THE BRAND LAWYER
The Business and Law of Brands and Branding from Steven Weinberg of Holmes Weinberg. PC
BRANDS AND BRAINS
When you think of your favorite brands, what is the first word you associate with them? According to psychology Professor Paul Bloom of Yale, the word we all associate with our favorite brands, even if subconsciously, is “pleasure.” We all seek pleasure in our lives. How we define pleasure is of course subject to individual variance. But pleasure, however defined, is what we seek, as well as all of the satisfying feelings and emotions that go with it. The knowledgeable brands know this, and capitalize on it. Using imagery, music, words, sights, smells, and taste, they create around the brand, and infuse it with those stimuli that trigger any number of perceived pleasure points in our psyches, moving us closer to embracing the brands into our lives. Making them part of who we are, who we imagine ourselves to be and how we want others to see us. And as an extension of our pleasured selves, we endow on them immense legitimacy. Professor Bloom in a recent NPR TED Radio Hour, http://www.npr.org/programs/ted-radio-hour/308752278/brand-over-brain, gave an example that all of us with kids know only too well – if you can’t get kids to eat something, just tell them it’s from McDonald’s®! Why? Because in a kids’ world, just the thought of that brand, and all of the memories of happiness that go with it, strongly bolstered by lots of impactful advertising and promotion, not to mention the smell of those fries, brings immediate pleasure and legitimacy.
Adults who purchase by brand behave pretty much the same. We purchase certain brands because having that branded product brings pleasure. It can be in the form of feeling safe – for example, many people will buy a branded product and not the absolutely identical store brand, at much higher price, because they assume the branded product is a safer, more legitimate choice. Other brands induce feelings of social acceptance, or of living a fantasy, or, analysis aside, just feeling really, really good. Even if we know all of the brand imagery is mere fantasy, and what is promised will never really occur – honestly, will we really become immensely rich and fly into the wilds of Africa in our private plane dressed to the hilt with expensive safari clothes and luggage with the person of one’s dreams hanging onto us with seductive smiles and loving eyes merely by buying Ralph Lauren® luggage? — we allow ourselves to drift into the pleasure of that fantasy, believing at some level that if by some toss of the cosmic dice this all could come true, buying the brand is the ticket. And just by buying the brand, tagged by these thoughts, we experience pleasure.
Where the carriage transforms back to pumpkin is when the brand makes lots of pleasurable promises up front, but then fails to deliver. How quickly pleasure is lost when dealing with terrible customer service. Or with warranties that aren’t honored. Or the texture, taste, or smell of the product is not what is promised. Or product defects. There’s little worse than having one’s pleasure, one’s fantasy, one’s high expectations, destroyed with harsh reality.
And that’s where the truly great brands make their strides. Brands like Zappos® and Amazon® Prime, which have redefined customer service. Or (most of the time) Starbucks, which by inviting us into the fantasy it created, changed how we drink coffee and publicly commune (and learned that free WiFi brings even more pleasure). Brands that understand the pleasure principle know that they need to follow through, and keep the happiness factor high if we are going to come back to them. And in these days of real-time, viral, uncensored criticism, brands that don’t deliver on their promises will not survive.
Those of us who protect brands for a living know this well. We fight to keep the brand’s reputation intact, or, unfortunately in too many cases, fight to overcome the damage that’s been done either by themselves, their co-venturers, their competitors, their critics, or unhappy consumers. We have a much better chance at prevailing if the brand’s behavior has been consistent with its enchantment; it’s tough to win over a judge or jury when their experience has been the same as the disenchanted consumers. And so there is every reason for a brand to deliver on its promises. And that, my friends, is not fantasy.
BRAND INNOVATION AND EXTENSION: LESSONS ON HOW TO MAKE IT WORK
There are a number of ways to grow a brand from its core product or service (for brevity’s sake, throughout this blog, I refer to both as “products”). Two prevalent forms are licensing the brand and brand extension. In licensing, the brand owner gives permission to third parties to make and market products under the brand in categories not necessarily related to the category(ies) in which the brand is established. Success for the licensing model depends in large part on the third party’s expertise and reach in sourcing and merchandising in specific products categories and often in specific channels in specific countries. The entertainment, art and fashion (designer) industries employ licensing extensively, which is how one gets, for example, Mickey Mouse® toothbrushes and Ralph Lauren® just about anything lifestyle. Iconic consumer brands also have used licensing to move into new categories where they can rely on their brand strength. Two great examples are Arm & Hammer® air filters and Tide® dry cleaning establishments. (I’ve been involved in licensing for 30 years, as lawyer, brander and agent, and will have a lot to say about it in a future post.)
The subject of today’s post is the other major model – brand extension. Unlike licensing, which usually takes brands into new categories, brand extension occurs when a brand with success in a category is extended to a new product or product line within that category or to an entirely new product that expands the category (the latter called “brand expansion”). Not a “new and improved” version of an existing product, but a new product that is designed to meet or create a new consumer driven need or a perceived new need. A successful example of brand extension is Reese’s® Minis — moving from full size to a mini size.
There are dozens of books and even more blogs about how one successfully can expand a brand, but there’s probably no better way of doing it than studying how others have done it well, or not, and then integrating those learnings into one’s own innovation process. Starting with basic notions, such as branding guru Marty Neumeier’s brand strategy of “zagging” when others are zigging (his book “Zag” is a must read), is of course necessary to innovating, but taking away the learnings from real examples helps to frame a collaborative process that is likely to lead to marketplace success. And of course there are the important legal considerations as well – starting with determining whether the name for the extended product is available for use and subject to trademark protection in all of the countries where it will be marketed. Or deciding not to seek protection for the extension name. For example, when DuPont invented what became popularly known as “polyester” it decided to give that word away to the public so that the new brand name Dacron® would not become generic for this new invention.
The Nielsen company, the same folks who bring us TV ratings, has been publishing very useful reports related to brands and consumers. In its recently published 2014 “Breakthrough Innovation Report,” ( to download, go to: http://www.nielsen.com/content/corporate/us/en/insights/reports/2014/breakthrough-innovation-report.html) it tells the stories and analyzes the teachings of what it characterizes as “Breakthough Winners” — 14 of 3463 consumer products launched in 2012 that “delivered a new value proposition to the market,” “generated a minimum of $50 million in year-one U.S. sales” and “achieved at least 90% of year-one sales in year two.” One of the more important lessons to emerge from this report, combined with the results of earlier studies, is the conclusion that real extension/expansion innovation is defined by consumers. As Nielsen concluded: “We have found a consumer-centered behavioral definition of innovation turns out to be the only really reliable one when establishing criteria, beliefs, and mental models about what is and what is not ‘innovation.’ The right question and the trustworthy guide is ‘does the brand offer a benefit bundle that brilliantly performs an important job in consumers’ lives for circumstances in which previously available solutions were unsatisfactory or nonexistent?’ When consumers discover brands that reliably perform important jobs for them, they pull these brands into their lives again and again.” Wherever Steve Jobs may be, he’s certainly smiling.
FACEBOOK, BRANDS AND PROMOTION – A WHOLE NEW SET OF CHALLENGES
I recently searched the phrase “social media marketing challenges” on Google® and Bing® and got back a low of 44 million hits (Bing®) and 99 million hits (Google®). These results are not at all surprising given the constantly changing social media environment, the diversity of consumers using these platforms, and the overwhelming clutter in this space. There is strenuous debate about which forms of advertising and promotion work best, for example, banners vs. contests vs. native, and how to determine if all of the effort is even working – there are constant changes in measurement and standards to be measured. One of the constants over the last few years is that Facebook® is by far the largest social network and, according to at least one source, is the most popular social media platform in the U.S. with nearly 60% of all visits to social media sites being to Facebook.® (Statista – chart of most popular social media websites in the US in September 2014 based on share of visits http://www.statista.com/statistics/265773/market-share-of-the-most-popular-social-media-websites-in-the-us/).
Given these numbers, branders share the need to be successful on Facebook®, both for building brand awareness and for sales. And for years, Facebook® has been holding out the torch to marketers, urging them to abandon ads in favor of content, especially native/organic sponsored stories. And so followed the faithful, with lots of sponsored stories filling the pages. We’ve all seen them and debated both the ethics and the legality of these sponsored videos and stories, but overall we came to accept them.
Starting in January, we may see some dramatic changes. Two weeks ago, Facebook® announced that it would decrease the effectiveness of brand posts it decides are “too promotional.” And how is that to be defined? We are given some clues based on the results of “people” Facebook® surveyed (https://www.facebook.com/business/news/update-to-facebook-news-feed):
1. Posts that solely push people to buy a product or install an app
2. Posts that push people to enter promotions and sweepstakes with no real context
3. Posts that reuse the exact same content from ads
While these seem fairly obvious, our friends at Facebook® don’t tell us more, other than giving us the ominous line that “All of this means that Pages that post promotional creative should expect their organic distribution to fall significantly over time.” Note the absence of the word “too” in this warning. While lawyers make their livings arguing over the meaning of words, and mind you I’m not complaining, brands investing in social media marketing on this leading platform need to have more definition. Especially since the arbiter of what is or is not too promotional is an algorithmic exercise. And some marketers are reading this message from Facebook® as telling them that they will have to abandon all of the fans they have been building over the last few years using the kind of content Facebook® is now saying they can’t use. And what about the real consumers who “liked” the kinds of organic stories they were getting from these brands? On the other hand, will this lead, as Facebook® claims it will, to better quality ads and happier consumers or, as others believe, merely to more paid promotion to Facebook® by brands that can’t afford the expense of producing acceptable ads? I’m frankly not advocating one approach or the other; what I do know (see my next post) is that brands need to satisfy consumer demands to be successful, and having a middleperson censor ultimately may not be a win-win-win.
THE SECRET(S) OF CHOOSING A GREAT BRAND NAME
There are many ways to describe what makes a great brand. Being a sailor, I often think in terms of sailing imagery. In that context, imagine the marketplace as a dense fog, filled with names, logos, messages, information, content, and massive overload. A deep, dense, grey fog, where nothing is delineated clearly, and everything blends into everything else, and there’s no way to determine where you are in it. Just dark, damp, wet and cold. A great brand is the bright, constant, clear laser-like light from a lighthouse, cutting deftly and purposely through the fog. Creating an unmistakable path of safety. Creating in the beholder feelings of joy and relief, knowing that following that light will lead out of the dread of the fog to a place of happiness, safety and security.
So now that we know the vision and the mission, how does one create a great brand name that generates such clarity and joy? This is the subject of great debate, and the answer(s) sit at the intersection of branding business and law.
There are marketing professionals who believe that names that describe some aspect or quality of a new product are the best because it takes less time to explain to prospective customers what the product does or the need it fulfills. They may play with the spelling to try to add a distinctive flavor to the word, or add a gTLD like “.com,” but the result is still a descriptive name. Examples are: After Tan (after sun lotion), Beer Nuts (salted nuts), Computerland (computer store), Frosty Treats (frozen desserts), Tender Vittles (cat food) and Tintz (hair coloring). Words of puffery like “Premier,” “Best” and “First” also are considered descriptive.
The challenges with using such a name are many. Here are a few: (1) words that are too descriptive may legally be generic and not protectable as a legal trademark – one well known example is pets.com, which cannot be used to stop petco.com or petstore.com, etc. (2) competitors legally are allowed to use descriptive words to describe their product, including words that are being used by another as a brand name – for example, Consumer Reports, the magazine name, couldn’t stop a competitor from using a tagline like “reports for educated consumers” (3) if there are a lot competitive products being sold under brand names, tag lines, domain names, etc. that all use similar words, how are consumers going to figure out which is which? In such a case, the fog remains and envelops the little light that struggles to get through (4) trademark law doesn’t protect descriptive names – one has to spend a lot of marketing dollars to elevate a descriptive name into one that is protectable (this elevation is legally called “acquiring distinctiveness” or “acquiring secondary meaning”) – but even then these names can’t be used to stop others from using the same words to describe their competitive products.
If the idea is to have a unique brand name, then choosing one that describes the product, its function or its purpose won’t do that. It may work for a while if the product is the first of its kind in the market, but smart competitors soon will find a way to use those same words to confuse the marketplace. A fog machine, so to speak.
The lessons to be learned from highly successful, very protectable brands like Nike, Apple, eBay, Google, Yahoo, Tumbl’r, Facebook, Waze, and others are that (1) simplicity, two syllables or three at the most (with a nod to InstaGram, Timberland and others) are easiest to remember and effectively blast through the fog and (2) names that have no relationship to the product and are fun to say (Nike, Yahoo!, Google. eBay) or have a kind of relationship to the product (Facebook, Waze, InstaGram) are easiest to remember, and there is no threat of competitive descriptive use of these names. Combining them with powerful visuals, like logos, or memorable slogans that can be featured as part of an inspiring campaign (“Just Do It”) makes them even better. And legally, these are the easiest to protect. Generally speaking, trademark law rewards brand owners that choose non-descriptive names and make their brands known – the less descriptive and the more well-known the brand, the more protection is granted.
Pre-internet, some believed that these non-descriptive names were more difficult to introduce into the marketplace because it was hard for consumers to remember made-up words. That appears to be true for some names that are completely made up and have syntaxes that are uncommon, since people tend not to easily remember words that have no meaning or context (for more on this, and how people think and understand, a must read is Daniel Kahnemans’ brilliant work, “Thinking, Fast and Slow”). Simple names that are not made up but are used for products they don’t in an way describe (Apple, Nike, Yahoo, Google) or which have a suggestive, but not descriptive relationship to the product (Waze, Facebook) have a good chance of being remembered. And of course really effective pre-Internet, advertising and promotion were a lot less precise and a lot more expensive than today’s creative strategies employing social media with other integrated campaigns to get a brand quickly known and loved (or not loved – the challenge of instant consumer feedback) to a targeted demographic.
So what is the best business and legal choice for a great brand name? Something easy and fun to remember that doesn’t describe the product it’s used for. Boost it with distinctive logos (literacy in the world is decreasing, so powerful symbols may be even more important than brand names – think the Twitter bird, the Nike “swoosh,” the Target “bulls eye”, etc.) and support it with great marketing creative and strategy that drives home the brand message. And most important – integrity and responsiveness (great customer service) is still key since the brand name is the symbol of the reputation of the company and products it represents.
THE FICKLE FINGER OF FANDOM
During my early professional years, a major studio retained me to police counterfeit merchandise featuring IP from its mega-hit space themed film and television series. Research showed that most of illicit merchandise, much of it hand-made, was created, and traded, by fans of the property, often at conventions where stars of the show made appearances and hobnobbed with them. This caused quite a challenge – much of the fan merchandise being traded and sold fell below the studio’s quality standards, and a number of authorized licensees of the property claimed that some of these fan products violated their exclusive license rights. The dilemma should be obvious – on the one hand, fan fanaticism and devotion were deemed important to the ongoing success of the property, so the last thing the brand owners wanted to do was to become aggressive in a legal way against that loving base, but on the other hand there were some very unhappy (and possibly litigious) licensees and a flood of inferior quality merchandise being bought, sold and bartered. Fortunately, the legal and branding teams, over time, with the assistance of fans and licensees, were able to finesse a satisfactory result
Fan use of the internet to show support for their favorite brands initially presented the same kinds of dilemmas faced by my studio client. During the 1990’s and into the 2000’s, many brands really didn’t know what to do about fan sites. The marketeers of course loved that fans were expressing their adoration and devotion on a global network that filled computer screens, but were not pleased when fans starting expressing their unhappiness with new products or corporate behavior. Nor were they happy with fan sites that had multiple misspellings, incorrect facts or just looked bad. And the in-house lawyers were very concerned. Trademark owners are legally bound to stop unauthorized uses of their trademarks (more about this complex area in another post), and fan sites were not authorized. Not to mention that some consumers might mistakenly believe that some of these fan sites were not fan sites but actual brand sites, which creates a host of legal and business headaches – especially if the fan site was poorly done. Various approaches were used to navigate through this mess, and by the mid 2000’s some best practices had emerged.
The appearance and rapid growth of social platforms like Instagram® and Pinterest® and fan use of content such as photographic images and videos to display their feelings, coupled with the importance of being “liked” on Facebook® (still the most important social media platform for brands – to be discussed in another post), has put a whole new face on the way brands view fans. One seismic change is that brand owners have moved 180° from trying to control and restrict fans to giving them incentives to show the love and doing their best to provide interactivity that matches fan expectations. There are many reasons for this shift; one of the more important being the recognition by brands that they can’t control fans, that fans now have the power to make or break new products or brands in hyper-driven ways, and that putting hurdles in the way of expressing their fan-ness was, and is, a very bad strategy.
The challenge for brands in maintaining fan interest these days is much tougher than merely keeping them engaged and happy in a world where fickleness and limited attention span are dominant behaviors. Brands are learning that merely building a place for fans to come home to and keeping the lights on for them is not enough. A recent poll by Hubspot of 569 consumers indicates that fans expect brands to be available for engagement on at least 3 if not more of the major platforms (Facebook® and Twitter® for sure, and depending on the gender and age demographics of the consumer, one or more of Instagram®, Pinterest®, LinkedIn®, YouTube® and Google+). Despite these expectations, however, the poll also showed that while 64% of the respondents expect a brand to be on Twitter®, only 31% actually follow their favorite brands on that platform. This finding more or less held true for each of the platforms – reality of use was far less than the expectation of being there. There’s lots of other good insights and data in the poll, called, “The Social Lifecycle: Consumer Insights to Improve Your Business” ((http://www.slideshare.net/HubSpot/the-social-lifecycle-consumer-insights-to-improve-your-business) with significant teachings of these results being: (1) brands should focus on the right platforms for their consumer demographics (2) content for each platform should contour to the platform and not be serial repetition, and (3) ensure that consumers are greeted with passion and a persona with which they can resonate.
And with all of this while we’re still not sure what the financial ROI is for a brand’s investment in social media, we certainly know what the risks are in not pleasing fans who use social.
MILLENNIALS AND BRANDS — SOME NEW INSIGHTS
One of my favorite sources of information regarding the relationship between social media and branding is Digiday (Digiday.com). In a recent post with the title “Millennial media-consumption habits explained, in 5 charts,” the author presented a summary of findings from two recent studies, comScore, Noise|The Intelligence Group’s Cassandra Report and nScreenMedia’s report “What Millennials Want from TV,” which provides insights into understanding the media consumption habits of Millennials. Why is this important? Millennials, the generation of 18 to 34 year olds, is the largest demographic in the US with significant numbers in other developed countries. For brands, understanding how this digitally native group consumes media provides insight in planning where and how they should be marketing to this very complex and diverse group. Some of the more important findings are (1) current affairs and news are very important to this group and the majority rely on social media as the source for this information, (2) smartphones and other mobile platforms are the most popular social media sources, with Facebook leading the crowd followed by YouTube and Pandora, with Snapchat growing in importance, and (3) for news, Huffington Post is the leading source relied on, and interestingly Buzzfeed is growing as a news source. http://digiday.com/brands/millennial-media-consumption-habits-debunked-5-charts.
Knowing where Millennials are looking, however, doesn’t necessarily translate into success. A 2012 survey of 3000 adult consumers across five international markets conducted by Vanson Bourne produced data showing that only 26% of these consumers use social media to follow brands, and of those that follow a particular brand only 48% are positive when they see brand communications and 40% said that they would be negative to communications from brands they don’t follow. And a whopping 65% said they would stop using a brand whose social media communications upset or irritated them. That all being said, one of the more positive results is that adult social media users are swayed by friends and family — 84% responded that they are likely to investigate brands recommended by F&F, and might even make a purchase. So the good news is that the “social” in social media is working for brands.
And that’s exactly why brands have to be so careful about their messaging and not doing and saying dumb things that will harm their brand identity, reputation and integrity.