Brands, technology and people | Jez Frampton, Interbrand | OnBrand '17

the afternoon I'm gonna spend a little bit of time talking to you about brands technology people and also we'll make a few shameful references to best global brands which some of you may be aware we actually unveiled this around about two weeks ago in New York and we've been doing it for 18 years so there's an awful lot of insight that you can get out of doing a study like this on a regular basis and some of the things that we're beginning to realize of course is that we're all living in a world where everything seems to be switching around all the time everything's changing and somehow as a business as a brand you've got to be out of grow in the middle of all of that because generally that's what businesses want to do for those of you who might want to tweet about me at Jess Frampton's very very easy so let's take a look people technology brands and growth if well I am a CEO but if I were CEO of a big company these would be the four things at the top of my agenda and certainly from our perspective as a business we're hearing more and more and more about that interface between teep people and technology and how you can actually create something which is truly unique to you as a company because that's what brands do they stand you out from anybody else before we start that let's just consider the times that we're living in this is 5th Avenue in New York around about 1905 just around the corner from my office actually and at that time cars and horses happily shared the highways and nobody really thought much about it if you'd seen this image 5 to 10 years later there would be virtually no horses we first started using this image around about three or four years ago to talk about the fact that we could see that there were massive changes going on that technology was causing which we're going to shift the way we brand the way we market and indeed how we even think about our companies I think it would be fair to say that they're all coming true now so let's take some time first of all to have a look at what's going on with people because the effects of Technology and the potential of technology of course is so much to do with us as human beings and actually that's what brands are really about as well I've been quoted as saying before that brands aren't a marketing trick they're a human truth they're actually the way that we make sense out of the world if you think about it every time you meet somebody you start to form opinions of them through the way they're dressed what they say who they're with what they do where they live all of these different things come together to create an image of who that person is we do exactly the same with companies and our task as brand owners brand managers consultants whatever we are is to actually make sense of all of that to create an experience which generates a clear image of who that business is tied into their values and what they stand for and of course nowadays we're dealing with even cleverer human beings especially those Millennials which I suspect actually the vast majority of the audiences and your demands are much greater than any of the generations before you and the world's changing in so many different ways on macro level in terms of the way we want to work what we expect from the companies that we work with we've got a diminishing degree of respect for hierarchy for national institutions and we want to be able to live our lives the way we want to live them well surely that affects the way that we interact with brands as well and it puts a tremendous amount of pressure on businesses to make sure that they stay relevant I use this quote the Millennial raw was after the general election in the UK last year was many of you are familiar with and if you take a look at that slide on the left you'll see that there was a massive almost a generational drop of young people's involvement in politics and then last year we saw it in vivid vivid color in the UK and that's now still rolling on you can see a turn-up in the u.s. in the recent elections there and I would bet that the next time there's an election in the u.s. that red line at the bottom is going to arc up even further the Millennial Generation are now running our businesses they are the successful entrepreneurs they are dictating the way that companies work and how we live our lives they are our employees as well of course as they are our customers and we have to listen very carefully to what they want otherwise our brands will fail to connect 60 percent of Millennials are looking to work for a company based upon their purpose in other words I'm not so Kerr sure I care about what you do but I'm far more interested about why you do it why should I get up every day why should I contribute part of my working life to build your company and on the outside 66% of consumers tell us they're prepared to pay more they always tell you they're prepared to actually making them do it is another question entirely but even employees at a senior level an executive level believe that companies can be more successful if there's a strong sense of purpose and for those of you have ever looked at any kind of data relating to the effectiveness of people within organizations a lot of it is what's going up in here about what you believe the company stands for and whether or not you subscribe to their values and that's even more the case now so companies have to be much more mindful of what they're about and of course there's millions of examples of the power of purposeful people if you can really encourage people to a point where they are fully subscribed to what you're trying to do as a business as a brand as a company above and beyond making money or delivery shareholder returns something that actually means something to a human being the possibilities are endless that's why companies like this of course are taking the best talent because that generation want to work for a company like that and this has a big impact on the way that we build brands the second big factor of course is technology in the way that we're interacting with it I think it would be fair to say that over the last six or seven years companies have spent a lot of time and a lot of money trying to get themselves up to par digitally and in the process of doing that many of them have managed to create some fantastic user experiences they've changed their customer experience but often at the detriment of thinking about the human beings that it's interacting with and indeed the brand that it stands for a brand without uniqueness without a sense of authenticity without any differentiation is not a brand it is a bland people don't want to buy bland and they don't want to work for Bland's they want to work for brands that mean something to them and the technology has to fit with that about two or three years ago we introduced the concept of the age of you ie personalization and now of course everyone's talking about the power of programmatic media and what that can do to change the way that you interact with your audiences we have such a vivid image of each individual and that's only getting sharper every single day the ability to be able to serve up the perfect advertisement the perfect brand experience just when you want it with the people who you're with at the right time with the right offers is something which is now available at the touch of a button and is going to completely revolutionize the way we do our jobs every single day the opportunities are incredible but it will of course have an impact and one of the biggest impacts that's going on against some fantastically simple data both from the brexit which I have to say I was a remainer so for those of you think that I'm from that awful place England that doesn't want to be part of Europe it wasn't me but if you just take a look at the way that they actually you used the leave campaign used social media to influence people it's quite remarkable and look at Trump in terms of versus Twitter and his Facebook following was significantly higher than his primary competitor let alone everybody else and we've all heard the stories about the Russians but the point is this is how people want to engage with brands nowadays so anyone who talks to me about building a brand and doesn't mention social media or their ability to have a conversation with their customers and staff every single day I figure they're not really up with what's going on they don't actually understand their audience and this is only going to accelerate what am i scary or exciting numbers depending on which way you look at it is the one on the top left there 17% doesn't seem like a lot on its own but if you read through 800 billion dollars of worldwide spend on IOT going on right now 17% up from the previous year 800 billion it's gonna completely change everything again isn't it over the next five years people are talking about 3.0 I wonder when we're gonna hit 4.0 because once you start wrapping together this with the thinking about the individual the ability to build build what we would call Mikko systems around people have not only the products and services that you might offer as a brand but actually things which are related to your ecosystem then built personalized for an individual incredible opportunities in terms of the way to market to people and the way to build brands but of course we actually make sure that we don't step over the wrong side of the line is remarkable actually how little is being talked about all of this at the moment I think there's a wonderful shot at the top there of actually one of Amazon's fulfillment centers but one of my friends who runs a very good very big car company was telling me recently that when he joined their plant their construction plant in the UK had 25 thousand people working in it now it has 35 just 35 people an incredible change now this has been going on for years you know any of you have ever been into a big fulfillment center a factory whatever it might be you've seen robots running around like crazy but of course it's actually coming closer and closer to everything that we do our own industry the marketing services industry that I've worked in for the last 30 years is going to be turned upside down by this over the next few years media is being bought in a completely different way the ability to plan campaigns and structure messaging systems automate with with individual pieces of content designed for individuals all of this is possible and will soon live in a box or a server somewhere in the cloud that's great because it gives us the opportunity to be even more creative in the things that we have to do to be able to create connections with those wonderful people that we market to every day and the wonderful people that we want to work with us every single day there is no doubt about the fact that technology is killing jobs and only technology can probably save them it gives taking a look at some of my clients they're shifting people who were in customer services roles you know maybe two years ago and that largely was an administrative role I haven't actually removed the jobs they've changed them in effectively they've upgraded them they've used that the people as the means to interact with the people that they're doing business with so although technology is definitely a threat and an opportunity to use those wonderful terms how we actually deal with it how we manage the cultures inside our companies in order to be able to manage through change and indeed how we present ourselves as a brand to all of those wonderful consumers out there we have to learn how to walk the right side of the line I would say over the next 10 years or so so if that's what's going on in the world of people and how we're changing and how technology is changing our lives what does all that mean for brands well Brad I would say at the point where people technology and business come together most of us in this room work for someone or we have our own business and we have a relationship with that company based around some individuals but also based around the brand and in terms of technology we use that for the betterment and fulfillment of what we're trying to do for our customers so brands are the point where it all comes together and they're the thing that human beings relate to but if it's all changing out there in the world how do we have to change well let me just step back for a minute and tell you how we think brands work and how we value them because I'm going to come on to some of the stuff about Best Global Brands in a little while there's three things we look at the first thing is financials does your business make money and where does it make money the second thing we're looking at is trying to work out what proportion of that is actually due to the brand it's something we call role of brand and it's very easy way to explain it it's effectively a percentage what we're looking at is if if I made $100 of profit what how many of those dollars are actually related to the brand because it could just be that I've got some great deals and I'm selling a commodity so if I was buying for instance petrol gas whatever you want to call it probably might be going on for much longer because it a little bit electric but it's a great way of explaining it in that purchase about 15% of it is actually due to the brand not surprising really if you're driving along in your car and just about to run out of gas the most important thing will be proximity what's available second thing might be priced most people don't really understand the pricing differences between petrol stations they kind of assume they're all the same so the brand is actually relatively low down in that decision but there's probably some places where if you went past and you weren't desperate you might not go in there because you'd never heard of them kind of makes sense about 15% of the decision if you were buying a Ferrari to put the petrol in about 75% of that decision is the brand don't listen to what they tell you it's an amazing piece of engineering it's fantastic piece of design it's wonderful isn't it's not it's a self-expression the large part of purchase is all about what it says about you how it makes you feel and therefore the brand is driving really most of the decision so that's the second thing choice the third thing is how much longer into the future might that Bramber be able to derive income for you this is something we call brand strength another way you can look at it is that it's a measure of relative competitive strength or you can even look at it from a customer's perspective and say it's actually about loyalty how long ago how much longer am I liable to continue to buy that particular brand and we use 10 different factors four of which look on the inside and six of them look on the outside from everything like how clear is the strategy how committed to the people - how well differentiate is in the brand and how well are they visible and present within the marketplace you bring these three things together and it enables you to put a value on the brand because you know how much of the profit that you're making is attributable to it and how long it's liable to continue for and what's driving it now if you understand those things you can actually make your brand work harder for you so we work with our customers clients helping them understand how their brand works in the context of their business how you can make it work harder and then how you bring it to life how do you create an experience which is going to help you grow the value of your brand and they do work absolutely brands work extremely hard for the businesses that own them this is tracked over a period of 17 years you know as you can see we've got it trapped going to the Nasdaq against the S&P you can track it pretty much against every single different indices and the result is the same the 100 best global brands ranking that group of brands outperforms so it's o facto brands are a pretty handy thing to have because they drive your business and in a world where everything almost appears the same and it's harder and harder to stay ahead of one of your competitors on a product difference or even a service edge the brand is the thing which gives you incredible license to innovate and also protect you against risk it's pretty difficult when you're far away to work out which one's which right capabilities are pretty similar in fact if you look at mobile phones headphones pretty much any kind of these things that we run around with every single day it's quite often the case that the best product from a tech to technical perspective may not be the brand leader because you buy it because you believe in the brand there you go in case you hadn't worked it out for yourselves they all look the same don't they increasingly of course people just want to buy from companies that they think are doing something good and I think we have a slightly different point of view about some people about purpose a lot of people talk about it in the context of course corporate social responsibility and it's all about being good yes well I think companies do need to be good we should all have a responsibility for the world that we live in but it can be just about actually about being clear about what you're there for on what you're about and increasingly you can see that the companies that we are drawn to and want to do business with and want to be a part of are the ones which stand for something very very clear there's some great examples there the second thing you've got to be able to do after managing all of these wonderful purposeful people you have is to be driven by data obviously given the conversation earlier on about technology I remember about eight or nine years ago going to see one of my big clients who were a very very well known brand they're right up in the top of our list and I said how much money do you spend understanding how your brand works within the context of your organization and we worked out that it was probably let's say a factor of 1 and then I asked them how much they spent on understanding the value of their tangible assets yeah so this place it's got a brand to the sugar city but it's also got a physical tangible space they spent 13 times more every year revaluing their existing assets which were by nature depreciating over time because most buildings plant most whatever it is you write it off if you're an accountant over a period of time as you probably know brands work in a completely different way if you invested in them they get stronger they get more powerful they work harder for you and yet most companies spend only one-thirteenth on actually understanding how their brand works compared to looking at their fixed assets which i think is crazy there you go and of course nowadays because of the speed at which markets move we have to be so much more capable of working together around the world so increasingly a lot of the work that we do where we're providing perhaps strategic or analytical points of view about what's going on in a market place they're driven online because you've got to be able to connect people everywhere because if you're a big international business the ability to respond to what's going on with your competitive marketplace is obviously driven by how well connected and how well focused everybody is around the world responsiveness is absolutely key it's one of those ten things that we look at in brand strength how able is the company the brand to be able to keep up with what's going on around it and how well defended is it in the case of where markets start to work against you a competitor comes out with a new product that you weren't expecting your brand can protect you during that period of time you have to be ready to respond and increasingly people are looking on the insides of their business to say how well is my marketing capability organized how does it actually interact with the other parts of my business and indeed in the longer term of course how do I change it and make it absolutely integral to everything we do you know you could argue that the job of the CMO has changed so much over the last ten years that really and truly you're kind of some cross between chief customer officer and chief integration officer trying to get everybody within the organization to actually work on behalf of the customer there's a lot of things that companies need to do but we need to make sure that above all we remain human back to those points that I said at the beginning because the nature of our employees are changing then of the people that we're selling to is changing and we have to maintain that clear understanding of what's going on and what people need in order to make them want to come work for us or indeed to buy our products or services so some real big challenges for companies to change themselves to make sure that they match up to this world where it's all about people technology and brands brands quite simply our business strategy brought to life very simple way of thinking about what it's all about what you're trying to do is in the intend as an organization that's how you bring it to life through every single touch point every single experience every single thing that anyone ever interacts with you as a business people well brands are about the way that they actually make connections between themselves and companies so if you don't understand that and you're not using that to your benefit as an organization you're missing out that is your brand technology will not save you it's a combination of people technology and brands and ultimately of course technology enables people to grow but also provides an incredible platform by which we can actually deliver brands to customers let's take a very quick look at the best 100 we as I said we do this every year we've been doing it for the last 18 for the first time well we're getting close to close to over 40% of the total value resides in the top 10 and what I was going to say is that for the first all four of those brands which everyone called gaffer a few years ago goober Google Apple Amazon Facebook are all in the top 10 in fact if you look at it seven of the top 10 brands and our technology brands now does this mean that we're all obsessed with technology yes probably means actually that we're going through an incredible industrial revolution which is what I started saying in the beginning 16 of those brands in the top 100 achieved double-digit growth and this is the 10 of them Facebook 48 percent increase in brand value combination of improved financials and a much much stronger brand but even companies like Morgan Stanley and Goldman Sachs reappear going up again Starbucks back on the resurgence and Amazon Elastic Amazon are incredible because if they actually made the kind of profits that everyone might expect them to is you probably know they do a very good job of holding their profits down so they can reinvest they'd probably be number one on the list three new entrants this year two that you might have expected Netflix very interesting I think there was about two days after we agreed to do this that the whole thing with Disney went off Salesforce which again if you don't understand Salesforce and you work in marketing that you are an incredible disadvantage and Ferrari you've actually been in and out they only sell around about seven or eight thousand cars a year and yet generate an incredible amount of brand value it goes back to what I was telling you earlier on doesn't don't listen to what anyone tells you 75% of the choice is all to do with the fact that it's a Ferrari so thank you very much for taking the time this is the top 100 this year for those of you who happen to be on this ranking congratulations you have to have a brand alone work worth four billion dollars just to get on here and such a tremendous amount to be learnt from it if you have a moment go and have a look at our website you can play around across sectors you can still look at how people's values have changed over time an incredible range of insight about anything you could possibly imagine about brands thank you very much for taking the time to listen to me and enjoy the rest of your day [Applause] [Music]