Lochhead on Marketing 124 The Big Brand Lie: How Categories Make Brands & Why Brand Marketers Never Believe It
The Brand Cult Myth
- Many marketers belong to a "brand cult" that assumes the most well-known brand always wins.
- Christopher Lockhead shows data that brand awareness alone doesn't guarantee market dominance.
Categories Create Brands
- Categories make brands, not vice versa; creating a new category drives lasting value.
- Branding is often a cosmetic fix that ignores the underlying lack of differentiation.
Category Design Vs. Brand Marketing
- Category design educates customers about a new solution and moves them to a different future.
- Brand marketing screams "look at me" while category marketing evangelizes transformational outcomes.
Welcome to a very special episode of Lochhead on Marketing. This episode is based on a recent Category Pirates newsletter that we wrote, which was about Big Brand Marketing and why it doesn’t work.
It is also available as a mini eBook here.
Think of this episode as more of an audiobook than a podcast, as I will be reading the article for you. Without further ado, let’s get to reading.
The Brand Cult
A meaningful percentage of marketers, entrepreneurs, and executives are in what we like to call “The Brand Cult.” They’ve been taught the best (aka: “the most well known”) brand wins.
Even though the data shows this is not true.
- Ford spends $2.5 billion per year on brand advertising, with a market cap of $50 billion. General Motors spends $3 billion, with a market cap of $70 billion. Meanwhile, Tesla spends $0, but has a market cap of $700 billion.
- In 2011, Google spent almost $600 million building and launching a social network to compete with Facebook and Twitter called Google+. If “the best brand wins,” how come Google+ failed? After all, Forbes named Google the 2nd “most valuable brand in the world” in 2020.
- Comcast spends more than $5 billion on branding and advertising each year. And yet, Comcast has long been considered “America’s Most Hated Company.” There’s even a Wikipedia page dedicated to the company’s inadequacies, titled “Criticism of Comcast.” (United Airlines is a close second, if you ask us.) So if branding and “shouting from the rooftops” is the key to winning the game, how come $5 billion per year can’t solve Comcast’s problems? Maybe they need $10 billion?
Though sharing data with a cult member is about the worst thing you can do. That’s because facts are upsetting to feelings—particularly facts that disprove everything you’ve been taught to believe.
Well, here’s a fact:
Categories make brands. Not the other way around.
How The Brand Cult Began
In 2011, The Atlantic published a piece titled, “How Brands Were Born: A Brief History of Modern Marketing.”
“In the 1950s, consumer packaged goods companies like Procter and Gamble, General Foods and Unilever developed the discipline of brand management, or marketing as we know it today, when they noticed the quality levels of products being offered by competitors around them improve. A brand manager would be responsible for giving a product an identity that distinguished it from nearly indistinguishable competitors.”
Note that last sentence.
From our perspective, the obvious response and clear “no brainer” solution to being “nearly indistinguishable” is to get different: design a new space, come up with something new, and make others play a game you created.
But that’s not what most “marketing & branding experts” decided.
Instead, they said, “Let’s ignore the fact there is nothing unique about us, our product, or what we do for the world. Instead, let’s do some branding.” As if sprinkling some kind of magic dust on your “brand” (changing the colors, the font, the logo design, etc.) is going to drive a breakthrough in growth. Or, even worse, “Let’s call ourselves a community. Let’s use big, all-encompassing, undifferentiated language to make ourselves appeal to everyone. Something like, ‘We are an authentic, purpose-driven brand.’”
Thus, “the brand cult” was formed—and The Big Brand Lie began.
If you’d like to hear the rest of the article, download and listen to this episode. You can also check it out at Category Pirates. Who knows, you might find that you have a little pirate in you as well. ?☠️
Bio
Christopher Lochhead is a #1 Apple podcaster and #1 Amazon bestselling co-author of books: Niche Down and Play Bigger.
He has been an advisor to over 50 venture-backed startups; a former three-time Silicon Valley public company CMO and an entrepreneur.
Furthermore, he has been called “one of the best minds in marketing” by The Marketing Journal, a “Human Exclamation Point” by Fast Company, a “quasar” by NBA legend Bill Walton and “off-putting to some” by The Economist.
In addition, he served as a chief marketing officer of software juggernaut Mercury Interactive. Hewlett-Packard acquired the company in 2006, for $4.5 billion.
He also co-founded the marketing consulting firm LOCHHEAD; the founding CMO of Internet consulting firm Scient, and served as head of marketing at the CRM software firm Vantive.
We hope you enjoyed this episode of Lochhead on Marketing™! Christopher loves hearing from his listeners. Feel free to email him, connect on Facebook, Twitter, Instagram, and subscribe on Apple Podcast! You may also subscribe to his newsletter, The Difference, for some amazing content.