The economic potential of distinctive brand assets
Imagine a certain streaming platform didn’t have a knocking sound at the beginning of every show or movie they produce, a certain sportswear brand didn’t have three stripes on all its products, or a certain luxury fashion brand didn’t have its famous green and red stripes. Imagine a certain Nigerian bank didn’t have Asa singing at the doors of its branches. Imagine a certain sportswear brand didn’t tell you to “Just Do It”. Imagine a certain telecoms brand didn’t say “Y’ello”. The culmination of these scenarios means we might be bordering on an alternative universe. These iconic elements, which have even on many occasions influenced popular culture, are referred to as distinctive brand assets or brand codes.
First coined by Jenni Romaniuk of the Ehrenberg-Bass Institute for Marketing Science, distinctive brand assets are the sensory trigger elements of a brand’s identity, made to build the memory structures needed to create strong associations with that brand in the minds of consumers. They can come in the form of unique sounds, colours, shapes, mascots, people, words, and other sensory elements. These assets are used alongside the brand name over time until it achieves a threshold level of salience where there is a consensus among consumers that this distinctive element identifies the brand, even without the brand name.
Take Netflix for example. There’s consensus that when you hear the ‘ta-dum’ sound as used internally by Netflix employees, even without the brand name you can tell what brand it identifies. Empirical evidence shows that consumers are more likely to purchase (and repurchase) brands based on familiarity and salience, as it reduces the need to think and search for products. In a study by IPSOS in 2020, where high-performing campaigns were compared with low-performing ones, there was little difference (+3%) in the frequency of brand mentions — for example saying “Indomie instant noodles” in an Indomie ad — between the two. However, with distinctive assets, there was a 34% increase in the frequency of use on high-performing campaigns. Human beings are cognitive misers — our brains will do anything to simplify the process of digesting information, for example, prioritizing the familiar ones. Distinctive assets improve effectiveness by making it easier for your audience to digest the information contained in ads and other communications. This makes advertising and content marketing much more effective. Beyond influencing popular culture, distinctive assets impact marketing performance.
According to Romaniuk’s publication, achieving that threshold level depends on two things; popularity and uniqueness.
Popularity: how many people associate the brand with that asset
Uniqueness: how many of those people only associate that brand with the asset.
These two variables can then be mapped into four quadrants as a framework to determine the effectiveness of any trigger element on the brand. In the chart below, you see the risk involved in investing in a popular asset category that is low on the scale of uniqueness as well as investing in a unique asset that is unpopular with your market. When done effectively, distinctive assets can become economic powerhouses for your brand.
Distinctive assets also create value for an organization on a more strategic and economic level, particularly in management accounting.
Let’s paint this scenario…
Mercedes, an automobile brand has launched a new line of sportscars, the Z-class. The new product line features models like the Z-200, Z-450, and ZLE. The designs of these models follow the sleek style of Mercedes-Benz cars that customers are very familiar with, along with some design modifications appropriate for sports cars. At the same time Electronic Arts (EA), a multinational video game publisher, has just developed a street racing video game called Need for Speed. In this game, players get to buy cars and upgrade them with the tokens they get from winning races. For this to happen, cars need to be available for purchase. EA can either (1) create their custom cars requiring high design/engineering costs and marketing efforts or (2) use models of established car brands like Mercedes which will have less design/engineering costs and will be more exciting to players.
Mercedes, having placed trademarks, patents and copyrights on their model designs, will need to be paid royalties for those designs to be used by another entity, in this case, Electronic Arts. This is a process called brand licencing. The cost of the licensing contract between these two entities is reported as an intangible asset on EA’s balance sheet as they own a license to use Mercedes’ designs. The earnings Mercedes makes from the royalties paid by EA are recorded on their income statements as licencing revenues. This analogy tells us that at some point, and depending on its impact on the brand, a distinctive asset can play a role in a company’s financial strategy. It’s worth noting that for this to happen, it needs to pass the uniqueness-fame test. It needs to have made a long-term marketing impact to become an asset strong enough for licencing agreements such as this.
Internally generated assets like Mercedes’s copyrighted design of its cars are helpful in management accounting. The case of course may vary across industries and company types, this isn’t a formula for every company. The purpose of this article is to introduce to you in detail, the possibilities that come with investing in building distinctive assets. These assets are derived from distinctive elements of the brand’s identity which are associated IP. A cosmetic view on design and branding will limit the possibilities they bring to the growth of any company. Branding brings value that reaches the very core of a company’s economic resource base.
In a sequel to this article, I will write on the different classes of distinctive assets with successful case studies, and what it takes to effectively build one. I will also outline in detail, how to reach the threshold level of salience within a shorter period by taking advantage of key moments and category entry points.
If you find this article insightful and would like to discover new ways to increase the effectiveness of your brand building with design, connect with me on LinkedIn as I will be sharing more content around this topic.
