Digital Revolution

Shoppers and brands share the power

The numbers tell the story.

Apple is the world’s most valuable brand, followed by Google. Facebook, just seven years old, appears in the BrandZ Top 100 Most Valuable Global Brands for the first time, at No. 35.

While the meteoric rise of these technology brands is compelling, equally important is their impact, as brands in every product sector respond to the fast-changing world of digitized and disintermediated information. Last year, brands reached customers on brand and retailer Web sites, on Google and other search engines and on mobile apps that rewarded shoppers for interacting with brands. Some brands led the way. Others attempted to catch up.

Few ignored the tide. As recent events in the Middle East demonstrate, digitally connected people wield enormous power to express their desires and influence each other and events. The analogy to brands is imperfect, but respecting it is imperative.

As digital revolutionizes the relationship between brands and consumers, interactions that could be adversarial increasingly become collaborations aspiring to mutual benefit and reciprocal trust.

In these digitally enabled relationships, the role of marketer as brand builder, selling products to the public, is supplanted by the role of marketer as brand enabler, engaging the public’s help to improve products and raise customer satisfaction.

In a digital creation story, the universe isn’t completed on the sixth day. It’s a work in progress, a partnership aimed at perpetual renewal and relevance. One element remains the same, however – the desire for an apple.

Collaboration and co-creation

At the start of last year, few people fretted that their lives felt bereft of a digital gadget smaller than their laptop but larger than their mobile phone. By the end of 2010, however, around 18 million of us owned iPads or other tablets.

Apple understood that its customers wanted access to data and images anywhere, anytime, in easy-to-view definition with an easy-to-use touch interface. In a span of a few months, the brand met these needs with the iPad and iPhone 4.

Apple trusted that its customers would discover uses for these products that would help organize, simplify or complicate, but mostly improve their lives. This cocreation approach resulted in roughly 350,000 Apple apps, and it added value to the product and the brand. Another perhaps 250,000 Android apps were created.

In a similar co-creation, brands improved products and marketing based on comments from customers in conversations on social networking sites. Co-creation also was the basis of collective shopping sites such as Groupon, which help merchants and brands increase sales and shoppers increase savings. Digital enables strangers to connect around something they share in common – the desire for a bargain.

Shift in how we view customers

When brands enjoyed sovereign control over the dissemination of information about themselves, marketers could choose a demographic – for example, 18-to-24- year-old women – and design an attention-grabbing, persuasive 30-second TV commercial.

That’s changed. Some of our interests cut across the traditional demographic categories, often making our designation as a Millennial or Boomer less relevant than whether it’s Monday morning or Saturday night and whether we’re focused on planning for the week or for our next vacation.

Brand success requires recognizing this change and allowing customers to self identify, form groups, and access utilities and dynamic, well-built libraries of information. Last year, Pampers, No. 34 in brand value, launched an iPad app called “Welcome Baby.” It illustrated the development of a fetus in the womb and helped expectant parents understand and track the stages of pregnancy.

This kind of information is the currency of the digital democracy. It changes brand-customer interaction from a series of isolated transactions into an ongoing relationship that becomes deeper and more interconnected. With each encounter, the customer gains more knowledge about the brand and brand-related topics and the brand learns more about the customer.

Sustaining these relationships depends on transparency and trust from both sides, brand and customer. Both sides lose when the relationship deteriorates because brands collect information using stealth tactics or customers respond with a subterfuge of false information.

Quality products need quality content

But being straightforward gets brands only part of the way. The quality of the brand-consumer interaction online is determined in part by the quality of the digital content. Brand manufacturers, retailers and their ad agencies traditionally have not been in the content-creation business.

Consumer product companies and their advertising agencies are sometimes more comfortable with the traditional research-driven, time-consuming process aimed at perfecting a campaign. Digital content, in contrast, is more iterative. Speed subordinates perfection. Ongoing presence and continuity supersedes the finite nature of a campaign.

Campaigns were designed for the path to purchase shaped as a funnel, for consumers who would move predictably and sequentially from awareness, engagement, discovery and investigation to selection. Campaigns alone are insufficient in the digital world of shopper marketing, where the path to purchase has exploded into random, non-linear points of influence when the shopper may be in front of a computer screen at home, making a shopping list or walking down the street about to enter a store.

Digital’s impact on shopping soon will intensify further as 4G – with rapid transmission of rich data – becomes more widely available and mobile devices continue to offer greater sophistication for less money. The path to purchase will never look the same. Its appearance may be most radically shaped in fast-growing markets like Brazil, China or India, where mobile was the first telephone experience for many consumers. Brands face immense and unpredictable challenges in this highly connected, increasingly transparent and digitally transformed world.

BrandZ Top 100 2011

BrandZ Global 2011 Report Top 100 Report

Top 100 Chart

Methodology and valuation by Kantar Millward Brown

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