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When Intel debuted the “Intel Inside” branding in 1991, the MBA side of my brain sounded alarms for all the PC makers whose short-sighted greed for co-marketing dollars overcame their common sense.
Ive heard multibillion-dollar estimates for the brand-name equity value that those PC OEMs yielded to what had formerly been a back-door supplier of component parts. According to the 2006 Interbrand survey, the Intel brand is worth about $30 billion and is the fifth most valuable brand in the world (behind Coca-Cola, Microsoft, IBM and GE): Id certainly argue that at least two-thirds of that consumer recognition value is due to 15 years of hearing that signature ringtone, and seeing that Intel Inside logo, at the end of TV ads for any number of big-name PC vendors.
Were seeing another side to the question of component branding in the furor over Sony-built batteries for many makes of laptop PCs. I dont recall ever seeing “Battery by Sony” trumpeted in the ads for Dell or other portable devices, but the makers of those machines have certainly performed an artful piece of marketplace jiu-jitsu in throwing off the blame for their potentially dangerous hardware.
Im thinking that if Sony had spun off a company under a different name to build OEM battery cells, then the laptop makers would find it much harder to get their customers anger redirected toward (hypothetically) “The Lucky Acme Energy Module Company.” But the Sony name has enough recognition (the worlds No. 26 brand) that people find it an acceptable target for their anger and disappointment.
The advent of Web services and hosted software as a service creates a similar set of questions and issues for enterprise application builders. Youre not likely, I wouldnt think, to see “Servers by Amazon” logos on the Web sites of Target or Borders, but the server slowdown at Amazon last month affected all three sites — because the two competitors sites are partially hosted by the Big A. The success of IBM and Sun in positioning themselves as service providers and remote IT hosts is also an assumption of risk: Their own brand names could be irreparably, or at least severely, damaged by an incident that results in numerous well-known brands all pointing a finger of blame in one direction.
When Disney wanted to get into more adult-oriented movie making, it didnt risk the Disney brand in that space. It created the Touchstone brand in 1984 to serve as the platform for its PG and racier content, with sibling company Touchstone Television now producing the decidedly non-G-rated “Desperate Housewives” and “Lost.” Its smart to think of brands as assets and to build them and use them in carefully chosen ways.
In a flat world of international mobility for capital and talent, brand name equity is one of the few assets that cant be readily challenged with essentially zero startup delay by a well-funded competitor who decides to enter a new market. Make careful decisions about what brand identities you build, and how you use them; do your research into whos actually behind the brands you buy, and make sure that accountability is where you want it to be.
Tell me what brands you trust, or avoid, at peter_coffee@ziffdavis.com.
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