The resurgence of the corporate brand Why the parent brand is increasingly becoming your most important investment Introduction A fter two decades of watching marketers devote the majority of their energies, creativity, and dollars to product-level brands, we are now seeing a rapidly growing focus on parent branding. Previously relegated to the sphere of investor relations and corporate social responsibility, across industries there is now a new mandate to tell a story at the corporate level. Major companies, whether in B2B or B2C, are all stepping up their corporate brand building, reinventing this 1970s-era strategy, but for new reasons evolving from today’s new imperatives. A rapidly growing focus on parent branding This trend has been clearly evident in consumer goods. Long content to let its corporate brand exist in the handful of its powerhouse portfolio of brands like Tide and Pampers, Procter & Gamble has been the most recent champion of crafting and telling the parent story, beginning with their 2010 Olympics campaign “Proud Sponsor of Moms.” Credited with generating over $100 million in incremental sales, this effort was expanded for the 2012 games. Positioning thirty-four of its brands under P&G’s corporate umbrella was a first for the company. Not only was it the company’s biggest corporate campaign ever, it was also the first to run on a global basis. Beyond P&G, a series of CPG players such as Unilever and SC Johnson have stepped up visibility for their corporate logos, taglines, and messages. Even product marketing leader Coke has been emphasizing its brand parent story, with a new corporatewide engagement website that talks about the impact of all its brands, focusing on the values and mission of the entity that binds them together. However, the shift to messaging the parent company is bigger than consumer goods, and applies across multiple industries. Multiple corporate or parent brands – ExxonMobil, Dow, Google, and IBM to name a few – have all upped the messaging on their unifying corporate story. In fact, Kantar Media data shows that corporate advertising dollars grew to 17% in 2012 versus just 3% percent for total ad spending. This is a growing trend regardless of a company’s brand architecture. Whether the corporate structure is a “parent” brand like P&G or General Motors; an “asymmetrical” structure like Johnson & Johnson or Bank of America, where the parent shares identity with one of the business units; or a “masterbrand” structure like GE or IBM, each typology has seen increased focus. Google, an asymmetrical structure, has increased emphasis on messaging the total story as well as increasing the usage of the parent name to better unite its diverse services, for example, changing Froogle to Google Shopping. Microsoft’s new brand identity SENSE PERSPECTIVE 3 was crafted to better visually connect its distinct offerings such as Surface, Windows, Bing, and others, uniting them as part of a more coherent parent. Masterbrand leaders, too, such as IBM and GE, are also continuing to invest in a single corporate-level story. All of these brands are looking to tell the bigger story – the story of who they are and what they believe, not just what they sell. McDonald’s, for example, has recently shifted their emphasis toward their values and business intent, rather than the price of their food. Their corporate message tells stories about the farmers who grow the product and decisions to put apples into the Happy Meal – stories of who the company is and intends to be. It matters increasingly to signal where you are going, what you will provide in the future, and how you will behave. “ We think there’s some advantage to making P&G as a company more like a brand. If you look at investors, they buy our company. You look at the various lists out there — Most Admired, Most Respected companies — they’re about the company, not about the brands. –Bob McDonald, CEO P&G Source: Associated Press ” Why the new focus? People matter as much as products The longer-term drivers of this trend are many, and they will only become more pronounced over time. Smart companies understand that investing in the parent brand delivers returns against a diverse set of audiences: First, for your customers, the purpose of the company can often matter as much as the performance of the product it sells. In today’s radically transparent business environment, understanding a company’s integrity, values, and, most importantly, its intentions, matters more than ever to customer decisions. However, this is not just indicative of a trend toward values in decision-making. A strong corporate brand signals where you will invest in the future. 3M’s powerful story of an intensely collaborative and innovative culture is a promise that tomorrow’s relationship will hold the same meaningful breakthroughs as yesterday’s, whether it be in office supplies, nanotechnology, or health care. Ford’s quality message signals a set of actions that apply to all their brands. A publicly visible promise of who the company is, backed by real proof points, raises the stakes – and those courageous enough to make one, under today’s media spotlight, send a powerful signal about what they intend to deliver in the product. Second, for employees, a new kind of talent market requires a new kind of employer brand. Talent markets have changed irrevocably – not only are employees less loyal than they were a decade ago, but the information a job hunter can discover about a company has multiplied exponentially. With hundreds of millions of people using LinkedIn, and putting their employer name right next to their picture on Facebook, people are “badged” with their employer’s brand like never before. SENSE PERSPECTIVE 4 Visible in our professional and social spheres as it has never been, what our company stands for can be as important a public signal of who we are as the car in our driveway or the watch on our wrist. The need for a corporate brand that connects with employees has been accentuated by declining loyalties in recent years. A greater number of people feel less connection today – either influenced by downsizing, working in industries such as financial services and health care that have experienced a decline in public esteem, or impacted by a merger wave where their brand affinities are fractured. More so than ever, the corporate brand meaning to employees and recruits now needs to be managed with the same care and professionalism as its product brands. IBM, for example, has leaned on its employees themselves in ads that tell the Smarter Planet story, closing with the words “I am an IBMer.” GE’s recent campaign also puts the employees at the center, showing them realizing the impact of the life saving medical devices on cancer patients, or witnessing the flight of their jet engines. Both What our company stands for can be as important a public signal of who we are as the car in our driveway or the watch on our wrist. of these companies explicitly connect the everyday purpose of their employees to the products they make. Nurturing the corporate brand belongs in the toolkit of the HR executive as much as the benefits program and the performance system. Third, for the general population, the court of public opinion matters more than it ever did. In the Internet age where information is always at our fingertips, divisions or brands of companies, who in the past could be siloed or shielded, can no longer enjoy this autonomy. If something happens to a division or brand, it is immediately connected back to the corporate parent and the parent is held responsible. Now more than ever, corporations need to build a reservoir of image goodwill that can serve as a buffer if a crisis arises. Few companies would have survived the Tylenol crisis had they not had the hugely positive reputation that Johnson & Johnson did. Corporations are in the public dialogue more than they have ever been. Increased media scrutiny has put companies much more on the defensive than ever before. If you examine Gallup’s data, you see a precipitous decline in the trust of companies over the last three decades, almost halving from 34% to less than 20% since the mid-70s. This is even truer for the under-35 “digerati,” a generation significantly less likely to trust companies, and significantly more likely to drive the conversation. CNBC runs shows on corporate greed. Politicians talk about corporate excess with more intensity than in any other election cycle. The speed and breadth of media means that any bad news – the oil spill, the customer service Now more than ever, corporations need to build a reservoir of image goodwill that can serve as a buffer if a crisis arises. SENSE PERSPECTIVE 5 mishap, the security breach – will stay “in the news” for significantly longer than it would when media distribution was controlled by the front pages of a handful of printed dailies. Today, the tens of millions of commenters, bloggers, and citizen journalists can post, comment, upload, and feed the conversation as long as they can command an audience. The consequence: public relations and social responsibility simply can no longer be viewed as a distinct effort; they must emanate from the same corporate positioning that drives the business. For example, the Goldman Sachs “10,000 Women” initiative to foster female entrepreneurship and its advertising message about its role as a catalyst of progress play as important a role in helping source the best talent to create public goodwill. Finally, to the investor community, corporate branding matters more than ever before. In the age of Jim Cramer and CNBC, a powerful parent brand can send clear signals to an investor base that is increasingly diverse, and only ever one click away from a $4 trade. Indeed, for institutional investors who now search an increasingly broad global playing field for the best investment story, a clear corporate brand direction and set of guideposts is an important signifier. So today, each of these audiences wants to know more about the parent company’s brand than they ever did. Despite this trend, many executives still view the corporate brand as just a corporate communications/IR issue, seeing it as another discretionary expense with uncertain return. However, it should be viewed as one of your best investments with tangible advantages. How to build the corporate brand? The rules have changed While the advantages of corporate branding are growing, the last time it was in vogue, the rules were very different.In the past the focus was largely on leveraging increased advertising dollars to get the story out, religiously applying a consistent identity and visual approach to unite brand presentation across businesses. Today, the rise of connected media has created new imperatives for building a strong corporate brand: 1. M ust be owned from the top. Today’s corporate brands are best viewed as a strategic management tool, as opposed to just a corporate communications effort. The best articulation of the brand is in the daily words of its leaders. IBM’s “Smarter Planet” was not just a marketing initiative; it was spawned from the words that the CEO used to describe the strategy. Walmart’s “Saving Money So You Can Live Better” directly echoed the words of the founder as well as current leaders. The brand should be crafted from the very top, as a way to powerfully communicate the CEO’s vision and values. It should directly and simply connect with, or replace, other leadership and communications frameworks, such as vision, mission, values, and strategy. 2. Must be rooted in not just your brand’s unique story, but also the experience you create. Today, a unique experience – one that can be echoed in consumer-generated media – is as important in building the corporate image as the story you convey. Positioning the company brand is about conveying the SENSE PERSPECTIVE 6 mission and demonstrating it credibly and consistently in actions that are shared across the businesses and products the parent brand represents. A great example is Unilever, who in 2004 crafted its corporate brand story around the concept of “Vitality” – the positive impact its products have on lives and the environment. At Unilever, this is more than campaign; it is a pledge to inject a new environmental and socially responsible approach in every brand in the portfolio, a commitment to halve their environmental footprint while doubling the size of the company, and a measurement approach to do so. This approach, anchored in purpose and backed by real proof points and plans, is more deep-seated and enduring than the Sunday morning TV media spend. Similarly, 3M’s repositioning around their unique approach to innovation across thousands of disparate technologies and products is as much celebration of the experience as the message. Their brand is reflected in the singularly unique way that engineers collaborate with customers in their Innovation Center, regardless of business, product, and geography. It is an experience that is uniquely 3M, just as the customer insight process that delights moms is uniquely P&G. 3. M ust celebrate the parent company’s personality. The prior generation of the parent branding focused on the rules of “presentation consistency”: the logo, identity, how the stationery and business cards looked, how names and messages were presented. While important, this is no longer enough. A great “corporate” brand today is not an institutional brand; it needs an approachable, vital, and human voice. The brand is in more places and more situations: events, shows, webinars, twitter feeds, blog responses. Brand presentation today is about creative and dynamic devices to tell the story, in more touch points and environments than ever before. IBM’s smarter planet icons and graphics tell a versatile story that works in a flexible way across distinct businesses. And beyond visual presentation, the corporate brand also now needs a real and dynamic voice in actual dialogue: a branded way to handle comments and conversation on Twitter and Facebook, for example. A parent company interacting 24/7 needs to show its unique and humanizing personality – the trustworthy precision of a Bloomberg, the friendly irreverence of a Virgin, the innovative collaboration of a 3M – a personality that works regardless of the products housed under the parent. 4. M ust unite your employee base across businesses in a common purpose. with powerful internal tools and approaches to capture employee hearts and minds to really motivate them to know and deliver the total company brand story. They help customize a single story to diverse businesses, driving consistent language and ideas but working to version them across cultures and businesses. 3M, for example, engages and trains its employees in one purpose and set of brand pillars, across 70 countries and 35 business units. The story must be built with the internal audience in mind: it needs to be inspirational enough to drive connection to the company’s mission, but also tangible enough that it can guide daily action in delivering. Finally, today’s focus needs to be as much internal as external. Corporate marketing leaders team with their internal HR communications and business partners within distinct lines of businesses, and provide them Questions to ask yourself The trend of corporate-level brand building is here to stay. Companies are now forced to act more like groups of people and less like faceless institutions. They must open up about their goals and intentions to engage more directly across constituencies in real dialogue and to tell their stories. Products no longer are enough; consumers want to know about the people behind them. In this new world, the following questions merit real consideration: • How strong is your parent brand today? Is it perceived as real, authentic, and trustworthy? Does it lend strength to the products and services it sells and vice versa? • How recently have you proactively thought about investing in it? • Does your parent brand have the right story for the next chapter of your growth? Can it serve to unite diverse businesses under a common umbrella, and explain how the whole is greater than the sum of the parts? SENSE PERSPECTIVE 7 • Does your company’s story truly capture the hearts and minds of your team? Are your employees able to articulate and understand the actions they need to make to deliver? Are they proud to say they work for the company? • What strategy should you take to better use your parent brand as a competitive weapon? Should you stop at telling the story, go further as an endorser, or even rethink the architecture and naming structure? • The answers to these questions will vary by company. But the imperative is clear: it’s time, again, to proactively manage your corporate brand, or run the risk of others doing it for you. AUTHORS John Marshall Senior Partner, Global Director of Strategy Richard Wilke Senior Partner, Global Director of Business Development Rick Wise Chief Executive Officer ExxonMobil Houghton Mifflin Harcourt Hyatt Hyatt Place Infiniti ITT Exelis Johnson Controls McDonald’s Meredith Nissan SABIC Samsung SK Stanley Black & Decker Starbucks Telus The Hershey Company United Airlines United Technologies Vale Walmart Western Union SOME OF OUR CLIENTS 3M Actavis American Express British Gas Citizens Bank Coca-Cola Delta Air Lines Doosan Group eBay Egon Zehnder Enbridge ABOUT LIPPINCOTT Lippincott is a leading brand strategy and design firm with a 70-year heritage crafting authentic stories, memorable experiences and winning strategies for the world’s most iconic brands. Its expertise spans all aspects of brand building including strategy, identity design, experience innovation and activation. The firm uniquely combines business-based strategic thinking and creative excellence to solve complex challenges facing corporations today as they shape their brands for the future. www.lippincott.com © 2012 Lippincott, a division of Oliver Wyman, Inc. NEW YORK • BOSTON • SAN FRANCISCO • LONDON • PARIS • HONG KONG • SÃO PAULO