The Battle of Brand vs. Direct (1,220 words)
by Bob Hacker
Brand is now presented as the holy grail of marketing—"brand it and they will come"—with general advertising agencies the self-proclaimed Delphic oracles of brand stewardship. That one-size-fits-all marketing prescription is too simplistic and very misleading, particularly for direct marketers.
The first part of this article addresses the issue of brand and how it relates to a company's success. In this case, we'll define success as the ability to increase revenue and profit, since no CEO would spend a dime on advertising, promotion, direct marketing, public relations—or the people who manage these functions—without some expectation of positive return on investment (ROI).
In part two, we'll talk about how brand impacts direct marketing, and vice versa.
Part 1: Brand is important, but come on!
In an article in the January issue of Target Marketing, I proposed that the purpose of brand building is to create brand preference. Preference, in turn, is supposed to do two things for a business:
1) Generate more sales and higher market share by creating desire for a brand or product that's stronger than the desire created by competitors.
2) Protect and enhance margins by using the brand to avoid commodity status and add value to the selling proposition.
If "brand" can't do these things, there's virtually no ROI on brand investment, so why do it? This raises the question: Does great brand automatically result in revenue and profit? Often, the answer is no.
Need proof? As just one example, take a look at IBM. In the opinion of many, and I am one of that legion, IBM does the best brand advertising in the high-tech world. The best. Ever. But take a look at its revenue and pre-tax income over the past four years. Where is the correlation between the world's strongest technology brand and bottom line success?