Select Page

Umair Haque at Harvard gives us this article discussing The Shrinking Advantage of Brands. The genesis of the article is a report that Google has become the top brand in the world even though it intentionally avoids traditional brand advertising.

Haque defines a brand as “a promise: information from a firm promising you a set of costs and benefits from the consumption of a good or service. Brands shape your expected value.”

Haque proffers that branding made sense in an industrial era because interaction was expensive. Branding allowed complex promises to be associated with logos and slogans compressed into thirty-second ads.

But, “when interaction is cheap, the very economic rationale for orthodox brands actually begins to implode: information about expected costs and benefits doesn’t have to be compressed into logos, slogans, ad-spots or column-inches – instead, consumers can debate and discuss expected costs and benefits in incredibly rich detail.” This has resulted into consumers “massive defection to hundreds of thousands of social networks and microcommunities, where connected consumers endlessly discuss, debate, and validate brands and their promises.”

While Haque is largely correct in his conclusions, he misses an important point. A brand may convey a complex promise, but as much as anything its designed to convey trust. Trust in the product. Trust in the company which produced it. Trust that what you are promised is what you will receive.

Trust in the power of brands is not going away any time soon. The process by which a company builds consumer trust is definitely evolving however. Trust is an association between two parties that must be earned over time. In the past, in a world where information was asymmetrical, traditional brand advertising could use that asymmetry to create a false sense of trust.

The internet has made it easier for consumers to compare their own experiences with a greater number of fellow consumers however. Information assymetry between producers and consumers is declining. As a result, traditional brand advertising finds it far more difficult to use information assymetry to create that false sense of trust. Without that asymmetry, trust must be rebuilt based upon actual consumer experience instead of consumer anticipations.

Moreover, a company’s attempts to maintain information asymmetry risk damaging the brand itself. The internet has made it more difficult for a company to withhold information. I previously discussed what I described as Coke’s deceptive marketing practices. In reality, these practices are not deceptive. They are merely attempts by the company to withhold information that might damage the trust that decades of branding has helped to create. But information desires to be free. If the information is not available from Coke’s website, it is available in other places.

Once I found that information I was satisfied with what I received. My view of a Coke product did not change dramatically based upon learning how much sugar is actually in a can of Coke. I was expecting something similar. The brand damage resulted from Coke’s attempt to maintain information asymmetry. By withholding information, Coke damaged my trust in their brand far more than if they had been forthright in providing the information.

My initial purpose of the Coke essay was simply to convey to consumers the amount of sugar in the product. I intended to make the information more readily available so that consumers would be better able to make an informed product decision. That purpose would not have changed if the information had been readily available on Coke’s website.

After examining the information Coke had made available about their product however, my intentions changed. No longer did I simply desire to convey product information. It became my intention to also convey my own sense of damaged trust. It became my intention to inform other consumers how I felt about Coke’s marketing practices.

Traditional brand advertising may be on the decline. Brands may become defined by consumer experience as much as consumer expectations. Google’s ascension as the top brand does not mean that brands are becoming less important however. It simply means that brands can no longer be built in the same way that they have for the last few decades. Brands about trust and trust must be earned over time through the honest exchange of information.