When Intel debuted
the "Intel Inside" branding in 1991, the MBA side of my brain
sounded alarms for all the PC makers whose short-sighted greed for
co-marketing dollars overcame their common sense.
I've heard multibillion-dollar estimates for the brand-name equity
value that those PC OEMs yielded to what had formerly been a back-door
supplier of component parts. According to the 2006
Interbrand survey, the Intel brand is worth about $30 billion and
is the fifth most valuable brand in the world (behind Coca-Cola,
Microsoft, IBM and GE): I'd certainly argue that at least two-thirds of
that consumer recognition value is due to 15 years of hearing that
signature ringtone, and seeing that Intel Inside logo, at the end
of TV ads for any number of big-name PC vendors.
We're seeing another side to the question of component branding in the furor
over Sony-built batteries for many makes of laptop PCs. I don't
recall ever seeing "Battery by Sony" trumpeted in the ads for Dell or
other portable devices, but the makers of those machines have certainly
performed an artful piece of marketplace jiu-jitsu in throwing off the
blame for their potentially dangerous hardware.
I'm thinking that if Sony had spun off a company under a different
name to build OEM battery cells, then the laptop makers would find it
much harder to get their customers' anger redirected toward
(hypothetically) "The Lucky Acme Energy Module Company." But the Sony
name has enough recognition (the world's No. 26 brand) that people find
it an acceptable target for their anger and disappointment.
The advent of Web services and hosted software as a service creates
a similar set of questions and issues for enterprise application
builders. You're not likely, I wouldn't think, to see "Servers by
Amazon" logos on the Web sites of Target or Borders, but the
server slowdown at Amazon last month affected all three sites --
because the two competitors' sites are partially hosted by the Big A. The success
of IBM
and Sun
in positioning themselves as service providers and remote IT hosts is
also an assumption of risk: Their own brand names could be irreparably,
or at least severely, damaged by an incident that results in numerous
well-known brands all pointing a finger of blame in one direction.
When Disney wanted to get into more adult-oriented movie making, it
didn't risk the Disney brand in that space. It created the Touchstone
brand in 1984 to serve as the platform for its PG and racier content,
with sibling company Touchstone Television now producing the decidedly
non-G-rated "Desperate Housewives" and "Lost." It's smart to think of
brands as assets and to build them and use them in carefully chosen
ways.
In a
flat world of international mobility for capital and talent, brand
name equity is one of the few assets that can't be readily challenged
with essentially zero startup delay by a well-funded competitor who
decides to enter a new market. Make careful decisions about what brand
identities you build, and how you use them; do your research into who's
actually behind the brands you buy, and make sure that accountability
is where you want it to be.
Tell me what brands you trust, or avoid, at peter_coffee@ziffdavis.com.
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