system two

system two
start-up thinking in the enterprise

Tuesday, 25 May 2010

The intangible value game....


This TED is brilliant. Insightful, witty and amusing. But somehow I felt I was being entertained in a burning Rome.

My issue isn’t so much with the morality of advertising (although I have strong personal objections to much of what goes on in our business). Where the argument for intrinsic value creation falls down for me is in the numbers. Most of us know the advertising game has always been fun, dynamic, high risk and (relatively) well paid - working in strategy is as close to being paid to gamble in a Casino as anyone with half a brain is likely to get - my concern is the game has changed. That technology has rendered it unwinnable.

When the wisdom of the crowds can lay waste to any carefully constructed brand essence in seconds, where is the economic rationale behind capital being committed to build brands?

The business case for branding is simply no longer convincing. As users become more connected, more self aware and cynical - cold economic logic suggests that investing in (what I call) commodity clubs, simply represents a better economic bet.

Put another way. If an organisation

-    provides a great product or service people still need when money is tight, at a reasonable price
-    ensures if they source raw materials from poor countries, that they make the lives of the poor people they work with better
-    treats its staff and shareholders with respect
-    endeavours to minimise the environmental impact of its operations (and has a plan to reduce them to 0 or better still, actually improve the environment)
-    contributes in other ways to the wider (and local) community
-    accepts blame willingly when things go wrong

Why does that organisation need a brand?