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Inside the branding industry

Inside the branding industry
In this presentation, we go inside the branding industry. It’s a big business, employing, we reckon, over 1.2 million people. As we go through this guided tour of the industry, it’s worth thinking, what excites you about the industry? Where would you start? Where would you want to go if you were working in the branding business?
Basically, the industry has two halves– brand owners, the big companies that own the brands we buy, and the brand agencies, the specialised agencies that advise and help them. And we’ll look at each of those two halves starting with the brand owners.
There’s a whole range of different kinds of brand-owning organisations, those focused on consumers, usually called B2C, Business to Consumer businesses; those focused on selling things to other businesses, B2B, that’s Business to Business; those focused primarily on investors. They’re relatively invisible to most of us, but businesses like Berkshire Hathaway, or Fast Retailing, Inditex own other brands that we will recognise. And then, finally, those focused on supporters and citizens, often not-for-profits organisations.
And many of these big brand owners own multiple brands. They own lots of brands, and some famous brands are here on this slide. And I wonder if you have any idea who owns them, because it’s not so obvious to consumers who’s behind most of the brands that we buy. The answers are coming up on the next slide.
Dove belongs to Unilever, Cadbury to Mondelez International, Ben & Jerry’s, another Unilever brand. Braun belongs to Procter & Gamble, Ariel, another Procter & Gamble brand, and Kenco is another Mondelez International brand.
Within these organisations there’s a job title called brand manager, which goes back to 1931. Procter & Gamble, realising they needed to manage their different brands, not least so they didn’t compete with each other, and established this new role, this new job, the brand manager. And the idea spread quickly so that by 1967, 84% of the large, American, consumer goods companies had one or more brand managers.
And these are the sorts of things that brand managers in big companies do. There’s the basic brand management role. There’s strategy, thinking long term about where the brand is doing. Media planning– that’s buying advertising space. Advertising and communications itself– that’s usually directing the work of advertising and other agencies. Brand sponsorship and retail communication, thinking about how the brand comes across in shops.
Where do your skills work best?
So where does all this brand activity fit in an organisation? Well, most brand managers work in the company’s marketing department. But managing a brand actually depends on managing the whole of the customer’s experience, which depends on people outside the marketing department, operations people, customer service people, HR people, R&D people. So actually, managing a brand means influencing colleagues who are not in your department, colleagues right across the organisation.
And to help make this happen, some companies have created a new role, which is a bigger role than marketing, which spreads across the organisation, called the chief brand officer. Here are three of them.
So here are some of the things that are changing in the world of brand owners. Brand management being seen as part of marketing to be beyond marketing, not just policing the brand, but also coaching colleagues elsewhere in the organisation, not just about communications, but about the whole customer experience. And very interestingly, it used to be mainly to do with creative judgement. But now data plays a huge role. Technology plays a very, very big part in brand management, and brand managers need very strong data analytic skills.
Now, the other half of the brand industry, the brand agencies. And actually, there are four big groups dominating the market. And again, these are names that are not familiar to most ordinary people. They’re the names behind all of the big agencies– Omnicom, IPG, WPP, and Publicis. And there is a challenge here, which is, as these organisations grow in size, they could start to lose their creativity. So for all of these organisations, there’s a very delicate task of managing creativity in their agencies.
And here are some of the big four’s biggest clients. And you can see how if you were a really big organisation, like Vodafone let’s say, it’s very helpful to have a big agency group working alongside you, not least because those agency groups can do nearly all of the things that you need. So if you look at WPP, for instance, which is the biggest, 170,000 people, they can do your advertising for you. They’ve got brand consultancies. They’ve got market research companies. They’ve got PR agencies, and they’ve got digital agencies. So virtually everything you need could come from one group if you wanted to play it that way.
And here’s what things look like inside a typical brand agency. And you can see here that the people in an agency tend to be divided into four groups, creative people– that’s the purple column there; the strategy people or the planners, the yellow column; the accounts people, client services, that’s that pink column; and then the people who sell the work of the agency itself to its clients. That’s the marketing director and so on. And the people who look after the business– finance, accounting, human resources, and so on.
Beyond the big four, there are still lots and lots of independent agencies of various different kinds, often shading into each other– advertising, experience service design, brand consultancy design-led, brand strategy, innovation, and business strategy.
And everybody’s invading each other’s space. All of those people have got brand experts and seek to advise companies on brand. So as you plan your career, where will you fit in? And perhaps you’ll pioneer something entirely new, a new kind of brand consultant.
And what’s changing in the world of the brand agencies? Well, we’ve seen that lots of independent agencies are merging into the four big groups. In the old days, it was advertising agencies that dominated the industry. But now media agencies– that’s people who buy advertising space– and digital agencies are on the rise. It used to be that television advertising was top of the tree, and it’s still very important. But now online advertising, of course, is the part of the world that’s rising fastest. And again, this is a world that used to be primarily creative and still is, but is increasingly now about data.
And that’s one of the reasons that media agencies that have tonnes of data about consumers and how consumers experience brand communication, why they are on the rise. So it’s a world that’s changing rapidly, too.

In this video slideshow, you’ll explore the branding industry – both the companies that own brands and the agencies that help create and build brands.

(Since we made this video, Steve Easterbrook has become CEO of McDonald’s.)

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