Nigel Hollis presentation Tendensdagen 2009

1. Authenticity: It's All About You
Nigel Hollis
Chief Global Analyst
Tendensdagen, Stockholm, Sweden

2. Agenda
What is authenticity?
What is authenticity worth?
What are the characteristics of an authentic brand?
2
In my presentation I will address three topics:
First, I will share some feedback from my Millward
Brown colleagues in Europe and North America on what
authenticity really means in relation to brands.
Second, I will look at what authenticity is actually worth
to a brand.
Third, I will consider the characteristics of authentic
brands – what sets them apart from others and how an
authentic brand is created.

3. What Is Authenticity?
To answer the question of what authenticity really
means in relation to a brand, I enlisted the help of my
colleagues in Europe and North America. I asked them
what it means when a brand is described as "authentic"
and then invited them to name some "authentic"
brands.
First, let's see which brands were volunteered as
authentic.

4. Only 5 brands were mentioned spontaneously by
more than 5 percent of participants
10%
7%
6%
32% 25%
Source: Survey of 488 Millward Brown staff in Europe and North America 4
While over 500 different brands were nominated as
being authentic, the vast majority were mentioned by
1% or less of our sample.
This slide shows the five most frequently mentioned
brands: Coca-Cola, Levi's, Apple, Nike, and Jack
Daniel's.
Other brands mentioned by more than 1% included:
BMW, Budweiser, Google, Heinz, Chanel and Harley
Davidson.
The massive tail of brands that followed included the
likes of Saab, Converse shoes, Marmite savory spread,
Alfa Romeo and Tabasco hot sauce.
So what properties link such a diverse set of brands?

5. We found substantial agreement on what
"authentic" means…
Which words or phrases below describe an "authentic" brand?
True To Its
Origins
Genuine
"The Original"
0 20 40 60 80
% endorsing
Source: Survey of 488 Millward Brown staff in Europe and North America 5
There was substantial agreement that authentic brands
were true to their origins and genuine.
European participants were more likely to say that
authentic brands are "true to their origins." This may
reflect a greater emphasis on provenance and brand
history in Europe.
North American participants were more likely to endorse
"genuine" and "does not misrepresent itself." This might
be a reflection on the quality of marketing or the
consumer mindset. I often see brand communication in
the United States that seems to be designed to sell and
manipulate opinion rather than engage consumers with
a brand.
To sum up, an authentic brand is one that is true to its
positioning and values. It does not change its message
simply to attract new users; it stands for something.

6. …and on what it doesn't
Which words or phrases below describe an "authentic" brand?
Puts Customers
First
Comes From A
Specific Place
`
Trustworthy
0 10 20 30 40 50 60
% Endorsing
Source: Survey of 488 Millward Brown staff in Europe and North America 6
My colleagues do not believe authentic brands put the
needs of their customers first. (Only 7% endorsed this
statement.)
Contrary to my personal expectations, only 26% agreed
that authenticity implies a brand comes from a specific
place.
And an authentic brand may or may not be considered
trustworthy. Just under half of our respondents
endorsed this word in relation to authentic brands.

7. What Is Authenticity Worth?
So now we know what authenticity is and what it is not.
But what is authenticity actually worth to a brand?
Before I explain that, I first need to introduce you to
Millward Brown's brand equity database, BrandZ.
BrandZ is a quantitative brand equity study that is
based on our BrandDynamicsTM brand equity framework.
BrandZ has been conducted annually by Millward Brown
on behalf of WPP since 1998. The database now includes
measurement of 10,000 brands in over 30 countries.
Central to BrandZ is the Brand Pyramid, which measures
consumer commitment to a brand.

8. The Brand Pyramid explains purchase
behavior
High share
of wallet
Individuals who Bond
Individuals who Bond
with a brand are more
with a brand are more
than ten times more
than ten times more
likely to buy it than
likely to buy it than
those who just know
those who just know
the name
the name
Low share
of wallet
8
The pyramid's first level is Presence. Consumers who reach the
Presence level are actively aware of the brand when they think about
the product category, either because they've tried it (or know someone
who has), or because through some other means they've become
aware of what the brand stands for. Consumers reach the second level,
Relevance, when they believe that a brand promises to deliver
something of value to them at an acceptable price. To move to the
third level, Performance, people must believe that the brand delivers
satisfactorily on its basic functional promise. Those who reach the
fourth level, Advantage, believe the brand offers rational or emotional
benefits that distinguish it from the competition. People who reach the
fifth level, Bonding, believe that the brand offers unique advantages in
terms of what is most important in the category; therefore it is the
best brand for them.
People are typically at least 10 times more likely to buy a brand they
are bonded to than one that they are simply aware of at Presence.
Because of this relationship with individual behavior, Bonding has a .82
correlation with share of market figures, representing an excellent
measure of a brand's present attitudinal equity.
(Note: While bonding represents a predisposition to buy a brand, in-
market behavior - and therefore market share- is affected by factors
such as distribution and pricing.)

9. Authentic brands have stronger Brand
Pyramids and higher market shares
Authentic Brands Other brands
Bonding
Advantage
Performance
Relevance
Presence
9
Here we can see the average Brand Pyramid for authentic
brands compared to that for the remaining brands.
Authentic brands are stronger throughout. Presence for
authentic brands is 50% higher than that for other
brands, but the real benefit comes at the Bonding level.
Over four times as many people are bonded to authentic
brands. The end result is that authentic brands tend to
have market shares that are twice as big as other
brands.
So authenticity is associated with a brand's current
attitudinal loyalty and market share. But even more
important, authenticity can influence future brand
performance as well.

10. Potential growth depends on how well a
brand converts people from…
This...
10
Based on extensive analysis, we have found that we can
predict the probability that a brand will grow or decline
based on a subset of the BrandZ data.
The better a brand converts people from active familiarity
with a brand–either using it or thinking of it
spontaneously—to agreeing that it is one that they think
highly of, is more appealing and is different from other
brands, the more likely it is that the brand will grow
market share in the coming year.

11. Potential growth depends on how well a
brand converts people from…
To this...
e.g. Apple's unique
design
e.g. 4-wheel drive
+ +
e.g. something
"Different (in a good way)"
11
In other words, brands that people think are different (in a
good way) are more likely to grow.
We call this measure Voltage 2.0. Voltage 2.0 is a measure
of the degree to which a brand is primed to succeed or fail.
It's "the wind in your sails" (or in your face).

12. Voltage 2.0: Improved probability of market
share growth, reduced probability of decline
12
This slide illustrates how we’ve validated Voltage 2.0.
An analysis of over 350 brands, including packaged
goods, telecoms, automotive, and others,
demonstrates that a strong brand that is seen to be
different in a good way is much more likely to grow
than others.
It shows that in cases gathered from our database
over the last decade, as Voltage 2.0 grew, the
probability that the brands would increase market
share in the year following the study also grew.
It also shows that as Voltage 2.0 gets lower, the
probability of those brands losing market share
increased.
From this we can confidently assert that the higher a
Voltage 2.0 score, the greater the probability that a
brand will succeed in the months following the study.

13. Authentic brands are more likely to have
positive growth prospects
Authentic
Brands
13
If we plot the average scores for authentic brands on
this map, we see that the authentic brands are firmly
placed to the right of the average, with higher growth
potential and lower risk of decline.
Here in Sweden, Coca-Cola would appear to have very
strong growth potential and a low risk of decline. Other
authentic brands in a similar position would be Apple
and BMW.
Unfortunately, authenticity is not a guarantee of future
success. In the United States, Levi's, nominated by
25% of my colleagues as authentic, has struggled to
compete against new fashion brands in the face of
shifting consumer tastes. In spite of its best efforts, the
brand's growth potential is negative.
Here in Sweden, a well-known local brand risks finding
itself in a similar position. Volvo has a Voltage 2.0
score of -5, neither positive or negative.

14. Younger European respondents were less
likely to believe Volvo is authentic
Please select the brands below that you think are "authentic."
45
40
35
30
25
20
15
10
5
0
40 and under 41 and older
Source: Survey of 488 Millward Brown staff in Europe and North America 14
And perhaps our survey reveals the reason why
Volvo's consumer growth prospects are not as
healthy as they might be.
Younger respondents were less likely to agree the
brand is authentic. Perhaps the views of older
respondents are less tainted by Ford's ownership, or
by recent reports that the brand would be sold to a
Chinese company?

15. The Characteristics Of An Authentic Brand
Our analysis suggests that '"authentic" brands may have
larger market shares and stronger growth potential than
other brands.
So what are the distinguishing attributes of authentic
brands? How do you ensure that your brand is seen as
authentic?
First, let's see what makes people bond with a brand
and how authentic brands compare to others on those
key factors.

16. Six possible ways people might choose a brand
e.g. Coke's iconic
status
e.g. Mercedes
reputation for quality
e.g. Guinness's
positioning
e.g. Apple's unique e.g. McDonald's value
design menu
e.g. Red Bull's events
16
People bond to brands for different reasons. We have
identified six broad underlying factors, which are driven as
much by experience as by what brands try to tell people.
Any one of these criteria could give someone a reason to
choose one brand over its competitors.

17. People think more highly of authentic brands
X 1.7 X 1.5 X 3.6
X 1.6 X 1.8 X 0.8
Source: BrandZ database analysis 17
Here we see a comparison of authentic brands to others in
the BrandZ database.
The biggest difference is seen in terms of perceived
popularity. Authentic brands are over three times more
likely to be mentioned as popular than others.
But the true strength of authentic brands lies in being seen
as better than others, more appealing, and different.
These characteristics give these brands greater growth
potential and also help justify a stronger price premium
(which is why they are less likely to be seen as a good
deal).
Authentic brands live up to their promise. They offer
something different from other brands, deliver a great
brand experience, and are more appealing. That's what
makes them popular.

18. Authentic brands are leaders, not followers
Compared to non-Authentic
Assertive +26%
Trustworthy +26%
Adventurous +24%
In Control +23%
Desirable +22%
Rebellious +20%
Arrogant +18%
Sexy +17%
Brave +15%
Wise +6%
Source: BrandZ database analysis 18
The other thing to note about authentic brands is that
they tend to have a distinctive brand personalities. They
tend to be leaders, not followers.
Authentic brands are more likely to be considered
assertive, trustworthy, adventurous, in-control, and
desirable.
Does this profile remind you of someone?

19. Does this profile remind you of someone?
19
I am reminded of Captain Jean Luc Picard of the
Starship Enterprise from Star Trek: The Next
Generation. A man not afraid to boldly go where others
have not gone before. One who is willing to take
responsibility for difficult decisions. And one who holds
true to his principles whatever the cost.
The characteristics that made Jean Luc successful –
whether as a starship captain or more realistically as a
TV star – are characteristics that marketers would do
well to emulate if they want to be authentic. You need to
know what your brand stands for and be willing to hold
true to those values.
To explore this idea, let's have a look at two renowned
global brands.

20. European colleagues were much more likely to see
Apple as authentic than Nokia
Please select the brands below that you think are "authentic."
45
40
35
30
%
Endorsing 25
brand as 20
"Authentic"
15
10
5
0
Apple Nokia
Source: Survey of 488 Millward Brown staff in Europe and North America 20
As I noted before, Apple was one of the top five brands
mentioned spontaneously as authentic by my Millward
Brown colleagues.
When provided with a list of brands and asked to
identify brands that were authentic, 42% of my
European colleagues selected Apple. By contrast, only
18% did so for Nokia.
So why the difference?

21. More than a good product: Clarity of associations
21
Both brands are known for their innovative products but
Apple has done more than simply sell new technology.
Apple has created a strong and desirable brand with a
multitude of positive brand associations.
Steve Jobs provides vision and leadership to the brand.
As a result, Apple maintains a 100% focus on customer
needs, design, and simplicity of use. By comparison,
Nokia struggles to create the same clarity of
associations in spite of its commitment to innovation.
But there is more to it than a commitment to innovation
and a positive brand experience. Tone of voice also
plays a part. It is not just what you stand for, it is how
you engage consumers with your brand.
To examine this aspect of authenticity, let's compare
two beer brands. Both come from the United States. The
first is Bud Light and the second Sam Adams. There are
no prizes for guessing which brand is more likely to be
thought authentic.

22. Bud Light
22
The ad for Bud Light is humorous and consistent with
the brand's personality, but it clearly does not convey
authenticity. If nothing else the wave idea has been
used in other ads.
Bud Light is the offspring of Budweiser, and the biggest
beer brand in the U.S. The parent, Budweiser, is
considered authentic by many. However, Bud Light's
tone of voice makes it tough for that brand to share its
parent's values.

23. Sam Adams
23
The ad for Sam Adams features Jim Koch, the brand's
founder, and highlights his commitment to brewing and
selling fresh-tasting beer.
Behind most authentic brands – Method, Zappos,
Facebook, Chanel, Apple and the like – there is someone
who is responsible for ensuring that the brand lives up
to its promise and does not deviate from what people
have come to appreciate about it.
As the founder of Sam Adams, Jim Koch is featured in
the brand's advertising. This need not be so. Brand
champions can also lead from behind the scenes, but if
they do, their role is the same: to ensure the brand acts
authentically.

24. Vegemite: An iconic Australian brand
24
Vegemite is an iconic Australian brand. This savory
spread was first introduced in 1923 when a competition
was held in order to choose the name. Today the brand
is truly embedded in Australian culture. It is most often
used on toast and in sandwiches, often with cheese or
other ingredients.
To give you a feel for the brand, here is an ad that
appeared on TV not so long ago. Though it is recent, it
harks back to earlier advertising, which parents of today
might remember from their childhood.
Since people do eat Vegemite with cheese, Kraft
recently introduced a new variant: a "Vegemite with
cheese" spread. Again, a competition was held to name
the new product. This time there were over 40,000
name submissions. The winning name was announced
on September 26th of this year. And the new name
was…

25. And the winner is…iSnack 2.0?!!!
25
…Vegemite iSnack 2.0. This introduced a problem. While
the new product was well received, the new name was
not. The reaction on blogs, Twitter and Facebook was
very negative.
Like all good marketers these days, Kraft listened to the
feedback and announced that they would change the
name. So what's the problem? That takes care of the
bad publicity, right?
Well I would argue that when it comes to a brand like
Vegemite, which has always been seen as authentic, you
risk undermining that authenticity when you introduce
new things that are not in keeping with what people
expect of the brand. The technology associations of the
new name are simply not seen to be appropriate to the
brand or its history, and the brand's authenticity may
suffer as a result.

26. Conclusion
26
So let's recap.

27. Authenticity: It's All About You
Actions speak louder than words
> Authenticity is about the way a brand acts and engages its
customers
> If people perceive a brand to be genuine in its actions they
will likely perceive it as authentic
Authenticity does have a payoff
> Brands that are seen to be authentic are more likely to grow
market share than those that are not.
27
Authenticity in itself does not imply good or bad things
about a brand.
It is entirely down to whether the brand acts in a way
that is consistent with a defined set of values and how it
engages its consumers.
As we have seen, authenticity does have a payoff. Those
brands judged as authentic tend to have stronger brand
equity, which leads to higher market shares and
stronger growth potential.

28. Authenticity: It's All About You
Identify your brand values and stay true to them
> Sometimes acting in a genuine manner means forgoing the
quick buck
> And it always means delivering on your brand promise
To that end, brand champions must ensure that the brand's
actions are aligned with its values
In the words of our role model, Jean-Luc Picard, if you want your
brand to be authentic then,
"Make it so."
28
So what do you need to do in order for your brand to be
seen as authentic? The recipe is simple, though hard to
follow.
First, identify what your brand stands for. What is its
prime reason for being? What can it offer consumers
that other brands do not?
Second, ensure that your brand's actions – the
experience and communication – deliver on the promise.
Sometimes that will mean forgoing a quick buck. In the
United States, Starbucks stood for a great place to relax
with a good cup of coffee. But the need to drive revenue
led it to saturate the market with new outlets, take the
emphasis off the fresh coffee experience, and to start
selling breakfast goods. What has happened is that the
brand's equity has been diluted and it has come into
direct competition with fast-food retailers like
McDonald's. On a like-for-like basis, revenues have
fallen.
Truly authentic brands usually have a a leader or brand
champion that ensures that the brand's actions are
consistent with its ethos and values.
So if you aspire to create an authentic brand, you need
to follow Jean-Luc Picard's directive: "Make it so."