In 1996, Apple reported a billion dollar loss in a single quarter. The Rolling Stone cover story was “Death of an Icon”. This would have killed any other tech brand at the time - Dell, HP, IBM, Packard Bell, Compaq would have been gone (note - 3 of them have since dissolved).
So why and how did Apple survive? One reason and one reason only - Deep Brand Loyalty from the Brand Building Investment it had done over two decades.
As proven by Apple and other great brands, the sure way to secure high gross margins, profits, and maintain the best ROI possible long-term, is to Build Your Company’s Brand.
Note - Brand Building will NOT have immediate measurable ROI results one can see in a spreadsheet the next day. However, it clearly has the largest and longest lasting ROI for the future of a company, its customers and its investors.
Unfortunately, today’s executives do not have the patience for this, and dismiss Brand-Building programs as wasteful and off-strategy.
Today’s executives focus heavily on ROI when making every decision.
Not a bad strategy - but, let me rephrase that.
Today’s executives focus heavily on instant ROI when making every decision.
The “instant” part is where the trouble lies. Short-term measurable profits do not ensure long-term health or profits for the company.
Companies may survive with short-term, formulated thinking, but they will never thrive. And when the economy takes a hit, these companies will take a beating. Many will disappear altogether.
The Blurring of Marketing and Sales Promotions.
Building Brand Awareness, Consideration, Excitement and Loyalty has been on the chopping block for years. The main issue is that many C-Level Execs, pressured by institutional stock brokers, fall into the trap of managing with an extreme short-term mentality.
Bottom line, business decisions designed to affect the hourly stock price ultimately hurt the stock price. You cannot build a brand or a secure future in that manner.
Marketing Executive roles have been taken over by Sales Promotions Professionals. When’s the last time you saw GAP or Lucky do anything more than some form of 30% off. All that does is reduce the value of the brand, and have customers waiting for the next discount, which are pretty much constant now. These companies are living off the branding they did years ago, but that value is waning, if not gone.
Companies Aspire to Apple - But Fail To Take Advantage of How They Did It
As noted above, a great example of a company that has done Branding right is Apple.
From the beginning, Apple created a brand. It was part of every aspect of its business - not just marketing. It included design, ergonomics, user interface, materials, support, packaging, out-of-box experience - and of course marketing.
That is where its value lies and has always been. But, while almost all aspire to Apple’s success, most dismiss the strategy it used to get there.
I can tell you with certainty, Apple’s success was not achieved by focusing on marketing that had immediate measurable ROI. In my 10 years as Brand Marketing Director at Apple, I cannot think of a single marketing program that was approved only after analysis determined it was deemed to have immediate measurable ROI.
Clearly, Steve Jobs understood the value of a brand deep in his soul. Do you really think he sat there with a calculator or used market research to determine if the “1984” ad would have measurable ROI before creating and spending millions to air it a single time?
Years after Steve Jobs left, Apple launched the “What’s On Your PowerBook” print campaign - a very early “Think Different” type approach with each ad featuring two recognizable, leading edge people from different walks of life. It was so creative that the celebrities involved were so excited to be involved they participated for scale. No ROI research was done to create or print this campaign.
In 1996, Apple did a worldwide promotion with Paramount’s release of “Mission Impossible”. It leveraged the power and imagery of a major feature film and actor and injected it into the Apple Brand. The spot used lots of action shots, including footage of its PowerBook in the film, no specs, no prices - no narration until the end - “After you see the movie, why not pick up the book.”
No ROI analysis was done before creating and launching the promotion. Was it successful? Well, at the end of the year, Apple had spent over $200 million in marketing worldwide. Research done by Apple at the end of the year showed that the only campaign anyone recalled was Mission Impossible, which was less than 5% of that budget. It clearly raised excitement around the Apple brand during a very difficult period, and people remember it to this day. It played a major role in keeping Apple ‘cool’ and getting them through a very difficult period.
When Steve Jobs returned to Apple, he was in full form and executed two of the most successful branding campaigns in history.
The first was “Think Different” - Again, creative branding by association. No product features, no product photos, no pricing. Just an Apple logo alongside photos of brilliant and creative people. Pure emotional motivation
While I was not at Apple at the time, I can assure you that no ROI analysis was done prior to launching that campaign.
The second was the iPod Intro - A broad billboard, sides of buildings, and print campaign that featured only a silhouette of a woman listening and dancing wearing earbuds and holding an iPod. Just one word of copy “iPod”. Now considered one of the best product intros in tech history.
Was there ROI research done for this before proceeding? What do you think? It’s basically impossible to measure ROI from a billboard campaign beyond the number of people driving by. You certainly cannot say of x people that saw the billboard y went and bought an iPod. But it clearly worked, and worked well.
Apple’s Product Placement Program that started in the late 1980’s continues to play a strong brand-building role. It was the first major Tech company to have such a program. When the program started, Apple barely had a 10% market share. However it achieved over 90% market share of the silver screen. Did people run out and buy Apple products immediately after seeing them on TV or in a film? I doubt it. Did it ingrain the Apple brand deeper into their psyche as a cool, fun, leading edge company? Definitely. Was it a factor in determining which tech products to consider and buy? Absolutely.
What have decades of Apple’s brand building resulted in? The highest margins and profits in the industry. Oh yeah - incredible ROI and very happy investors.
In summary, Yes - it is important to do Sales Promotions to help meet short-term ROI/financial goals. However, without a deep and concerted effort to Build Brand Awareness, Consideration, Excitement and Loyalty, over time the company will fail. Sales Promotions inevitably lead to deeper and deeper price cuts just to maintain goals. And worse, while doing so, you will severely damage the long-term viability, profitability and longevity of your company.
Building Your Brand is the only way to truly achieve the ROI required to reward your Employees, Customers and Investors.
Eclipse Worldwide specializes in and leads the industry in Organic, Fee-Free Product Placement in Television and Film Productions. Founded in 1997, it has placed over 170,000 Products seen in over 30,000 Episodes, with a value of over 10 Billion Dollars, reaching over 100 Billion Viewers for its clients, all without paying fees