By now everyone’s sick to death of hearing about the technology decline — especially those who actually continue to work and thrive in the industry itself. It’s worth discussing, though, the role of the “brand” in the downturn.
Brand building has been all the rage
over the past five years. It’s really nothing new. Branding has been around since nations invented flags, kingdoms made coats of arms, and Highlanders weaved tartans. In the technology world, extremely strong brands like IBM, Xerox and Apple were built well before the dot-com boom of the 1990s.
But it was indeed the advent of the Internet that made brand building in the technology industry the thing to do. Massive amounts of venture capital was poured into fledgling companies that had little more than a hunch on which to base their business. Actual revenue and sales were less important than an idea and a catchy name, and, thus, the focus was put on the brand, rather than the products and technologies.
For me, it came to a head in the overblown and overpriced advertising for the 2000 Super Bowl. Arrogant startups with few if any actual customers poured over a million dollars for a 30 second spot, designed ostensibly to sell an image of a company rather than an actual product. It was a ridiculous display of ego over intelligence, and it had disaster written all over it.
It was akin to a corner reseller investing all his marketing money in a full-page ad in The Globe and Mail.
Unlike the mainstream consumer world, technology marketing needs substance first, and brand building thereafter. New technology, or technology that purports to be different or better, must be experienced to be believed. Influencers like the media need to determine if the technology is in fact different or better. A product has to be tried and tested, and intense logo splashing on its own without additional marketing to support it will not attract and retain customers no matter how much a new company spends.
By its very nature, technology is new. The industry keeps moving forward. New companies with new products based on new technologies face the challenge of introducing and explaining these new things. Without first effectively communicating new technology to target markets, a company with a new name and concept can’t possibly be understood or believed.
And that’s a big reason why so many startups failed. Inexperienced employees, drunk with VC money, took a path of least resistance and spent their budgets on advertising rather than public relations and direct marketing. Advertising allows companies to have complete control over what appears and what’s said, whereas PR leaves it to target audiences to draw conclusions, to recommend new products and technology. Because the company controls the message, readers see advertising as far less credible than objective editorial content. Technology advertising plays a valuable role in the marketing mix, but it’s simply not an effective way to introduce a company or a new product.
From a marketing perspective there was a fundamental lesson that should have been learned from the dot-bomb revolution: brand building on its own can’t possibly convince people to invest in a new technology. By its inherent nature, technology is new, and what’s new must be explained and experienced first hand. Word of mouth marketing — like public relations — is thus a technology company’s most powerful marketing tool.
Hopefully, by the time the next technology revolution — which will come eventually — rolls around, the mistakes of the marketing fathers will not be visited upon their marketing sons.
Andrew Berthoff is senior vice president with Environics Communications Inc., a North American communications agency delivering solutions for the computer industry. He can be reached by e-mail at [email protected]