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Generational labelling has reached the end of the alphabet and is now starting again – from Generation Z to Generation Alpha. But that doesn’t mean brands have to start from scratch as well.
Sociologist Mark McCrindle coined the Generation Alpha label, applying it to people born between 2011 and 2025 – so the oldest Alphas today are nine years old, and the majority haven’t even been born yet.
As a rule, I take predictions and business advice based on generational trends with a healthy pinch of salt. But as the proud dad of two Alphas, I’ve got a vested interest in how brands are going to relate to this age group, both today and as they grow up.
Generation Z were the first to grow up with smartphones as a normal fact of life. For Generation Alpha, replace smartphones with AI voice assistants like Apple’s Siri, Amazon’s Alexa and Google Home. Millennials bought into ‘connected home’ devices for their convenience, and for their Generation Alpha children, these devices are just part of the family.
This technology is already influencing the way this generation learns and plays. The growing ‘internet of toys’ uses image and voice recognition to encourage interactive play. Mattel’s Hello Barbie, dubbed the world’s most interactive toy, can interpret and respond to a child’s voice. My favourite, Cozmo, is a robot that communicates huge personality and emotion through simple expressions and movements.
Generation Alexa?
All this could make Generation Alpha the first generation brands and marketers don’t have to speculate about.
Whenever a new generation is minted, there’s a rush to define what their supposed values and behaviour might mean for business, and how brands should change to attract them (or to avoid attracting their wrath). But with so much of their home life and education mediated through connected devices and AI, Generation Alpha’s whole lives could well be mapped in data. And why speculate when you can measure?
The temptation will be huge. But I’ve pointed out before that brands need to be careful how they use marketing data and automation. That’s especially true when we’re talking about children. I’d be put off by any brand trying to insert itself into my kids’ lives just to sell them things, or to sell me things through them.
But I’ve seen some brands taking a smarter approach that I really appreciate. Google Home ran a TV ad showing how its smart speaker fit naturally into a conversation between a dad and his inquisitive child during reading time. And Crest Kids recently unveiled an Alexa skill that helps children brush their teeth – entertaining them with jokes, stories and silly songs that keep them giggling and brushing for the full recommended two minutes.
Fitbit are also getting into the game with the Ace 2, a device targeted at the six-and-ups. This is the first generation with the potential to have their health monitored from birth, so their healthcare can be preventative rather than reactive.
Know your destination
Why are these brands more welcome than the ones advertising products to my kids on YouTube?
They’re delivering something useful and, more importantly, something wholeheartedly connected to their purpose. Google wants to help you find information. Crest wants kids to have healthy teeth. Fitbit wants to help people live healthy lives. They’re all taking advantage of changing attitudes and new technology, but they’re not diverting from their core purpose. It makes the activity feel like a natural part of their journey, and not like a cynical intrusion into our family life.
So learn from these examples: make sure your brand has a strong sense of purpose. With that, there’s no need to chase the shiny new thing, whether that’s a new technology or a newly named generation of consumers. Purpose gives your brand the natural forward momentum it needs to stay ahead of any trend.
From issue 1 of the Brand Report
No two universities are the same. But you wouldn’t guess that from their photo libraries. The issue is so pronounced that the higher education sector has a name for it: “three and a tree”. And it’s something other sectors suffer from, too.
Universities want to show that their campus is pleasant and relaxed, and that the student body is diverse and welcoming. How do you do that? With a photo showing a diverse trio of students relaxing around a tree. Three and a tree.
It ticks all the boxes, and no one’s going to object to it, so that’s what ends up on the website, in printed brochures, and attached to tweets. But choosing the unobjectionable option – whether in photography, typography, colour, or any other aspect of the visual identity – is what leads to bland, generic looking brands.
We see this in every sector, in any organisation where the chain of approval for branded visuals is more than a couple of links long. It only takes one cautious link – one that hasn’t grasped the importance of differentiation in branding – to push a brand’s visual style away from something distinctive, towards the same middle ground already occupied by the majority of the sector.
But what’s unobjectionable to the organisation isn’t necessarily unobjectionable to the audience. In fact, when you take the middle road with your visual identity, “unobjectionable” is probably the best you can hope for. The more likely outcome is an identity that’s boring, unmemorable, or worse, not credible.
Brands stretch credibility when elements seem at odds with each other. For instance, if the messaging is all about brave new ideas, independent thinking and experimental approaches, but the photography, imagery, typography and colour palette are nothing but safe choices, audiences will question which impression is really true.
An organisation with the confidence to express a distinctive attitude through its visual identity is more likely to stand out from the crowd. And more than that, it can inspire your audience and gain their trust. Stepping off the middle road means taking a position. The risk is that not everyone will identify with that position; the reward is that some will, much more strongly than they ever could with a generic, unobjectionable stance.
The reward hugely outweighs the risk. Customers attracted by a clear position make far better advocates for the brand. Plus, a visual identity informed by brave ideas will naturally be more exciting, more eye-catching, and more distinctive.
And when your visual identity, messaging and – most importantly – actions all reinforce the same brave position? That tells everyone, customers, staff and stakeholders, what the organisation stands for and where it’s heading. So everyone can pull in the same direction – bringing the brand closer to achieving its ambitions.
This article is from issue 1 of the Brand Report. For more insights and action points to strengthen your brand, download the complete report now.
We wrote this long-read for Assets, the magazine for members of the Institute of Asset Management.
We’ve been project managing, editing, designing and publishing Assets since 2009, and we’ve picked up a few insights into the asset management profession along the way. This kind of asset management – not to be confused with the financial services kind – is all about realising the greatest possible value from your organisation’s assets, including its brand.
We saw a chance to combine our brand insights with our understanding of asset management, helping both Redhouse and the IAM to realise even more value from Assets. And now you can realise value from our combined insights too. Just read on…
Brands are today where infrastructure and other physical assets were before asset management moved things to a new level: valued purely on the balance sheet, if at all. There’s a clear opportunity for asset management thinking to help organisations in every industry realise more value from their brands.
The value of an organisation’s brand is easy to acknowledge, if difficult to quantify. Some form of brand, however basic, is part of the price of doing business. A brand that stands out to the right target audience makes an organisation more competitive. A consistent and memorable brand guides potential customers smoothly from awareness of the organisation to engagement with its products and services. A brand that represents its organisation’s vision and purpose brings alignment to different business activities, from high level strategy to everyday communication, improving efficiency by giving teams throughout the organisation a set of shared values and priorities to pull towards. That is, it provides a form of ‘line of sight’, a key asset management concept.
But how much of a given organisation’s competitiveness is attributable to its brand? How many potential customers would abandon their journey before engaging, if not for its brand? How much less efficient would the organisation be without the clear vision and shared purpose imparted by its brand? The intangibility of the brand makes it hard to determine how much value is being realised from the brand alone.
This poses an issue for brand and marketing people, and for agencies like us. Finance directors and other executives can be reluctant to invest in their organisation’s brand, because the return on investment is expressed in holistic rather than purely financial terms.
As a result, there has been a concerted effort over the past decade and a half to get brand on the balance sheet.
Until 2005, brands did not meet the International Financial Reporting Standards’ (IFRS) definition of an “intangible asset”, and could not be recorded on balance sheets. IFRS3, issued on 1 January 2015, changed the rules so that companies were required to add brands they acquired to their balance sheets. So for instance, when Microsoft bought LinkedIn, it added the LinkedIn brand to its balance sheet – but still could not add its own Microsoft brand.
Still, this provided one way to determine the value of a brand to the organisation that owns it: purchase price. With this method, the value of a brand is the price the owner could expect to sell it for, or the price it paid to acquire it. This method treats a brand just like physical assets were treated before the adoption of whole-life cost analysis and other asset management approaches: it goes on the balance sheet at the price the organisation paid for it, and depreciates over time.
Comparing sales of similar organisations can give us an idea of the value brand contributes, over and above the worth of the organisation’s more tangible assets. Take the UK mobile phone providers Orange and One2One as an example. Both companies started up and received their operating licences at the same time, both operated in the same regulatory environment, neither had a particular technological advantage over the other, and both were sold to German firms in 1999.
The main point of differentiation between these otherwise very similar companies lay in their brands. Orange’s brand had become associated with reliable network coverage, simple pricing, compensation for poor service, and other customer-focused policies. Mannesmann bought Orange for £19.8 billion, while Deutsche Telekom bought One2One for a comparatively paltry £8.4 billion. The strength of Orange’s brand made it more than twice as valuable as its close competitor.
This method of measuring brand value has significant limitations. The purchase price of a brand can only be realised when the brand is sold, so this method does not account for the ongoing value the organisation realises while it still owns the brand. And while the method functions well enough for consumer product brands, which can be bought and sold relatively easily by holding companies, not all brands are suitable for sale. Government departments, industrial firms and infrastructure companies, for example, are highly unlikely to sell their brands, and would struggle to find a market if they tried.
Academic approach
More recently, researchers have designed experiments to determine the value of brands. Participants in these experiments are shown mocked-up ads and asked how much they would pay for that product. The product is the same for all participants, but half are shown a branded version and half are shown a generic version. If, on average, people are willing to pay more for the branded product than the generic one, then that increase indicates the value the company is realising from its brand.
One such experiment, published in 2011, used Gateway computers. Part of Gateway’s brand was a distinctive black and white cowhide pattern. Every Gateway computer came in a box decorated with this pattern. In the experiment, university students were shown two different computer ads: one showing a plain box, and one showing a box with a black and white cowhide pattern. The ads were otherwise identical. The study reported that students who were shown the ad with the patterned box valued the computer at about $130 more, on average, than the students who were shown the ad with the plain box.
Based on this study, it could be said that Gateway realised about $130 of value from its brand every time someone bought one of its computers.
This method does a better job of accounting for the ongoing value an organisation can realise from its brand. However, it is still best suited to businesses selling to consumers.
The same experiment would be much less reliable if it asked participants to value something they would never normally consider paying for themselves, like a shipment of airline fuel, the upkeep of a major road, or the management of a power station. This makes it difficult for industrial companies, utilities or government departments, for example, to use this method to accurately estimate the value of their brand.
There is a clear need for something like a whole-lifecycle cost model for brands of all kinds. Asset management has changed industry’s understanding of the value of physical assets, taking into account the costs associated with operations, maintenance, downtime, revenue income, upfront purchase, replacement and disposal. Our understanding of the value of brands needs to change in similar ways, to account for factors like the complexity of applying the brand consistently (the equivalent of a physical asset’s operating costs), the regularity of brand refreshes (preventive maintenance) and the cost of a complete rebrand (refurbishment or renewal).
Applying asset management thinking to this ubiquitous intangible asset could introduce even more sectors to asset management. And asset management thinking would provide the rigour needed to convince executives of the value their organisations could realise by investing in a distinctive and coherent brand. So far, branding is largely unexplored territory for asset management professionals. But for how much longer?
Matt Boothman
Writer — Strategist
