Corporate branding is never easy. It is complex, time-consuming and expensive and if you get it wrong, it can result in public humiliation. But despite the pitfalls, identity specialists are enjoying the biggest boom since the 1980s.
The surge in corporate branding and repositioning is driven partly by the current spate of mergers and acquisitions. According to KPMG’s Corporate Finance Group, mergers and acquisitions activity rose by 47 per cent in 1999. Most of the cross border deals were made by companies from the UK and US. UK deals alone were worth $245 billion (£163 billion) last year and included the creation of companies such as publicly quoted businesses Vodafone AirTouch, and AstraZeneca.
While every sector is engaged in a flurry of M&As, pharmaceuticals – think the long awaited Glaxo Welcome/ SmithKline Beecham tie up which was finally announced last month (DW 21 January) – and telecoms, offer corporate identity firms the most fertile ground. Tony Allen, managing director of Interbrand Newell and Sorrell, says, “If you look at Europe, particularly the Nordic countries and Benelux, there seems to be a new ‘telco’ starting up every week. When we get a single currency, we will see more M&As as companies try to achieve critical mass.”
Richard Watson, partner at Global Design Register, agrees. “M&A is huge at the moment, both in the UK and Europe. Overseas companies are coming here or going to the US for corporate branding advice because there are very few serious local players.”
Corporate branding is also cyclical, says Clare Fuller, principal of Bamber Forsyth. Identities don’t last forever and some clients are reviewing all aspects of their businesses to take them into the new millennium. Sainsbury’s, for example, last year launched a new corporate identity – “living orange” by 20/20 Design Consultants – its first fundamental re-brand since the 1970s, and BT is to revamp it’s “piper” logo with darker, warmer colours for a more contemporary feel.
Peter Knapp, executive creative director at Landor – which is working on a creative and strategic repositioning for airline British Midland, says convergence of products and services where perhaps three separate entities have to come together is also stimulating the market.
Scottish Telecom, for example, has rebranded as Thus to allow the company to bring together its diverse businesses under a single brand name. Scottish Telecom was set up five years ago by Scottish Power. Its interests include call centres and the Internet service provider Demon. A spokeswoman explains that Scottish Telecom aims to be one of the UK’s leading data and Internet solutions providers.
“The new brand, developed by Glasgow-based 999 Design, is an important element in delivering this strategy. It is flexible, enabling new products and services to be added easily to the company’s portfolio. It also gives new focus for our businesses and employees as they move into the next development phase,” she says.
Repositioning to keep up with fast changing markets is also a growing trend. Arthur Andersen, the global accountancy firm, recently introduced a new global brand positioning and visual identity, developed by Enterprise IG to allow it to compete more effectively in a crowded environment. Global creative director Will Ayres says that the company wanted to reposition itself as “the leading professional services company in the new economy… It didn’t want to be seen as just an accounting firm.
“Andersen Consulting [the management consultancy arm] had effectively spun off and that took away some of the brand’s appeal and as a result, Arthur Andersen was seen as a bit dull,” he says. The solution, says Ayres, was to introduce some of the original maverick style of the brand. “It’s not so much a new idea grafted on, but a dormant attitude reinvented.”
Repositioning the brand took two years and involved interviewing partners around the world to get a consensus on where Arthur Andersen should be going. Building a strong relationship with the client was vital to the success of the project, he says. “Much of it was down to the leadership group of managing directors from around the world who learned and embraced the idea of branding, which isn’t part of the their day-to-day work agenda.”
And Doug Hamilton, creative director of Wolff Olins, says that the repositioning of white goods brand Indesit was all about team work. “It has been a team effort from the start, working with the client for the client. We’ve created a real visual and verbal language for the brand. It may not be a new category, but it’s a very fresh look at an old one.” Meanwhile, clients say that one of the most important factors for a successful corporate branding project is the strength of their relationship with their agency.
Simon Ingham, corporate affairs manager for Kelda Group – the new name for Yorkshire Water’s holding company – explains: “I appointed Bamber Forsyth because we wanted to work with someone who felt right. The people were crucial because they had to be credible to the board of Yorkshire Water. They understood what was needed.”
Although repositioning, convergence, and mergers and acquisitions are all fuelling corporate branding, it is digital media which is perhaps having the biggest influence on the market. Knapp says that much of it is coming from established brands which want to move into e-commerce.
HFC Bank, for example, which provides credit cards and hire purchase finance at high street stores, wanted a presence on-line. “Consumers have two problems with the Internet – they worry about security and it can be confusing. We wanted to create a brand that would be appealing on- and off-line and which consumers would understand,” says Martin Rutland, director of communications. The answer was Marbles, created by Wolff Olins.
“Marbles is about a new idea of money in the virtual space of on-line financial services. To counter the abstract, technical basis of the offer, the brand name and visuals refer to a playground currency that’s simple and familiar and it’s all done in a language they understand,” he says. Since its launch, 70 000 new customers have signed up with Marbles.
“We are very pleased with the results,” says Rutland. However, it’s not just “bricks and mortar” companies that are seeking “virtual” brand identities, e-commerce start-ups attracted to the biggest gold rush since the Klondike are also thinking about building their brands.
“In the past six months we have seen a massive rise in e-commerce start-ups which want an identity tomorrow. Some of them have money, but a lot of them don’t. It’s usually a very big learning curve for them because they don’t have a clue about branding,” says Watson of GDR. It is a high risk business.
Eric Benedict, who runs Ernst & Young’s Internet unit, says, “I reckon that about 99 per cent of ‘.com’ start-ups won’t get off the ground. It’s no longer enough for an e-business to have a good idea or follow another market.” Bridget Ruffell, managing director of Corporate Edge, says, “We have been approached by start-ups looking for an identity. Some say ‘will you do it for nothing in return for a percentage of the equity?’. They are looking for a partnership rather than someone to just provide a solution.”
However, aside from risky e-commerce companies which want a lot of hand-holding from their agencies, in general clients are much more clued up about branding and what the process involves. “We have noticed that clients have a much clearer understanding of branding in its totality – very few of them say ‘can you do us a logo?’,” Ruffell explains. They are also much more clued up about the need to communicate rebranding to internal audiences rather than the world at large. “There is a much greater emphasis on targeting employees and getting them involved, whereas it used to be all about communicating with the City,” she says.
Watson of GDR says that while many clients are looking for greater strategic input and the ability to communicate with an internal audience, some will look elsewhere for that expertise – management consultants or advertising agencies. But, he adds, “The biggest identity specialists, do get in at the ground floor because they have managed to build a reputation for both strategy and creativity.” However, he says that some identity specialists have forgotten their roots. “At the end of the day, clients select an identity specialist because they want creative input. Yes, it’s important that they can help clients find solutions to their problems and yes, its vital to understand strategy, but the one thing that clients can’t do themselves is the creative thing – and neither can management consultants. It’s something that they must not lose sight of.”