High Tech Brands Begin Blazing New Trails

March 1, 2005

BY MICHAEL KRAUSS

David Aaker called from Tokyo the other night to talk about high-tech branding.

“The problem high-tech companies have,” said Aaker, author of multiple books on branding, “is too many brands and too much confusion. Innovation creates so many product offerings. A lot of times they are so messy they are paralyzed by it.”

“The second problem,” said the thought leader behind San Francisco-based Prophet, the global branding consultancy, “(is) they don’t know how to focus their brands.”

Aaker and his colleague Michael Dunn, Prophet’s president and CEO, reminded me of IBM in the days before former IBM CEO Louis Gerstner Jr. brought in Abby Kohnstamm (IBM’s current senior vice president of marketing) and consolidated his agencies. Gerstner and Kohnstamm focused their brand building using the now-famous “Solutions for a Small Planet” and “e-business” campaigns.

In his book Who Says Elephants Can’t Dance? Gerstner praises Kohnstamm. He designates the refocusing of the IBM global brand as one of the cornerstones of his successful turnaround of the struggling IBM.

With the economy improving and emerging tech companies such as Scottsdale, Ariz.-based domain name registrar GoDaddy Software Inc. turning to Super Bowl advertising, it seems time to revisit the state of high-tech branding.

There’s another reason to consider technology and branding. Technology is changing media and the tools of branding. TiVo and Google, digital video recorders and search advertising threaten traditional Madison Avenue advertising shops like never before. For insights on high-tech branding turning to Prophet, a branding firm run more like McKinsey than McCann Erickson, makes sense to me.

And why not? Aaker’s branding books, such as his Building Strong Brands, have sold more than 100,000 copies in English and been translated into 14 languages. Aaker’s writing transformed branding. He’s put a set of processes and frameworks around our approach to branding that transcends the old thinking that branding = advertising. Meanwhile, through Dunn’s efforts, Prophet serves a veritable “who’s who” of the technology world.

“We work with IBM, HP, SAP and Sony,” Dunn says. On the software side there’s BMC Software and Computer Associates. We’ve worked with Intuit, Apple, Intel, Advanced Micro Devices, Fujitsu, Hitachi, Toshiba, Siemens and Nokia. We’ve done some work with Motorola.” (He had me at “hello” with IBM, HP and SAP.)

This client roster isn’t bad for a firm that began as Prophet Market Research in 1992 and only got its brand energy when it was rechristened Prophet Brand Strategy in 1998. Coincidentally, that’s about the time Aaker and Dunn joined the firm.
But this is a column about tech branding, not a paean to Prophet.

High-tech branding strikes me as bimodal: Big companies such as IBM and Accenture spend millions in traditional media while start-ups use new tactics or eschew branding altogether. That’s not to say the big companies don’t use new media. They do. It’s just that big companies can afford to pay the sky-high cost of traditional media while most start-up tech firms won’t risk the Super Bowl these days, except maybe GoDaddy.

Then there are truly class-leading start-ups like Google that bake their branding right into their product offer.

“We go back and forth and debate how effective it is,” Dunn says. “Do you really need to be educating ‘Joe Public’ about middleware?” he asks, rhetorically. Yet he believes IBM has become the model for companies like HP, which are drafting and implementing big mass communications programs. “You see people trying to replicate the IBM playbook,” Dunn says.

Having helped establish the Andersen Consulting brand in the 1980s, a precursor to today’s powerhouse Accenture brand, I like to think Gersterner and Kohnstamm were following the Andersen Consulting branding model, but I won’t quibble with Dunn.

His point is a good one. There is a class of tech marketers out there that includes Accenture, Apple, Dell, IBM, Intel and Microsoft that focus on branding in a big way.

Here are some of Aaker’s comments about these big tech brands:

• Accenture: “One of the wonderful brand-building cases in professional services--a lot of challenges. Creating Accenture was really non-trivial.”
• Apple: “There was a time when you couldn’t talk about Apple and branding because the company wasn’t doing well. The business model got squared away. We can talk about the brand again. The brand has always been strong.”
• Dell: “One of the most successful brands. They have really created an organizational brand around their business model.”
• IBM: “They stopped doing all this product stuff and shifted their resources into the IBM brand.”
• Intel: “It was just a marvel what they did with ‘Intel Inside.’ They developed it and then converted it into an endorser brand. They didn’t walk away from it. They are pretty disciplined.”
• Microsoft: “They’ve made progress clarifying their portfolio the last couple of years.”
• Google: “The fact that they are not building the brand in a conventional way does not mean they don’t have a strong brand. They stick to their knitting, making their product better and better.”

What about smaller tech players?

Dunn sits on the board of a $150 million online and catalogue gift retailer, San Francisco-based RedEnvelope Inc. He says 50% of its marketing spending is around vehicles and tools that weren’t even in existence seven years ago.

“Paid search, natural search, contextual search and all the different innovation that is happening online fundamentally changes the way marketers should think about trying to connect,” Dunn says. “The smart brand builders are able to effectively navigate these changes and get a leg up on the competition.”

Aaker encourages start-up tech marketers to consider being more opportunistic. “A lot of times it’s better to sit on the sidelines for six months and just try to get the buzz going so that people discover your brand, instead of forcing yourself on them,” he says. Aaker admires Tivo’s early brand-building approach of giving units opportunistically to celebrities, which led to mentions on talk shows and built the brand via word of mouth.

If you’re not yet into all this tech brand building but want to get aboard, Dunn suggests you forget about a job at Procter & Gamble or Kraft.

“Consumer tech is going to continue to be exciting and dynamic,” Dunn says. “That’s probably where I’d go first. Get a job at eBay in their paid search group or go get a job at Amazon around their customer retention marketing. I think you’ll learn more in two years that will be leveragable for the next 20 years than you could at any one of the big packaged goods companies.”

What if you want to work on building great brands? Should you still head for Manhattan? If you’re coming out of business school this June, I suggest you call Prophet. I can’t promise you they’ll be hiring; it’s a small firm by WPP standards. Still, learning their broad consulting-based model of brand building will position you better in the long run than a junior account executive job on Madison Avenue.

Michael Krauss is a partner with Marion Consulting Partners based in Highland Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com or news@ama.org.