Superbrands Face a Superchallenge

Over the past five years we’ve witnessed the birth of an unsurpassed number of brands. Not surprisingly, most of these have been born online and christened with a “.com” suffix. And most of these have been sources of amazement to me.

Dot-coms have launched some really innovative products that reflect new ways of thinking, and I don’t think I’m exaggerating if I say that it’s become almost the norm to be surprised by great new dot-com brands: “Wow! That’s smart!” is a response I’m sure you’ve had when you’ve encountered yet another ingenious way to use the Internet.

But hang on! What happened to all the old brands? The superbrands that we all admired and respected in the early ’90s: Coca-Cola, Gillette, McDonald’s, Heinz…? Have they gone into hibernation somewhere?

Take a look at Interbrand’s “The World’s Most Valuable Brands 2000” study, reported July 18, 2000, and conducted in conjunction with Citibank. You’ll read that Interbrand found the technology sector had garnered the most brand value in the previous 12 months and that dot-coms showed the greatest growth.

The survey’s findings showed that technology companies (Microsoft, IBM, Intel and Nokia) dominated the top five most valuable brands. The fact that four out of the five top brands in the world are technology brands is witness not only to their strong brand-building, but to the fact that the Internet’s innovations are affecting how we as consumers value brands.

Nearly all the past five years’ highlights have been online brands. Yahoo!’s value increased 258 percent since last year to reach a worth of $6.3 billion, and enjoyed a 233 percent rise and climbed to $4.5 billion.

The classic superbrand, Coca-Cola, while still ranking number one as the world’s most valuable brand, has seen its value decrease from more than $11 billion to $7.5 billion.

While thousands of innovative, shiny brands are entering the market, the old brands are looking older and more faded. Coca-Cola is still Coca-Cola, and the brand has its web site. But that’s about as advanced as the brand has managed to become since 1995. Gillette developed Mach3, which increased sales nine percent over the last half-year. But this development took more than 10 years to come to fruition. And Heinz? There’s not much new under its umbrella, nothing that stands out clearly from the familiar products.

Classic superbrands have been given a superchallenge. For every new dot-com brand that appears on the cyber horizon, the classic superbrands seem to recede a little more from the consumer’s notice. The development cycle they’ve pursued over the decades has lost its value: It’s just too slow to keep the brands from gathering dust.

The average production cycle for toy manufacturers was, until recently, five years. As you know, the total existence of the World Wide Web as we know it today spans that time. Most other manufacturers have similar product development times, and this leaves the brands they belong to in a 1995 time capsule.

Five-year-old ideas, once part of a product’s present manifestation, are now anachronistic. They relegate products to the back of the shelf, out of reach of the consumer’s current needs, interests and preferences.

Next week I’ll take a look at the key reasons for the superbrands’ struggle and consider what they can do regain relevance in a world where innovation takes place within days, not years.


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