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.

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.

Is $130m the only cost to Fonterra's brand?

New Zealand dairy cooperative Fonterra has been forced to write down $130 million this week as it's global brand reputation increasingly comes under attack.

The write down comes in the wake of the everwidening Chinese milk tampering scandal, which could result in one of the largest food recalls in the Asia-Pacific region.

One of the largest dairy companies in the world, Fonterra was widely regarded as a "clean and green" brand. Not only does the company own a 43 per cent stake in San Lu, the Chinese firm that sold the poisonous milk formula, but it seems on the face of it, the company's directors had prior to knowledge of the tampering but seemed unable to act on it.

A carefully stage managed press conference in Auckland New Zealand this week saw executives once again running for cover as they fended off press accusations that the company could have done more to avoid the scandal, which so far has claimed lives and hospitalised thousands of children in China.

Despite a presence on the San Lu board, who may have known about the introduction of the contaminant as far back February this year, Fonterra CEO Andrew Ferrier insisted their lack of knowledge of Mandarin hadn't have hampered their efforts to understand the extent of the tampering and in interviews said he "was appalled that this could go on."

Fonterra claims they first knew of the contamination in early August and took what it regarded as the best course of action, which was to work with the Chinese government on a product recall.

However, the depth of problem is demonstrated by the extent of the write down, as the company paid $100m for a 42% stake in San Lu, which is now valued at $62m and with some reports suggesting that San Lu's brand is now virtually worthless. It also seems likely to anticipate a much more substantial write down on Fonterra's brand value.

Fonterra appears to have stumbled at the farmgate - first denying knowledge of the scandal, failing to achieve a product recall and now having to admit it had knowledge of the tampering prior to it going public.

Fonterra would do well to have learnt a lesson from Perrier, once the leading brand of sparkling water in the US and the world.

In 1990 benzene contamination was found in bottles of its popular sparking water leading to a complete global recall of more than 160 million bottles which, like Fonterra, was also similarly poorly handled by its executives. The result was an overnight collapse in market share and a takeover by Nestlé in 1992. Perrier is yet to regain its pre-1990 marketshare.

As the scandal widens to Australia, HongKong and other Asian countries it seems that in this escalating attack on its brand reputation is likely to result in a significant drop in its share price, market share decline and community disquiet in its respective markets.

All of this could and should have been avoided if the company had some proper risk assessment and crisis planning in place. In short, this would involve training for its key executives so they can plan responses and ensure various constituencies are actively tracked. For a company of this size I would have expected this was mandatory. However, Fonterra appears to have already broken one of the cardinal rules for protecting brand reputation and ensuring trust - when in a crisis provide as much certainty as possible around how you are dealing with the problem. They haven't and now it's too late.

I wonder if this is going to be a long, slow debilitating drip.

The battle of the brands 2: new global brand survey just more deck shuffling.

There's nothing very surprising in BusinessWeek's annual survey of the 100 Best Global Brands, just that Google isn't already closer to the top of the pack and that it pre-empts the rapid decline of some world's major financial brands.

In its latest and eigth iteration, the brand rankings compiled from data from JPMorgan Chase, Citigroup and Morgan Stanley, see little shift in the dominance of global brands with the exception of Disney's failure to grow, Mercedes-Benz departure (down to 11) replaced by Google's (10) much anticipated entry into the top ten.

What's most interesting in this list is the fact that $157 billion Google hasn't already surpassed Microsoft (ranked 3) and that Swedish megaclothing retailer H&M is rocketing up the charts(22) while Thomson Reuters (44), Blackberry (73), Ferrari (93), Armani (94), FedEx (99) and Visa (100) are all marked as new entrants to the pantheon.

Behind Google, Apple (24, up from 33), Sap (31, from 34), Nintendo (40, from 44) and Amazon (50, up 62) all signalled significant growth off the back of strong sales and increasingly focussed efforts of true and marked differentiation via technology.

In what must have anticipated the seismic shocks in financial markets, big value declines were posted by Merril Lynch (-12%) Citi (-14%) and Morgan Stanley (-16%), while old school brands such as Ford (-12%), Gap (-20%) and Motorola (-10%) all struggled to hold onto their market and customer relevance.

Outside of the financial giants, Ford, Gap and Motorola have all been characterised as so bogged down in moribund cultures that their ability to innovate has had significant effects on their share price and caused subsequent declines in brand value.

Indeed for Ford, Gap and Motorola it must signal that lessons can be learnt, not from big ticket investing in advertising but in building cultures that are imbued by technological and design innovation, which big risers Google, H&M, Amazon and Zara already know.

The battle of the brands: the contest for the best brand surveys in the world.

Dr Hunter S Thompson must be smiling. The Hells Angels are Australia's number one brand, if yet another brand popularity survey is to be believed.

Brand rankings, brand affinity, brand preference, brand valuation studies - dress them up as global and national rankings and name them the World's Best Brands, the World's Most Valuable Brands, the World's Most Recognised Brands, the World's Most Powerful Brands, the World's Most Loved Brands and you get some sense of the beauty contest that is going on for companies claiming authority in battle of brands.

Advertising agency the Belong Group's Australian study of national brand awareness, appears just another example of yet another advertising agency trying to climb onto the brand popularity surveys bandwagon, with what can best be described as a very "independent" study.

According to Belong, the top five brands in Australia are the Hells Angels, Apple, Star Wars and the diary and stationery manufacturer, Moleskine!

While there is little detail on the study methodology, it seems that a 1000 consumers were polled on the basis of what a brand stood for, if there was a clearly articulated belief and whether the brand elucidated a particular type of behaviour in people. A panel of, what Belong describes as, "industry experts" then ranked and shortlisted 20 brands.

It's not too dissimilar to advertising agency Saatchi and Saatchi's Lovemarks project.

A love mark is a product, service, person or place a consumer can’t imagine living without, has a specific name that is identifiable by others and is based on a personal experience.

Lovemarks is about consumer's identifying a small, everyday product or brand that embraces and infuses people's live to make them a little better via the Lovemarks' website listing.

Interestingly there is some affinity with Belong top 20, Lovemarks contributors rank Apple at 4 and Moleskine at 6 among their top 200 and also Nike at 87 and Star Wars at 148.

Belong's top five of the top 20 brands (Alannah Hill, Free Hugs, Peter Alexander, T2 and the Bra Boys) are Sydney based, would suggest that either Belong are looking for new clients (Saatchi and Saatchi reportedly won US$430 million JC Penney contract because of Lovemarks) or that the brand menu was very selective and the research net wasn't cast too widely outside of Sydney.

Compare this to the top five in last years The World's Best Brands, an annual global study published Business Week for the last seven years, which lists CocaCola, Microsoft, IBM, General Electric and Nokia and you'll see why things must have gone a little awry over at Belong.

In the Business Week study, Nike which ranked 12th on Belong's list slips in at 29th, Harley Davidson motors in at 45th and Apple manages to get 33rd. No mention of Smiggle, The Body Shop and shoe brand, Ecko.

Unlike the Belong study, this ranking uses a combination of analysts’ projections, company financial documents, and own qualitative and quantitative analysis to arrive at a net present value of company earnings to establish the brand value.

To even qualify for this list, brands must make at least a third of their earnings outside the home country, be recognisable outside of its customer base and have publicly available marketing and financial information.

Global brand valuation agency Brand Finance's Top 100 Australian Brands, published in June this year, lists National Australia Bank, Woolworths, Commonwealth Bank, Telstra and the Foster's Group in the top five. Coca Cola is listed at number seven.

Happily for Belong - Seven Network, which screens Sunrise (ranked 18th) is ranked 28th by Brand Finance and one of the licensees of the Virgin brand (ranked eight by Belong) Virgin Blue scrapes in at 45.

Brand Finance's rankings are based on the brand portfolios of Australian Stock Exchange listed companies, in terms of their absolute dollar value, and also the percentage contribution that the brands make to enterprise value.

Brand Finance defines a brand portfolio as the value of trade marks and trade mark licenses, together with associated goodwill.

Global marketing research agency Millward Brown's World's Most Powerful Brands or BrandZ Study published in April this year lists Google, General Electric, Microsoft, Coca Cola and China Mobile in their top five.

In their list Apple comes in at seven, Nike at 53 and Harley Davidson at 72. No listing for Dove or Star Wars here though surprisingly Unilever, which does own the Dove brand, (perhaps no one knows who they are in Australia) is unranked but McDonalds ranking eigth and Subway (73) are.

Millward Brown's annual BrandZ Study measures the brand equity of 50,000 global “consumer facing” brands and interviews over 1 million consumers globally (though this is probably across numerous studies of unspecified nature). The Top 100 ranking assesses brand value using market and consumer research, in combination with financial data from Bloomberg and Datamonitor, to calculate and break-down intangible earnings), brand contribution (the brand’s effectiveness in driving business earnings and what they call Brand Momentum (an index of expected short-term brand growth).

The Millward Brown ranking takes into account regional variations since even for truly global brands measures of brand contribution might differ substantially across countries.

The Belong study is based on consumer sentiment with an "expert" filter and provides a simplistic but popularist ranking of the "top" brands in Australia. Alongside Lovemarks, it proves there's a long way to go before we get a more accurate measure of the relevance and influence these brands have on consumers. While the global brand ranking studies do provide a substantial degree of homogeneity in their brand rankings because of common financial inputs, the degree to which they measure power and recognition is something recognisable consumer input could make a significant contribution to.

Is Woolworths rebrand a failure to launch?

Two weeks after Australian supermarket giant Woolworths launched a fresh new look, the old logo is still being prominently featured in both advertising and the launch of its new credit card.

One of the best ways to kill the momentum of a rebrand is to execute poorly and hesitantly - and Woolworths seems to be on a similar track.

At launch Woolworths promised that the rebrand would take place slowly and steadily and that only a small number of stores would be rebranded with the new look and the rest would come on stream as they joined a refurbishment program or new stores were opened.

However, since the launch Woolworths seems to be exhibiting all the hallmarks of poor brand management.

On August 22, Woolworths announced the launch of a general all purpose, all singing and dancing credit card that can be used for purchases both within and outside Woolworths outlets and at group stores such as Dick Smith, Dan Murphys and Big W.

While a joint venture with global banking group HSBC and Mastercard, the Everyday Moneycard proudly carries the Mastercard mark but also the OLD Woolworths logo as does the Woolworths website, where you sign up for the card and the in-store and other advertising for the card.

And no one seems to have told Woolworths' advertising and media agencies. A similar story was repeated in newspaper and television advertising - the old logo continues to blaze in full colour.

None of this seems to make sense when in the same week Woolworths shrugged off the ACCC report into supermarket competition and announced the fresh new look would, as its head of marketing Luke Dunkerley is quoted as saying, "be instantly recognisable as Woolworths and be associated with the word fresh within a short time".

Here at DIFFUSION we wonder what Woolworths thinks is a "short time" and whether perhaps the flurry of announcements were designed to draw interest away from some of the more adverse findings in ACCC's supermarket competition report released on August 5.

More importantly, it demonstrates that large scale rebranding projects such as this are critical to Woolworths' long term strategy and require far more than a marketing department's control. A concentrated and well executed timetable, that is both realistic and cost effective, would forestall the impression that this is a hamfisted exercise. We wondering whether Woolworths' CEO Michael Luscombe isn't about to repeat some of the disasters from competitor Coles' rebranding efforts, which resulted in successive profit write downs from the botched Bi-Lo merger and John Fletcher's downfall.

Woolworths unpeels its new logo and kills off the Safeway brand.

Australia's largest supermarket retailer Woolworths has unveiled what the company describes as a "fresh new look" for its 780 stores, a harmonisation for the parent brand and the closure of the Safeway brand in Australia.

The new logo and word mark revamp, by Sydney based design agency Hulsbosch, came after a two way pitch against one of the doyens of Australian graphic design, Ken Cato.

It's the first visual makeover for Woolworths' stores in 21 years after it introduced the slogan “The Fresh Food People”.

While the logo has been designed to reflect what the compay calls "its strong commitment to fresh food, convenience and value for customers", customers won't be seeing the new mark on stores in most stores with a staged rollout planned only for those that have recently been refurbished.

The first store destined to carry the new branding is the company's Mona Vale store in Sydney’s Northern Beaches, with a selection of other stores to be rebranded over the coming months.

More controversially customers of the Woolworths' Safeway stores in Victoria are going to see the loss of their much loved brand as Woolworths' completely rebadges all 189 stores. Woolworths has owned the brand since 1985, prior to this it had been operating in three Australian states since 1962.

The parent brand mark now looks closer to the US Woolworth's logo, a brand that closed in 1997.

Woolworths' management have gone in early to fend off criticism of the new mark by describing the design as symbolising several aspects of the Woolworths brand including the use of an abstract leaf symbol to represent fresh food, a connection to one of the Woolworths logos of the 1970s and the idea that it somehow represents a person with their arms up in the are - meaning that Woolworths focuses in on its customers.

While we think the old mark needed a freshening up, we're struggling to see how it is a leaf symbol and that it somehow represents a person. It's more closely aligned to a symbolic apple peel and to the 70s double chevron.

According to a Food Week interview with design head Hans Hulsbosch, the logo was benchmarked overseas and there was extensive consultation with both Woolworths' staff and senior management.

Hulsbosch said the logo was then tested in focus groups, though the size and scale of the testing is unknown.

“The reaction from those groups across a wide range of demographics and regions was so positive it confirmed our belief that we had found the right solution for the retailer. The test showed that the new identity successfully communicates positive values to customers," he said.

Despite the announcement, Woolworths' website was still sporting brand guidelines for both the old retail and company logos, a seemingly significant oversight in brand implementation. And Hulsbosch Communications media link to the new brand was also empty.

The logo announcement comes on the back of rival Coles' recent brand harmonisation and new nationalism and heritage tagline "Proudly Australian since 1914" unveiled during Olympics' television advertising.

Woolworths is Australia's leading supermarket retailer with revenues of $45 billion and is ranked 23rd among the world's leading supermarket brands. It was recently subject to an Australian Competition Commission investigation into supermarket dominance in Australia.

What drives Booz's brand analytics tool?

Booz&co have ventured into the small but under-estimated brand valuation market with the launch of a brand vitality assessment tool designed to help failing brands redefine themselves..

The announcement comes off the back of Millward Brown's recent alliance with Brazil’s leading brand valuation consultancy, Brand Analytics, designed to complement its Optimor evaluation and measurement products in the South America market.

It also signals the tendency for global brand and business consultancies to merge strategy and engagement with valuation and analytics off the back of increasing client demands for transparency and justification in spend.

In the latest issue of Strategy and Business, Booz&co cite the success of revitalized brands like Abercrombie & Fitch, Johnnie Walker, Olay, and Ford’s Mustang as evidence that the success or otherwise of brand revitalisation and brand extension has been traditionally driven by "instinct and an appetite for risk".

Booz claims its new tool kit provides "data-driven analytics" to minimize the risk associated with these kinds of decisions. Called the Brand Vitality Assessment (BVA) and sounding much like Y&R's Brand Asset Valuation (BAV), it says it examines every aspect of a brand including communications strategy, pricing and the state of its competitors to reveal how much life is left in the name.

Booz's BVA is supposed to help companies "identify latent value — or the lack thereof — in their product portfolios before deciding what to do" or in other words, what the brand equity is. No surprises here and hardly different from their competitors.

Booz's BVA process is based on a brand having what they describe as "residual strengths" such as brand associations, the potential for or meaningful differentiation on at least one purchase driver and basic distribution infrastructure to support the revitalization.

It uses four related evaluations that incorporate consumer (where hoping that B2B hasn't been ignored here) research to create a holistic and data-driven view of how the brand is currently performing in the marketplace.

The evaluations seem fairly qualitative rather than quantitative and Booz is unable to cite any examples of what kind of measures are actually made and what kind of data is produced. Further, they don't provide any evidence of any brands they have worked with that have employed quantitative measures but apply only market share figures as demonstrations of how the process works.

The four evaluations appear almost entirely qualitative. They are:

1. The Purchase Funnel Assessment (PFA) is just another way to evaluate the purchase decision process and from DIFFUSION's experience this is generally qualitative as it relies on customer assessment from awareness to point of purchase.

2. The Brand Equity Review (BER) is designed measure residual brand equity and loyalty within the target customer segment. While it might identify the brand’s attributes, one would think these would be known and those attributes which have been eroded or been rendered irrelevant by competitors, again this seems more qualitative measure.

3. Competitive Dynamics Assessment (CDA) is a look at which competitors are taking away market share, why, and how easily the problems could be rectified.

4. Value Proposition Check (VPC, I suppose) analyses the brand’s benefits including marketing communications and pricing. It includes standard brand attributes and benefits check built around the functional, emotional and expressive against consumer, competitor, and internal perspectives. Nothing new here.

Booz's so-called Brand Vitality Potential (let's call it BVP and not sure how it snuck in) is the final evaluation, where the "cold hard facts, as uncovered by the previous four analyses, come into play". I guess this is where we might see some numbers.

Booz says the BVA is "not a panacea for tired brands" but that it offers is "a rigorous, data-driven approach to deciding a brand’s future" except we don't know what the real data is except it's all qualitative.

Booz could do well to state whether any other quantitative measurements are being used such as total market shares, sales by segment against overall PE ratios and how these are applied by the BVA. What scoring tools will be used? How will one tool be used against another? What are the weightings? If any?

More importantly, how will the assessment be reported and by whom and within what framework, particularly from the point of view of brand stretch and brand extension.

Then there are the issues of brand redefinition, activation and engagement, which follow on from such work. Booz and for that matter few other consultancies, have little capability or experience doing this kind of work despite talking about it and claiming it. The article cites no projects they have worked on this area, just suppose sos.

That there are so few consultancies and their clients who have undertaken these kind of complete lifecycle projects following a brand valuation, says much about the the general market wlllingness to understand the process behind brand creation and to make the actual investment required to revitalise dormant brands as it does about the abilities of the consultancies they use. The one's who have done it and been successful have obviously understood this from the outset.

Image courtesy of Chronicle Books.

Kluster's crowd naming rights and wrongs.

In naming a product or service, it's great to have the benefits of a large focus group, but everyone who works in naming knows that it's even better to have a focussed outcome based on a good brief.

So when US based crowd sourcing company Kluster launched their recent Namethis service, DIFFUSION was both interested and abhorred all at the same time.

Kluster philosophy is based on crowdsourcing, meaning if you can get a group of passionate people working together you can get better solutions for almost any decision-making problem than with a single person. Whether its writing an online encyclopedia like Wikipedia, designing a new logo, or creating a new product or a new name, the people at Kluster think the power of the crowd is a better way to do it. They may be a little off the mark.

While there is much debate about the ethical, social, and economic implications of crowdsourcing, it's a popular outcome of Web 2.0 but not without it's detractors. I'm going to join the critics.

Firstly, what's interesting about the whole naming proposition, is the idea that naming can be made simple and the result usable. It's a very clear three phase process that includes a company or individual paying the $99 fee, posting it up for 48 hours and letting people put their suggestions and then what is described a ssome" fancy math machine" makes some decisions (?) and payment is apportioned out to the crowd.

Sure, there's some good names in some of the suggestions but the outcomes seem bizarre and, in many cases, unusable. A case in point. An organic skincare company gets the name Altitude. The brief:

A unique combination of pure, natural and organic ingredients from the Swiss Alps that is USDA and ECOCERT certified natural and organic skin care. Rare medicinal plants plants found at very high elevations are combined with essential oils to nourish and protect the skin from losing moisture and keep the skin beautiful and healthy. The high elevations and exposure to extreme temperature and humidity changes and high UV has resulted in plants that have developed protective factors that have proven to be beneficial to our skin.

The result is 275 names including Altitude, of which 12,523 watts of power were invested in the project to come up with the name. Or by my calculations 576kWH. or around $172, depending on how much energy costs per kWH where you live.

Now the energy usage is all very well for green credibility, but the actual cumulative time taken by the 275 respondents could be something close to something like 91 hours, if we say that each individual spent on average 20mins on this project within the 48 hour deadline

Now if you want to attach a real monetary value for the project, it's close to three working weeks for a single individual. Or approximately $31,000 worth of value on global brand consulting naming rates (yes, I know what the rates are!) for a single consultant without any add on rates or taxes.

While it looks like incredible value and it is, what's troubling about social media being used as product naming avenue is the fact that the process, intellectual and economic value is being completely undermined.

In the case of Altitude, there's no real attempt to validate the name beyond possible domain name registration. I did a quick Whois.net check and the name Altitude is registered for the major TLDs. Forget any trademark or company name checks and any other legals registrations in whatever territory or country you wish to operate in.

With a single search engine check and I can come up with at least two global companies (Napoleon Perdis and Swiss Army) using the name Altitude as a product name. And I'm not even sure whether they have registered this name.

The likelihood of its use by the project sponsor is subsequently likely to be low, because really the exercise is just that..a exercise. Even the "winning graduate" as they are described, is unlikely to have any rights to the name if there annexure has been buried in the fine print. Sure there might be the opportunity to come up with some great names but really, Kluster proves crowdsourcing works but it doesn't prove that it's right for everyone. So far the Kluster people have come up with 10 names. The value of this $999. And to Kluster, $200.

So you see what the value is.

See this is the future of television. So why haven't the networks seen it?

Three events in the past two weeks have convinced me traditional television and traditional television viewing is being e radically transformed.

On Friday German publishing giant Axel Springer and Dutch consumer electronics producer Philips announced they had developed a system that will make it possible for television viewers to create personalized channels from their favorite TV and Internet video content.

And last Tuesday Sony, along with six of the biggest US cable operators Comcast Corp, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems Corp and Bright House Networks, signed a deal that enables US consumers buy digital televisions that can receive a cable service without a set-top box.

Finally, last week a syndicate of Japan's largest electronics manufacturers announced that it may have reached agreement on a standard for a new internet television and new set, which will let users browse websites and watch streaming programs at the touch of a remote control, could be on sale as early as March 2008.

In each case, the opportunity was clear to all but those in what is now called "heritage media". Traditional network based and free-to-air television is being increasingly forced into a wider choice set that sees the television screen as a portal for all content and interactivity - both linear and non-linear - global, national and local.

Add to this increasingly expanding opportunities for delivering content to mobile, laptop and gaming devices, and you can see why brand owners and television network owners are fast becoming small fish.

The new Phillips software-based system, called TV Digital Personal, will be available on Philips television sets in Europe in time for Christmas. It will also be available for free download onto personal computers and can be used on digital video recorders and mobile devices.

TV Digital Personal is based on Springer's digital TV guide, so in effect another walled garden with yet another EPG. The software called APRICO is not unlike TIVO and automatically learns viewing preferences and suggests additional programming based on what has already been chosen by the viewer enabling the viewer to build their own channel.

Advertising could possibly be microtargetted according to viewer selections with an opt out permissions. This will be in addition to the regular TV commercials already embedded in programs.

The Sony announcement establishes a new US technological standard to be adopted by 2009 that will enable a new generation of TVs to include video-on-demand, digital video recording, interactive programming guides and other services.

By adopting a Java-based application called tru2way as a US interactive standard, it will enable the adoption of new "plug-and-play" interactive devices that can be used with TV sets.

The technology will also make it easier for consumers to receive the full range of cable-based services on other devices such as laptops, MP3 players, and cell phones.

Japan's new internet television is the brainchild of the TV Portal Service Corporation founded in July 2007 by Matsushita Electric Industrial Co, Sony Corp., Sharp Corp., Toshiba Corp. and Hitachi Ltd, set up a TV Portal Service with So-net Entertainment Corp., a Sony-affiliated Internet service provider and shareholder and is backed by the Japanese Government.

The companies aim to establish a global standard for the service and its portal, operating under the name acTVila, connects TV users free of charge to various web sites that provide consumer-oriented services, such as news and shopping.

From July Sharp will also sell TVs with an additional internet portal that offers access to Yahoo! Japan - the country's most popular website - as well as digitized print magazines and high definition video-on-demand.

In the end all of these announcements are still announcements but what they signal is indefatigable - television screens can no longer be viewed as just technology but as the conduit for an increasingly complex dialogue between media and content owners, producers, users, viewers, technology makers, brand owners and their agencies. And, if all the talk is right, the traditional television industry is showing all the signs of being undone by technology and its users just as the music industry was late last century.

Police halt Bill Henson opening on child sexualisation investigation.

NSW Police closed down the opening night of Australian and international photographer Bill Henson's new show at the Roslyn Oxley Gallery in Sydney's Paddington this evening.

I was on the scene when two NSW Police walked from the building and advised the waiting media and bemused art lovers like myself that the gallery owners and Bill Henson had halted the opening pending an investigation by the NSW Child Protection Authority. Henson was seen leaving before Police made the announcment.

Police said they would be interviewing one of the subjects of the photographs and her parents.

Henson's work is renowned for it's use of young models set against lush and often opulent settings. He featured in a major retrospective at the NSW Art Gallery in 2006.

NSW Police were reacting to a piece by Sydney Morning Herald journalist Miranda Devine in Wednesday's edition which in turn fueled Sydney's incendiary talk back radio commentators with critics describing the images as contributing to the sexualisation of children.

Expect outrage from many quarters against the conservative Devine's outpourings and a backlash from both the Australian art world and media and the start of a new round of censorship.

Brand heuristics: how we have all bought into the murky world of murketing.

I was recently sent a preview of New York Times' consumer columnist Rob Walker's soon to be released book Buying In and at the same time I was looking at some recent published research on the role of heuristics in consumer choice. It was timely.

Walker's book, also subtitled The Secret Dialogue Between What We Buy and Who We Are, underlines two main ideas - what he calls murketing and the creation of a desire code - as the basis of this "secret" dialogue.

Murketing, Walker defines, in two parts. First, it refers to what he describes as the increasingly sophisticated tactics of marketers who "blur the line between branding channels and everyday life", and secondly, through the "consumer embrace of branded, commercial culture" or what I would describe as participant marketing, "the modern relationship between consumer and consumed defined not by rejection but by frank complicity".

The second part of Walker's thesis surrounds something he calls the Desire Code, "the complex of factors, rational and otherwise, that spark us to make particular purchase decisions" but what he was really doing was identifying what neuroscientists and those at the sharper end of branding already have a name for - brand heuristics.

Brand heuristics IS the basis for the creation of the desire code. Essentially, heuristics are simple, efficient rules we use which are hard-wired by evolutionary processes or are learned via experience. They explain how people make decisions, come to judgments and solve problems, typically when facing complex problems or faced with incomplete information such as when they go to buy a particular product or consider a service. Heuristic rules work well under most circumstances, but in certain cases lead to what are described as systematic cognitive biases.

It is these cognitive biases which branding trades on. For example, in his 1899 book, The Theory of the Leisure Class, economic theorist Thorstein Veblen identified a penchant for people to perceive more expensive goods as being better than inexpensive ones (providing they are of similar initial quality or lack of quality and of similar style). He found this even holds true even when prices and brands are switched; so putting the high price on the normally relatively inexpensive brand is enough to lead people to perceive it as being better than the the other product that is normally more expensive. It's the typical Pepsi vs Coke taste test, which Walker also cites in his book.

Brand heuristics (and I have struggled to find a single simple definition) so here's mine: is a system of organised and systemic visual, verbal, olfactory and emotional cues and evidence that trade on and or create cognitive biases. In effect, this is Walker's desire code.

Walker sees the goal of branding to "narrow the range of actual differences in commodity attributes" to create "a different kind of value". And he's right. Brand heuristics puts in play, for good or better, the great sleight of hand. How else do you explain the desire to buy Hermes' Birkin Bag (see pic of Roger Federer from a recent campaign) for $16000 with a waiting period of six years versus an eBay knockoff for $169.99, which you can get now. Both, as Walker acknowledges, are likely to be of similar quality with little variation. So it's back to the desire code, the brand heuristics.

Or, as I have noted in DIFFUSIONblog 14/7/05 Replacing place, the specificity of luxury brands, what happens when Prada begins manufacturing their bags in the same factories that produce bags for Target?

It is murketing, as Walker puts it, that is being used to affect a great change in how we perceive and participate in brands. He cites examples of people signing up with "word of mouth" firms to become what are commonly called "brand ambassadors" you see on CraigsList postings who can spread the news about some new product or the hundreds of thousands of people submitting their own reviews of services and product offerings in places like Yelp.com and Trip Advisor.

So while Walker doesn't present us with a lot of new ideas here and he hasn't looked around at the research, he's good at filtering the ideas and packaging them up in a readable way. While many of these same examples cultural and brand critics have been citing for some time (it's the usual suspects like Timberland, American Apparel, Red Bull and iPod), what he does do successfully is popularise the idea of what I call participant marketing and the use of "desire codes" as a simulcra for brand heuristics, the successful and perhaps somewhat accidental exploitation of these hidden biases by both brand owners and their agencies.

Walker's book is released in the United States on June 3.

Coles Express and predictable irrationality.

As gas prices rise around the world, it's not hard to see why consumers and governments are getting more and more irritated with gas retailers but perhaps they only have themselves to blame.

In Australia, the dominant supermarkets chains - Woolworths and Coles - have seen spectacular revenue growth from their entry into the petrol retailing market and a major contribution to this growth has been shopping docket priced discounts, mainly available through their supermarkets and liquor stores.

So when a furore broke over Coles' petrol pricing policies this week, it best illustrated the predictable irrationality around our brand based buying decisions.

Not less than two government pricing watchdogs, the Australian Competition and Consumer Commission and the new petrol price commissioner (yes, they do have one!!), warned Australian motorists to consider alternatives to the Coles Express stores following a survey into prices paid at the pump.

According to the price commissioner, Pat Walker, motorists who regularly used Coles Express discount dockets (available only after a $30 purchase in Coles Supermarkets and other Coles Group stores and offering an intial $0.03 off the per litre price), should shop around before buying petrol at Coles Express.

The Commission identified about 30 Coles Express sites in Sydney that were selling petrol for 155.9 cents a litre, when the average price was 143.3 cents a litre.

Although differences of 15 to 20 cents a litre among service stations were typical, the Commission had issued the statement because it believed the discrepancy was significant and was worried consumers might be buying out of habit.

The Commissioner's statement illustrates the kind of irrational behaviour identified by MIT professor Dan Ariely in his recent book, Predictable Irrationality: The Hidden Forces that Shape our Decisions.

In more than 20 years researching behavioral economics, Ariely discovered that people tend to behave irrationally in a predictable fashion. Drawing on psychology, economics and behavioral economics, Ariely's book demonstrates why cautious people make poor decisions about sex when aroused, why patients get greater relief from a more expensive drug over its cheaper counterpart (a 5 cent aspirin vs a 50 cent one), why we steal hotel soap. Or, in the case of Coles Express, why consumers are willing to buy petrol at more than 12c above the market rate just because they might benefit from a 3c cent or more discount.

According to Ariely, our understanding of economics which is currently based on the assumption of a rational subject, should, in fact, also be based on our systematic, unsurprising irrationality. It's also something that quantitative analysts in the financial markets have been dealing with for years.

Ariely argues that predictable irrationality provides an opportunity to gain a greater understanding of previously ignored or misunderstood forces (emotions, relativity, social norms and dare we say, brands) that influence our economic behavior brings a variety of opportunities for both consumers and brand owners to reexamine both individual motivation and consumer choice.

What's most interesting about the Coles Express example is that Ariely's predictable irrationality is being reinforced at the brand level. The station signage, ticketing and shelf ticketing provides a strong visual reinforcement of this irrational view that the consumer is actually saving. The constant message, right down to product naming, is always "saving".

Whether people associate Coles Express with value and hence saving, or its just plain laziness, can only really be explained by this predictable irrationality. And the brand messages simply serve to reinforce the perception of saving, even if it is, as the petrol price commission and the ACCC point out, it's not the case.

Woolworth's Thomas Dux challenges Coles.

Woolworths is set to add to Wesfarmers' supermarket woes with the first of its new Thomas Dux branded stores opening in Sydney.

With another store already earmarked for an August opening in Sydney's Paddington, Woolworths says the stores will concentrate on offering mainly fresh foods and a larger deli in smaller format supermarkets under the new brand. Some of the brands to be included in the new store include one's already stocked at Woolworths' deli counters as well as new ones such as Simon Johnson.

In a local release, Thomas Dux Grocer is described as "a bunch of people passionate about food" who care about "what you care about" and aim to make the food shopping experience "so much better." It's going to be prove challenging as no supermarket brand in Australia seems to be able to do this with all relying on similar strategies to maintain market dominance, yet with none with a particularly differentiating brand strategy.

The move marks a new chapter in the attempt by both Woolworths and Coles to capture what is an increasingly savvy grocery customer and replicates similar IGA formats in Victoria and Queensland.

The look and feel of Thomas Dux (retro name and logo) is very much in line with similar format stores in London for small grocers such as Shepherd Foods and Partridges, and the reliance of fresh and specialist lines for stores replicates similar strategies used by US organic grocer, Wholefoods.

Both Coles and Woolworths look to be under threat by changes announced last week by the Australian Federal Government which will see the market set opened up to international competition. Already US big box superbrand Costco is set to open in Victoria later this year.

Coles is increasingly seen to be on the backfoot in its battle to maintain the Australian supermarket duopoly (Australia is one of the world's most lucrative supermarket battlegrounds deliverying higher than world average margins).

While Coles is currently undertaking a major review of both its media and advertising buying and strategy under new CEO Ian McLeod, no new brand strategy has been revealed. It was the absence of a coherent strategy that so successfully undermined John Fletcher's tenure in the role.

What the ?!?! happened to ?Whatif!

Global brand innovation agency ?WhatIf! has closed down its Australian operations.

According to a press release, UK based ?What If! commenced operations in Australia in 2001 and had a team of 25 in its Sydney offices. The office was closed on 31 March.

The business had an impressive client list that included businesses as diverse as ABN AMRO, Babcock and Brown, Bluescope Steel, Unilever and Westpac.

In October 2007 the company appointed Nudie founder Tim Pethick to head up the Australian arm. Pethick was contacted for comment on this post and his comment is found below.

In a case of a near Soviet-style disappearance, the details of the Sydney operation are no longer found on the UK based website.

Apple's iPhone goes 3G and downunder.

Apple's new 3G iPhone looks set for a June global launch in Australia.

According to a New York Times article on Sunday, Apple is likely to launch it's 3G iPhone in June. The new phone has been designed to to further increase its appeal to both consumers and carriers in Australia, Asia and Europe.

A number of Australian carriers, including Vodafone, are known to have been internally trialling the phone on their networks for months now. The trials and the arrival of the 3G version confirm that the new iPhones will now be able to run on Australian 3G networks.

The launch of the new phone seems designed to coincide with the opening of Apple's Australian flagship store in Sydney. Part of Apple's global rollout, the flagship stores are designed to not only enhance the brand but underpin Apple's direct sales strategy.

The NYT reported that analysts and the industry were expecting Apple to introduce the 3G phone to ensure Apple's Steve Jobs meets his 10 million iPhone sales forecast by the end of 2008.

More than 1.7 million iPhones were sold by Apple last quarter with Apple struggling to meet demand in particularly in the US and Europe. However, this contrasts with reports of lagging European sales being blamed on Apple's network exclusivity, pricing and lack of 3G capability. Complicating demand issues is the widespread belief that more than 1 million unlocked phones have found homes outside the US and are not in official carrier forecasts.

Meanwhile, competition is expected from Samsung's Instinct and LG's Vu, both very similar to the iPhone. Both were premiered at the Las Vegas CTIA Wireless 2008 earlier this month and are expected to launch on US networks soon. They will also pose a significant threat to Job's ability to meet analysts' expectations and will add urgency to the 3G launch.

Prada and Starbucks: the non-place of retail.

In his eponymous essay and book Non-Places: Introduction to an Anthropology of Supermodernity (1995) French anthropologist Marc Auge coined the phrase "non-place" to refer to places of transience that do not hold enough significance to be regarded as "places."

In Auge's original concept non-places were those spaces you typically encounter when travelling such as airports, bus terminals, hotels, shopping centres and supermarkets and which you often only remember in very generic terms.

But the concept of non-place is now increasingly engulfing many more places as brand owners and their brands struggle with brand differentiation and experience.

I was recently struck by the comment in a recent review of Taylor Clark's Starbucked: a Double Tall Tale of Caffeine, Commerce and Culture, where the enclaves of Starbucks were described as "non-place" and could just as easily be in "Manchester, Mumbai or Montreal" given the scale of its globalisation.

The two key issues non-place raises is: does globalisation make it possible for ANY brands to create real and unique spaces? do the elements of branding actually work against the development of these kinds of spaces and experiences?

In the first instance, globalisation is designed to bring about both ubiquity and consistency in the performance of the brand and in the consistency of experience. For retail brands there should be little difference between your experience of your brand in one country versus another. This is best demonstrated by luxury brand, Prada.

Given the brand strength of their various marks and portfolios, luxury retailers rely particularly on the elements of place to support their brand positioning. Location, store fit out, visual merchandising, service and stock are all shared elements. In Los Angeles, the Rem Koolhaus Prada designed store might look like a garage - it has no fascia and unlike most stores on Rodeo Drive, is open to all. Despite Koolhaus' experiments with reversing a traditional store layout (the stairs face backwards and are used as more of a display area, the overall design, layout and availability and display of product still remain essentially consistent with the Prada brand identity and system.

While Koolhaus tries to subvert our notions of a retail space, I felt it was as much a a non-place as a Gap or a Starbucks, because my experience was essentially the same as any other Prada store I had been in from Rome to Sydney. As Auge puts it Prada presents "the clean, cold lines of non-place" and in what he describes as the "supermodern".

Auge describes a place "as relational, historical and concerned with identity, then a space which cannot be defined as relational, or historical, or concerned with identity will be a non-place". In simple terms, Prada's place branding is so concerned with the assertion of its own identity everything else seems opaque.

This failure supports the second issue, if branding is designed to contribute to the creation of meaning, why in the same instant does it also create non-identity and non-space and perhaps the answer lies in the non-critical application of branding.

Branding works best if it can create, manifest and control the experience of identity. However, the application of logos, design systems, visual positioning, tone of voice which all in their own way produce brand and product expression and convey core messages and meaning, also work best in an environment that can be ordered. This is the purpose of branding, to create that order through a shared and understood experience.

If we take Starbucks as an example, it is fairly easy to see how Auge's non-place can be applied and how branding works against the brand. Firstly, the stores have been designed against a specific set of criteria with user experience mapped through identified touch points. These touch points, whether they are transactional (lining up at the counter order and pickup the coffee) or visual (the logo) are part of a series of cues for messaging the brand, and provide an incentive to buy and consume product.

Secondly, because customer experience is so managed within the store to maximise sales, the brand is only ever going can only deliver a ubiquitous experience. It is as
Starbucks chairman Howard Schultz said, the brand has last lost its soul (see DIFFUSIONblog 3/5/07) If as Auge claims place is "relational, historical and concerned with identity" then Starbucks branding is never going to deliver anything but a partial sense of this.

In an internal memo published last year Shultz describes "the commoditization of the Starbucks experience", he laments the the loss of "the romance and theatre" of the traditional Italian espresso machines, which have been replaced by "cooking cutter" formats and automatic machines. And it is is this sense of place created by the "romance and theatre of the machines", which is what I think is part of this non-replicable brand experience. They are intrinsically linked to the European cafe experience, which tends to be seen as non-commodified, unique and very very much about Auge's idea of "place", the Italian lifestyle.

So what can retail brands do? Auge describes the place and non-place as "polarities" and with the latter never fully resolved and this is where I think retailers need to address. If we are all supermoderns, wondering from place to non-place as we traverse the globe and even our own countries in the search for authentic experience, we need to start to encounter retail experiences which relate to a sense of place, are embedded in historical context and contribute to the creation of personal identity. The desire for a Prada suit might deliver some aspects of this but the store as the mechanism of experience is flawed. Branding needs to be far more self critical and ready to fall outside systems and formats. Its why love boutiques and flea markets. They are unordered, lack any brand homology and are always different.

Colour wars 2: Darrell Lea defeats Cadbury

In the latest round in the international colour wars, pint sized chocolatier Darrell Lea has defeated international retailer and bully boy Cadbury Schweppes for control of the colour purple in Australia.

In DIFFUSIONblog 25/5/07 we reported that Cadbury had won an appeal in which it claimed that since 1995 it had achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia through the Pantone 2685C colour purple.

It alleged that since 2001, Darrell Lea had consistently used a colour bearing a "striking and obvious" likeness to Cadbury's purple in its signage, badging, wrapping, store fit-out and point of sale facilities.

The Australian Federal Court has now dismissed the latest application by Cadbury Schweppes that the use of purple by Darrell Lea amounted to misleading and deceptive conduct.

Justice Peter Heerey said he was not persuaded that Darrell Lea in using purple had passed off its business or products as those of Cadbury or had contravened Australia's Trade Practices Act.

"I am not satisfied that such usage has resulted, or would result, in . . . purchasers of chocolate being misled or deceived," Justice Heerey said.

Cadbury had claimed customers the use of the colour purple affected customers ability to discern the difference between the two company's products.

But Darrell Lea counterclaimed Cadbury's knowledge was limited to inspection of goods on display and physical surroundings. The claim was correct as the original evidence presented in an audit of colour use made no attempt to actually observe brand experience.

"Cadbury Schweppes has deliberately established a connection between our shade of purple and Cadbury chocolate, and many consumers associate Cadbury purple with Cadbury chocolate,'' Cadbury managing director of Mark Callaghan said in a statement.

"We remain totally committed to protecting our brand identity and Cadbury will appeal this decision.''

As we noted this the second appeal Cadbury has lost. In the original April 2006 hearing, a Federal Court judge dismissed Cadbury's claim. In the disputed hearing the court ruled Cadbury did not “own” the colour purple and that Darrell Lea's use was not likely to convey to a” reasonable consumer” that it was associated with its rival.

The field of brand identity can be somewhat murky and "locking up" what are essentially public colours without a similar attention to the impact of the rest of the identity system can be fraught with danger, as Cadbury continues to find.

Yahoo, slow death of a portal?

Microsoft's increasingly aggressive stance on its Yahoo bid looks certain to be bolstered by recent figures on Yahoo’s overall performance as a search vehicle.

According to SearchEnginewatch nearly 10 billion "core" searches were conducted in the US in February, accounting for a 6 percent decline from January search activity.

Altogether search queries were down at all the major search engines. Google serving 5.9 billion search queries, down 5 percent from January. In February, Google's share of searches was 59.2 percent, up from 58.5 percent.

Yahoo's search share slipped from 22.2 percent in January to 21.6 percent in February. Overall, it served 2.1 billion searches, down 8 percent from the previous month.

In March, much the same scenario has also been played out over at Hitwise, whose measures have Google owning around 67.25 percent of all US searches for March. Yahoo! Search, MSN Search and Ask.com each receiving 20.29, 5.25 and 4.09 percent respectively.

In 2007 Hitwise had Yahoo with 21.26% of all searches and the year before that 22.30%. It represents not only a continuing rout by Google but also plays into suggestions that Yahoo’s market position is being eroded.

In Australia, the Yahoo7 alliance has been criticised for its inability to find focus with advertisers increasingly shunning the joint venture (See DIFFUSIONblog 23/10/07) and relegating it to a second tier advertising status.

In February Nielsen//NetRatings Yahoo!7 in third place in the market with 5 million unique users, though this figure is an aggregate and does not represent search only. It cites its recent content deals with Bebo and Disney as proof that its a real challenger to Google.

The Australian operations focus seems to be on stretching the width of advertising, rather than increase the range of opportunities for users and increasingly gain traction from engagement with the brand. In a mature market such as Australia, where Neilsen claims internet usage has peaked at 80%, the effort may go unrewarded and probably unrecognised.

This scenario is mirrored in almost all aspects of Yahoo’s attempts to rescuscitate its ailing brand.

The simple fact, as the statistics show, its market relevance with users and with advertisers is declining. From a content, usability and experience side, Yahoo now does little to differentiate itself from its competitors. Its competitors, particularly MSN, do nothing more than mimic the same.

Portals, like Yahoo, and before that Excite, Lycos and AltaVista (remember these!) all experienced year-on-year declining relevance and consequently market share as their brands no longer provided users with differentiating content and experience. It wasn’t about building advertising platforms, it was as Google worked out, about building a brand that delivered differentiating and innovative content and usability for users.

I'll let the statistics speak for themselves. According to SearchEngineWatch in 2001 Yahoo was the top search engine, referred the most traffic to web sites in the US, accounting for more than 38% percent of search referrals with MSN 15.9 percent, the nascent Google 11.3 percent and AOL 7.8 percent. Internationally, Yahoo referred 41.5 percent of all traffic, followed by Google at 13.9 percent, MSN 12.9 percent and AOL 5.4 percent.

As everyone knows, its a numbers game. And the numbers are real.

Jeans and the aesthetics of invisibility.

Since the 1950s the distribution and sales of jeanswear on a global basis has changed round a few times. Consumers used to associate price, quality and reliability of apparel merchandise with the retailer rather than with the manufacturer but this tended to swing around in the past decade back in favour of the manufacturer as designer. In the late 90s came the prolific growth of even more independent labels and the designer became more important. On the back of this retailers like JeansWest and JustJeans tried to arrest the flow with the launch of their own labels, but this was not enough. In Australia department stores like Myer and David Jones already saw something of this future, moving to stock branded jeans and own labels, whereas multiples stuck to own label.

So many of these denim retailers, have mistaken the significance of their labels for a brand in itself. The fact is a label is not a brand.

Increasingly denim labels have sort to find their own niche and voice (many successfully, Evisu is a good example). They have been looking to influence consumer choice with advertising, sponsorship and merchandising for their own labels against the tide of increasing product proliferation. As the large multiples have expanded both store coverage and product range, what’s been missing is that in this pursuit has been their brands - increasingly divorced from the customer base, both in terms of relevance and subsequently acceptance. The store brands have become something consumers no longer recognize as reflecting an aesthetic they even would be interested in.

Still all the major brands (Levis, Lee, Wrangler) continue to offer a wider range, prices and margins putting further stress on the lower end of the market. One of the major issues facing the multiples is that in this pursuit of a new positioning, brand equity might be damaged and profit margins invariably chewed up as once-loyal customers migrate to even less-expensive and more commodity brands. The acknowledged wisdom for the multiples is that is there are new opportunities to take jieans to two points along the scale - higher prices points vs lower price points – in both cases these are volume plays - but what is missing in this equation is how customers can truely align themselves with the æsthetic of the brand and not just the label, where that aesthetic has increasingly lost relevance with consumers

Add to this the sheer number of alternative denim labels in Australia as well as the opportunity to purchase globally via the internet, meaning there is no longer a mainstream for denim labels or indeed any mainstream for many apparel categories. The jeans market has become essentially dichotomic as customers have: invisible jeans (like Nobody, Nudie, Mavi) with no manifest branding compete with jeans that have a surfeit of branding (Levis, GStar, Ksubi), all of this because many types of customers exist simultaneously. And at the margins sit the Australian commodity brands like Jeanswest, JayJays and Just Jeans taking tilts at the newer labels while trying to sure up their markets against more overt labels. It’s no wonder mass market has an identity problem.

In the absence of what I see as a strong design aesthetic, reflected across all aspects of a brand, price becomes the only point of difference. The brand itself becomes irrelevant. invisible in the worst possible sense and the label a mere endorsement for a consumer price consideration.