Wednesday, January 18, 2017

The Social Dimension of Brand

It’s been observed that people buy a product because of the functional value that owning and using the product provides to them, but they purchase a brand because of its meaning, which may have nothing at all to do with the purpose of the product.   But meaning exists in two dimensions – “what does this brand mean to me?” and “what does my consumption of this brand mean to others?”   The second is the social dimension of a brand.

This is most obvious with conspicuous consumerism: people associate specific qualities to a person who consumes a brand, and assume that other people will associate those same qualities to them when they consume it.   If they believe that sophisticated people consume a specific brand, then they consume it in order that they may be perceived as sophisticated by others who observe their consumption of it.   And this may override both the functional benefit and the meaning of the brand in these instances.

The social dimension of a brand thus attributes qualities to the individual, but these qualities are of secondary importance.   There are two fundamental purposes to any social action: to associate oneself to one group or distinguish oneself from another.   The person who wishes to appear sophisticated by consuming a brand is making an overture to a reference group of people whom he believes to value sophistication among their members, or to distance himself from another reference group of people who disdain sophistication.

That is to say that the consumption of a given brand leads the consumer to have a sense of belonging to a society of people who use the same brand, and a sense of being separate from (and generally superior to) the group of people who consume a different brand.   This behavior can even be seen among young children: they demand a specific brand because they wish to “fit in” with a desirable group and shun a competing brand because they want to make it clear that they are not members of a group of undesirables.

But marketing in the social dimension can be exceedingly difficult because these perceptions and associations are arbitrary: what a product “means to me” is entirely subjective, and what a product “means to other people” is both subjective and speculative.  The consumer often does not know what a brand means to others, and is merely guessing, except in instances where an influential member of the social group has directly communicated the association (and even then, it may be an individual who is not influential, but aspires to become so).

It is further complicated by the proliferation of brands: there are so many choices that there is no clear indication of which is correct.  And while the advertiser may attempt to convince the market that its brand is associated to a specific social group, it remains the decision of that social group whether to accept the advertiser’s suggestion (and often, they do not).    Moreover, the same brand may have different meanings in different social groups – the brand that is favored by the “in” crowd at one junior high school may not be the same as that favored at another, and in fact may be a stigmatized brand in that social group (particularly if the two schools are rivals).

And to complicate matters further, there is the unconscious or semi-conscious mind, which often misleads individuals into thinking that they have acted on their own judgment when, in reality, they may have been influenced by external sources of which they are unaware or against which they are practicing denial: the choice may be rationalized, but it is inherently an irrational one.

There are rather few products in which the social dimension is entirely irrelevant – those that are purchased and consumed out of public view are entirely immune, but so much consumption is social, by virtue of the manner of consumption or by open declaration of consumption, that the social dimension of brand is worthwhile to consider, and to consider it in the context of a specific individual and the reference groups they encounter.

Wednesday, January 11, 2017

Quackery and Ignorance

In 1832, Charles Babbage made an astute observation about technology that remains true to this day: any new development is followed by a wave of “quackery and ignorance” in which hucksters offer technology solutions to those who do not understand the technology but are eager to benefit from it.

Babbage was speaking of the most basic forms of industrial automation, as during his time there were many shady operators who offered machines and mechanisms of various kinds to industrialists, claiming the implementation of a device would boost productivity and eliminate the need for dozens or hundreds of manual laborers.   In rather few cases this was a valid claim, but in most it was not: the machines did not work at all in some cases, or when they did what they were supposed to do the promised results were not delivered.

Nearly two hundred years later, I see the very same thing happening with networked digital technologies.   The claims made of the power of knowledge management, social anything, big data, and the like are always wild and outlandish, and there are a great many companies that offer solutions, but little news that these solutions ever delivered on their promises.   Any time there is a new buzzword in the media, there’s a brief frenzy followed by a guilty silence.

My sense is it’s just history repeating, and that two centuries of repetition have not driven Babbage’s message home, nor do I have the sense it ever will.    There will always be ignorance and greed, and there will always be great profit to be made by swindling the ignorant and the greedy.  

And in the end, perhaps it’s only right that those people who are willing to hand over their budgets and the success of their operations to the latest species of snake-oil salesman are taken in.  But will the lesson ever be learned?

Wednesday, January 4, 2017

Informal Research: Brands in Social Media

I’ve been curious for some time about brands in the social media, but have not been able to find any good research (quantified and verifiable) into the subject – merely general claims and personal opinions that assert that brands are pervasive in the social media.   And so, I did a little informal research …


The methodology for this research was entirely casual:  I visited a site that served up random Facebook profiles ( and examined the “timeline” and “about” sections of 100 users to seek activities related to brands (any commercial product whose maker is mentioned) in various ways, as detailed in the findings.

Naturally, this means that it is a random (rather than structured) sample and I was only able to observe material that is made fully public by the individual who posted it.   So the behavior of users who are more discreet in their posting were not included (I skipped those whose newsfeeds and profiles were empty).

Another caveat is that this study was conduced in December, during the holiday season, when the mention of brands is more likely to appear in discussions (regarding gifts) than at other times of the year.


Since 100 profiles were examined, the raw numbers below can also serve as percentages:

  • 32 of the users’ newsfeeds contained a mention of a brand in the last ten posts
  • 18 profiles included brand-related content that was “liked” by the user
  • 2 of these 18 instances liked content that was published by the brand itself (as opposed to mentioned in content that was published by someone other than the brand)
  • 9 of the users’ newsfeeds displayed posts containing brand content that was shared with the user by friends
  • 0 of those 9 instances were content published by the brand itself
  • 46 of these users’ profiles contained brand-related content (which includes music, movies, books, pages, and profiles “liked” by the user)


In the broadest sense, my interpretation of this data leads me to the conclusion that brand content is not as pervasive in social media as some sources suggest.   Brand is not absent, and some of these statistics (brand mentions in newsfeeds and profile) do seem substantial, though somewhat less than a majority of users.

Ultimately, this means that social media is still quite non-commercial in nature, and the mention of brands is entirely casual and likely no more prevalent in social media than it is in face-to-face conversations of a social nature.

Suggestions for Future Research

Since this was an informal study that was very limited in scope, there is much room for refinement and validation of these results.   A more structured sample could be used, the inclusion of private (versus public) conversation might alter the findings, and a more rigid definition of “brand” would be useful (to exclude entertainment brands such as movies, which are mentioned more often than non-entertainment ones).

But for my present purposes, simply to get a feel for whether brand is “pervasive”: in the social media, this informal observational study is sufficient for me to conclude that it simply is not.

Wednesday, December 28, 2016

The Interests of Investors

While advertising activities are primarily directed toward the purchasers in a market, it also stands to reason that it has an indirect effect on the financial markets:  the belief that a company will be successful in growing its market share through advertising leads to an expectation of greater revenue and better financial performance of the company as a whole, which makes its stock and other investment vehicles more appealing to investors.

However, this is not as straightforward as it seems:  investors take different perspectives as to their preference for short-term versus long-term profitability of their investments.  The long-term investor is more concerned with slow and sustainable growth, whereas the short-term investor wants as much of a return as soon as possible and shows little concern for the long-term sustainability of the firm.

The effect of investor confidence is likewise not solely to be considered in terms of new investors purchasing into a company, but of existing investors selling out.   Where any action on the part of the firm signals the potential for short-term profit but long-term damage, institutional investors dump their holdings on the hordes of eager short-term investors.   Likewise, when an action serves the long-term benefit of a firm at the sacrifice of short-term profits, the short-term investor leave the firm and unload their holdings on those with a greater long-term interest.

This problem is complicated by the traditional approach to ownership, in which the investors maintain complete control over the firm and place their interests before those of all other stakeholders.   Since management is beholden to investors, it is essentially helpless to object to the agenda of those investors.   Where investors wish the firm to achieve short-term returns while sacrificing the long-term sustainability, management must yield to this directive (or be replaced by more amenable managers if they resist).

While it is believed that the articles of incorporation provide protection against the firm’s being raided by investors with a short-term agenda, this protection is entirely superficial, given that the investors can simply change the articles to favor their agenda.   There is no contract or manifesto that is ironclad, as history has shown.

Friday, December 23, 2016

What’s in a Name?

It was one of those conversations you can’t help overhearing because it was going on at a volume that was meant to be overheard: a group of three unemployed twentysomethings having a brainstorming session in a public place about an idea one of them had for an internet company that would make them all rich.  The discussion wasn’t about the product or how to best provide value to the customer, but about what the company ought to be called.   It struck me that, while it seemed puerile, I’ve been bored by the very same conversation in the meeting rooms of Fortune 500 companies.

Far too much emphasis is placed on trivial things like this, to the detriment of the more important decisions that actually create value to the customer – whether it’s the name of the firm, its logo, or what color to paint the reception area, these are simply distractions from business and aren’t as important as those who have great enthusiasm for trivial matters like to pretend.

I’m unaware of any evidence that the name of a firm is a critical factor of its success, and am meanwhile aware of many company names that make absolutely no sense in terms of the brand or the products the company provides.  Scroll through the Fortune 500 and you will find very few companies whose names are meaningful in and of themselves.

Ultimately, the name of a firm functions like the name of anything else: it is merely a mnemonic device by which something is remembered and can be spoken of.  The name of a firm doesn’t become meaningful until the brand becomes meaningful, and isn’t known to anyone unless and until they benefit from the brand enough to make it worth remembering to ask for the next time a similar need arises.

Aside of the need to avoid names that are awkward or offensive (locally or globally), or a name that is already strongly associated to something else, there is no reason to prefer one name to another.   Toss a handful of Scrabble tiles on a table and add a few vowels, and you likely have a perfectly usable name and one that stands as good a chances as any other of becoming a household word if the brand is any good.

In the end, it just doesn’t seem to matter, and it stands to reason that the more time and money spent on superficial things such as this are distractions from the more important matter of devising a way to deliver value to the customer.   And it could well be that people who are most enthusiastic about such discussions are well aware of that.