You might expect a bias towards branding over marketing from an agency named Brandemix, but we believe they’re all connected. That said, there’s a definite hierarchy. It’s simple: marketing and recruiting would be almost impossible without branding.
There’s an old joke that marketing is like a man approaching a woman in a bar and saying, “I have a great job, I work out, I’m intelligent…” and on and on. Branding, however, is like a woman approaching a man and saying, “I hear you’re a great guy.”
Branding is more than just “nice to have” or “a fun exercise”; it offers the best return to the bottom line.
Let’s look at Starbucks.
In 2011, Starbucks became the #3 food chain in America, just after McDonald’s and Subway, and ahead of Burger King and Wendy’s.
Starbucks is also famous for spending less than 1% of its annual revenues on advertising. By comparison, McDonald’s spends around 4%. Impressive? Look at the actual numbers: Starbucks spent $150 million in advertising in 2012; McDonald’s spent $957 million, more than six times as much. In fact, McDonald’s spent so much that it placed fourth on Advertising Age’s list of the biggest American advertising spenders of 2012.
Let’s take the idea to its extreme: What if Starbucks ended all its paid advertising tomorrow, leaving only its website, social channels, and mobile app? Heck, let’s get rid of all the online communications too. What would they be left with?
That’s the essence of brand equity: it lays a strong foundation for loyalty. So strong that marketing may not even be necessary. (Addiction to caffeine is only slightly relevant.)
Let’s look at Coca-Cola.
It may not be totally fair to compare Starbucks to McDonald’s. How about comparing Coke to Pepsi?
The products are very similar. Both were invented in the South, eight years apart, so you can’t argue that one brand has decades of legacy ahead of the other, or that regionalism plays a role. But Interbrand ranks Coca-Cola as the third- most valuable brand in the world, with Pepsi at #22. That means that if you took away all the brand’s assets — from the factories to the bottles to the actual soda itself — just the name and logo of Coke would be worth almost $80 billion. Pepsi, by contrast, would be worth less than $18 billion.
Coke and Pepsi are almost the same product. So what’s the $62 billion difference? A century of branding, from connecting the brand to Santa Claus, to uplifting songs, to adorable polar bear characters who are about to get their own movie. And as you may expect, Coca-Cola isn’t anywhere on Ad Age’s list of the biggest advertisers. The company doesn’t have to advertise nearly as much because of its fantastic branding.
A brand is a promise, an emotional connection that goes beyond the product itself. Along with people who only go to Starbucks or only drink Coke, look at the “cult” of lovers of Apple — Interbrand’s #1 global brand in 2013. Once you have a strong brand, marketing becomes much easier.
You can measure the ROI in brand awareness, customer loyalty, and savings on advertising. Any way you slice, a strong brand is worth the effort.
ABOUT THE AUTHOR
Jody Ordioni is the author of “The Talent Brand.” In her role as Founder and Chief Brand Officer of Brandemix, she leads the firm in creating brand-aligned talent communications that connect employees to cultures, companies, and business goals. She engages with HR professionals and corporate teams on how to build and promote talent brands, and implement best-practice talent acquisition and engagement strategies across all media and platforms. She has been named a "recruitment thought leader to follow" and her mission is to integrate marketing, human resources, internal communications, and social media to foster a seamless brand experience through the employee lifecycle.
