When There's Two Identical Brands, Who wins?

To me, the value of a brand is incalculable.

But, with that said...

Here's a story that puts a number to it.

It's a tale of two competing brands.? They're neck-in-neck.

Let's call them Brand A and Brand B.?

Yep, you guessed it. It's based on a true story.? And, yes, you're right again. There's a solid, surprising twist at the very end.

THE SET UP

To start, here's the set up.

Both brands are extremely close competitors.? You can hardly tell them apart. Seriously.

Let's just go ahead and call them identical.

• Their products are the same.?
• Their selling strategies are similar.
• They're both new to direct-to-consumer (DTC) business.?
• Both brands purposely do not have large wholesale partners. ?
• Their communication is pretty much the same too.
• The way their copy is written it sounds almost like the same person speaking.
• Even their creative is strikingly similar. Lots and lots of images of close up cropped shots shown on models or simple product images on white backgrounds.

On and on.

You get the picture. It's like comparing two red apples from 20 feet away. How do you make a choice?

Year One

Let's begin the competition.

I bet most of you will be able to quickly guess the actual year. Was it 2010, 2013, 2016, 2019, or 2022?

You'll get it.

It's the year everyone thought they found a magical, marketing button. You know, the one where all you have to do is press it and things just work. Like the easy button.

What's the button? Digital marketing of course!

This year pumping dollars into platforms like Google and Facebook becomes all the rage. It's not only hot. It's on fire. As more and more companies discover its power, they just keep pressing and pressing and pressing.

In fact, everyone is doing it. Big and small.

Big companies that had pretty much ignored digital marketing up until now, start really pushing. They move big portions of their budgets into it.

Take Nike.

This year they appear like a poster child. They bring on an incredible, digital leader in John Donahoe. They spend big. Nike's digital marketing is absolutely everywhere. As a result, their DTC begins to surge in growth.

But let's not forget those small companies. Of course, they are playing too. A lot. As are the many new, well funded up-and-coming brands.

It's pretty obvious why. We all know it.

The entry point to doing marketing online has never been easier. Anyone can do it. Literally, all a company has to do is take some pretty pictures, make some rectangular images or videos, insert a company credit card, and press go. Easy.

One of my favorites during this time is the women's underwear brand Parade. I know, strange, since I'm a guy. But I just LOVE the way they've challenged the entire women's underwear category with size inclusivity and diverse looks.

No wonder Parade raised a lot of outside capital. As a result, I see their online ads everywhere too. Which, when I stop to think about it, is kind of strange, because again, I'm a guy.

So what about our two identical brands A and B?

Not surprisingly, both go all in too.

This means they unlock the power to digitally target exacting, narrowly and aggressively. They look for audiences that are either:

1. Clearly in-market for their products.
2. Or, show high affinity signals that they will be in the market soon.

Once identified, the two brands then bombard these people with digital ads. It kind of works like shooting a fish in a barrel or hitting a bullseye every time you throw a dart.

For example, both brands run digital campaigns that use lots and lots of keywords (e.g. office desk, work desk, professional desk, etc.).

They also set up campaigns that use behavioral or associative signals. Signals can be things like the websites you have visited recently (e.g. Design Within Reach, West Elm, Restoration Hardware, etc.).

Or, signals can be built from your existing customer file to target other people that look and act just like them.

Yet, some say there is even something more powerful going on.

Like how I always feel like my phone is listening in on me. For example, like the time my wife and I talk about how we'd love to have a new juicer for our kitchen. Then guess what? As soon as I open up TikTok, there's a barrage of different juicer brand ads popping up all over my feed.? Coincidence? Maybe. ?????

More than ever, this year digital marketing becomes all about targeting and driving efficiencies. There's more and more options to reach that audience that must already be looking for you. They just don't know it yet!

Forget about throwing arrows and hitting the bullseye. This type of marketing is more like marketing with laser beams.

The year ends fast.

Both brands end up spending a ton of money on digital.

Yet, Brand B also raised a lot of outside capital investment. This allowed them to spend way more than Brand A.

As a result, can you guess the score? Could there be a winner already?

Look at the above chart.

We’ll use this chart for scorekeeping.

• It shows the level of brand interest for each brand.
• The interest is spread across 12 months.
• The scores are indexed up to 100.
• Brand A is in Blue.?
• Brand B is in Red.?

You see what I see?

Wow.

Clearly Brand B is winning.?

Their outside investment to drive up their digital spending is working.? This is allowing them to press the easy button all year long.

Brand B even gets a score of 100 during a key holiday period! They're crushing it.

More importantly, look at the map of the United States.? It’s dominated by Brand B’s red color.

Is this competition already over? Glad you asked.

YEAR TWO

The second year starts.

This year, Brand A tries to make a move. They have to catch up. They don't have outside funding. So instead, they just spend more of their hard earned cash flow.

Or course, this hurts Brand A's profitability. But they have to keep up, right?

As Brand A spends more and more, guess what happens?

Their marketing spend as a % of net sales goes up and up and up.? At times their marketing spend raises to 37% of their total net revenue.

Uh, oh.

Even though Brand A's color is blue in this story, this is an immediate red flag. Seriously.

But who cares, right? At least Brand A is catching up.

Look below. Brand B's lead is cut in half. But, one has to ask, "At what cost?"

And, even though Brand A looks like they are making progress, are they? They never really go above Brand B's red trend line.

And, Brand B still scores a 100 during the key holiday shopping period. Yikes.

Oh. And, the map? Yep. It's still almost entirely red.

YEAR THREE

So, here comes year three.?

This is a unique year. A year a lot of people never saw coming.

It's a complete disaster for digital marketing.

Why? Because there's a huge amount of change in the digital space.

To start, everyone is now playing the digital game. Everyone is full speed ahead. So many big companies have shifted their mammoth marketing budgets to digital platforms. This pumps up pricing competition at an all time high. CPMs and CPCs rise at least +30%.

But that's not all.

This year there's a huge amount of technological disruption. This causes the platforms to struggle. Suddenly they don't seem to work anymore.

The digital platforms:

• Suffer with browser and device changes.
• They struggle with signal tracking.
• They have difficulty with enforcing new privacy standards.
• They're also getting sued by big governments.
• And, much more.

Thus, they rush and make a lot of core changes to their platforms. Like winding down popular campaign options. Tools like interest targeting and shopping feeds suddenly disappear. They gently enforce API first party tracking. They also start to inject a lot of untested artificial intelligence (AI) into their algorithms' logic.

Thus, this year digital marketing becomes:

1. Costly,
2. Extremely difficult,
3. Highly variable with wild performance swings. ?

But seeing little choice, both Brand A and Brand B have sort of made their beds.? They continue to spend heavily on digital ad platforms.?

What’s the score by the end of this year??

Look at the above chart.

Both brands' interest levels stay kind of the same even though their spend levels remained very high.

Overall, it's sort of a tie.

Yet, both brands scores now sit firmly in the low 30s. Is this really the score they should be aiming for?

Clearly, cracks are starting to show for both brands' over reliance on digital marketing.

Yet, at least Brand B still has a couple things going for it.

• They still win the holiday shopping season 100 to 68.
• And, don't forget about the map. They still largely dominate it in red.

Yet, keep this in mind. Both brands are still spending a lot of money. It must seem like running to stand still, right?

By the end of this year, new questions start to emerge:

1. Are online marketing platforms (on apps & phones) the best option to build a brand?
2. Do these platforms tempt brands to over-target?
3. Do their formats really work for the types of stories these brands have to tell?

YEAR FOUR

Cue the music.

Here comes the end of our story. ?

This is year four.? It’s going to be the same thing right??

Well sort of.

It's certainly the same story for Brand B.? They keep pumping dollars into digital marketing.

But, now Brand B inserts a new twist.

They actually start promoting a lot of discounts. Stuff like running a 20% off of everything sale. Wow! Talk about taking a hit to the bottom line.

So what about Brand A?

Do they follow the same game plan as the last three years?

Nope. They have a completely new twist too. They flip the script.? They feel they have no choice.

They decide to invest in brand building.

This means they double down on creative and messaging. Doing the work. Putting together the briefs. Collaborating with talent. Partnering with new agencies. Funding the activities.

Brand A really has to dig in. They have to develop their story, understand their core customer and create their point of distinction.

They also need to clearly understand what value they deliver and how it ultimately connects with their cherished customers.

All of the above meant Brand A had to change how they funded and allocated their marketing budget.

Thus, they focused on:

• Being aware of the dynamics of the full funnel.
• Driving awareness activities.?
• Allocating across a diverse set of marketing channels that catered to storytelling and held attention.
• Actually cutting their digital spend!
• Utilizing offline mediums. Ones that made them real to audiences and validated their positioning and trust in the market.?
• And on and on.

And, decidedly, they didn't follow Brand B's discounts.

They actually increased their prices, not once, but twice!

What happened?

Look below and you tell me.

THE FINAL SCORE

Brand A’s score surged to a level it has never seen.?

1. Their average overall score soars to a 51. That's an increase of 60%!
2. They open up an average 15 points lead.
3. Thus, the map of the U.S. has turned almost completely blue.?

It's a landslide!??

And, here's a nuanced, but important point.

Brand A also sees their online performance marketing become even more efficient during this time.? CPAs/CACs go down. CPCs go way down. Traffic across the board goes up.

But here’s the real kicker.?

Brand A’s total marketing spend becomes the lowest % of net sales than at any other time during the four years.?

I want to say that again. But, I'll spare you and won't.

Yet, let the above sink in. Brand A has lowered their overall spend of marketing while also growing their market share over the competition.

Talk about getting both growth AND profit!? We have a winner.

It's a BRAND LANDSLIDE!

EPILOGUE

Today, Brand A continues on their strong path of growth. They continue to increase their market share.?

They continue to invest in brand building.

This also does wonders for the company culture.? This can't be over emphasized.

The excitement at this company is at an all time high.?

People love working at a company that has a strong identity and clear on-brand message in their external marketing. It gives people inside the company a collective voice and identity.

What a difference it makes!

Hat Tip

This true tale was inspired by a recent That's What I Call Marketing Podcast podcast.

In the podcast, James Hurman is interviewed by Conor Byrne .?

Here’s a terrific quote from the interview.

When I first heard the quote, it was likely the exact moment I wanted to write the above Identical Brand story.

The quote:

“Brand awareness is a controlling factor for the performance of performance marketing.”

Listen to the podcast and check them both out.? Big fan of both.?

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