Seven years ago we wrote two articles about the latest trends in brand strategy (you can read them here and here). Back then, we focused primarily on the brand messages that were either gaining or losing popularity.
Today, we are examining changes that not only shape brands’ communications but, more importantly, also inform their business strategy.
We believe that the five changes have been brought about by one factor: companies are increasingly held accountable not only for their financial results, but also for how they run their business and how they treat their stakeholders and the planet.
1. Beyond financial performance
Although the terms sustainability, corporate social responsibility (CSR) and environmental, social and governance (ESG) have been discussed in business and academia for a few decades now, it’s only within the last 10 years that they have become more mainstream and led to substantive change. Today, most of the publicly listed companies are required by law to report on their social and environmental impact using hard data.
This increased focus on being a good corporate citizen has influenced how brands position and present themselves to the world. Some brands go as far as to define themselves almost entirely through the CSR / ESG lens (e.g., Patagonia and Ben & Jerry’s). Some attempt to build their sustainability credentials as an additional brand strategy pillar, for example, Nespresso and H&M.
All in all, we believe it’s a very positive trend. By no means do we think that this transition happened because of corporate goodwill; it has been enforced by various groups of stakeholders. But even small, involuntary gestures from multi-billion dollar giants can have a huge impact on the communities and environment.
There is, of course, still a lot of room for improvement. The intensified pressure on businesses to be more sustainable has also dramatically increased what many refer to as “greenwashing” practices, allowing some companies to mislead their stakeholders to achieve commercial gains. However, it is encouraging to see that even the companies which in the past refused to engage in CSR-focused activities, started taking the topic more seriously (e.g., Walmart). It is also a positive sign that some corporate behaviours which were common practice 20 years ago, are almost unthinkable today (e.g., promoting tobacco brands, positioning sugary snacks as healthy, or producing tonnes of unrecyclable plastic). Sustainability, slowly but surely, is becoming a moral imperative but also a potential competitive advantage for companies.
2. A more active role of the corporate brand
A corporate brand is a set of associations built around a company, rather than its products or services. Some examples of corporate brands include Alphabet (owner of Google), Meta (owner of Facebook and Instagram), Unilever (owner of Dove and Magnum) and Procter & Gamble (owner of Tide and Pantene).
There are also corporate brands that exist as consumer brands, e.g., Danone, Microsoft, Nestlé or L’Oréal.
We wrote about the differences between consumer, corporate and employer brands here.
Corporate brands traditionally focused on engaging with investors, while consumer brands communicate mostly with end-users. For that reason, even though products from companies such as Unilever or Procter & Gamble were well-known to the general public, the companies themselves weren’t. This is changing.
Today, corporate brands interact with a wide range of stakeholders including not only investors, governments, local communities, employees and trade unions but increasingly they are also engaging directly with consumers.
The more recent trend is that some firms (especially those more advanced in brand management practices) use their corporate brand to endorse consumer brands in their portfolio and inform their individual brand strategies.
Unilever is one such example. It defines its overarching corporate brand purpose as “making sustainable living commonplace” and executes it not only through company-wide activities but also through its consumer brands. Some Unilever consumer brands even adjusted their strategies to be more in line with the company’s overarching “sustainability agenda” (e.g., Hellmann’s and Axe / Lynx). It is also worth noting that Unilever is no longer an invisible corporate brand like it used to be. It now plays a more prominent role in the branding and communication of its individual brands (“the trust mark of sustainable living”).
This is a positive change. Stronger visibility of the corporate brand to consumers contributes to a higher level of corporate transparency. Businesses tend to act more responsibly knowing that consumers might be more likely to buy products and services from them if they are perceived as “a good citizen” and that the damaged reputation of their corporate brand could potentially harm the commercial performance of their consumer brands.
3. New positioning model and purpose branding
In recent years, a positioning model that centres around brand purpose and “the why” has become increasingly popular (read our article about the most effective positioning models here). A similar concept, brand mission, was known for decades but, for some reason, never had the same impact. The event that played the biggest role in popularising the idea of brand purpose was Simon Sinek’s 2009 TED talk, “How Great Leaders Inspire Action”, which introduced the notion of “Start with Why” and emphasized the importance of purpose.
This new positioning model managed to re-energise the brand and marketing community (and allowed many brand consultancies to create a new source of revenue).
Today, most marketers believe that the brands should “start with why” and have a brand purpose at their heart.
We think this trend has gone a bit too far in communications departments and not far enough in boardrooms.
Brand purpose can lead to a meaningful change only if it’s treated as a business strategy, not a communication platform. There are companies that managed to accomplish that (you can read about some of them here) – they not only focus on communicating their brand purpose but, more importantly, they use brand purpose as a guiding principle to make business decisions: restructure their portfolios, change product formulas and production processes, improve their supply chain, drive reorganisation, manage talent and many others. If the brand purpose is at the core of everything the company does, only then it can make a difference.
However, it looks like the opposite phenomenon is taking place. Many companies treat brand purpose as a pure comms exercise – another way to use words to capture what a brand is about. And although words can be powerful, they don’t lead to change if they are not substantiated by action. Consumers, after all, don’t care if you have a well-worded brand purpose. Some of them might care though how they experience your company and its practices.
4. More unified brand architecture
When working on portfolio projects 20 years ago, a house of brands (products sold under separate brands) was a popular brand architecture approach (to learn more about different brand architecture types, read our two blog posts: Part 1 and Part 2). Companies tended to launch more new brands, not related to their existing assets, and invest in them only to remove them from the market after a few years (e.g., telco companies launching new product brands with little or no endorsement from their umbrella brand).
Nowadays, it seems that there’s a better understanding at the executive level that a more unified brand architecture and especially a branded house framework (products sold under one brand) is the most cost-effective option. It’s not a coincidence that the most valuable brands in the world use the strength of their umbrella brand to launch or relaunch various products: Apple is a textbook example of a branded house, Microsoft is reducing the number of non-Microsoft brands and moving its product sub-brands under the Microsoft umbrella brand (e.g., Office has become Microsoft365), Amazon has extended its brand in multiple directions and Google, similar to Microsoft, has renamed or discontinued some of its offerings to increase the prominence of the main brand (e.g., moving from Picasa to Google Photos, renaming GoogleAdWords to Google Ads).
In literature, the two extreme brand architecture variants, branded house and house of brands, are often presented as a choice between two equal options. This couldn’t be further from the truth.
Building your business on the house of brands framework, that is, owning a number of different brands and marketing them separately, can be done effectively only with a substantial budget (think Unilever, Nestlé, L’Oréal or Procter & Gamble ). This is because achieving a satisfactory level of brand awareness takes a great deal of time and a lot of money. If you have, let’s say, 10 brands in your portfolio, to reach this goal for each of your brands, you will essentially need a marketing budget 10 times higher than for one brand only. So, there is a strong commercial rationale underlying the strategy of moving to a more unified brand architecture framework. This is a positive trend to watch.
5. Elevated seriousness
20 years ago, most brand briefs were focused on building hedonistic values: fun, pleasure, joy, indulgence, escapism, status and so on. Today, even brands representing categories that are naturally associated with pleasure, are trying to convey a more serious message. Cadbury has successfully repositioned itself from “providing moments of joy” to a more serious area of “Celebrating genuine acts of kindness and generosity.” Axe / Lynx moved from “male irresistibility” to a brand strategy focused on empowering men to feel attractive and proud of who they are regardless of their looks, skin colour, sexual orientation, etc., and celebrating what is unique about them.
It seems that many brands have matured and become more responsible and sustainable. In many instances, it’s a good thing. However, in some cases, it means that the brands and their communication have just become more indistinguishable from one another. This is exactly the opposite of what they should aim to achieve.
We believe that there is a big space for brands that act responsibly but also have a sense of humour and offer a more light-hearted approach.
We, as consumers, all need a break after all.
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