just bad timing for Baz Luhrmann's Australia tourism campaign.



The launch of Australian director Baz Lurhmann's $40m advertising campaign for Tourism Australia might just suffer from a case of bad timing.

Two new film advertisements ("Come Walkabout" and "Boabs") have so far been produced which will screen in 22 countries, with the first ad shown in cinema's in the UK last week. It's hard to understand the logic of this media planning decision when none of the advertisements begin in London. The first two film ads featuring the bustling metropoli of New York and Shanghai, before moving to feature the Australian outback.

Altogether 11 different ads are to be shot in all Australian states and territories but it is not clear whether these will be Luhrmann produced film advertisements or a combination of online and print ads.

Each ad is to feature the keywords "arrived" and "departed", with the emphasis on replacing a stressful everyday life with a holiday that promises a traveller will return home a new person.

I wonder what kind of segmentation study, if any, was conducted by the agency for this new campaign and what input Tourism Australia had into both the content and timing of the launch, which seems more aligned with the much slated November release of Luhrmann's film Australia.

On the basis of the the "Come Walkabout" and "Boabs" film advertisements, did Luhrmann have exposure to Nic Roeg's Walkabout and Peter Weir's The Last Wave, as both seem very much in this tradition.

DIFFUSION understood Tourism Australia's strategy was to move away from the standard iconic images of brand Australia into a broader expression of the sum total of an Australia experience. On this basis, while the film ads are beautifully shot and produced there is no real movement away from what is already regarded as an atypical set of images of Australia.

Further, both ads appear targetted at highly paid DINK couples. I was in New York late last week and given that this segment is the one going to be most exposed to the global financial meltdown it seems a rather cruel and ingenuous campaign.

Put simply, bad and unfortunate timing and more of the same against a segment who may very well be concerned about their jobs and financial security than with a holiday in Australia.

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