The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It [Hardcover]

John Gerzema (Author), Edward Lebar (Author)

Book Description

Publication Date: October 13, 2008

How to use brands to gain and sustain competitive advantage

Companies today face a dilemma in marketing. The tried-and-true formulas to create sales and market share behind brands are becoming irrelevant and losing traction with consumers. In this book, Gerzema and LeBar offer credible evidence--drawn from a detailed analysis of a decade's worth of brand and financial data using Y&R's Brand Asset Valuator (BAV), the largest database of brands in the world--that business is riding on yet another bubble that is ready to burst--a brand bubble. While most managers still see metrics like trust and awareness as the backbone of how brands are built, Gerzema asserts they're dead wrong--these metrics do not add to increased asset value. In fact, by following them, they actually hasten the declining value of their brands.

Using a five-stage model, The Brand Bubble reveals how today's successful brands--and tomorrow's--have an insatiable appetite for creativity and change. These brands offer consumers a palpable sense of movement and direction thanks to a powerful "energized differentiation." Gerzema reveals how brands with energized differentiation achieve better financial performance than traditional brands have. Plus, Gerzema helps readers develop energized differentiation in their own brands, creating consumer-centric and sustainable organizations.

Editorial Reviews

Amazon.com Review

How to use brands to gain and sustain competitive advantage
Read a Q&A with author John Gerzema [PDF].

Companies today face a dilemma in marketing. The tried-and-true formulas to create sales and market share behind brands are becoming irrelevant and losing traction with consumers. In this book, Gerzema and LeBar offer credible evidence--drawn from a detailed analysis of a decade's worth of brand and financial data using Y&R's Brand Asset Valuator (BAV), the largest database of brands in the world--that business is riding on yet another bubble that is ready to burst--a brand bubble. While most managers still see metrics like trust and awareness as the backbone of how brands are built, Gerzema asserts they're dead wrong--these metrics do not add to increased asset value. In fact, by following them, they actually hasten the declining value of their brands.

Using a five-stage model, The Brand Bubble reveals how today's successful brands--and tomorrow's--have an insatiable appetite for creativity and change. These brands offer consumers a palpable sense of movement and direction thanks to a powerful "energized differentiation." Gerzema reveals how brands with energized differentiation achieve better financial performance than traditional brands have. Plus, Gerzema helps readers develop energized differentiation in their own brands, creating consumer-centric and sustainable organizations.

From School Library Journal

These authors both hold senior positions at Young & Rubicam (Y&R), part of the largest ad agency holding company in the world, WPP Group. Their book sounds an alarm based on a gap in value between how consumers and investors perceive brands. The authors have a proprietary research tool that they use to measure value, and they've found that investors reward companies with greater brand awareness, even if consumers don't see much utility. The book presents recommendations on how to close the gap between consumer and company perceptions. Many other books present theories about branding. Al and Laura Ries's The 22 Immutable Laws of Branding offers a hands-on approach to branding, focusing on what works and not necessarily why, while Janelle Barlow and Paul Stewart's Branded Customer Service attacks the problem of branding from the view of the customer experience. David A. Aaker and Erich Joachimsthaler's Brand Leadership's more quantitative approach and academic perspective can be compared most closely to this new book. The Brand Bubble is appropriate for a business school or corporate library and will be useful to marketers as well as investors.—Stephen E. Turner, Turner Devaughn Network, Abington, PA
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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Product Details

• Hardcover: 272 pages
• Publisher: Jossey-Bass; 1 edition (October 13, 2008)
• Language: English
• ISBN-10: 047018387X
• ISBN-13: 978-0470183878
• Product Dimensions: 6.3 x 0.9 x 9.2 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.9 out of 5 stars  See all reviews (75 customer reviews)
• Amazon Best Sellers Rank: #763,241 in Books (See Top 100 in Books)

More About the Author

John Gerzema is a pioneer in the use of data to identify social change and help companies anticipate and adapt to new interests and demands. A best-selling author, columnist, speaker and social strategist, his books have appeared on "best of" lists at FAST COMPANY, Inc., and THE WEEK Magazine. His research, writing and interviews have appeared in The Harvard Business Review, The Economist, The Wall Street Journal, The New York Times, CNBC, NPR, Forbes and many others. As a Fellow with the Athena Center for Leadership Studies at Barnard College, he is an expert on emergent leadership strategies and executive chairman of WPP Group's BAV Consulting. John oversees the world's largest database of brands and consumer behavior. His new book, The Athena Doctrine: How Women (And The Men Who Think Like Them) Will Rule the Future with Michael D'Antonio. John's TED talk 'The Post-Crisis Consumer' has been viewed by over a quarter of a million people. www.johngerzema.com

Most Helpful Customer Reviews

15 of 16 people found the following review helpful

3.0 out of 5 stars Agree with Viriya July 9, 2009

By Matthew R. Coakley

Format:Hardcover

I was pretty disappointed by this book. After all the hype, who would have thought that there was a review bubble! So, the first chapter or so is pretty decent. The case for a 'brand bubble' is presented effectively. After that, the book seemed to lose traction. The authors gave interesting examples, but the principles behind these examples seemed ambiguous as best. Most of the text consisted of platitudes and fluff. Also, it read like an extended advertisement for Young & Rubicam. Finally, the whole idea of 'energy' was unconvincing. If you're interested in brand management, you might want to check this book out of your local library. Otherwise, I'd skip it.

16 of 20 people found the following review helpful

3.0 out of 5 stars It can be better April 16, 2009

By Viriya Taecharungroj

Format:Hardcover|Amazon Verified Purchase

(First of all, I do not want to give 3 stars for the sake of it but I try to be honest and hope you read my review with an open mind, thank you)

"There's another bubble hiding in our economy"

"The Brand Bubble" by John Gerzema and Ed Lebar is to remind and warn everyone that the current economy crisis might not be the last one in present days. Brands, around the world, have been inflated perceptually and financially. With the new era of technology, customers are surrounded with blogs, news, reviews, discussions, recommendations, and they are within an arm reach; this is the so-called ConsumerLand by the authors. Big brands are not invincible anymore. Brands that survive, thrive, and flourish need "energy". This book tells you the meaning and importance of "energy" and how can you foster it.

Contents

Part 1: Introduction

Chapter 1: Tulipmania and Inflated Brands
The first chapter tells you the current state of brands and how they were inflated mainly by the hands of Wall Street. Brands are less trusted, less liked, less salient, and more often perceived as low quality but the value of the brands, or the intangible assets of the company measured by the stock market, is still on the way up.

Chapter 2: Can You Say "Irresistable"?
The authors state that the new dimension that drives the brand is "energy", and the new four pillars of brand are Energized Differentiation, Relevance, Esteem, and Knowledge. There is an interesting grid of BrandAsset Valuator© or BAV which has Y-axis as Brand Strength and X-axis as Brand Stature. You can take a look at TheBrandBubble.com....

Chapter 3: Wall Street, Meet Main Street
The point of the chapter is that consumers are more sophisticated and act more like investors that they seek future benefits, want to maximise returns, accumulate information and knowledge, watch for movement, and demand transparency and accountability.

Chapter 4: The Postmodern Craving for Creativity
Creativity is a must, full stop.

Chapter 5: Welcome to ConsumerLand
The Internet and more specifically social media changes the way consumers behave

Part 2: Application
In this part, each chapter is the stage of brand development. In each chapter, the authors will explain the contents and end the chapters with 1.) Obstacle to beat back 2.) The law of energy, 3.) The new rule of brand management and 4.) Case study. I will write brief explanations without going into too much detail.

Chapter 6: Stage One-Exploration: Performing an Energy Audit
The chapter starts with and anatomy of BAV and, into details, "Energized Differentiation". The author stressed the word "Energized" by defining it as Vision, Invention, and Dynamism (VID) and how sample brands are ranked on the sprectrum.

Chapter 7: Stage Two-Distillation: Identifying the Energy Core
Gerzema and Lebar's "Energy Core" is equivalent to Jim Collins' "Core Ideology" with a slight tweak. If you have not read Jim Collins, it is the heart of an organisation, it's how to company is, have been, and will be built.

Chapter 8: Stage Three-Ignition: Creating an Energized Value Chain
"In ignition, the enterprise takes the fuel from its Energy Core and uses it to drive the brand forward." And every function can contribute to the ignition of the brand.

Chapter 9: Stage Four-Fusion: Becoming an Energy-Driven Enterprise
Fusion is when the new practices are becoming the culture of an organisation or "brand as culture". The examples of Energy-driven enterprises are Google, Whole Foods, and Nordstrom.
Chapter 10: Stage Five-Renewal: Active Listening and Constant Refreshing of Brand Meaning

The authors tell you that brands need to evolve and keep changing over the time. "Tactics are strategy, strategy is tactics"

...

In the next part, I'll compare this book to the ideal book, a book that is easy to understand, distinct, practical, credible, insightful, and provides great reading experience.

Ease of Understanding: 5/10: This book is on an abstract subject, branding, and the authors did not make it clearer. The first part, introduction, is explained nicely; and that's where the 5/10 are from. However, the author fails to elaborate the second part, application. The contents (of the second part) are not linked together beautifully. You might wonder why this "Obstacle to beat back", "The law of energy", "The new rule of management", or case study is in this chapter. And what does it really mean? What it has to do with the chapter? Why isn't it there, instead?

Distinction: 6/10: Like I mentioned earlier, the first part is written with interesting data and BAV is fascinating. There are analysis, valuation, speculation and it is a blend of marketing, management, economics, finance, etc (Ed Lebar is the former professor of economics). The second part is pretty much like other mainstream business books. The essence of the Energy Core is already defined numerous times under different names by different authors. However, the case studies are not bland; Lego, Virgin, Xerox, Mumbai Tiffin Box, and Uniqlo.

Practicality: 4/10: I had high hope in the second part, application but it did not turn out to be very practical. There is no solid step, those five stages are mere guidelines and example of successful organisations.

I'll give an example of Stage Three-Ignition, the authors tell us that Energy Core can be from any part of the organisation; Leadership, Finance, R&D, Business Model, Sales, Manufacturing, Operations, Distribution, IT and CRM, and HR. Each of these has different examples which is great. Now, the obstacle to beat back is "Management's focus is primarily on today's profitability" and the author suggested that we must look for the long-term because most of marketing (in typical companies) is just selling. Then, the chapter moves on to The Third Law of Energy: "A brand is not a place, it's a direction"; they state that brands must be verbs and positioning can no longer be static. And the new rule of brand management is "Drive the brand back through the organization"; there came Xerox case study.

The application is more like "that's the way it is".

Credibility: 7/10: The book has lots of solid and sound examples and case studies. They look very sensible and credible. However, the only drawback is BrandAsset Valuator© (BAV) because the book relies significantly on this model. Although we know the concept and basic anatomy of BAV such as VID (Vision, Invention, and Dynamism), we do not know how they are ranked and the math behind it.

Insight: 9/10: I will state again that the book has lots of examples, data, researches. Most issues are explained sufficiently (albiet not always clearly). And the greatest value of this book is cases, examples, and how they are analysed.

Reading Experience: 5/10: In the very first chapters, the book looks extremely promising but the excitement fades away due to the abstractness of the latter chapters. I do not like to compare with other books but at times, you will feel that this book is much like Jim Collins' "Good to Great" and "Built to Last". The good point of this book is that it is newer and sounds more fun (branding vs corporate management) but the drawback is that chapters are not tied together like those two books mentioned.

Overall: 6.0/10: I desperately want to like this book because it has what it takes to be great; great examples and case studies, very insightful researches, and interesting analysis. However, this book fails to synchronise the contents and stories. And it does not offer good-enough practical guidelines to readers. I will be looking forward to the next book by Gerzema and Lebar. I would say buy this book but do not have your expectation too high. Read more ›

8 of 9 people found the following review helpful

2.0 out of 5 stars Sometimes Less is More - October 1, 2009

By Loyd E. Eskildson HALL OF FAME

Format:Hardcover

The authors lay out credible evidence that businesses think brands are worth more than the consumers who buy them. At the same time, the financial markets keep raising brand valuations. The result - a brand bubble that represents $4 trillion in S&P market capitalization alone. According to the authors, the average brand value component of market capitalization is 71% using Young and Rubicon's 'BrandAsset Valuator' that was developed with $113 million to track 40,000 brands in 44 nations.

Explanations for the decline in consumer valuations of brands: 1)Glut of products - 58,375 new products introduced in 2006, over 2X that of just 2002. The average American sees 60% more ad messages/day than when President Clinton took office. Not surprisingly, over 81% of consumers could not name one of the top 50 products launched that year. 2)The glut invariable leads to commoditization of brands. 3)Consumers are more price sensitive - not surprising given the flattening of real incomes and large job losses. 4)Better products - even the lowest-priced goods exceed the average acceptable quality levels for most people. Stated alternatively, regardless of what you buy, you'll be happy with your purchase. 5)Trust in institutions and corporations has declined - this includes advertising as well.

The authors should have quit at this point. The remainder of "The Brand Bubble" is vague, and seems like a long commercial for Y&R services. Reality, however, is that a growing worldwide surplus of goods and declining economic strength for U.S. consumers doesn't leave much future for brand value. This trend is reflected in growing Wal-Mart and declining mall, high-end store sales. Period, end of book.

3 of 4 people found the following review helpful

4.0 out of 5 stars Energize your brand - Increase your valuation! May 26, 2009

By Laurent Pacalin

Format:Hardcover

Energy drives brands and successful brands drive valuation. This is what John Gerzema and Ed Lebar demonstrate in `The Brand Bubble". This book is a great addition to a subject that has been written about a lot. As the chief marketing officer of FICO, the company that enabled equal-opportunity lending through analytics, I particularly welcome the quantitative approach that they use to make their point, as well as, their thorough analysis of how the forces of social media affect brands. This is a great read for executive teams in search of a brand boost!

Laurent Pacalin
Chief Marketing Officer at FICO

3 of 4 people found the following review helpful

5.0 out of 5 stars Important stuff for the creatives and the suits October 12, 2008

By Sean King

Format:Hardcover

The next bubble in our economy has to do with brands - this is important news for anyone in the creative industries, in marketing, as well as those on wall street. John & Ed make a clear case for why the value given to brands by speculators does not match up to their real values in consumers' minds. There is some good news here, though - once you know about this bubble, you can move your brand in ways that your customers will value.