A History of Marketing / Episode 24
What does it take to build a brand that endures? Few people on earth can answer that question better than David Aaker.
David Aaker, AKA the "Father of Modern Branding," is back to mark the launch of the 2nd edition Aaker on Branding. This book distills decades of Aaker’s work, covering brand strategy, portfolio management and execution. Our conversation is a great entry point.
My last interview with David Aaker is the most popular podcast episode of “A History of Marketing” in terms of downloads and streams. I’ll be honest: I think this one is even better.
Listen to the podcast: Spotify / Apple Podcasts / YouTube Podcasts
We cover a lot of ground in this episode, including:
New “5B’s of Branding” framework for brand-led growth
How Aaker’s pioneering work on brand equity elevated the role of marketing
A case study of Dove’s Real Beauty campaign
And more
Now here’s my conversation with David Aaker.
Note: I use AI to transcribe the audio of my conversations. I review the output but it’s possible there are errors I missed. Parts of this transcript have been edited for clarity.
Andrew Mitrak: David Aaker, welcome back to A History of Marketing.
David Aaker: Yes, as we were discussing offline, that this podcast was one of the most popular that we shared in the last four or five years.
Andrew Mitrak: Right back at you. This first episode that I published with you was the most popular episode that I've shared to date on this podcast as far as measuring downloads and streams. There's some magic, some little spark. And so I'm hoping we can go even bigger with the sequel.
I'm just grateful to speak with you again and also speak to the new edition of Aaker on Branding, which I read, and I'm really excited to dive into.
David Aaker: Good, good. Thanks for having me.
The Enduring Influence of Philip Kotler
Andrew Mitrak: Congratulations on the second edition of your book, Aaker on Branding. I actually wanted to start right at the end of the book and jump to the acknowledgments section. And you write in the acknowledgments section, "A special thanks to my role model, Philip Kotler."
And I'm sure a lot of marketers, your readers, former students see you as a role model. And when I was reading this, I was like, "Oh wow, even David Aaker has, has a role model." So, could you share what makes Philip Kotler a role model for you?
David Aaker: What I'm so impressed with Phil is that he has really introduced whole new concepts and perceptions of marketing. I mean, he came up with social marketing. He's done so much. He came up with the idea of a customer journey. And then he has turned to larger issues of the economy and our society and so on. And he's got a dozen or more books on that subject. And in those areas, as in all his areas, he's very good at conceptualizing, providing frameworks, overall frameworks, and helped people. And of course, that his pivotal work was the marketing management textbook that he did something like 20 editions ago.
Jeez, he's just such a driving force. And then he's been such a personal friend. When I was a young professor at Berkeley, just a couple of years out of my PhD program at Stanford, Isat down with Phil, and he was a giant at that time. And he would listen to my discussion. I was a statistician. I was doing the most incredibly boring stuff. And he would sit and ask me about my material, and he was taking notes. He took notes. I was two years out. I wrote six articles on the stochastic model of consumer behavior. It was awful. No impact, no interest. And Philip Kotler was taking notes about it. He was always so curious about that.
Then 11 years ago, in my first Aaker on Branding version, he labeled me as "The Father of Modern Branding." Then it stuck, and it's all Phil.
He's just such a generous guy and he's such a creative, curious guy.
Andrew Mitrak: Wow, that's great. I wanted to start with Phil Kotler because he was the person who actually introduced us. And as you mentioned, I had a similar interaction. I'm a very small little peon compared to a person of his stature. But when I spoke with him, he really did seemingly kind of just treat me as an equal and didn't talk down to me, didn't condescend. And he was nice enough to introduce me to colleagues like yourself to also interview. So he's, he's been such an early supporter of this, this podcast that I thought I would start there.
As you mentioned, it was kind of tying back to Aaker on Branding. It was in your first edition that was published in 2014 that Kotler called you the "Father of Modern Branding." And it stuck. And can you just share more about your reaction to how that happened and what it meant to you to have this title bestowed upon you?
David Aaker: I've written 18 books now, and I think most of them have Phil as, done an endorsement for me.
If you look at the back cover of almost all my books, there'll be a comment by Phil Kotler. And he's just so generous with that. And that was his comment on this book.
Andrew Mitrak: So one of the things that also reminds me, coming back to ideas around branding, is that a big part of brands is that they don't just reflect what you say about yourself, but brands are what other people say about you. And your brand being "The Father of Modern Branding," it's something that you don't bestow upon yourself or wouldn't, if you just called yourself that, it wouldn't have the same weight as when somebody else calls you that.
David Aaker: Yeah, it would be really tacky to call yourself that. (Laughs)
Andrew Mitrak: Yeah. So 2014 was the first edition of Aaker on Branding. And your new edition is just coming out now in 2024. I guess the obvious question is, what's changed between now and then? Why revisit this book and what are the kind of the major updates to the new edition?
What's New in the Second Edition of "Aaker on Branding"?
David Aaker: Well, there's several motivations, but the main one was that a lot of my work and thinking since then has been engaged in applying branding to different areas of strategy and marketing. And I've written three books since then: the Creating Signature Stories, the Owning Game-Changing Subcategories, which is about branding and disruptive innovation, and The Pursuit of Purpose-Driven Branding, which is about signature social programs.
And I've written about 150 blog posts. I've written about six or eight articles. And so, that needed to be incorporated because the whole point of the book is to kind of summarize my writing so you don't have to read nine books. But, the second reason is that really the world has changed. And there are at least three major challenges, three or four major challenges. And for each challenge represents a real opportunity for branders.
And finally, I introduced what I call the Five Bs. And I did that as a way to make people understand the real breadth and depth of branding and not to slip back into this it's an image and awareness problem.
The Five Branding Bs Explained
Andrew Mitrak: I want to ask you about these five branding Bs. So the B does stand for brand in all of them, but I think what it speaks to, something you said in our last conversation is that you don't really talk about brands because "brand" alone is, is not descriptive enough, or it doesn't have, have enough. So you kind of have to have “brand” attached. So there's brand equity, brand relevance, brand image, brand loyalty, and brand portfolio. Those are sort of the five branding Bs that are discussed in this book. And what was the sort of the idea behind having, introducing this concept in, in Aaker on Branding?
David Aaker: I don't want people to sort of short-circuit branding and think again, back in the old days when it was awareness and image, that they're kind of done. It's something that can be delegated. And I want to remind them of the scope of it. And so I thought that that sort of cute device might be a way to get people to, to make sure that they're thinking more broadly.
It starts with the three pillars of brand equity, which are brand relevance. I said brand awareness is not enough. You need to have brand awareness in the context you're interested in. So if you make electric cars, it doesn't help if you have high awareness about your ability to make hybrid cars. It's not enough to know about the brand; it has to be credible. And that means there has to be no reason not to buy the brand. You have to think it's capable of doing what it promises. So relevance for me has become a really important topic. I talk about winning the relevance battle instead of the brand preference battle.
And then brand image. What I want to make sure of is that people don't focus in on functional benefits, but they realize that any association that can contribute to the instincts about a brand, it can contribute to the relationship with a brand, is important.
And the third is brand loyalty. Now, brand loyalty is what I used to attempt to change people's view of branding way back 30 years ago when people were indeed thinking of brand awareness and image, you could delegate it to middle management, you could delegate it to an agency. But when you introduce brand loyalty, it's so pivotal because it means that branding is involved in all aspects of the brand touching the customer. It's involved in product development, it's involved in the consumer journey, and it's involved in consumer insights, involved in segmentation. It's a strategic variable. And it's an asset.
Brand as an asset is really huge. And that's what got marketing a seat at the executive table, CMOs, VPs of marketing, where they had heretofore been relegated to middle management. And so, so brand loyalty is, is just so important in conceiving of a brand and of implementing a brand.
The Power of Synthesizing Brand Concepts
Andrew Mitrak: What I love about this book is, as, as you're saying, you just packed in so much there. And we're going to come back and dive more into a lot of the points you just raised and the examples you talked about. But what I love about this book at a high level is that, like you were saying, it takes a lot of the concepts you've written about in other books, packs them all into one. And so all of these pillars you've discussed, they've been books in themselves, and we could spend full podcast episodes, multiple of them, just diving into any one of these examples. But this kind of gives a great introductory view to so many of your ideas.
At the heart of a lot of these ideas is, is really brand equity and what they, and brand as an asset, which is sort of a, a pillar of your career and contribution to the field of marketing. And when, when you spoke about brand equity and the introduction of it, and how it changed everything on the last podcast, this was like a new idea to me. I hadn't quite done my research on this. And I was almost skeptical, like, "Oh, that was when CMOs became a thing? and that's when branding really got elevated? Is it when brand equity became an idea?"
And I'm going to share in the video version of this podcast in the blog that goes with it, this Ngram view where it looks at the frequency of word usage. And right around the time you publish, you start writing about brand equity, the mentions of brands (and branding) just shoot up, like it skyrockets.
David Aaker: Really? That's interesting. I didn't know that.
Andrew Mitrak: It's really interesting. Right around this time that you see the frequency of the word "brand" and "branding" is just jumps. It's like it's, it exists, but it's, it's not nearly, like right around the early 90s through the, through the 2000s, it jumps up. And then also, I spoke with Sergio Zyman, who was the first CMO of Coca-Cola, and he's, according to him, the first CMO in history. And it times out with what you were saying. He became CMO in the early 90s at Coca-Cola and got a seat at the table all around branding. It was one of those things where when you said it, I hadn't fully digested the implications of it. And since we've had a chance to talk and I've been able to reflect and kind of learn more about marketing history, it's like, wow, this really was a big, impactful event.
David Aaker: Yeah, Sergio Zyman, wow, a name from the past. He was a very visible and energetic and kind of controversial CMO, but he had left his impact.
Andrew Mitrak: He did.
The Historical Context of Brand Equity's Rise
Andrew Mitrak: So, do you have any other reflections on the historical importance of brand equity and kind of this, this time in history?
David Aaker: In writing this book, I was reflecting on that, and I sort of connected the evolution of brand equity to what had been going on in the 1980s. The 1980s was characterized by the, the strategic model of the day was driven by the Boston Consulting Group's market share growth matrix. It was developed actually in 1971 in a famous article. But that was so influential. And what it said was market share is a driver, driver of success. And so, if you have high market share, that means you have scale economies, it means you have experience economies. And that means that you're going to have lower costs. That means you are, are going to can, can wipe the floor with competitors. And they had all this analytical data to prove that large market share companies were more profitable than small market share companies if you control for things.
People would do anything to increase market share. They would buy market share with promotions, they would put out products that were cheaper, just to gain market share and to get a lower price. And, they destroyed brands doing that. And, but at the same time, in the mid-80s, scanner data came out. So you had the thing on every package, you could scan it. Gosh, you think that's what, 40 years old or something. But when that came out, people were so excited because now marketing could be done scientifically. No longer was it sort of rely on judgment and instinct and creativity. It was science. So now you could do experiments where you could change the appeal of the advertising, you can change the advertising weight, and you could see exactly what happened the next day. You could see what people were buying the next week, accurately, totally, absolutely accurately. It was the scientific world.
Well, what they learned was that the only thing that moved the needle was price-off promotions. So everybody rushed into price-off promotions, which destroyed brands. Kraft took two years to recover from this debacle. And what they learned was they did not achieve growth, and the profits went down.
The growth-share matrix and the scanner data with experience made people really receptive to another route. And that other route came in the form of brand equity.
I was at the right place at the right time. At that point, I was very ill-defined as a brand myself. I was all over the map. I came out as a statistician, I wrote a market research book, I did all kinds of analytical statistical studies. Then I wrote an advertising book. I was really interested in advertising. And then I got into business strategy, wrote a business strategy book, market strategic management that was a textbook for that course. And so I was extremely ill-defined.
Then came this brand equity thing, and people were really intrigued by it. The Marketing Science Institute, the support of academics, made that, elevated to the number one research priority. But nobody could agree what it was. Most people thought it was awareness and image.
I wrote the book, Managing Brand Equity, in which I defined it to include brand loyalty. And then I also in that book put out the 15 ways that brand equity helps a business. That's when it took off. And the next book, Building Strong Brands, was how to do it. It just was a lot of luck. I stumbled into branding, and from then on, that's been my purpose in life.
The Role of Marketing Science Institute and Academic Collaboration
Andrew Mitrak: You mentioned the Marketing Science Institute, and I actually just interviewed a former president of MSI. But what was so interesting to learn about it, so the MSI is this institute that kind of gathers academics and then marketing practitioners. And there was this conference, and I think it was the 1988 one, where the topic of brand equity was elevated.
And this is also an interesting commonality between you and Philip Kotler, by the way, is that brand equity was not something you invented, but you caught on to the idea and you brought it out of this niche, kind of siloed academic conference and brought it to the masses and made it so that the entire business community could make use of this and take action based on this idea and change things.
Similarly, Philip Kotler, a lot of people might even think he invented the four Ps, which, which he didn't, but he took this, again, this, this niche, this idea that was sort of in academia, and he made it applicable to marketing managers and actionable. Recognizing that there's an interesting idea and spreading it in a way where the masses can more broadly use it and digest it and understand it and that it's a model that they can apply, I think is a really useful tool that, like identifying a good idea and spreading it. Like, do you see that as, as something in common, this, this idea of identifying the idea and evangelizing it to a broader community of marketers?
David Aaker: I was told just the other day that by somebody that's a big contributor to branding, that I was able to form frameworks and structures that are broad and to position the totality of it and not just make a contribution within one part. That was Bernd Schmitt of Columbia, who's done a lot of work in experiential marketing and in the big think, he calls it. He noted that my work was the work that really provides the broader frameworks. And I think that's true for Phil too. You can take a concept and put a framework on it and position it within marketing.
Case Study: Dove’s Real Beauty Campaign
Andrew Mitrak: I want to come back to Aaker on Branding and the Five Bs in the book and also try to weave in a little bit of a historical lens and a case study. And one of the examples that you mentioned earlier is Dove. And Dove features really prominently in the book. Unilever owns Dove and introduced Dove in the 1950s. The Dove of the 1950s and the Dove today, there's been a big evolution to that brand. So I'm wondering if maybe we could talk about them in the context of the Five Bs, and if you could tell the story of Dove's evolution as a brand and how Unilever has managed that brand.
David Aaker: The Dove product came out of some research that was done in the Second World War on how to dress wounds. You, you need to keep them moisturized. And so they took that moisturizer idea, and its patent, in 1952, developed a soap around it. And they didn't call it a soap, they called it a beauty bar. And it was a bar with a moisturizer. Talk about disruptive innovation, talk about really being differentiated. They were. And it was a very successful product. And they built on that, always with this moisturizer idea. And they would have ads where they would pour cream into a bar of soap, and that was the moisturizer entered in, the moisturizer cream. So they had a very unique soap, very differentiated soap.
And flash forward to 50 years, in 2004, they had extended that brand to other products, like shampoo and deodorant and body wash. And so it's hard to talk about moisturizer if you make a shampoo. It's not very relevant. To boot, they lost the patent, the patent ran out, the moisturizer. So they had competitors that were coming out with moisturizers too. And so they really needed a new start.
And so they were doing some research on their market, the women that bought their soap. And they, I don't know how they did this, but they stumbled onto the idea that women really resent this beauty standard. You have to be thin and young to be beautiful. And they did some research and they found that only 3% of the world's women thought they were beautiful themselves. Only 3%. And this artificial standard was out there and it was so resented. So they took on the task of changing that. Almost every year they would do a, a some sort of visual demonstration that this was a phony standard.
So one time, for example, they had a person that drew faces from descriptions. And they did it from the description of a woman, and then a second-hand description of a woman being described by somebody else. And it turned out the sketch based on the woman's own self-description was very unattractive next to the other one. So their tagline was, "You're more beautiful than you think."
Incidentally, taglines are really underused, that's another topic. But anyway, they're really good at it. And, that ad, which came out in 2013, was the most viral ad ever up to that date. Can you imagine? The most viral ad ever. I mean, this stuff really struck a chord.
They had campaigns like that that were every other year they had one time they had people go to a store and there were two doors. One is the beautiful door and the other is the plain door. and a lot of people would go through the plain door because they didn't think they were beautiful. They did such clever stuff. and of course the subject is ripe for creativity.
And then they developed, two years after they developed Real Beauty, they developed self-esteem programs for girls. And they, that tended to involve a lot of people and in teaching or mentoring girls, and they had a lot of support for that. They developed workshops, they developed agendas, they developed plays and so on. And the whole thing actually changed the lives of hundreds of millions of women, hundreds of millions. And it drove energy and visibility and liking into a brand that was still making just horribly mundane products.
And by the way, one of the things people worry about, and justifiably so, is that these are regarded cynically as, "Oh, you're just out to sell me something, and you only, you don't really care about this, you just want to get some leg up for your brand," which is absolutely true. But nobody says that about Dove. Nobody. It never comes up. And it's because they've made a long-term commitment, it's because they're passionate, it's because they're knowledgeable, they're thought leaders, it's because they're so successful.
Analyzing Dove through Aaker’s 5 Bs of Branding
Andrew Mitrak: Yeah, there's so much in this example. The videos, first off, I watched some prior to this interview. They hold up so well. It's hard to not have your eyes well with tears as you're watching this. And they touch on, there's this emotional element to them. There's also this almost scientific element to it. It seems like a psychology case study. It seems almost like a scientific A/B test of one person describing.
David Aaker: Oh, it is. It is. Most of their things are real experiments.
Andrew Mitrak: Yeah, it really is. And it kind of gives it this another level of credibility where it's not just tearing at your heartstrings on an emotional level, but there's, there seems to be science and research and a surprising idea behind it, and it's all executed to perfection.
If you tie these sort of back to your, your Five Branding Bs, there's so much to this as well. Dove was part of a brand portfolio. And you said how they had extended themselves into product lines that were a little less relevant. So there's the brand relevance idea that shampoo wise is, is not as relevant when it comes to moisturizing skin. There's the image, brand image, aligning themselves to this idea of real beauty. And that kind of pays off into loyalty by, by the longevity of them running this campaign for decades. You mentioned how they introduced this in 2004, but that video went viral nine years later in 2013.
David Aaker: The video was made nine years later. It was just one of a, of a, of a dozen and a half things, such things.
Andrew Mitrak: That the video was made nine years later, but that tells you they were working on this campaign and this idea and committed to this over the long term.
David Aaker: Yes.
Andrew Mitrak: All of that ladders up into Dove and Unilever accruing “brand equity.” So it has all the Five Bs, it seems like, working together with Dove.
David Aaker: Now, in the case of Dove, moisturizer is a terrific example of a branded differentiator. It was really a brand in its own right. And real beauty as is the self-esteem program, are brands that are attached to them, and they're terrific branded energizers and branded differentiators.
Brand Decisions: Objective Data vs. Subjective Taste
Andrew Mitrak: When a brand like this is thinking of making this bet, say like Dove making this, this Real Beauty campaign bet, I don't know if there's any quantitative data that I would have in advance as a marketer or as an executive kind of buying into this campaign that would give me high confidence this would work. It seems like at some extent, like there's, there's creativity and there's instinct and there's taste, and it's the way that the campaign is executed. And I'm wondering how much of brand building can sort of be planned based on empirical data versus being a matter of gut instinct and taste?
David Aaker: Well, I've always said that, that you need to test things and so forth. But the really, really great ideas, you don't even have to test. Some ideas just click and they're so powerful, so logical, so appealing that you could test them, but you know what's going to happen, it's going to work. So that's a nice place to be. But it is good science to test in the laboratory or in the field of a program.
One of the classic experimental designs is before-after design. So you look at the situation before, and then you do a treatment and then you look at it after. So you could look at what Dove was, what its sales level was, what its attitude toward it, the loyalty level and so on. And then you introduce the Real Beauty program, and then the next year you can look at Dove again. And that's a nice experiment because you've controlled for a lot of things. It's the same product, it's the same company, it's the same kind of customers. All that's the same. And so you do the treatment and, so you can be pretty sure you're looking at the impact of the treatment. And then you can do the same thing from 2005 to 2008 to 2010 and get more information. Then if you do it on a pilot basis or in the laboratory, then usually you can run a similar experiment but a more controlled one.
The Central Tension: Short-Term Results vs. Long-Term Brand Building
Andrew Mitrak: When I think of your body of work and brand equity and a lot of the ideas in Aaker on Branding, I think there's a tension around you advocating for long-term thinking against all of these short-term tactics. And a couple of quotes here:
"At the center is a drive to build strategic brand assets that will provide the platforms for future success as a counterweight to the dominance of short-term financials."
And another quote in this book is that,
"A brand is an asset with long-term value as an enabler of strategies, and the effort directed at short-term results should support or at least avoid damaging the brand."
And this, this short-term versus long-term thing is something I encounter every day as a marketer. Every company I've ever joined, there's some like "close the gap" initiative and "hit this quarter's sales target" or "meet some growth milestone by a certain date." And in your role as an author, as a consultant, as, as a marketer, how do you advise people to manage this tension between short-term results and long-term thinking?
David Aaker: Well, when I was writing the book, it came to me that this illusion that the brand is an asset thing has been growing for 30 years and we've got CMOs and Vice President of Marketing in place, that the battle is over. Turns out the battle is not over. Short-termism is just always there because it's driven by the fact that that's the way people are evaluated in business and that's the way executives are evaluated.
And it's very easy to do that but it's very difficult to measure long-term results because a lot of it is conceptual, it's not data-driven. So that it raises its head. And it's now come up with its own label. They call it demand marketing or performance marketing instead of short-term results. So it's got a more respectable label.
And my take is that, it's fine to have short-term programs, demand marketing programs, but if you're in a B2B, you have to create leads and so on. But it's important to do it in such a way that it doesn't damage the brand. Hopefully, you do it in a way that enhances the brand by leveraging some of the brand assets. But at least you should do it so it's neutral to the brand, so that people are comfortable. It's not so off-brand that they say, "They're doing that?"
You know, you have Toyota dealers talking about the sale of the month or something, and you just cringe, and they don't have any control over that. If you do have control over it, you want to make sure it doesn't damage and at least it's neutral. That's one thing. The second thing is, what you want is brand programs that are so powerful that they create short-term results as well as long-term results. So there shouldn't be any controversy then.
You look at the Dove program, that created enormous immediate sales every time they ran these programs.
Andrew Mitrak: Funny enough, you mentioned demand, that's actually my full-time job title. I'm not a podcaster full-time, this is a hobby. But that's a funny thing because it's something I identify with.
I'd like to do the campaigns that accrue long-term value, but sometimes you're pressured to get the short term results.
But if I'm purely being selfish and I want to get promoted this year, there's a lot of incentive to focus on those quick wins. And even if there's zero or even negative impact on the brand, because if I'm purely being selfish and just want to climb the corporate ladder, there's this incentives problem where the thing that I'm measured on is in the near term. The long-term thing, I'll be promoted by the time they figure out that was bad for the brand, right? And do you think that this is some of the tension and how can companies need to fight against this?
David Aaker: Oh, it's very much part of the tension. And it's, it's healthy to be decentralized. It's healthy to have these kind of objectives, but it can be really damaging. So what, what you need is somebody that is at a senior level that has the authority to take a big picture and say that, to make sure the brand isn't damaged. And you have to achieve your objectives in another way. And Prophet has done a study that indicates that the most successful companies have these two arms work together. And if that's done, then the problem is reduced.
Andrew Mitrak: It strikes me that for most general life advice, long-term thinking is a good thing. If I could eat that donut today, I'll be really happy at this moment, but if I eat the salad, I'll be better in the long term. And we all know that's the right thing to do with most things. It's just something that maybe doesn't click or people have to be reminded of it when it comes to branding, that investing in, in the things that accrue long-term value, brand equity, is better than this short-term thinking.
David Aaker: Yes.
Brand's Role in Disruptive Innovation
Andrew Mitrak: I want to transition and ask you about the role between brand and brand equity and disruptive innovation, because I think this is a really interesting idea of how those two things interact with each other.
David Aaker: Yeah, I mentioned that one of the challenges that I see that's that it has always existed, but it's magnified manyfold. Disruptive innovation has always been the route to growth. "My brand is better than your brand" marketing almost never creates growth. But what's happened is that these disruptions are more frequent, they scale faster, and they have more impact on the marketplace than ever before.
And what is also true is that branding has, has often been underused or even forgotten in the process because the focus is so much on creating the disruption and putting it in the marketplace, that branding is considered a tactical thing we'll worry about later on. So they want to get the disruption right and they want to get the resources, financial or otherwise, to make it happen. That's their priorities. And they usually don't even have access to marketing talent, or if they do, they don't use it properly.
So the opportunity is for marketing to become a player in disruptive innovation, to help them develop what I call the "must-haves" that define the disruption and through their consumer insight and their being close to the market. And secondly, to position the disruption, to position what I call the new subcategory that emerges. And that's a marketing task. It's different than they've done before, but it's a marketing task they're good at. But you have to position the subcategory because the subcategory has to win. And that's the underbase of the strategy.
And third, they have to build barriers. And you do that by scaling fast. You do that by creating a loyal group of customers, that's a branding problem in part. And you do it by branding the innovations. And because that will prevent people from copying you because they won't have access to the brand.
Andrew Mitrak: Do you see it as brand plays a role on both sides?With disruptive innovation, there's the incumbent, and then there's the emerging startup that is going to disrupt the incumbent.
And it seems like you're speaking to how the disruptor should also embrace investments in branding as a vector for disrupting the incumbent. But also the incumbent could invest in brands as a preventive measure to disruption.
David Aaker: Yes. I outline the alternatives for the incumbents in the book. One alternative is to leapfrog and to create an even more superior must-have that will trump the existing one. So you fight the relevance battle by creating a super subcategory. The second thing is to do what Kevin Keller has talked about, develop a parity brand. So you develop some, some capability in that must-have dimension, and you don't need to claim it's better. You don't even have to claim it's as good. You just claim it's good enough. It's good enough so you shouldn't use this criteria to not buy our brand.
So that's the parity option. The third option is to ignore it. And so this guy has got a thing. I think it's going to make my whole thing I'm competing in irrelevant in the future. I'll eventually close down. But in the meantime, I'm going to make a ton of money because I'm not going to invest in this thing. I'm going to milk my customer base, I'm going to milk their momentum. And I'm not going to have to invest in it. I'm going to make a ton of money and I'm going to use that money to create some disruptive innovation elsewhere. And maybe they're wrong that this is going to happen overnight.
The fourth strategy is to say, "It's been a good run, I'm leaving." There's a time that comes that you're strategically better off putting money into growth areas than you are trying to keep alive something that's dormant.
Andrew Mitrak: There are so many disruptive innovation examples we could cover. I think one that's struck me is Netflix. You, you do write about Netflix in the book and who they're disrupting is Blockbuster. And Blockbuster at one point had a pretty good brand, right? Like it was a place where people would go, it was pretty iconic colors and image, you would see, you'd see them. But they kind of got greedy with late fees. And Netflix disrupted them on a different vector, which is, is the DVD, which was small enough that could be shipped by mail and at a relatively low cost. And their differentiator was "no late fees ever." And then also they had this really long, long tail of their back catalog of more obscure titles that wouldn't make sense for Blockbuster to stock, but Netflix in a warehouse could. And so they found different vectors to, to compete with Blockbuster. And of course, that's even before they got into streaming, which is a whole other angle. That was them leapfrogging as well.
David Aaker: Well, that's what I was going to say. Netflix is one of the rare, rare companies that are able to do a disruptive innovation against themselves.
I mean, most companies just cannot bring themselves to do that because they're making a lot of money doing what they're doing, and they're very good at what they're doing, what they're, and they're not, they're not going to be good at anything else. And so they resist it. But Netflix is a rare company that was able to do that.
The Underrated Power of Taglines and Jingles
Andrew Mitrak: Last time we talked, we talked about the disappearance of taglines and how they're less and less common nowadays. And I wanted to ask you this time about a fun one: jingles.
Jingles are virtually non-existent now, and you haven't heard a jingle in a long time, in a long time. You know, they were a huge part of advertising and of a brand in the, in the 50s and 60s. They lingered around to some extent in the 80s and 90s, and now they're virtually non-existent.
To come back to Netflix, all you get is a little audio "dung dung."
They, they do a little sound, not a jingle at all.
So it's like they've gotten more and more compressed and maybe there's some branded audio element to them, but not very much. So I'm just wondering, do you have any, any thoughts on jingles and why they're virtually non-existent today?
David Aaker: There used to be a saying in advertising, "If you have nothing to say, sing it."
Yeah, it's a really interesting question because jingles are really important. They catch in your mind. They're, it's a way to make a tagline come alive. Very interesting question. I suspect that as things evolve, there'll be people here and there that will figure out a way to make a jingle relevant and work again. But I'll just say a thing about taglines. I got involved in the political campaign of the year. I was involved by giving advice that nobody listened to, but nevertheless, I was into it. And I was so frustrated by the fact that these people are really good at owning the news of the day. Something would happen in the morning, they could use AI or something, come out with an ad in the afternoon, put it in the marketplace, and it would be really topical and they would win the day. But the net result was a barrage of ad hoc, ill-focused ads with no message that you could remember. What cried out to me as you needed a tagline and you need a visual symbol and hopefully both.
It's not easy to create a great tagline, but you always ought to try. And you should have a set of three or four campaigns around three or four issues with taglines for each. And it just seems so obvious to me. They wasted so much money. And so I wrote a chapter in the new book called "Taglines and Symbols" to let people know why those things are so important and what they can do.
Final Thoughts and Future Learnings
Andrew Mitrak: You inspired me. It strikes me that this podcast– I don't have a tagline, I don't have any symbols, I don't have a jingle, so I got to get to work on some of those things.
David Aaker: Well, yeah, but you have a good title.
Andrew Mitrak: Thanks. (laughs)
David Aaker: And the name is kind of like a tagline and a symbol. If you get the name right, and that's not so easy to do because a name can lock you in and so on. I mean, if they called it Amazonbooks.com, which people thought was the intelligent thing to do back then, they would not be where they are now.
Andrew Mitrak: Yeah, it's funny. On the title, I had the title before I had the podcast. I kind of thought of it. I'm like, "Does that exist?" It doesn't. I better do it.
David Aaker: Yeah, it's, it's really unique. There's nobody else that looks at things from an historical point of view, and it's so useful.
Andrew Mitrak: Thanks. And to get guests like yourself, like Philip Kotler, who doesn't want to be part of history? Right? If it was, if it was about me like it was “the Andrew Mitrak Show”, which nobody cares about, right?
You wouldn't want to bother with that. But if it's, "Oh, I'm worthy of history." This is clearly about elevating marketing to hopefully a higher stature, and who wouldn't want to be a part of that?
David Aaker: And there's so much to be learned from experiences that could be 30, 40, 50, 100 years old. A lot of learnings there. And also it's really interesting to know the process by which something evolved because that's a, that's a great teaching for what's going on today.
Andrew Mitrak: Yeah, for sure. There's this Charlie Munger quote that I like that goes, “There's no better teacher than history in determining the future,” and that… “There are answers worth billions of dollars in a $30 history book.” I've always enjoyed his writings.
Why do we do the things we do? How did marketing get to where it is? That I'm really grateful to be exploring with experts like you on this show. So I've really enjoyed your time and your expertise, and thanks for coming back for a second episode. I've really enjoyed this conversation.
David Aaker: Yeah, I want to mention, Andrew, about my new book. I'm going to have 10 learnings, one a week, every Wednesday in my blog on LinkedIn. And one of them, the third one will be the history of brand equity that we discussed.
Andrew Mitrak: That's amazing. If listeners aren't already following on LinkedIn, they absolutely should be. It's such a great resource to find continuous inspiration and insights and lessons as well. Also, listeners should definitely purchase the new, second edition of Aaker on Branding. It's a great read and follow David Aaker on your blog at Prophet and also on LinkedIn as well. All really great resources. So, thanks again, David.
David Aaker: Thank you, Andrew, for having me. It's always fun.
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