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Is it ethical to create intangible brand value?

by Nigel Hollis | April 24, 2013

The other day I was with a group of friends when the subject of advertising came up. Given that my profession is inextricably linked to the practice of advertising and brand building, I felt compelled to defend the practice to a group that included a pastor, a rabbi and a couple of academics.

My attempt to explain that advertising could add intangible value to a product experience was met with blank incomprehension at best. Creating intangible value seemed to be equated with duplicity. Advertisers cheated people by creating erroneous beliefs about the quality, efficacy or value of a product. It was unethical. So maybe you can help me come up with a better and more compelling argument?

First, let me state that I am all in favor of developing products that deliver a tangible and positive experience for their users. This is the first step of creating a strong brand. Advertising can serve a useful role simply by informing people of the existence of a product that might serve their needs better. But that does not preclude creating an even better experience through the creation of intangible benefits. Just as placebos can produce a positive response in patients, so too brands can create a more positive experience for their consumers.

The comparison with placebos was prompted by a recent discussion on Millward Brown’s internal social network, The Greenhouse, that pointed me to this article by Jeremy Bullmore in the 2011 WPP Annual Report. In it, Bullmore equates the effect of brands and that of placebos and quotes the famous account planner Stephen King as follows:

…there is still a puritan streak in us which says it is wicked for people to have non-functional values, that they ought to buy brands for function and performance only.

As Bullmore notes, and as I found out the other night, such views still exist. Although not in the minds of the great consuming public, if the experience of a specific brand increases their pleasure in using a product, they consider that is a good thing. 

So maybe what I should have said is that advertising is the practice of enhancing the emotional reward associated with using a product. The reward might be additional pleasure, satisfaction, or confidence. What do you think? Please share your thoughts. 

19 comments

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  1. Olivia Morales Zenteno, May 16, 2013
    Nigel, great posts, thank you.
    Trying to distill:
    Brands are to products [companies], as what for a person would be "to come from the heart".

    We dissociate, for the purpose of better understanding, facts and communication, but they are normally one and the same thing. Facts are not such unless someone knows about them, and there is necessarily a "communication process" in between.
    Distill the essence of a product is quite an art, but distilling the essence of this product coming from an hipercomplex social body is even harder.
    And staying true to it... our job.

    Authenticity would be key, the role of advertising is to simply communicate that which is already authentic at its very core, in an authentic way, to someone that might want it, and the process should unfold naturally.
    One other thing is to try to force a product into someone. A waste of energy, resources, time. If you can't find someone that wants your product with grace, then probably that product shouldn't exist.

    In my view, the problem does not lie in advertising itself but in the whole system. This race for wanting more, ever more consumers, and competition, that has been ingrained at the very core of the [falling] economic system, keeps forcing and pushing things. If you can't prove continual growth then you die. Isn't that absurd? I suspect McDonald's will conquer the Moon before allowing the shares to fall.

    Oversimplifying? Maybe. But would be a rather long post.
    Regards
  2. Nigel, April 26, 2013
    Well I did not expect quite so many comments on this post. Thank you!

    Vaughn, I love the fact that you raise the issue of sustainability in this context and that it needs to create positive change for both customer and brand. To be sustainable a value exchange needs to be seen as equitable and worthwhile by both sides. And in pondering the inherent conflict between the growth imperative and sustainability I have to believe that generating more profit through services and intangible value has to play a key role. I am do not have a clear viewpoint on this topic but maybe I will return to it in a later post.

    Cai, your second point touches on what we refer to as enhancement. I usually think of this as advertising helping to focus attention on the positive, functional aspects of the brand experience but as my colleague Dom Twose notes there is nothing to stop this applying to the emotional side of the experience: happiness, confidence, pride, etc.
  3. Vaughn Gunnell, April 26, 2013
    After pondering the topic of this post a little further, I have come to the conclusion that one should not be trying to weigh up the pros and cons of creating tangible vs. intangible value. That perspective is already doomed from the get go. Who says that the intangible doesn't add value?

    My thoughts are that we should be seeking to create meaningful value. Here's a TEDx talk by Nathan Shedroff explaining his research on what he calls "The 6 Dimensions of Experience." It's one thing to create value, but if it doesn't resonate with your target segment, if it's not meaningful, and is therefore of no benefit. 

  4. Cai, April 26, 2013
    I am loathe to comment on the internet for fear of seeming self-important but I have a few observations which I shall try and couch in neutral terms in order to minimise how pompous I sound.

    Firstly, I think there is a clear distinction between the creation of intangible value and the promotion of duplicitous material. In the first instance one is encouraging people to respond to a brand/product on an emotional level; in the second one would be misleading an audience as to the functional capabilities of a product. I would acknowledge,though, that there may potentially be overlap between the two.

    Secondly, I would suggest that the creation of brand value could only be an ethical issue if it is assumed that the intangible benefit is so ephemeral as to be tantamount to being non-existent. This, however, is not the case. The emotional value of buying into a brand is very much an existent phenomenon. That such emotional value is produced by advertising does not diminish it's worth. If I feel particularly happy buying a specific product that emotional response is still worthwhile even if it is manufactured by advertising promoting that very product.

    Thirdly, there seems to be a pre-supposed primacy of functional value over emotional. Whether I would question this I am not sure but I would somewhat baulk at it's unquestioned acceptance.

    Fourth (and I imagine to everyone's relief, finally), people are neither as powerless or stupid as to accept wholesale a given company's advertising to the extent that they are unable to make a decision based on any factors external to it. No amount of brand building can turn an awful product into a great one, and nor is it in the interest of a company to spend vast amounts creating a perception of their products that doesn't match reality. You can't force people to buy anything through advertising, and people do have minds of their own.

    Consider my rant over, definitely getting dangerously close to a know-it-all diatribe at the end there for which I apologise!  
  5. Vaughn Gunnell, April 25, 2013
    Nigel, this post is awesome! Thanks for stirring this topic up!

    I completely agree with your post, but to take things even further, in today's day and age - where almost every person one meets is connected to the internet and social media - advertisers/marketers and brands alike have the ability to enhance a brand and/or products tangible and intangible value.

    Being able to create engaging and interactive campaigns that enhance the brand experience and strive towards not only product improvement and better target segmentation, but also social good, is now a reality.

    Whether or not advertisers, marketers and strategists choose to create intangible value instead of actual tangible value is up to them. The tools and strategies are available, it just involves a change of mindset. Brands need to understand that you look good by doing good. 

    Nothing kills a bad product faster than good advertising!

    However, at the same time, what one might perceive as intangible brand value created through enhancement of the emotional benefit might be exactly what the target segment is looking for. Again, it all boils down to target segmentation and audience at the end of the day. Nothing is 100% cast in stone.

    The research should inform the communication strategy and platforms used to execute it.

    At the risk of sounding idealistic, I think the question everybody should be asking is whether they are happy with just creating intangible value?

    I think our mission should be: "To create positive change, by leading brands and people towards a sustainable future." 

    Sustainable, used in it's purest form refers to an ongoing process, a process that does not take more than it gives, always improving. Value created, whether tangible or intangible, is justified as long as it creates positive change for both customer and brand.
  6. Guy, April 25, 2013
    As Seth Godin puts it "All Marketers Are Liars", or more accurately, "all marketers are story-tellers," and consumers are a willing audience - who doesn't love a good story!?

    In an age when time is scarce and choice is abundant, brand stories provide welcome guidance on the choices we make, and this only becomes unethical if brands tell stories which they cannot bring to life for us.

    The creation of intangible value adds a personal element to our relationship with brands, and if that improves our overall experience, and the product does not mislead us with it's story (both functionally and emotionally) then I see no reason to question the ethics of the relationship?
  7. monika klama, April 24, 2013
    1/Adding emotional value to products is a way of competition in mature product categories. If there's no way to advance function (e.g discman vs. ipod) this is the only way to compete.

    2/ Those who think of themselves as led only by function are the ones most prone to fall for emotional benefits.

    3/ Hailing only functional benefits is a way of adding emotional ones as well. This is the benefit of thinking of oneself as "not easily fooled". As manipulative as any other.
  8. Ashwin Malshe, April 24, 2013
    It beats me why anyone will find intangible value unethical. All our relationships with other people are based on the intangible values. I am sure I can fairly estimate my worth by discounting all the expected future cash flows that I will generate over my remaining lifetime. It's an exercise many of us do while deciding how much life insurance coverage to buy. But for my parents and wife my worth is way more than that discounted cash flow. The difference between their perceived value and my economic value is all intangible. I fail to see how that can be unethical. And if that's not unethical then why a consumer's perceived value of a brand suddenly becomes unethical?
  9. Shalece Daniels, April 24, 2013
    Simple. If you're not engaging all senses of the consumer when promoting/ advertising your product, you are not in sync with the Social Age- the biggest change since the industrial revolution. 

    Lots of inferences can be made from the above statement and by all means, each and every risk of failing to appeal to your consumer emotionally should be weighed. 
  10. Ed C, April 24, 2013
    I like it. I'd comment that sometimes the emotional reward is bigger than the tangible reward. Take women's purses - are they actually purchased to carry things or to show status? If it's not immoral that a company produce any product that is not for the greater good, I would think it not immoral for a company to produce (from scratch) these emotional tag-alongs to their product. Hopefully with either the consumer knows what they're buying into.
  11. Jakzen, April 24, 2013
    In My Defense

    I was attempting to help you with your definition of advertising not marketing. Perhaps a more accurate word for "communicating" would have been "announcing".

    Not that you asked, but my definition of marketing is roughly- all activities necessary to bring a product or service to market AND all activities necessary that bring the consumer to that product or service.

    In other words, advertising is only a small subset of marketing as you suggest.

  12. Harry Falber, April 24, 2013

    Actually, you are spot on with advertising's role in creating intangible brand value, Nigel.

    Unfortunately, too many people want to pound corporations for making products that are inferior and that can't live up to the advertising - but I don't know that is a fact.Others just want to pound advertising in general - as they have done for decades -easier said than done. And that is a fact.

    Advertising is about creating brand value. Great advertising is Pavlovian - making prospective consumers salivate. The response to great advertising is conditioned - " I want it". And after one owns it, it supports the "wise decision" to have purchased it. There is nothing wrong with that unless the manufacturer was duplicitous - promising Park Avenue and delivering Jackson Heights.

    By the way, those consumers that reject products that are all but utilitarian have probably succumbed to advertising that has used that positioning. And if it was great advertising, it probably 
    influenced a lot of people to go "bare bones" vs. "bells and whistles". So much for non-functional values and the role of account planning - it still takes a great creative business idea to influence people.

  13. phil herr, April 24, 2013
    An interesting counter-argument to your friends might be pointing to the Soviet Union as an example of advertising-free products. Hard pressed to suggest that the products they consumed -- pure commodities I'd imagine-- were particularly well regarded. (Except for those occasions when you had to stand in line for hours to get them).

    Which brings me to my real point: advertising drives competition. And part of that is to create an ambiance for the brand to help distinguish it from its competitors. And where successful, this will be a combination of functional and emotional benefits.
  14. Paul Bierzychudek, April 24, 2013
    In a case where all that advertising does is make an effort to create an intangible benefit on top of what is an otherwise unremarkable or sub-par product, than I think the argument can be made that the ethics of the situation are questionable.  Sadly, I think this is the case with some brands, but certainly not all.

    In the perfect world of economic textbooks, all consumers would have perfect information and make informed, rational decisions about their product purchases.  In such a world, each and every product could be evaluated on its tangible benefits, and the best product would be the one purchased.  Since we don't live in such a world, consumers look for any sort of marker that will quickly provide them with just enough information to be comfortable in making a purchase decision.  In the most literal sense of the word, brands are exactly this type of marker, and advertising is an effort to communicate this information to consumers.

    When executed well, a significant value that a brand adds to a product is in helping consumers make better decisions in a world of imperfect information.  Further, the branding extends the identity of the producer of the product onto the product itself.  This puts the producer's integrity on the line, and should the product fail to deliver on its promise, the consumer knows where to lay the blame.  Conversely, should the product live up to or exceed the expectations set by the advertising, the consumer knows who to reward with repeat purchases.

    I would argue that the above is entirely ethical, and even admirable.  
  15. Mats, April 24, 2013
    Interesting to note that the discussion took place with a pastor and a rabbi. Their profession includes preaching and spreading the gospel in various ways which (hopefully) adds intangible value for their audiences, just as marketing communications aims to add intangible value for its intended audience. Two ways of selling a message, but not that different if you think about it...
  16. Alex, April 24, 2013
    As usual Nigel, good food for thought.

    Let me comment I don't believe this issue is a yes/no matter, but more a pendulum that goes from the unethical (i.e. creating forced linking between values and questionable products) to the ethical and social valuable (i.e. emotional advertising against familiar violence)

    Your chat partners, being opinion leaders in their own turfs and communities (parish, classroom) should know better about it: a hammer can be used for building a house, yet it also may serve to smash a head
  17. Nigel, April 24, 2013
    Thanks for the comments.

    Jakzen, I understand why you suggested the edit but have a concern that if we only regard marketing as "communicating" we risk losing sight of the contribution the practice of marketing can bring to the whole product experience. Is event marketing "communication" or "experience creation"?

    Graham, I totally agree that duplicitous advertising is neither defensible nor sustainable. Ultimately it is self-defeating and undermines brand value rather than creating it. As to your second point, I might agree with you but I am sure others will not. But then, if they are true believers I am sure they will find it in their hearts to forgive you! :-)
  18. Graham Staplehurst, April 24, 2013
    Good post, Nigel.  I have two comments.  The first is that I might lean towards your 'opponents' views, if a brand either obscures a defect or creates a mistaken view of functional superiority, where such might lead to damaging effects for the user.  Let's take a car as an example.  If clever advertising persuades me that this car is safer, and makes me feel more confident when I drive it, I might mistakenly drive beyond my capabilities and cause an accident.  Potentially as damaging is the creation of emotional rewards in soft drinks or fast food chains which outweigh the negative effects of obesity or diabetes.

    The second is that your friends are being disingenuous - after all, what is religion but a package of emotional rewards taken on faith through unvalidated and highly partial forms of communication?  Religion offers us some of the best examples of exaggerated product claims (live forever!) and persuasive language (or you will be damned forever!).

    No offence intended to any particular religion; my personal views as an atheist.
  19. Jakzen, April 24, 2013
    Another enjoyable post, Mr. Hollis!

    I would sightly edit your revised statement to read, An important "part" (or "purpose") of advertising is the practice of "communicating" the enhanced emotional reward associated with using a product. If you are still greeted with blank incomprehension I would go immediately into, "A preacher, rabbi and professor walk into a bar..."

    However, should your audience desire more, hit them with communicating functional and self-expressive benefits as being other parts (purposes) of advertising. If they're still hangin', then the segue into why companies build brands follows effortlessly.

    Imho

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