In advertising we trust: brand new worldMay 21st, 2010 | Posted by in advertising | brand | culture | marketing
Branding is not a modern invention. Its origins can be traced back 40 centuries to the Harappa civilization in the Indus river valley in modern Pakistan and Northeast India. The Harappans were great traders who branded their high quality products with ‘Indus seals’—small square tags made of terra-cotta, brass or copper that signified the product came from the Indus valley.
The reason back then was same as it today: to differentiate commodities with added value external to the features of the product. Perhaps goods from the Indus river valley had a money back guarantee that made buying them a safer bet for the consumer. Whatever it was, it was the beginning of something big in human history.
The modern marketing definition of ‘branding’ can be traced to early American distillers, who burned their marks on the barrels they shipped. By the 19th century, American consumers who had previously purchased goods like sugar, soap, rice, and molasses from large bulk containers had been introduced to branded packaging.
Before this, consumers just bought what the shopkeeper had in stock. But once the branding genie had been let out, consumer demands wouldn’t allow it back in the bottle.
Soapmakers were early advertisers of packaged and branded products. Brands such as Ivory, Pears and Colgate date from around 1880. Just after the turn of the century, Americans began to be aware of brands such as Bon Ami, Wrigley, and Coca-Cola.
Coca-Cola can thank the Harappans for inventing brand identity, but modern corporations have taken the concept to an incredible new level. When a Harappan ship pulled into a foreign port, their branded pottery, jewelry and agricultural products were perceived as high quality. But nobody assigned a value to the seal itself. That too has changed.
In the modern economy, more than a trillion dollars in corporate wealth is allocated to swooshes, globes, golden arches, mouse ears and hundreds of other brands.
In 2001, Coca-Cola’s market capitalization was about $110 billion with 61% of that value coming from its number one ranked brand. Xerox’s brand accounted for an astonishing 93% of the company’s value. 82% of Kodak and 76% of Polo Ralph Lauren’s corporate value was derived from the strength of brand identity.
Naomi Klein, author of No Logo, suggests “the astronomical growth in the wealth and cultural influence of multinational corporations can arguably be traced back to a single, seemingly innocuous idea developed by management theorists in the mid-1980’s: that successful corporations must primarily produce brands, not products.”
Brands have a powerful impact on our world. They affect individuals in a profound and often emotional way. They help channel the flow of trillions of dollars. They are a huge component in the success of massive multinational corporations. And entire industries have blossomed to help inject these brands into our collective thoughts.