Tendensdagen 2009 Nigel Hollis Authenticity Final 9 30 09


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Tendensdagen 2009 Nigel Hollis Authenticity Final 9 30 09

  1. 1. Authenticity: It's All About You Nigel Hollis Chief Global Analyst Tendensdagen, Stockholm, Sweden
  2. 2. Agenda What is authenticity? What is authenticity worth? What are the characteristics of an authentic brand? 2 In my presentation I will address three topics: First, I will share some feedback from my Millward Brown colleagues in Europe and North America on what authenticity really means in relation to brands. Second, I will look at what authenticity is actually worth to a brand. Third, I will consider the characteristics of authentic brands – what sets them apart from others and how an authentic brand is created.
  3. 3. What Is Authenticity? To answer the question of what authenticity really means in relation to a brand, I enlisted the help of my colleagues in Europe and North America. I asked them what it means when a brand is described as "authentic" and then invited them to name some "authentic" brands. First, let's see which brands were volunteered as authentic.
  4. 4. Only 5 brands were mentioned spontaneously by more than 5 percent of participants 10% 7% 6% 32% 25% Source: Survey of 488 Millward Brown staff in Europe and North America 4 While over 500 different brands were nominated as being authentic, the vast majority were mentioned by 1% or less of our sample. This slide shows the five most frequently mentioned brands: Coca-Cola, Levi's, Apple, Nike, and Jack Daniel's. Other brands mentioned by more than 1% included: BMW, Budweiser, Google, Heinz, Chanel and Harley Davidson. The massive tail of brands that followed included the likes of Saab, Converse shoes, Marmite savory spread, Alfa Romeo and Tabasco hot sauce. So what properties link such a diverse set of brands?
  5. 5. We found substantial agreement on what "authentic" means… Which words or phrases below describe an "authentic" brand? True To Its Origins Genuine "The Original" 0 20 40 60 80 % endorsing Source: Survey of 488 Millward Brown staff in Europe and North America 5 There was substantial agreement that authentic brands were true to their origins and genuine. European participants were more likely to say that authentic brands are "true to their origins." This may reflect a greater emphasis on provenance and brand history in Europe. North American participants were more likely to endorse "genuine" and "does not misrepresent itself." This might be a reflection on the quality of marketing or the consumer mindset. I often see brand communication in the United States that seems to be designed to sell and manipulate opinion rather than engage consumers with a brand. To sum up, an authentic brand is one that is true to its positioning and values. It does not change its message simply to attract new users; it stands for something.
  6. 6. …and on what it doesn't Which words or phrases below describe an "authentic" brand? Puts Customers First Comes From A Specific Place ` Trustworthy 0 10 20 30 40 50 60 % Endorsing Source: Survey of 488 Millward Brown staff in Europe and North America 6 My colleagues do not believe authentic brands put the needs of their customers first. (Only 7% endorsed this statement.) Contrary to my personal expectations, only 26% agreed that authenticity implies a brand comes from a specific place. And an authentic brand may or may not be considered trustworthy. Just under half of our respondents endorsed this word in relation to authentic brands.
  7. 7. What Is Authenticity Worth? So now we know what authenticity is and what it is not. But what is authenticity actually worth to a brand? Before I explain that, I first need to introduce you to Millward Brown's brand equity database, BrandZ. BrandZ is a quantitative brand equity study that is based on our BrandDynamicsTM brand equity framework. BrandZ has been conducted annually by Millward Brown on behalf of WPP since 1998. The database now includes measurement of 10,000 brands in over 30 countries. Central to BrandZ is the Brand Pyramid, which measures consumer commitment to a brand.
  8. 8. The Brand Pyramid explains purchase behavior High share of wallet Individuals who Bond Individuals who Bond with a brand are more with a brand are more than ten times more than ten times more likely to buy it than likely to buy it than those who just know those who just know the name the name Low share of wallet 8 The pyramid's first level is Presence. Consumers who reach the Presence level are actively aware of the brand when they think about the product category, either because they've tried it (or know someone who has), or because through some other means they've become aware of what the brand stands for. Consumers reach the second level, Relevance, when they believe that a brand promises to deliver something of value to them at an acceptable price. To move to the third level, Performance, people must believe that the brand delivers satisfactorily on its basic functional promise. Those who reach the fourth level, Advantage, believe the brand offers rational or emotional benefits that distinguish it from the competition. People who reach the fifth level, Bonding, believe that the brand offers unique advantages in terms of what is most important in the category; therefore it is the best brand for them. People are typically at least 10 times more likely to buy a brand they are bonded to than one that they are simply aware of at Presence. Because of this relationship with individual behavior, Bonding has a .82 correlation with share of market figures, representing an excellent measure of a brand's present attitudinal equity. (Note: While bonding represents a predisposition to buy a brand, in- market behavior - and therefore market share- is affected by factors such as distribution and pricing.)
  9. 9. Authentic brands have stronger Brand Pyramids and higher market shares Authentic Brands Other brands Bonding Advantage Performance Relevance Presence 9 Here we can see the average Brand Pyramid for authentic brands compared to that for the remaining brands. Authentic brands are stronger throughout. Presence for authentic brands is 50% higher than that for other brands, but the real benefit comes at the Bonding level. Over four times as many people are bonded to authentic brands. The end result is that authentic brands tend to have market shares that are twice as big as other brands. So authenticity is associated with a brand's current attitudinal loyalty and market share. But even more important, authenticity can influence future brand performance as well.
  10. 10. Potential growth depends on how well a brand converts people from… This... 10 Based on extensive analysis, we have found that we can predict the probability that a brand will grow or decline based on a subset of the BrandZ data. The better a brand converts people from active familiarity with a brand–either using it or thinking of it spontaneously—to agreeing that it is one that they think highly of, is more appealing and is different from other brands, the more likely it is that the brand will grow market share in the coming year.
  11. 11. Potential growth depends on how well a brand converts people from… To this... e.g. Apple's unique design e.g. 4-wheel drive + + e.g. something "Different (in a good way)" 11 In other words, brands that people think are different (in a good way) are more likely to grow. We call this measure Voltage 2.0. Voltage 2.0 is a measure of the degree to which a brand is primed to succeed or fail. It's "the wind in your sails" (or in your face).
  12. 12. Voltage 2.0: Improved probability of market share growth, reduced probability of decline 12 This slide illustrates how we’ve validated Voltage 2.0. An analysis of over 350 brands, including packaged goods, telecoms, automotive, and others, demonstrates that a strong brand that is seen to be different in a good way is much more likely to grow than others. It shows that in cases gathered from our database over the last decade, as Voltage 2.0 grew, the probability that the brands would increase market share in the year following the study also grew. It also shows that as Voltage 2.0 gets lower, the probability of those brands losing market share increased. From this we can confidently assert that the higher a Voltage 2.0 score, the greater the probability that a brand will succeed in the months following the study.
  13. 13. Authentic brands are more likely to have positive growth prospects Authentic Brands 13 If we plot the average scores for authentic brands on this map, we see that the authentic brands are firmly placed to the right of the average, with higher growth potential and lower risk of decline. Here in Sweden, Coca-Cola would appear to have very strong growth potential and a low risk of decline. Other authentic brands in a similar position would be Apple and BMW. Unfortunately, authenticity is not a guarantee of future success. In the United States, Levi's, nominated by 25% of my colleagues as authentic, has struggled to compete against new fashion brands in the face of shifting consumer tastes. In spite of its best efforts, the brand's growth potential is negative. Here in Sweden, a well-known local brand risks finding itself in a similar position. Volvo has a Voltage 2.0 score of -5, neither positive or negative.
  14. 14. Younger European respondents were less likely to believe Volvo is authentic Please select the brands below that you think are "authentic." 45 40 35 30 25 20 15 10 5 0 40 and under 41 and older Source: Survey of 488 Millward Brown staff in Europe and North America 14 And perhaps our survey reveals the reason why Volvo's consumer growth prospects are not as healthy as they might be. Younger respondents were less likely to agree the brand is authentic. Perhaps the views of older respondents are less tainted by Ford's ownership, or by recent reports that the brand would be sold to a Chinese company?
  15. 15. The Characteristics Of An Authentic Brand Our analysis suggests that '"authentic" brands may have larger market shares and stronger growth potential than other brands. So what are the distinguishing attributes of authentic brands? How do you ensure that your brand is seen as authentic? First, let's see what makes people bond with a brand and how authentic brands compare to others on those key factors.
  16. 16. Six possible ways people might choose a brand e.g. Coke's iconic status e.g. Mercedes reputation for quality e.g. Guinness's positioning e.g. Apple's unique e.g. McDonald's value design menu e.g. Red Bull's events 16 People bond to brands for different reasons. We have identified six broad underlying factors, which are driven as much by experience as by what brands try to tell people. Any one of these criteria could give someone a reason to choose one brand over its competitors.
  17. 17. People think more highly of authentic brands X 1.7 X 1.5 X 3.6 X 1.6 X 1.8 X 0.8 Source: BrandZ database analysis 17 Here we see a comparison of authentic brands to others in the BrandZ database. The biggest difference is seen in terms of perceived popularity. Authentic brands are over three times more likely to be mentioned as popular than others. But the true strength of authentic brands lies in being seen as better than others, more appealing, and different. These characteristics give these brands greater growth potential and also help justify a stronger price premium (which is why they are less likely to be seen as a good deal). Authentic brands live up to their promise. They offer something different from other brands, deliver a great brand experience, and are more appealing. That's what makes them popular.
  18. 18. Authentic brands are leaders, not followers Compared to non-Authentic Assertive +26% Trustworthy +26% Adventurous +24% In Control +23% Desirable +22% Rebellious +20% Arrogant +18% Sexy +17% Brave +15% Wise +6% Source: BrandZ database analysis 18 The other thing to note about authentic brands is that they tend to have a distinctive brand personalities. They tend to be leaders, not followers. Authentic brands are more likely to be considered assertive, trustworthy, adventurous, in-control, and desirable. Does this profile remind you of someone?
  19. 19. Does this profile remind you of someone? 19 I am reminded of Captain Jean Luc Picard of the Starship Enterprise from Star Trek: The Next Generation. A man not afraid to boldly go where others have not gone before. One who is willing to take responsibility for difficult decisions. And one who holds true to his principles whatever the cost. The characteristics that made Jean Luc successful – whether as a starship captain or more realistically as a TV star – are characteristics that marketers would do well to emulate if they want to be authentic. You need to know what your brand stands for and be willing to hold true to those values. To explore this idea, let's have a look at two renowned global brands.
  20. 20. European colleagues were much more likely to see Apple as authentic than Nokia Please select the brands below that you think are "authentic." 45 40 35 30 % Endorsing 25 brand as 20 "Authentic" 15 10 5 0 Apple Nokia Source: Survey of 488 Millward Brown staff in Europe and North America 20 As I noted before, Apple was one of the top five brands mentioned spontaneously as authentic by my Millward Brown colleagues. When provided with a list of brands and asked to identify brands that were authentic, 42% of my European colleagues selected Apple. By contrast, only 18% did so for Nokia. So why the difference?
  21. 21. More than a good product: Clarity of associations 21 Both brands are known for their innovative products but Apple has done more than simply sell new technology. Apple has created a strong and desirable brand with a multitude of positive brand associations. Steve Jobs provides vision and leadership to the brand. As a result, Apple maintains a 100% focus on customer needs, design, and simplicity of use. By comparison, Nokia struggles to create the same clarity of associations in spite of its commitment to innovation. But there is more to it than a commitment to innovation and a positive brand experience. Tone of voice also plays a part. It is not just what you stand for, it is how you engage consumers with your brand. To examine this aspect of authenticity, let's compare two beer brands. Both come from the United States. The first is Bud Light and the second Sam Adams. There are no prizes for guessing which brand is more likely to be thought authentic.
  22. 22. Bud Light 22 The ad for Bud Light is humorous and consistent with the brand's personality, but it clearly does not convey authenticity. If nothing else the wave idea has been used in other ads. Bud Light is the offspring of Budweiser, and the biggest beer brand in the U.S. The parent, Budweiser, is considered authentic by many. However, Bud Light's tone of voice makes it tough for that brand to share its parent's values.
  23. 23. Sam Adams 23 The ad for Sam Adams features Jim Koch, the brand's founder, and highlights his commitment to brewing and selling fresh-tasting beer. Behind most authentic brands – Method, Zappos, Facebook, Chanel, Apple and the like – there is someone who is responsible for ensuring that the brand lives up to its promise and does not deviate from what people have come to appreciate about it. As the founder of Sam Adams, Jim Koch is featured in the brand's advertising. This need not be so. Brand champions can also lead from behind the scenes, but if they do, their role is the same: to ensure the brand acts authentically.
  24. 24. Vegemite: An iconic Australian brand 24 Vegemite is an iconic Australian brand. This savory spread was first introduced in 1923 when a competition was held in order to choose the name. Today the brand is truly embedded in Australian culture. It is most often used on toast and in sandwiches, often with cheese or other ingredients. To give you a feel for the brand, here is an ad that appeared on TV not so long ago. Though it is recent, it harks back to earlier advertising, which parents of today might remember from their childhood. Since people do eat Vegemite with cheese, Kraft recently introduced a new variant: a "Vegemite with cheese" spread. Again, a competition was held to name the new product. This time there were over 40,000 name submissions. The winning name was announced on September 26th of this year. And the new name was…
  25. 25. And the winner is…iSnack 2.0?!!! 25 …Vegemite iSnack 2.0. This introduced a problem. While the new product was well received, the new name was not. The reaction on blogs, Twitter and Facebook was very negative. Like all good marketers these days, Kraft listened to the feedback and announced that they would change the name. So what's the problem? That takes care of the bad publicity, right? Well I would argue that when it comes to a brand like Vegemite, which has always been seen as authentic, you risk undermining that authenticity when you introduce new things that are not in keeping with what people expect of the brand. The technology associations of the new name are simply not seen to be appropriate to the brand or its history, and the brand's authenticity may suffer as a result.
  26. 26. Conclusion 26 So let's recap.
  27. 27. Authenticity: It's All About You Actions speak louder than words > Authenticity is about the way a brand acts and engages its customers > If people perceive a brand to be genuine in its actions they will likely perceive it as authentic Authenticity does have a payoff > Brands that are seen to be authentic are more likely to grow market share than those that are not. 27 Authenticity in itself does not imply good or bad things about a brand. It is entirely down to whether the brand acts in a way that is consistent with a defined set of values and how it engages its consumers. As we have seen, authenticity does have a payoff. Those brands judged as authentic tend to have stronger brand equity, which leads to higher market shares and stronger growth potential.
  28. 28. Authenticity: It's All About You Identify your brand values and stay true to them > Sometimes acting in a genuine manner means forgoing the quick buck > And it always means delivering on your brand promise To that end, brand champions must ensure that the brand's actions are aligned with its values In the words of our role model, Jean-Luc Picard, if you want your brand to be authentic then, "Make it so." 28 So what do you need to do in order for your brand to be seen as authentic? The recipe is simple, though hard to follow. First, identify what your brand stands for. What is its prime reason for being? What can it offer consumers that other brands do not? Second, ensure that your brand's actions – the experience and communication – deliver on the promise. Sometimes that will mean forgoing a quick buck. In the United States, Starbucks stood for a great place to relax with a good cup of coffee. But the need to drive revenue led it to saturate the market with new outlets, take the emphasis off the fresh coffee experience, and to start selling breakfast goods. What has happened is that the brand's equity has been diluted and it has come into direct competition with fast-food retailers like McDonald's. On a like-for-like basis, revenues have fallen. Truly authentic brands usually have a a leader or brand champion that ensures that the brand's actions are consistent with its ethos and values. So if you aspire to create an authentic brand, you need to follow Jean-Luc Picard's directive: "Make it so."