The Rise & Fall of Digital Brand Building

The floodgates have opened

The age old phrase “the grass is always greener on the other side of the fence” is an apt starting point for understanding the hype behind digital brand building (and its gradual fall from eminence). Digital brand building is the most prominent of all the commercialisation initiatives of the internet. But it wouldn’t have reached its current state without the explosive growth of the internet in the last 1980s / early 1990s. We suddenly got a new past time in our lives, which eventually became our life. From something that we use to spend 15–30 minutes in a day (by specially making an effort to connect wires, start up a modem, hear some nice whirring sounds etc.), we are now in a constant online mode (digital detox advice is becoming the next big occupation).

The article below in the excellent The Atlantic explains how the first ever banner ad (as part of AT&T’s “You Will” campaign) changed the course of advertising history. Hotwired.com, from whom AT&T bought the hosting space for the banner ad claimed an astonishing 44% CTR for the ad.

Where are we now on this? The fall from grace of display and search advertising (the original components of digital branding) is nothing less than astonishing.According to WordStream, the average CTR for a search and display ad are as follows (by the way 2% is considered average and anything above 2% is considered good):

The grass looks greener on the other side of the fence, but when all the grass on the other side of all fences looks greener, it starts losing its importance. At its very onset, digital branding was aspirational for brands. It was a novel way of brand building on a medium that was slowly revolutionising our lives (still primarily in terms of how we access and use information). The typical downside of any form of commercial initiative is its ability to reduce the lowest common denominator. From being a novel and aspirational way of brand building, digital mediums became the only way of brand building (and gave rise to the fancy catchphrase of “digitally native”).

Exclusivity has long been a key component of luxury brand building. But global surveys of luxury consumers (by different parties) now reveal that quality is a stronger influencer of purchase (rather than exclusivity). Have luxury brands accepted this new reality? They have not and are still struggling with it. Why did I bring up this concept of exclusivity at this point? A brand is not an isolated dimension anymore — it is a connected dimension. A brand is now as much as where it advertises and communicates compared how its identity is and who are its consumers. @Tom Goodwin recently wrote about the “Democratisation of Ecommerce”. This very concept of democratisation can be extended to digital branding channels.

Consider the following facts from Adobe Digital Insights (for more details you can read the full article here):

  • The average cost of a digital ad (now categorised separately for mobiles / laptops / iPads / tablets) has gone up by 12% in the last two years
  • Brands have increased their investment in search advertising by 42% in the last two years, but the number of people visiting websites of brands through search advertising has only increased by 11%
  • People are spending less time on websites than they did before (the reasons are muddled here but it could be a combination of more efficient and structured availability of information combined with the advent of apps)

The democratisation of digital channels as mediums of brand building is significant. The barriers to entry are significantly down (or are virtually non-existent). Instagram allows me to start a promotion using one of my recently snapped pictures for as low as $5 to reach an estimated 10,000 people. When the first banner ad debuted in 1994 as part of AT&Ts “You Will” campaign, things were neither this easy nor were they straightforward (and for good reasons). According to Joe McCambley, who created the banner ad, there was a reason behind the 44% CTR:

  • It was part of an integrated marketing campaign (with spends on TV, radio and print) that had $50 million in annual spends — the banner debuted 2 years after AT&T ran multiple spots using different scenarios but all culminating in the same holistic message of “You Will” — It was not click-bait and had a high level of in-built awareness and curiosity
  • Way back in 1994, the AT&T team created a virtual reality tour of the world’s famous museums and loaded it on to the Arts section of Hotwired.com, which was were the banner ad appeared. Clicking on the banner ad opened up this magical experience, which again goes back to the fundamental premise of digital branding — building experiences (and not merely brands)
  • Supply was more than demand — There were only 6 global advertisers who lined up for running banner advertising on Hotwired.com. In Joe’s own words, “The supply of creative talent far outstripped advertiser demand. For about two years many of us in digital advertising created some of the most amazing experiences of our careers”

The three characteristics of success of the first ever online banner ad are exactly the three factors that have led to the slow demise of digital branding as a meaningful medium of brand building. The endemic factor that holds back the progress of the human civilisation is our constant need for copy-cat behaviour, displaying herd-mentality and getting easily influenced. Marketers are solely responsible for tipping the balance in favour of demand over supply. Quantity will never beat quality in any sense or dimension.

As the floodgates opened, quality of online advertising (aka as a primary influencer of digital branding) declined. What started off as a novel and unique method for building brands, quickly reduced itself to an array of sub-standard execution, misleading CTAs, overwhelming volumes, push marketing vs pull and a creator of a sense of paranoia among consumers. Marketers and brand builders of all shapes and sizes now create online advertising and endeavour to build their brands digitally. Majority of it are laughable, embarrassing, silly, noise and annoying. Consider the significance of the following quote, which indirectly outlines why digital branding as a principle is a failure:

“Too often we tend to think of change in a very singular mindset, technology. But technology is not the real issue, not the root cause. It’s an effect, for sure… [but] the real driver of societal change is society itself, not your smartphone.” — John Hayes, ex-CMO, American Express

The fall from grace of digital branding is because of a complete misunderstanding or arrogance on the part of marketers on our ability to react and take back control. What has been happening since the time consumers have started realising the idiocy and annoyance of online advertising (aka digital brand building component):

  • Mad Robots, Farcical Digital Experience, Retargeting runs amuck — I couldn’t find a better way of writing this so have left the bullet heading unchanged. You can read the full article here
  • More statistics can be found here but 11% of the global internet population is blocking ads on the web, which in itself is a growth of 30% from the previous year (2015)
  • More meaningful and deeper collaborations and partnerships — With the fallacy and waste associated with programmatic advertising laid bare, brand builders are increasingly getting into more controlled and careful collaborations with other brands. This is with the aim to develop more deeper and meaningful content with a win-win outcome for both parties
  • Global campaigns have not lost their shine when it comes to digital brand building, but localisation has assumed critical importance — The previous notion that the borderless nature of the internet will allow marketers to shove down the same set of images, video and sound across millions of consumers around the world has been quickly discarded. Digital brand building, and for the right reasons, has embraced the development and dissemination of more localised brand experiences. Apple’s localised carnival themed campaign in Brazil to push the iPhone 7 Plus is an example:
  • The language of online advertising has changed and so has the ‘offer’ available to brands — When we say ‘offer’ here, it actually means the redefinition of what constitutes an ad on online channels these days. Media owners and content creators have started offering brand builders the concept of ‘original content creation’. The fundamental reason behind this movement is to stop online ads from popping up (which can be ignored or blocked) but integrating brands into the storyline of entertainment (TV shows, movies, original streaming content etc.). There is a new definition of an ad doing the round these days, which advertisers need to get their head around

What started off in the early 1990s as an honest and highly creative attempt in brand storytelling and creation of branded experiences, is now under increased scrutiny from marketers (who has lost tonnes of money), consumers (who are dazed, confused and annoyed), regulators (who find advertising ethics and principles getting blurred), industry bodies (as they see the last visage of their control slipping away) and platform owners (who are now experiencing the adverse impact of earning money without any checks and balances). The rise of digital brand building was due to an honest attempt by marketers to use the capabilities of the internet to enhance their brand messages. The fall of digital brand building is a failure of the whole marketing ecosystem, from which it will never recover.