What is it all about?
The power of marketing / how to measure value add / data as the basis for strategy and valuation
Three words – one unmistakable brand
I would like to start this blog by inviting you, dear reader, to help me conduct a little experiment. Do you think you can guess a brand from just three little words? Let’s give it a try. Spectacle, risk, can. Are you now thinking of Red Bull and complaining “well, that was a bit too easy”? But was it really that simple? Think about how little information you had. You knew nothing about the industry, and I didn’t tell you the company’s famous slogan. On the basis of just three relatively frequently used words, you identified the unique association to a brand that has clearly achieved something unparalleled in a hard-fought and highly competitive market. And you have “honoured” the marketing department of a company that, for more than two decades, has been implementing one of the most remarkable and successful marketing strategies the world has ever seen.
Razor sharp profile
Last year, Red Bull sold 7.5 billion cans in 171 countries and reported a turnover of more than six billion euros. Of this, industry experts estimate that around one in every three euros the company earns is spent on marketing. As a percentage of revenue, you’d be hard put to find another company that spends as much on marketing as Red Bull. As a percentage of the company’s revenues, Red Bull’s marketing budget is enough to make 99.9% of all laymen, let alone entrepreneurs, cry out: “That can never pay off”. And as if the relative size of the company’s billion-dollar marketing spend wasn’t enough, there’s also the fact that Red Bull’s advertising doesn’t even really advertise the product, it sells a way of life. Everything Red Bull does, from sponsoring athletes and influencers to organising events and producing TV shows and magazines, its marketing is razor-sharp and perfectly tailored to its confident and independent clientele. Red Bull addresses its target consumers (18- to 34-year-olds, sporty, dynamic, liberated, fashion conscious) with emotional messages designed to create an authentic connection between brand and consumers and to establish a loyal community of like-minded people. The result: a razor-sharp brand profile that is second to none.
Capitalising on the company
For me, the most amazing thing about this story is not Red Bull’s success, but the failure of so many counter-examples that immediately spring to mind. More than a century has passed since the term marketing was first coined at U.S. universities, and yet it still seems as if a majority of businesses and business people do not understand what marketing should and can achieve. In Germany, for instance, many people link the birth of marketing to Dr. Oetker’s invention of baking powder in 1893. For the very first time, a company used mass marketing to sell a product that made consumers’ lives easier – but which they had never previously dreamed they couldn’t live without. And, because Dr. Oetker has made sure to continue refining its baking powder and add new product variants, its product line is still going strong today.
In short: Marketing is not simply an investment you make to promote a product. Nor is it a media technique brands use to give sales a direct boost. And no, truly goal-oriented marketing is not just about increasing brand awareness at a high price. It boils down to far more than that. It’s about every single measure that is carried out at any level of the company from the management down with the aim of creating a targeted, consumer-centric, unmistakable brand profile to capitalise on the strengths of the entire company in the long term.
Faux pas with fallout
Speaking of razor-sharp profiles, would you care to repeat the three-word brand experiment we opened with? I’ll even tell you the industry this time around – real estate. Okay. Sustainable, dynamic, affordable. Nothing springs to mind? Okay, here are three more words that are in keeping with the spirit of the times: forward-looking, digital, ecological. Those don’t work either, do they? It’s probably because real estate companies are not as high profile or at least not as distinctive as a soft drinks company. Or it could be because real estate companies don’t deploy such highly targeted marketing campaigns and their executives lacks Red Bull’s clear guidelines on direction, value orientation and positioning. In an ever more competitive environment, where customers, partners and investors want to know precisely who they are potentially going to be doing business with and how one company differs from its competitors, this could well be described as a major faux pas. If a brand doesn’t clearly define its position, it essentially allows outsiders to decide for themselves what the brand stands for. In effect, the brand creates a vacuum around its own values – a vacuum that others rush to fill.
Data-based & measurable
As competition increases, and especially in times of crisis that make consumers more critical and value-oriented than ever before, marketing becomes indispensable. Marketing is brand work, the sum of the (leadership) measures that define, position and differentiate a company’s brand. In this sense, data-based marketing is essential. On the one hand, it is supported by precisely analysed data on the market and internal and external brand perceptions and, on the other, it allows brands to control the impact of their brand work. The tools for interpreting data and evaluating the success of marketing campaigns are available to all in this age of Big Data. At Red Bull – to return to the beginning of this blog – there is no arithmetical doubt about the added value of branding. The company has always analysed relevant data and exploited the full power of its internal findings, which include analyses of users’ website behaviour and their engagement with its digital campaigns, as well as external market research. Relevant data is also gathered through regular customer surveys, field tests and focus groups, and the company ensures that its consumer profile is constantly updated. In concert, this all ensures that the company’s marketing remains relevant and effective at all times. The same can also be achieved in the real estate industry – and this is one of our greatest ambitions as the European Real Estate Brand Institute.
With branded regards
Your Harald Steiner