A Short History of Branding | Part 2

This newsletter picks up the thread from last week’s piece about the history of brands. Brands have existed as tools of commerce since the beginning of recorded history. Yet over the course of this history, the role and function of brands has continued to adapt and evolve. By looking back over each of these successive purposes, we can come to a better understanding of what brands are and what jobs they do.??

You can imagine these jobs as layers which build on top of each other. Each requires the layer that came before but adds something new. Last week we started with the three layers at the core of this structure, today we’ll review the remaining three.?

The use of brands in commerce has evolved over thousands of years. Each successive function of brands builds on the last. All are still relevant today.

Status

With the rise of the modern corporation in the 1800s, brands grew in reach, influence, and sophistication. Businesses realized that people would willingly pay a premium for brands that conveyed quality, luxury, or status. The ability to convey status had two complementary benefits: a premium brand increased demand and strengthen loyalty, while also directly increasing prices and profits.?

As premium brands emerged, it became clear that status-conscious buyers would willingly pay significantly more for a product based not only on the product’s quality but on its brand. This tactic was especially effective for products—such as clothing, watches, and luggage—that were “conspicuously consumed” by being worn or used in public.?

Brands that could convey status became a way for customers of the brand to convey their own status. The brands you used said something about who you were and where you fit into society. This played into the insecurities of the emerging bourgeoisie; increasingly rich, yet insecure about their social standing relative to those in the aristocracy.??

Perhaps it’s not surprising that the first such luxury brands were started in Paris. It was here, beginning in the 1850s, that Georges-Eugène Haussmann’s massive renovation of the city created the parks, gardens, and boulevards for which Paris is famous today. The design and creation of these new public spaces changed the way that people interacted, opening new opportunities for all to see and be seen.?The streets of Paris became the ideal stage for a new class to show off their luxury goods and finery. Department stores such as Le Bon Marché (est. 1838), which sprung up to meet this demand, themselves became forums for customers to experience and express their status.??

It was in this context that watchmakers like Vacheron Constantin (est. 1755), fashion houses like Hermès (est. 1837), and luggage makers like Louis Vuitton (est. 1854), built luxury brands that endure and remain relevant to this day.?

As brands became expressions of status, what they conveyed about quality of a product became less relevant than the qualities they conferred onto the product owners. Realizing this, luxury goods manufacturers designed products to telegraph their brands. This could be achieved through subtle aesthetic cues or—in cases such as Louis Vuitton’s famous LV monogram— much less subtle ones that would be unmistakable even from a distance.?

The ability to strengthen customer loyalty while charging a premium price continues to be a central function of brands today. This is most evident in fashion brands—and indeed Louis Vuitton (albeit a very different company than the one started in the 19th century) is Europe’s most valuable company.?

But other companies with conspicuously consumed products have taken a page from the fashion playbook, creating brands that can convey status through products as wide-ranging as technology, automobiles, and sporting goods. Even services and intangibles can fulfill this function. As anyone who has moved from an iPhone to an Android device can attest, losing one’s blue text of Apple’s iMessage can make one feel like they’ve lost a mark of social status.

Promotion

Beginning with the second industrial revolution in the 1870s, which saw the advent of both mass manufacturing and mass media, brands started to take their modern position as a central part of our economies and our lives. For the first time, newspapers, radio, and eventually television gave companies platforms upon which they could build nationally, or even globally, recognized brands.?

Advertising had first emerged with printed newspapers in the 17th century, around the time Benjamin Franklin was in the business. The ads in these newspapers were what we’d now consider classified ads: small, discrete, and text-based notices. These paid advertisements represented a small portion of a publication’s revenue, most of which came from educated and affluent readers who had the money to buy a paper and the interest to read one.

In the middle of the 19th century, however, newspaper publishers like Benjamin Day of the New York Sun and James Gordon Bennett of New York’s Morning Herald, flipped the newspaper business on its head. These early media entrepreneurs saw that rather than relying on newsstand sales, advertising could become their primary source of revenue. This new business model reduced the cost of a paper to a penny—greatly expanding the market for newspapers by putting “the news” within reach of readers who wouldn’t otherwise have been able to afford it.?

This new business model opened a new kind of advertising through which brands could be planned, promoted, and positioned to reach and appeal to ever larger audiences.?

In this era, the role of advertising was transformed from simply building awareness and driving demand to the shaping of perceptions. For the first time it was possible to not only promote a product, but to shape people’s perceptions of it through the “engineering of reputation”. It’s telling that many of the brands established at that time still dominate their markets today.

As the early adman Theodore MacManus put it, “We have found a hothouse in which a good reputation can be generated, as it were, overnight. In other words, the thing for which men in the past have been willing to slave and toil for a lifetime, they can now set out to achieve with semi scientific accuracy and assurance of success, in periods of months instead of years.” (Source: Tim Wu, The Attention Merchants, p.58)

It also led to the creation of an entirely new business—the advertising agency. With the founding of firms like N.W. Ayer & Sons in 1869, the business of creating advertisements was professionalized. Rather than relying on the newspapers themselves to create the ads they would run, clients could now hire specialists who brought graphic design, copywriting, and promotional offers to the work of selling products and services.

Radio and television—and eventually most of the large internet companies—would adopt the same business model pioneered by the 19th century newspaper. Give the content away for free, reaching as large an audience as possible to then monetize through advertising.?

The ability to advertise through mass media publications and airwaves created an industrial-strength sales tool that could carry a brand and its pitch to national or even global audiences. Companies found new and more powerful ways to build awareness and shape perception of their brands. Radio and television were ripe for experimentation and new formats as advertising became a way to entertain while inserting a product or message into the audience’s attention. Suddenly brands were given a “voice” that they could use in the marketplace. The result changed the world forever.?

Today brands are closely associated with the media used to promote them. We all can sing the jingles we’ve had drilled through repetition into our skulls—even if we last heard them decades ago. Advertising fatefully became the business model for many internet companies including Google, Facebook, and Twitter—combining 19th century business models with 21st century technologies including, now, AI. Politics and political movements have built brands of incredible power and influence—and to compete they must raise millions or even now billions of dollars to afford the media buys to ensure they are recognized and relevant.

Packaging

The turn of the 20th century arrived with an explosion of new products, new product categories, and new brands.?

Driven by the unstoppable forces of industrialization and industrialized advertising corporations—then fairly new phenomena themselves—were churning out everything from cigarettes to soap, to automobiles, and more. Suddenly customers were offered more products from which to choose from a range of different brands.?

Over the course of the 20th Century, consumer packaged goods companies like Procter and Gamble, General Foods, and Unilever pioneered new approaches to product development that emphasized the product’s brand and packaging a critical part of the selling proposition. The product itself was no longer enough—it had to convey an idea and speak to a particular type of customer in a way that would appeal to them.?

As the number and variety of choices grew, the traditional corner store was no longer adequate to the task of carrying it all. Instead, the era saw the emergence of “supermarkets” where customers would help themselves to products arrayed along aisles of goods before heading to a checkout line. The first of the new stores, Piggly Wiggly, opened its doors in Memphis Tennessee in 1918, but the format would continue to grow and expand alongside the automobile, the growth of the suburbs, and the post-War boom.?

The self-service format of the supermarket required that products do their own marketing through colorful, appealing packages that could catch the shoppers’ attention. Without the right package, it would be impossible to stand out on crowded shelves of the fast-expanding supermarket.?

The packaging of consumer goods greatly and irrevocably expanded the number of brands in the market. And these brands endured: many of the brands that still rule the consumer packaged goods category are those that got their start early in this period.?

The application of branding to everyday products allowed companies to greatly expand their portfolios, while also keeping them flexible enough to adopt to changing tastes. Brands allowed for the creation of new product lines that could be tailored to meet the needs, tastes, and budgets of different customer types and segments. Everything from beverages, to cleaning products, to snack foods could be targeted and tailored with great specificity. Many of these expanded and continue to expand into a dizzying number of flavors, styles, sizes, and versions.??

The packaging of products—and even services—as brands is such a normal part of our world that it’s easy to miss it entirely. As services businesses—think Starbucks—have been industrialized, they’ve used packaging very effectively to make intangible offerings feel tangible, real, and valuable. Businesses as diverse as software, car rental, and credit card companies have recognizing that the right packages are not only a way to get attention, but they’re also a way to diversify what’s being offered: targeting an offering while minimizing the need to make expensive changes to what’s inside the package.?

The history of the evolution of brands can teach us a lot about what brands are and what brands do. But this history is not over—we are living it today. As brands have become software, they’ve become some of the most powerful forces in the world—not only in commerce but in politics, culture, and society at large. Understanding the history of brands can help us to better understand what brands have become in the information age, and how these information age brands shape what we think, what we believe, and what we do.?

If we don’t understand these forces and the impact that they have on us, we’ll remain in helpless thrall to them and their power over us. And, more importantly, we’ll lose our own real opportunity to turn them to our advantage.?