Brands are suffering an overpopulation crisis. There are more trademarks in force in the world today than there are individuals in Spain – over 50M. And this trademark nation is thriving, increasing by 16% annually this century so far. That’s fifteen times the planet’s population growth, and triple that of the Dow Jones Industrial Average. We’ve gone from one brand for every 1,700 people in 2000 to one for just 158 people today. At this rate, we’ll soon be outnumbered.
What’s driven this population explosion? Many factors simultaneously. Abundant venture funding has fueled hordes of startups over the last two decades. Large, innovative companies are also fertile brand incubators, branding new technologies, products, and ranges at a rapid clip. For instance, Amazon, while a disciplined brand steward for its core services and devices, also has over seventy private brands addressing product niches (notably, many of these are two words joined by an ampersand, such as James & Erin, Stone & Beam, Franklin & Freeman, Lark & Row, a structure that makes trademark acquisition far easier). Amazon’s own marketplace, and other platforms such as Etsy, Google Play store, and Apple’s App Store, lower the barrier to entry for small businesses to innovate and access large audiences with new brands. None of these factors shows any sign of abating soon – despite clear signs that all this growth is a problem.
The fact is, we simply don’t need so many brands, and fewer and fewer of us know them or care about them. Brand tracker after brand tracker shows declining awareness and differentiation. In the first decade of this century, John Gerzema’s research into 2,500 brands showed awareness declining by 20%, perceptions of brand quality down by 24%, and that almost 70% were stagnant or eroding in differentiation. More recent studies show this trend continuing. In 2019, Brand Z reported a 26% decline in awareness of Chinese brands among global millennial consumers over the previous three years. Even for brands lucky enough to have awareness, the picture is challenging. The 2020 edition of BrandZ’s Top 100 Most Valuable Global Brands concludes that “’being known’ is not enough for brands to maintain their value. In fact, many failed businesses in recent years demonstrate a ‘salience gap’: Consumers knew these brands, but not what made them meaningfully different.” The blizzard of branding is making us snow blind.
So brand-owning organizations need to ask some hard questions. Should they enter the brand creation arms race, or try to protect awareness and meaning in the brands they have? Do they have too many brands and need to cull their herd? Are their brands helping each other out in the right ways?
These questions can be answered by building a brand architecture – a structure that defines which brands are needed, and assigns clear roles to each in an intentional system. But that brings yet another challenge. The current theory of brand architecture was developed in a prior era of commerce, and it risks leading to bad outcomes unless it’s radically updated.
Brand architecture is entering its forties, and it’s in a midlife crisis. In the 1980s and 90s, brand advisors such as Philip Kotler, David Aaker, and Erich Joachimsthaler brought structured thinking to questions of how to manage and organize multiple brands. They laid out a spectrum of approaches, from a monolithic “branded house” to a diverse “house of brands” collection, and defined criteria for figuring out which to adopt. This thinking was rooted in the commercial context and ethos of the time – an era dominated by consumer packaged goods, when shareholder value was the sole measure of success, and brands were considered fiscal assets to be managed (a philosophy apparent in phrases like “branding the corporate identity with a view to adding value to brand equity.” Notably, this theory of brand architecture is neutral about the right place to land, and at times it promotes a fragmented house of brands approach – as a way to “clearly position brands on functional benefits and to dominate niche segments”. But three secular shifts have changed things enough since then that we need a brand new theory of the case.
The first is the explosion of brands I mentioned before: In an era awash in brands, it takes a strenuous effort to get noticed, especially when media channels are also exploding in number and marketers have seconds to land a message. In such an environment, fragmented brand architectures risk letting their many separate components drown alone, and the logic shifts firmly towards monolithic or minimum-viable-brand approaches.
The second is the dramatic shift to direct digital relationships between brands and people, at the expense of relationships mediated by retail in B2C, or by attentive sales forces in B2B. This means brand architectures need to incorporate navigability as a key consideration, to help people understand and engage with a company’s offerings as a whole.
The third shift is the push towards purpose. This was underway long before Covid-19 and the Black Lives Matter moment in 2020, but both have given it rocket fuel. People demand far more of brands today than functional benefits and managerial emphasis on commercial success. This means brand architectures need to showcase a purpose-driven story, connecting all the offerings under a visible and transparent mission.
I’ll look into how to deal with the three shifts and some brand architecture principles that flow from them, in a future piece. As we’ll see, getting it right requires a mindset shift, from seeing brand architecture as an analytic practice, to a more ideological stance rooted in the belief that branding should become ever simpler, more human, and mission-driven.
Cover image source: Clint Adair