The fortunes of corporate identity are closely linked to those of the economy. In the early Nineties when recession bit hardest, spend on corporate design went into free fall, but as the UK and the US have regained economic prosperity, corporate identity is booming – at least for the moment.
In “cool Britannia”, design is once again on the agenda and is receiving unprecedented support from Government. Tony Blair is keen to change perceptions of the brand values of New Britain Plc and has thrown his weight behind such initiatives as the Panel 2000 committee, charged with masterminding Britain’s global image. Although the market is undoubtedly buoyant, figures for the total size of the corporate identity market are hard to establish. However, some indication can be gleaned from the fee income of some of Britain’s biggest players.
In Design Week’s annual review of fee income, WPP-owned Enterprise IG earned 55m, which includes input from the former Sampson Tyrrell Enterprise in London, Anspach Grossman Enterprise in New York, SGB Enterprise in San Francisco, Artistree Enterprise in Hong Kong and O&M Identity in Taiwan. And Wolff Olins reported fees of 11.8m this year – up from 8.8m last year.
The growing demand for corporate identity can be explained partly by increased business confidence and partly by the fact that the identities produced in the heady Eighties now look tired and need updating. There is a growing number of industry sectors which recognises the need for a coherent identity, including the pharmaceuticals sector and professional service providers such as law and accountancy firms.
The business world is also in merger frenzy, which can be explained in terms of strategy, scale and globalisation. This year alone, there have been a total of 10 401 worldwide deals with a price tag of $1.3 trillion (0.8bn), according to the American magazine Fast Company. This means more work for corporate identity specialists, particularly in the US.
Research New York’s from Anspach Grossman Enterprise [now Enterprise IG] finds that the number of corporate name changes rose for the fourth consecutive year in 1997 with 1625 companies changing their names – an increase of 10.5 per cent on 1996 and 62 per cent on 1993. This was mainly driven by mergers and acquisitions, which accounted for 743 name changes (up 8 per cent on 1996). This was followed by 632 straight name changes (up 20 per cent) and 176 from divestiture, spin-off and sale of assets (down 2 per cent). While much of this corporate identity work goes to US designers, UK design groups, which enjoy a good reputation in the US, are picking up the surplus.
UK consultancies are also picking up plenty of work in mainland Europe. Although there are strong corporate identity specialists in France and Italy, for example, the British are being selected for strategic work, rather than just their creative input. Much of this work is from the telecommunications sector and in newly privatised utility companies.
Globalisation is also having an impact. Companies in all sectors, from pharmaceuticals to airlines, are no longer prepared to dominate just their home markets, but want to establish their brands from Birmingham to Beijing and, in order to do it, they need strong identities which communicate their inherent values.
British Airways is just one of the companies to have taken the globalisation route. Interbrand Newell and Sorrell’s identity work was intended to play down its British associations and make the airline meaningful to passengers around the world. Which brings us to public reaction to corporate identity. Tabloid fury, which erupted in 1991 when BT’s piper was first revealed under the headline “BT blows millions on a trumpet”, was again unleashed in 1996 when BA and the BBC launched their new identities. Only this time the broadsheets joined in and asked if BA’s “60m” might not be better spent on protecting BA jobs and the BBC’s “5m” better spent on programming.
The Millennium Experience figure from Lambie-Nairn has taken some stick, but criticism has been fairly muted. However, that doesn’t mean that corporate identity is off the hook. Tabloid ire is likely again when the next huge corporate identity project appears (particularly if it involves public funds or coincides with job cuts).
The growth of the Internet is also having an effect on corporate identity. Analysts estimate that the number of people using the Web is somewhere between 60 and 80 million worldwide – a figure which is expected to grow by at least 25 per cent this year. Companies are understandably keen to tap into this huge consumer market and around 75 per cent of Fortune 500 companies in the US and 50 per cent of the UK’s leading companies have established their own websites. However, there is a problem because the range of local brands and marques appearing on websites is inconsistent, sending out confusing messages to consumers. They therefore need to standardise and align their identities.
While all this is good news for corporate identity specialists, they face some problems. Not least of which is that management consultants are muscling in on their territory and taking on responsibility for worldwide brand guardianship – McKinsey for example, is actively recruiting brand strategists. The Management Consultants Association says its members are increasingly offering strategic marketing advice to clients. In 1995, its members made 28m, in 1996 39m and this year the figure is expected to be close to 80m. Although it does not break the figures down, the MCA says a proportion of this is due to corporate identity advice and that it is a growing trend.
But perhaps the biggest threat to the buoyancy of corporate identity is the looming shadow of recession. As the Asian and Eastern European markets have been hit, analysts are wondering how long it will be before Britain and the US also take a tumble. If they do then corporate identity programmes will almost certainly be among the first casualties.