The Brand Avenger 2013 year in review.

I thought I would do something a little different for my 50th blog and provide a year in review for 2013. Over my last 49 articles The Brand Avenger has carefully dissected brand strategy, poor decision making and has scrutinised the controversial areas that have led to outrage from the public. However after spending so much time writing about the wrongdoings of many a brand I simply wouldn't be doing justice without providing a proper review. For the purposes of curiosity I would like to develop this further by providing a breakdown of the top ten brands who should be most worried, brands who don't need to worry despite some horrendous decision making and brands who might be in some danger so are ones to watch in 2014.

All is fine despite some poor decisions

Over the year we have seen just as many examples of poor branding decision-making from established brands as we have seen from smaller, independent companies. One of the first companies we covered for expenditure in celebrity endorsement as opposed to more measurable forms of marketing was Nike. We criticised Google for lack of clarity over data protection rules for email and was critical of Starbucks over tax evasion and lack of ethical practice. Whereas these were all valid concerns it is clear there are still some companies that have enough brand equity to not feel the impact too harshly from poor decision making. Within this 'safe' group I would place Channel 4, Adidas, Amazon, Microsoft, Facebook, Twitter and Coca-Cola on top of Starbucks, Nike and Google. Whether it is all measurable and worthwhile investment or not these companies are spending enough money to protect themselves from the poor decisions. Their sheer size and market strength protects them from feeling the repercussions of poor decisions making more so than the more vulnerable companies in the market. It of course doesn't justify poor decisions but does make it easier to protect against.

Ones to watch out for in 2014

If you have followed The Brand Avenger blogs in 2013 you may have noticed some big brands are missing from the above list. This is not to say these companies should worry about going out of existence anytime soon but it does mean that the following need great years in 2014 as they have a lot to prove to the market.

My first brand to watch is UK insurance comparison company Go Compare. The Brand Avenger covered this company in 2013 after it was revealed they had the most complaints for not one but two adverts to the ASA in the UK. Now one could argue the brand managed to turn negativity into smart and sensible strategy by evolving it's Go Compare advertising but they will have to be extra careful in 2014 to not evoke the same emotional reaction in the general public. It might be great every now and then to raise awareness but it won't be long before the company starts to really annoy customers and jeopardise sales. 

Staying in the UK Gregg's was responsible for some poor decision making in 2013 which wasn't helped by taxation and poor weather. Although still a prominent name on the UK high street Gregg's will need to ensure they stay on top of things this year and come up with new innovative ways to meet the needs of a public with changing tastes and perceptions of high calorie snacks.

The last two companies who need to have a strong and steady 2014 are Apple and M&S. 

M&S came under criticism for customer service following the Halal controversy of Christmas although this wasn't the least of the high street chains worries. Poor food sales and a competitive retail market has led to real challenges for the big UK name. They will need to get their head down in 2014 and focus on revival. HMV and Woolworth's are examples of what can happen if you continue to get brand positioning wrong or if you ignore changing trends in the market. 

Apple have been here before. The weight of expectation must sometimes be crippling however when you have a history of innovation this is the risk you take. It is clear from the early criticism we covered on Apple's innovation they need a big year strategically. The new CEO will be under pressure to deliver so we will certainly be watching this one closely.

The top ten worst brand impacts of 2013

And so all that is left to do is to cover the worst branding decisions of 2013.

10) Asda-Walmart: Stack it high, sell it cheap has long since been the motto for one of the biggest companies in the world. But what we began to see in 2013 was a breakdown in the belief that price is king. Asda-Walmart came under particular scrutiny regarding its treatment of staff. Adding this to a poor performance in the market and you really have to question how long the powerhouse can continue to support the notion that customer loyalty and retention is not as important as managing the bottom line.

http://brandavenger.blogspot.co.uk/2013/11/asda-wal-mart-having-had-much-to-be.html

9) Ryanair: In the Summer we released a blog with a somewhat provocative title claiming that although Ryaniar doesn't care about customers this works fine for their brand strategy. 

http://brandavenger.blogspot.co.uk/2013/06/ryanair-doesnt-care-about-customers-and.html

Now if you have recently viewed the Youtube clip of the dramatic 8 hour delay of the February 14th Ryanair flight from Stansted to Porto you might be inclined to believe that Ryanair doesn't care about customers at all. But for a long time now it is clear that Ryanair has managed to get away with a lack of customer service through positioning themselves as a market leader in low prices.

2013 Has already brought about a renewed emphasis on customer service from the Irish brand. If they want to ensure long-term success it will be crucial for them to continue this. However if they continue to get negative publicity from social media and scrutiny from regulatory bodies they might be putting themselves in real danger.

8) MySpace: I would see MySpace as a work in progress despite an unsure future prior to 2013.

http://brandavenger.blogspot.co.uk/2013/06/flogging-dead-horse-can-myspace-rise.html

Their might still be some life in the old horse yet if Justin Timberlake can work his magic and utilise his music connections. The repositioning of the brands to become more of a creative network for music artists appears to be bringing new life to the brand. However this type of repositioning is very hard to make scalable so it will be interesting to see how the powers at be can continue to grow the brand. I wouldn't expect it to reach the lofty heights it had done so before though.

7) Wonga: What a year for this UK short-term loan provider. On one hand you have a company that is making record profits and is in a clear period of growth. In the other you have a company which is scrutinised for exploiting the poor and high profile figures such as the Archbishop claiming to be coming after you.

http://brandavenger.blogspot.co.uk/2013/07/should-wonga-be-worried-about-its-brand.html

This is not so much a worry about the performance but more so about the context and conditions. Whether or not this will be sustainable will mostly come down to how well (or how poorly) Wonga manage its public perception. 

6) EA should find themselves very fortunate that they can be mentioned twice in Brand Avenger articles, can be nominated for worst company in the year two years running in the US and still be outside the top 5 of worst brand decisions.

http://brandavenger.blogspot.co.uk/2013/02/a-twenty-something-male-strolls-down.html

http://brandavenger.blogspot.co.uk/2013/04/is-ea-sports-worst-company-in-us-or.html

There is a reason for The Brand Avenger's decision to keep out of the top 5 and it is all down to the emotional reaction. EA impact on a large number of engaged and socially media active consumers and so I would argue it is easier for the company to face scrutiny than other brands. There are clearly poor strategic decisions that are being made but can we truly state that a company performing as financially strongly as EA is a company in danger of extinction?

5) Yahoo: Sales were on the rise in August but perception was suffering.

http://brandavenger.blogspot.co.uk/2013/08/is-yahoos-brand-reputation-on-rise-or.html

While it is clear Yahoo have made some massive strides in acquiring brands that will help stimulate long-term growth there are still questions that remain over the strength of the brand. Recent results show positive signs for the future especially when you consider mobile usage but when you consider customers are still turning away from utilising search engine functionality and Google continues to dominate the market you can't help but feel nervous for the big Y.

4) Abercrombie: A disaster year which has led to wide-scale criticism and the public demotion of key senior leaders. When the former CEO decided to chip in with his thoughts on who should be wearing Abercrombie he did more to damage the company in one sentence than many competitors have done by any other means in years.

http://brandavenger.blogspot.co.uk/2013/05/are-woes-of-abercrombie-fitch.html

I still don't see a revival for Abercrombie. All I can say is even if they don't believe in plus size shirts I hope they sell shoes above a certain size because it's going to take a larger than normal trainer to fit the big old foot in Abercrombie's mouth.

3) Groupon: We have seen positive signs under the new CEO however the company continues to struggle when it comes to its position in the market

http://brandavenger.blogspot.co.uk/2013/03/brands-behaving-bady.html

This is going to a big year for the discount voucher site. They need to get their mobile strategy right and understand the right deals to provide their customer base with a positive feeling for the discounter. Failure to do this could result in a nasty decline for a once promising start-up.

2) Billabong: In October we asked want went wrong with Billabong however maybe we should have asked what continues to go wrong for the clothing company?

http://brandavenger.blogspot.co.uk/2013/10/what-went-wrong-with-billabong.html

It's going to take a massive effort and a clear and concise brand recovery plan to save this Aussie export from extinction in the coming years. For a company that has has such a strong standing for so long you have to question where it all began to go so wrong.

1) Blackberry: And so finally we get to number one. The brand that has suffered more than any other this year following poor strategic decision making.

http://brandavenger.blogspot.co.uk/2013/08/kicking-habit-crack-berry-users-just.html

Blackberry had such a strong position and a clear advantage when it came to their association as the business phone of choice. But somewhere along the road as smartphones continued to rise in the market Blackberry has just lost itself along the way. 2014 s going to be a long hard year for the Canadian company. They need to come up with a strategy and come up with one fast. It isn't out of all possibility that by 2015 they could be completely out of the mobile market at this rate.

Game over for Nintendo?

Nintendo announcing projected losses of $240 million is definitely not small fry so should we all be worried about the long-term stability of Mario and friends? This will be especially concerning since sales for gaming hardware has increased 28% mostly driven through the launch of new gaming systems from Sony and Microsoft.

http://www.washingtonpost.com/business/technology/nintendos-painful-quarter-spells-real-trouble-for-company/2014/01/17/de531dbe-7f88-11e3-93c1-0e888170b723_story.html

There might not be too many reasons to panic as of yet. Most people would argue that Nintendo has been the main company propping up the sales of the gaming industry since 2008.

http://www.zeldainformer.com/news/apparently-the-gaming-industrys-decline-is-nintendos-fault-360-to-outsell-w#.UuWdvyg4kb0

Could the recent drop in sales really be testament of how the gaming industry is structured more so than an indication that the company could be facing a worrying future? The big names in gaming all enjoy a piece of a pie when it comes to the launch of a new console. Nintendo have carved themselves a successful niche over the years by positioning their brand to appeal to families and groups of friends whilst Sony and Microsoft have aggressively gone after the solo gamer. However as gamers can of course have more than one console hence lining the pockets of more than one tech giant is the recent decline in sales to be expected considering the launches of the other consoles?

Whereas there is a lot to be said in regards to the impact other console launches would have had on Nintendo you would surely expect the analysts who work at the company to have considered this in their projections. However if this is the case why have they the number crunchers had to readjust forecasts? 

Nintendo need to take stock of the situation and react fast to keep up with the consumption habits of the customer and changing trends in the market. One way they may look to do this if through entering brave new worlds such as the smartphone market.

http://www.bloomberg.com/news/2014-01-19/nintendo-pressed-to-exit-hardware-after-wii-u-flop.html

Nintendo’s extensive library of characters could be utilized in exciting new ways through a number of hardware and software capabilities. Nintendo could actually be the first games company to take an innovative and important brave step towards addressing how the consumer of tomorrow will want to consume gaming. It’s not like Nintendo have no history of innovating in the sense of adversity. In short the threat could certainly become an opportunity to contrary to what the good folks at Bloomberg might suggest Nintendo shouldn’t make the move to utilizing smartphone technology whilst fully turning its back on consoles. The true companies who make a difference invest significantly in the future whilst maintaining presence in current markets. If Nintendo are going to see out this storm it will be as important for them to address the console challenge as it will be to be the first to fully shape the future of gaming.

What is Facebook doing with your data?

Facebook might be the preferred social network in the US but that doesn’t mean it is immune from criticism or legislation protecting consumer rights. Most recently Facebook has fallen into some hot water following allegations from two American users that the site had scanned private messages for key words to sell to advertisers for targeted messages.

http://www.gmanetwork.com/news/story/342366/scitech/socialmedia/facebook-faces-suit-for-data-mining-private-messages

Ever since Facebook began commercializing data there was always a risk that the company would come under some sort of scrutiny around how they decide to use it. Facebook may have taken some comfort from the fact that other data mining companies have been here before and have come through the other side relatively unscathed. However the fact that the class action is raised from 2 users on behalf of what could be millions of US Facebook users will be a huge concern to the social media giant. However this will only be a concern for Facebook if it begins to hit the finances and as of yet the stock price has remained flat.

http://www.ft.com/cms/s/0/5c940122-73ed-11e3-beeb-00144feabdc0.html#axzz2pYJxbhVE

Facebook are no strangers to the controversy that can arise from the uncertainties of data handling. In 2012 they were forced to drop face recognition technology due to the uncertainties around how the data was used.

http://www.dailymail.co.uk/news/article-2207098/Facebook-switch-controversial-facial-recognition-feature-following-data-protection-concerns.html

The question now is how will the most recent lawsuit in regards to Facebook data policy impact the brand in the long-term? The answer to that question will come down to how Facebook approach the publics concerns. There needs to be some clarity around exactly how Facebook intend to use the data and maybe more importantly what access rights advertisers is given when they purchase it. It is clear from recent popularity polls and Facebook’s stock price that there isn’t too much to worry about now. But the data issue won’t go away so the reputation of the Facebook brand and popularity with its users in the long-term will depend on how well they communicate the data policy to users.

Has Virgin already lost with their decision to sponsor the Commonwealth Games?

You spend all that money on advertising for the Commonwealth Games and for what? For three quarters of the Scottish public to not even know who is sponsoring the event.

http://www.marketingmagazine.co.uk/article/1214670/three-quarters-scots-oblivious-commonwealth-games-sponsors

This is clearly an issue for the businesses who have decided to pay for the advertising and the Commonwealth marketeers who are looking to make a fast buck over the games. Perception can be everything so it might concern the official sponsors even more that the most recognised of the companies (RBS at 19%) ISN'T even an official sponsor! that's right, a company who hasn't invested one dime into the pockets of the Games organisers is simply benefiting from the existence of an event. If only the organisers could charge money for any publicity generated whether it is paid for or not.

http://www.theguardian.com/media/2013/may/24/virgin-media-commonwealth-games-sponsor

Virgin Media have clearly invested an considerable amount of time and effort into the sponsorship so it will come as a shock to the multi-media provider that they are currently ranked last of the official brand recognition poll taken from YouGov. Virgin are no stranger to lucrative, sponsorship partnerships with athletes and sporting events but this is clearly a blow to their long-term strategy. What is the point of spending millions of pounds on event sponsorship if the general public can't even identify your brand with the product. And there are many who share the view that event sponsorship just aint cutting the mustard.

http://www.meetpie.com/modules/newsmodule/NewsDetails.aspx?newsid=15209

Whether you agree with Fisk's view in the above article or not I cannot argue with the face that most people do in fact only remember three key pieces of information at any one time.  However, in the case of Virgin's sponsorship of the Commonwealth Games it seems that even three sponsors is too much for Joe Public to remember.

Of course we may have prematurely jumped the gun. The event hasn't even started yet and of course brand recognition will really peak around the time of the event. If anyone doubts the power this type of advertising can have they should look no further than the success of the Olympic and Paralympic Games last year.

http://money.aol.co.uk/2012/10/10/paralympics-success-for-sainsburys/

So what is the important takeaway for companies? If you are looking for a long-term, brand recognition exercise then Event Sponsorship might not be the thing for you. However if you are looking to build short-term acknowledgement and brand value then events might just be the thing for you.

Kicking the habit... 'Crack' Berry users just don't feel the same high anymore from the outdated mobile device

There is an advert that has been playing time and time again on Sky Atlantic in the UK. It features the new Blackberry model with particular focus on the dynamic camera feature. The problem is the feature wasn't really that new or game changing 6 months ago let alone now. It is simple, little things like this which probably explains why Blackberry has continued to experience a decline in sales and brand value. The company has lost its way in the competitive world of mobile technology, however what has really set the alarm bells ringing is the decision by a board to sell, which clearly demonstrates they are fresh out of ideas.

http://www.theguardian.com/technology/2013/aug/12/blackberry-for-sale-smartphone-market

An $85 million decline in sales last year would seem to suggest the former 'crack-berry' addicts have gone cold turkey. Blackberry has fallen behind the market leaders and is failing in the battle with Apple and Samsung. The company has clearly lost its way and the brand reputation is suffering as a consequence.

http://www.eweek.com/mobile/slideshows/blackberrys-mobile-market-decline-the-result-of-10-basic-factors/

Is Blackberry an example of what can happen when a company moves from an innovator to the imitator? Blackberry doesn't even seem to know where its product offering sits. it clearly isn't appealing to the price sensitive market and has allowed itself to fall behind in the battle to win share with the upmarket consumer. If smart phones today really are more about music and photos then they are about email then Blackberry clearly needs to be offering a viable alternative in this space.

http://www.theglobeandmail.com/report-on-business/the-blackberry-comeback-that-wasnt/article13719761/

And what about the corporate market that Blackberry has for so long experienced a sustained growth in? Well it turns out that Blackberry can no longer count on this market to bail it out of its current position. It is clear that even if the Blackberry review committee decided that the best way forward was to drastically downsize even more so than getting rid of the 5,000 employees they have already made redundant recently and go after the corporate market exclusively they might not even have an audience to cater for. When Blackberry first started to gain brand recognition and increased market penetration within the world of big business they were offering a valuable advancement in communication. Now they can't even offer the app, video or display capabilities that are needed to support the basic requirements of every small and large scale corporation.

http://yougov.co.uk/news/2013/08/14/blackberrys-new-model-failed-stem-its-brand-declin/

Brand index scoring doesn't paint a pretty picture for the future of the Canadian phone manufacturer. A steady decline from 2011 in both the UK and US markets demonstrates a clear message for any brand strategist about the dangers of losing touch with your market. Blackberry were once in a position where the brand was big enough to sustain the challenge of some of its fiercest competitors. Now they are in a position where without some careful planning and a clear and concise strategy it is in danger of being entirely squashed and swept up into the brand graveyard.

The Greggs or Dregs of Society?

You wouldn't believe how much of an impact the weather can have on the short term stability of brand value. In UK high street baker Gregg's case there doesn't seem to be any other plausible reason for a recent 7% decline in sales than the UK July Summer heat wave.

http://www.bbc.co.uk/news/business-23585083

You will have to forgive The Brand Avenger for a slight degree of skepticism but I feel Gregg's may have slightly exaggerated the impact of the weather on this occasion. No matter which way the high street baker wants to paint it their current strategy and product offering is just simply not giving the UK consumer what they need.

Of course for the sake of fairness we should try and understand if the weather could of had an impact on the major brands on the UK high street? Could it be that instead of hitting the stores the UK consumer has decided to spend the majority of their days lazing on a coast line beach bumming it up and down the Country instead? Well interestingly enough all results would suggest that to the contrary of Gregg's view most major and minor brands on the high streets have enjoyed considerable growth during the uncharacteristic summer months.

http://www.bbc.co.uk/news/business-23583825

So then it must simply come down to product offering? For whatever reason customers are simply not buying what Gregg's are cooking. Who wanted to supplement their Saturday morning sunbathe with a steak slice pasty? turns out not too many people. Who wanted to jump into the pool with a chicken bake or a hot sausage roll? Even less by the looks of it. Gregg's lack of understanding has quite simply led to a fall in profit. This can almost certainly be seen by the fact that despite the slump in sales customers perception in the brand remains largely unchanged.

http://www.marketingweek.co.uk/news/brand-audit-greggs/4007572.article

You may feel that a 29% year on year fall on profits is enough to suggest that something just isn't working with the perceived brand value of Gregg's with their consumers. However the fact of the matter is that brand perception scores remain fairly positive, clearly demonstrating a major positive factor for the brand. Their battle is not to try and change the perception of the consumer or gain trust following a PR disaster. Their major challenge now has to be built around something far more fundamental.

The key question the chief executive Roger Whiteside should be asking himself is how has Gregg's allowed themselves to become so out of touch with the UK consumer when major competitors such as Pret continue to prosper? The answer all lies with the knowledge the baker has of its consumers, or lack thereof in this instance. Gregg's shouldn't be in a position where their ranging is fixed throughout the year. The product portfolio and product offering should be flexible enough to allow for fluid and fast paced changes. Gregg's know what they have to do to build this important knowledge bank but so far they have been slow to release there much hyped 'loyalty scheme'.

http://www.telegraph.co.uk/finance/markets/questor/10026151/Questor-share-tip-Greggs-will-only-be-a-tasty-proposition-if-loyalty-scheme-works.html

Why is a loyalty scheme so important for the long term stability of the Gregg's brand? First of all it will help Gregg's build a fundamental understanding of their customers and will help with decisions such as when, what, where and how many products should be stocked across the thousands of stores that make up their estate. It can allow the high street chain to surprise and delight their most valuable customers with rewards and offers for the products they most buy. I would wager a bet that at least half of their sales are generated by their most loyal customers. Generating surplus income from these customers shouldn't be an uphill battle as these are the guys who want to shop with Gregg's in the first place.

But if Gregg's are looking to loyalty to build a sustainable long term viable strategy they need to do it right. We are long past the days where free coffee stamp cards or random, un-targeted product discounts are enough. If the scheme is to work it needs to be linked to customer information, pick out this info on and actual purchase behaviour and offer attractive discounts and marketing strategy based on what customers want.