History teaches us that many things are cyclical, with some cycles operating faster than others.

For example, if you believe Henry VIII was our first Brexiteer, then it’s taken more than 500 years for the idea to come around again – perhaps partly explaining our ongoing fascination with the Tudors and Henry’s decision to separate from the wider European enterprise at the time. On the other hand, it’s taken nearly 40 years for beards and craft beer to come back into fashion to the degree they are today. Which puts Tottenham’s achievement of finishing above Arsenal for the first time in 22 years somewhat into perspective!

The benefit of knowing how past cycles unfolded can prove helpful when trying to make sense of and adapt to the present. Interestingly, in marketing, one particular cycle has caught our attention here at AAR.

We are seeing a significant number of businesses going to market to develop or refresh their brand strategy. For some, branding – at its most basic – is the oldest of marketing’s professions. So is there something in the past that can help put today’s activity into context? What might the drivers be and what’s the best way to capitalise on them? Here are a few we’ve thought of.

Industrial revolutions spawn start-ups

At a macro-economic level, we are seeing the digital revolution give birth to many new ideas right across the industrial spectrum; from the creation of e-commerce as a channel to market to the AI applications emerging to help cope with the masses of data now being produced.

Charles Babbage, the English inventor and mathematician born in 1791, was tasked with poring over mathematical tables in search of errors. Such tables were commonly used in fields like astronomy, banking and engineering and, since they were generated by hand, often contained mistakes. Babbage longed for a calculator of his own. He ultimately would design several. So you see the same problem several hundred years apart!

Start-ups don’t have much money

These new products and services need at least a name and a logo – the very basics of branding. The problem they have, of course, is they don’t have much money as they haven’t made it yet. So they call on their mates to help, and not one of the established agencies. This is an important lesson from every cycle.

Design Studio was founded just months after Airbnb and did the rebrand work for the accommodation booking giant just a few years later. This is the classic start of a new cycle where new start-up businesses get support from new start-up agencies, as both want to disrupt their own market. Think how many agencies in the early days focused on the word ‘digital’ to signify, as clearly as possible, they were part of the new cycle rather than the old.

Back in the 80’s, when the UK had finally shaken off the deep recessions of the 70’s, there was a frenzy of new product development, and many NPD agencies emerged specialising in that very specific task. Sound familiar? In this cycle we have seen a sharp increase in innovation and brand consultancies which are helping bring new ideas to market, with many taking equity stakes in their clients as part of their payment.

Adapt or die

In contrast, many of today’s established brands and agencies which grew big off the back of the last cycle now find themselves trying to adapt to the new demands in the market. If they don’t do it fast enough, they will allow their fledgling competitors to gain a foothold. Amazon’s advance has been virtually unstoppable, and you don’t want to get cornered in a pub by a black cab driver when you’ve just booked an Uber home!

So as we go through another cycle of disruption it’s no surprise that we hear the words ‘transformation’ and ‘re-structuring’ an awful lot. Even here we don’t just see the big consultancy firms helping businesses transition from an old model to a new one, as they did in the 1980’s. The new innovation and brand consultancies mentioned above are working with the disrupted as much as the disrupters, because they are better at connecting business strategy to brand strategy. Meanwhile the big players are addressing this weakness; witness Accenture buying up agencies of late.

It is far easier to say than do, but the most successful businesses are those that have repeatedly adapted to each cycle, emerging stronger and fitter each time.

The McDonald’s turnaround case study is one great example and Argos would be another, more recent, one. Meanwhile Blockbuster, Woolworths and BHS are now case studies for all the wrong reasons.

When cultures collide

One of the strategies that established businesses deploy at such times is simply to buy the young upstarts. Innocent was bought by Coca-Cola, and more recently Camden Ales was sold to Anheuser-Busch InBev. Omnicom bought Adam & Eve; Publicis bought Fallon in the last cycle and Digitas, LBi and Sapient in this. But that’s only half the battle. Cultural integration takes a surprisingly long time and can be a massive distraction from the fundamental need to adapt.

These transformations, mergers and acquisitions are also another driver creating demand in the brand strategy and design world as the ‘new me’ needs to be communicated to internal and external audiences. Today, the briefs are about brand architecture; experiences across touchpoints; behaviours and tools over rules. Design is often a much smaller part of the mix and the corporate brand team are now expected to be inspiring ‘MasterChefs’ rather than the ‘brand police’ of yesterday.

When you need more than just a logo

When you have a new product or a killer app, that’s often enough to drive the initial phase of business growth; you simply believe your idea is unique until you bump into some competition.

However, distribution is much easier and faster these days, and so bumping into competition happens much faster, too. It took Morrison’s nearly 40 years to open its first shop in the South of England, having steadily expanded from its Bradford birthplace, and it now spends tens of millions of pounds on advertising. Before the big four started treading on each other’s toes, the media spend was somewhat more modest.

Contrast that with Expedia and Booking.com, which were founded in 1996 in the US and the Netherlands respectively. Both are pretty much global, and spend billions of dollars on advertising each year. There are thousands of supermarket brands around the world, as most have not ventured far from their domestic markets, whereas there are just a handful of travel booking sites globally. How brands develop and grow is changing – fast. Competition with businesses in a given sector certainly drives up marketing spend if you believe share of voice is directly related to share of wallet.

The difference for today’s businesses is that developing their brand needs to start much sooner in their thinking so they are ready for the competition when it arrives, because it will arrive fast. In the past, because distribution was much slower, you had more time to understand how the consumer felt about your product, how it might be positioned relative to the competition. The job of the agency was then to capture that ‘essence’ and attach it to the product so that you didn’t have to spend quite so much money on marketing.

So, with our thanks to Simon Sinek for making things simple to understand, there is much voice being given to ‘Why, How and What’ structures right now. Both disruptors and disrupted are going deep inside their organisations to connect – or re-connect – with who they are and why they exist in order to build a more sustainable brand narrative.

This next phase of the cycle is the one we see as the weak link in the approach of many of the new disrupters, one that gives established businesses – which have been down this path before – the chance to cement their place in the consumer’s mind. But if the disrupter does manage to find that killer utility they can then dominate a category pretty quickly, which is why some established businesses can have the rug pulled from under them.

However, those are the headline acts and there is plenty of activity in all categories to make this one of the most fascinating turns of the cycle we’ve ever seen.

About The Author

Tony Spong

Managing Partner

Tony joined AAR in 2007 and leads our integrated, design and below the line consultancy, helping clients and agencies compete more effectively against their peer group.

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