Sometimes used interchangeably (and incorrectly) with advertising as a term, branding plays a vital role in the success of any company. Despite this, many people tend to struggle defining what branding actually is. This week, we are going to take a look at the definition of branding, its importance and real world examples of branding in action.

1. Branding is more than just a logo and colour choice

Brand is often misinterpreted as purely a company’s visual identity eg. logo and colour choice. Visual identity, although crucial, is only one element of a brand.

The above quote summarises branding excellently. In a nutshell, a company's brand is its reputation. It is the emotional connection customers form with the products and company through presentation, interaction and experience. How a product works, looks, feels, sounds and even tastes has to be carefully developed and considered along with a company’s values and personality.

As such, branding is considered to be the heart of any successful company which is why many spend hundreds of millions boosting their brand every year through advertising and development.

2. Branding is about creating an emotional response

Take a quick moment and think about Coca Cola.

You’re probably picturing their logo, the red colour, the memory of the last time you had one of their drinks, a catchy song or jingle from one of their ads, their tagline “Always Coca Cola”, the sound a can or bottle makes when opened. You may even be thinking of summer while enjoying a Coke on a beach, or maybe you’re thinking about Christmas while humming “Holidays are coming” to yourself.

All of these elements are Coca Cola’s brand in action and a testament to the effectiveness of strong branding. Coca Cola spends an average of 4 billion USD every year on advertising to put those images and feelings in your head.

You may be wondering at this point what the difference is between advertising and branding. Think of it this way, advertising is the delivery platform, branding is the message and feeling the customer receives. Companies spend on advertising to boost branding and in turn, increase sales and revenue.

Whether you like their products or not, Coca Cola has an undeniably strong brand. They are globally recognisable and the mere mention of their company name triggers a series of emotional responses and images in our minds. Apple, Disney, Nike and many other large and successful companies share similarly strong brands.

3. Visuals matter

We’ve talked a lot about the less tangible elements of a strong brand but the visual identity, such as a logo and colours, also play an important part in the strength of a brand and its recognition. Companies can spend anything from a few euro to hundreds of millions on their logos, which typically need to be changed or updated every ten years.

When we think of Google, Microsoft and Apple’s logos we can sometimes think of them as these fixed in place, unchanged icons but each of these companies have gone through several (sometimes subtle) logo changes in the last two decades.

Updating the design of a logo to reflect modern trends is important but it is equally important to move your brand in the direction that your customers want and somewhat expect. Sudden and confusing changes have led to costly and damaging mistakes for some of the world’s top brands in recent years.

In 2010, GAP, the clothing retailer changed their 20 year old, iconic logo to what was considered to be more contemporary. After a crowdsourcing campaign, the logo was changed to a bold helvetica font in black with a blue gradient square placed on the top right of the text.

The backlash was huge.

Customers voiced their hatred online for the new design. They couldn’t understand the change at all. Within a week, GAP retreated and swapped back to their old logo. It’s estimated that this whole debacle ended up costing the company $100 million.

It’s theorised that the reason for the backlash had little to do with the actual logo design. GAP was possibly attempting to change too much too quickly. Rebranding their image without clearly updating their service offering. Changes to a visual identity need to come after changes to a service. GAP wanted to suddenly push forward but their customers weren’t ready to go with them.

It’s difficult to know for certain that this is the primary reason for the backlash but the GAP logo change fiasco absolutely proves two things; changing your visual identity can be risky; and when it comes to their favourite brands, customers have a massive sense of ownership.

4. There are limitless benefits to having a strong brand

The Brand Finance US 500 list 2020, listed the brand value of 4 US companies at over 100 billion USD with Amazon topping the charts with their brand valued at 220 billion.

This value represents Amazon’s ability to generate money compared to a lesser known brand in the same space. The benefits of a strong brand clearly have an incredibly high value, but what are they exactly?

Recognition is a primary benefit of a strong brand. Customers are much more likely to choose a product from a company they recognise over one that is lesser known. Standing out from the competition offers a serious competitive edge.

Loyalty is another huge benefit. People are much more likely to purchase products from a company that shares their values or portrays an image/lifestyle that they associate with. The stronger the brand, the more likely it is that a customer will form an attachment to the products and company.

According to a 2012 study conducted by the Harvard Business Review 64% of consumers listed shared values as the main reason they have a relationship with a brand.

This loyalty also translates to recruitment. A strong brand will attract high quality applicants and boost the motivation of current staff.

Trust in a brand also makes it easier for companies to set a premium price point (Apple being the classic example here). It’s easier for customers to spend more on a product when they can trust that it is from a company with a reputation for making premium quality products.

The Trust Barometer Special Report released by Edelman in 2019 found that 81% of consumers need to be able to trust a company before they can purchase from them.

Trust also makes it easier for companies to roll out new products and expand into other markets.

There are many benefits but ultimately, having a strong brand will drive a company’s sales and growth.

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