Re: Branding and marketing

From: Preston Bealle <preston_at_babygear.com>
Date: Tue 02 Jan 2001 14:50:02 -0500

The misunderstanding here in the interesting branding
vs. marketing debate is over one issue, which is what
you are asking your dollars to do for you, and when.

My entire(previous) career was in traditional
advertising, on products like Skippy peanut butter,
Life Savers candy, and Hanes hosiery. It was vitally
important that those products hold a position in the
consumer's mind, something that defined them, and
justified paying more than comparable products with a
different name, or private label products that were
close, but not identical.

When I left Madison Avenue ad agencies and went on the
web, where I had investors' funds in hand and had to
quickly get a return on that money, in other words had
to prove out a business model, things were different.
The people in my position who spent their money on
branding exercises, like network television spots or
even bus cards, were following the Skippy/Hanes model
without recognizing that those brands had been built
over decades. There's not time to behave like a major
national brand when you are using VC funds and you have
12 months to show real revenues. That's why we banned
the B-word in our company, and put marketing funds only
in places where direct orders could be generated,
tracked and measured. Share of mind was anathema to
the goal of bringing in increasing revenue each week,
in the first year of business.

So, the truth, as usual, is in the middle somewhere.
My argument against branding does not apply to Coke and
Nike, it applies to new web businesses which have to
quickly get profitable. Branding strategies offer
high-cost, low-return in the early days, because you're
buying a position. It's appropriate for new car brands
which have to stand for something for decades to come.
Direct marketing strategies are low-cost, high-return
in the early stages, and as I said before, the branding
comes along with it when the product arrives on time at
a good price. If you hit critical mass and are
breaking even after a period of months, then you can
afford to start burnishing the brand name with some
pretty magazine ads that make people feel good about
who and what you are, because your warehouse is already
busy shipping goods from all the cheap direct marketing
you executed. Nobody would argue that branding is a
bad thing, but it has certainly been used
inappropriately as a strategy by a lot of companies
which got little or nothing back on $25 million of
spending.

Preston Beallem





Received on Tue Jan 02 2001 - 13:50:02 CST