The Evolution of Brand

This past week, I read a great article by Paul Worthington, the head of strategy for Wolff Olins New York - a brand organization I greatly respect!

His article talks about the evolution of brand moving from a unique selling proposition to an experience selling proposition. What I liked most about the article was its reference to the importance in brand consistency through actions (i.e. innovations, product development, services, etc.) in developing a strong brand in today's market.

Because I feel this article should be shared, I have posted it below, with the permission of Paul, for you to enjoy. It can also be found on the Wolff Olins blog here.

USP ESP & XSP

Creating a definition of the word brand seems to be both the easiest and perhaps the hardest thing to do. The challenge is not that the existing definitions aren’t correct (or more accurately weren’t correct). The challenge is that the environment in which brands live is inherently Darwinian.

As the environment changes brands must adapt. Once brands have adapted enough then what you get are effectively new species - entities unlike what have gone before and that must now be defined in completely new ways.

This has been a constant process over time, but I think we could now define ourselves as being in the third age of brand.

1. USP

The first age was the product age. The environment was post war baby boom America and the defining factor was the rapid growth of the middle class.

In this age brands were built from functional attributes of the product, which spawned the concept of the Unique Selling Proposition or USP.

The technology that enabled this age of brand was television and the platform was television advertising.

In this age the Creative Director was invented and their role was to find creative ways to communicate this USP to the consuming public at large.

2. ESP

The second age was the marketing age. The environment was one of 1980’s excess and the growing demands of Generation X.

In this age the realization was that functional attributes were not enough. It spawned the concept of the Emotional Selling Proposition or ESP, which was defined through the mechanism of Brand Positioning - the technique of identifying and then owning an emotional territory for the brand.

The technology that enabled this age of brand was the desktop PC and the platform was consumer research.

In this age the Account Planner was invented, and their role was to more deeply understand consumer wants and needs in order to understand which emotions to manipulate for each of the brands audiences.

The second age represented a logical progression from the first. Marketing followed product. The connective tissue was that brand owners retained an information advantage relative to brand consumers. In both these ages an information asymmetry benefited the brand owner at the expense of the brand consumer.

3. XSP

Today we are in the third age, the experience age. The environment is one of unprecedented choice and transparency and the defining factor is a fickle Gen Y audience who demand more from less.

In this age brands must be built around their Experiential Selling Proposition (XSP). Unlike the simplicity of USP’s and ESP’s, the transparency of the third age demands that brands manage complex systems of value - understanding how all of the actions of the brand owner (product/service, societal, environmental, technological, marketing) interrelate to create the experience.

The technology that enables this age is the Internet and the platform is Social Media.

The definitive role that this age will invent is not yet clear, but so far we see Innovation leaders, Engagement leaders, Digital leaders, Social Media leaders and Experience leaders.

The fundamental and exciting shift is that the third age represents a sea change from the other two.

The brand owner no longer benefits from an information asymettry over the consumer. Instead this relationship has been reversed. As such, the old rules and indeed the very definition of how brands must behave in order to succeed has also changed.

The tools of brand positioning and advertising that have held such strength for so many years must now be replaced by both new tools and new rules.

XSP demands integration of product, service, social, environmental and marketing layers. It demands the creation of value across the system of the brand. And fundamentally it is built from a trust that brand owners will have to earn from their consumers on a daily basis.

The implications of this change for many brand advisers are potentially dire. Entire industries optimized for the more effective communication of a brands ESP now find themselves facing a systemic decline in efficacy and indeed value.

This will mean one of two things:

1. Brand advisers will need to focus less effort on how a brand communicates its ESP through marketing communications, instead focusing their efforts on helping brands to innovate across the entire system of the brand in order to generate revenue driving XSP.

2. Brand advisers who choose to remain focused on marketing communications will need to find ways of innovating and re-engineering their business model and offer for a lower value, lower fee world. Seeking structural change to create value both for themselves and the brand owner.

Wolff Olins have chosen to follow the first path: Our focus is increasingly on helping brands create new revenues and new value across the entire system of the experience.

Victors and Spoils on the other hand appears to represents an innovative new model designed to deliver the second.

Whichever model wins, whoever defines the new role(s) that will represent the third age, there is no doubt that this is an incredibly exciting time to play.

We may even get a new definition of what a brand is.

(Paul Worthington)