Ad agencies make you spend too much for the status quo

Tom Dougherty, CEO – Stealing Share

6 April 2011

The mantra for ad agencies – Keep the billing coming

It never ceases to amaze me that so many companies spend so much time, money and resources to change – only to remain in the status quo. This happens so frequently that most of us hardly seem to notice the “change” at all. Ironically, what drives the desire for change within most companies is the need to get noticed in the first place. But since the vast majority of this change is meaningless to the target audience, it is simply ignored or, worse, backfires.

Take the case of Tropicana Orange Juice. In 2009, Tropicana “rebranded” itself with a new carton that was intended to freshen up the Tropicana image. However, the rebranding effort failed miserably as Tropicana saw its sales plummet by 20% in a single month while its competitors reaped the benefits.

“That’s what happens when you use ad agencies to rebrand. They want to keep a relationship with you, so the change is just more of the status quo.”

This was not the first misstep for PepsiCo. Pepsi’s last “rebranding” of its flagship Pepsi Cola cost more than $1 Million and the compnay did little more than rotate the logo.

ad agenciesThis kind of rebranding is not limited to package redesigns. Companies change their names all the time for the sake of “rebranding.” Kentucky Fried Chicken became KFC (though it could be argued it changed the name simply because the company did not want to pay for the rights to the word “Kentucky” after the state trademarked the name), But the KFC rebranding was not a true change.

Radio Shack is trying to market itself as “The Shack,” and the SciFi channel is now SyFy. The list goes on.

Though companies spend millions of dollars on these kind of changes, nothing, in fact, ever changes. Organizational change is not precipitated by a change in a name or logo. In reality, it should be the exact reverse. Organizational change should occur first. Then the visual identity should be changed, but only when the need outweighs the costs.

Ad agencies will not upset the apple cart

That’s what happens when you use ad agencies to rebrand. They want to keep a relationship with you, so the change is just more of the status quo.

This misconception is what has given the concept of “rebranding” a very bad name. For most ad agencies, “rebranding” simply means increased revenue for themselves and has nothing to do with actual organizational change (or, just as importantly, change in brand promise that is meaningful to target audiences).

What happens instead is that the company sees sales flatten out or a competitor begins to steal market share. The knee-jerk reaction is to try to do something that gets noticed. The advertising agency, seeing dollar signs, suggests the company “rebrand.”

Though the right idea, the execution is often so completely wrong it doesn’t fix the problem and can be harmful to the brand in the long term.

We tell organizations all the time that they should not engage with us unless they are willing to get their noses bloody. We tell them that, unless you are willing to change your organizational culture, you cannot be successful in any rebranding effort and the return on investment will be negligible at best. Anyone can draw a pretty picture for a new logo. But enacting real change requires both discipline and expertise and a company willing to take a hard look at themselves.

Unless you are undertaking real organizational change, do not let an ad agency tell you the solution to your problem is that you should rebrand. If that is the answer to your problems, then perhaps your real problem is your agency.

See more posts in the following related categories: ad agencies Advertising Brand Branding


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