Brand Shift: The Future of Brands and Marketing

By David Houle and Owen Shapiro

In their book, Brand Shift: The Future of Brands and Marketing, David Houle and Owen Shapiro deliver a powerful and persuasive look at how cultural change and accelerating technological advancement will affect brands and marketing in the years ahead. Through a fascinating study of the history of brands and a detailed, cogent analysis of current tre

• Language: English
• Publisher: David Houle and Associates
• Release date: Aug 27, 2014
• ISBN: 9780990563518

David Houle

David Houle is a futurist, strategist and keynote speaker. Houle is consistently ranked as one of the top futurists and futurist keynote speakers on the major search engines. Houle won a Speaker of the Year award from Vistage International, the leading organization of CEOs in the world. He is often called the "CEOs' futurist" having spoken to or advised 2,000+ CEOs and business owners in the past four years.

Book preview

Introduction

In this second decade of the 21st century—and the new millennium—brands and the marketing of brands are undergoing massive upheaval and transformation. The speed of change is disorienting and fast. Old rules, old media are falling by the wayside. Disruptions are coming out of nowhere, bringing fundamental change. How can brands and those that market them adapt? What does the future of brands and marketing look like?

These are the questions this book seeks to answer.

This book springs from two sources:

David Houle left a successful and innovative career in media and corporate consulting to pursue his passion for writing and speaking about the future of humanity, technological changes, and social trends. Owen Shapiro built his career based upon the understanding of how people make decisions in an increasingly complicated marketplace—both on an emotional and rational basis. His roots are in classic social-science research methodology, combined with marketing strategy. David and Owen fell into a series of discussions about the ideas David developed in The Shift Age, published in 2008, which expanded to how they could apply these principles to market research and marketing strategy questions. A number of smaller pieces of collaboration evolved that included a look at how David’s ideas could be used to segment consumers by their level of adoption to ideas embodying the Shift Age, and how consumer trends were impacted by The Great Recession.

The collaborations led to speculation about the direction of marketing, and how the marketing of brands would change in the future. While David was writing Entering the Shift Age, in 2012, Owen was analyzing new ways to look at brands, resulting in the Brand Influence Index, developed by Leo J. Shapiro & Associates LLC. This thinking affected David’s view on the future of brands, and he quoted Owen in his book. Once that book was published, they started weekly conversations about the future of marketing in the Shift Age.

Brand Shift: the Future of Brands and Marketing does not seek to be an authoritative or academic textbook on marketing. Instead, it is a high-level look at the past, present, and future. After a brief high-level synopsis of the history of marketing and brands, Brand Shift reviews the present landscape, and the current trends that are reshaping the marketing of brands. This is followed by a summary of the Brand Influence Index, a new way to look at brands and how consumers relate to brands. Lastly, Brand Shift observes potential future disruptions, and what brand marketers can and should do to position for a pro-active success. The book is short, fast-paced, and high-level. We hope that in the brief time it will take you to read this book, you will have aha moments and insights that will help you succeed as brand marketers.

For us, the success of this book will be measured by the degree to which it helps you navigate the future.

David Houle         Owen Shapiro

July 2014

PART ONE:

PAST AND PRESENT

CHAPTER 1

BRANDS AND MARKETING IN CRISIS

Brands are rapidly shifting on two fronts:

Brand marketing is in a state of existential crisis. Everywhere, marketers are being impacted by a series of profound and rapid innovations that are transforming how they communicate with their customers.

Consumers are facing their own crisis as these same profound technological changes transform how they earn a living, communicate with the world, and even perceive reality.

These two epic waves of change are currently cresting, and they will leave in their wake a marketing landscape that is almost unrecognizable from the one we currently know.

The Crisis for Brand Marketers

Foresight doesn’t have to expand far, in order to find supporting evidence that brand marketers are in a state of crisis. Historically, brands and the concept of branding have changed with technological advances. Today, as we progress further into the Shift Age, technology is moving along faster than ever, leaving businesses to wonder how their brand can remain relevant.

Brands are undergoing a fundamental dislocation, as the core drivers of branding during the 20th century—limited information about product quality/performance and control of messages about brands by corporate owners—are losing their potency. This transformation has caught marketers and brand managers between two worlds…one that no longer works, and one emerging, where the rules and metrics for success seem, at times, to be unnerving and random.

Here in the 21st century, the Information Age has ended while the Shift Age is emerging. NOW is an inflection point or time in history, when much of humanity will change how it lives, thinks, works, interacts, and behaves. David has written about the Shift Age in prior books and will summarize his ideas in Chapter 5. This new age has created shifts in almost all aspects of life, and certainly in the area of brands and marketing. The pace and magnitude of change has only been accelerated by the recent transformational recession, which tore down century-old institutions and provided a market impulse for emerging industries, particularly in the area of technology and communication. While the Shift Age outlines major cultural shifts and historic themes, it also provides a framework for addressing immediate marketing and communication issues facing marketers today. This is more important than ever, as CMOs and others in the branding field grapple with this existential crisis. References to the critical brand situation abound. The book, The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It, for instance, is based on extensive research using Y&R’s Brand Asset Valuator. The authors, John Gerzema and Edward Lebar, conclude that, The tried-and-true formulas to create sales and market share behind brands are becoming irrelevant and losing traction with consumers.

One outcome of this dislocation is a major and unexpected shift in brand strength, where a weaker rival can overcome a formerly powerful brand. For example, note the dramatic and game-changing shift in status, popularity and profitability between Microsoft, Apple, and Samsung. Ten to twenty years ago, it would have been hard to find an analyst who would predict that Microsoft would be facing a crisis, and that Apple would be a dominant consumer brand in the world. In fact, one of Apple’s products, the iPhone, at times, has been more profitable than the entire Microsoft Corporation. More recently, Apple’s hold on the mobile-device market has slipped as Samsung has risen from relative obscurity, within a crowded field of consumer electronics brands, to emerge as one of the new kings—at least for now.

While the market may be growing accustomed to such rapid shifts, these kinds of changes were not the norm prior to the Shift Age, where iconic brands would battle each other over years, decades, and even generations.

The compression of innovative cycles suggests that the economy will be receiving disruptive shocks every few years, rather than every decade, as was the case during the Information Age. As a result, the economy will need to transition to a much faster succession of innovations. The shift from the Industrial Age to the Information Age was roughly a generational shift, wherein many industrial workers never made the change and just left the labor market.

In the Shift Age, the concept of planned obsolescence will be replaced with instant obsolescence. Companies will simultaneously mature and then become obsolete. Instead of a rapid rise followed by a long profitable plateau and gradual plateau/decline (think Microsoft), companies will ascend and descend much more quickly as their business models become challenged by changing technology and consumer preferences and habits.

At the same time, chief marketing officers are also facing a crisis. As brand managers, they are watching as their most powerful tool—television—becomes weaker and weaker. As TV is eclipsed in importance, it’s still not clear how to most effectively use new media, such as social media and mobile, which tend to be more global and individual-focused. Until the industry gets a hold on what works, CMOs will continue losing the ability to control the conversation about their brand.

As it stands, there is a strong undercurrent of excitement and frustration among brand managers, who are trying to deal with the disruptions taking place in brand communication. In recent high-level discussions between Leo J. Shapiro & Associates LLC and the CMOs of major companies, executives expressed the following:

There is so much competition for customers’ attention…it’s very layered, very complex.

There is a kind of information overload out there. Which channel do you pick?

It’s a challenge. It’s like there are too many entry points…electronic media is so fragmented now with different touch points…It’s diluted.

… everywhere, media is totally in play.

How do we redeploy those monies [from traditional media], and how do you hope to get a guarantee of results?

In the digital world, we are constantly testing, what about the subject line, various rich media, banner ads…we keep testing very aggressively month-in, month-out, week-in, week-out, looking for alternatives to use.

As much as CMOs are struggling with the dislocation created by rapid technological changes, that challenge is only going to grow in magnitude and complexity going forward. In 2012, the Fournaise Marketing Group conducted a study that paints a clear picture of how CEOs feel about CMOs: they do not trust them. In fact, of the 1,200 CEOs surveyed in North America, Asia, Europe, and Australia, 80 percent said they do not trust—and are not impressed with—the work done by marketers. At the same time, 90 percent of CEOs do trust and value the work of CFOs and CIOs.

The study found that the difference in trust is entirely wrapped up in ROI. CEOs believe that CFOs and CIOs will ensure that every dollar spent has a positive, quantifiable impact, as opposed to marketers, where results are less measurable and often deemed less critical. In fact, 74 percent of CEOs said they want marketers to become 100 percent ROI-focused.

People trust doctors, surgeons, lawyers, pilots, or accountants, simply because they know these no-nonsense professionals are trained to focus on the right set of data to make the best decisions and achieve the best outcomes possible. CEOs trust CFOs and CIOs for the same reasons. It’s not a game of data, but rather a game of the ‘right & relevant’ data for the right purpose