What Marketing Science Says About Growing a Brand | Professor Byron Sharp (Ehrenberg-Bass Institute)

Speaker A: Marketing funnels are nonsense, positioning and differentiation don't matter, and buyer Personas are a waste of time. These are not my hot takes. They come from decades of research by my guest, Professor Byron Sharp, who's the director of the Ehrenberg Buss Institute at Adelaide University, South Australia. He's the author of How Brands Grow, a book that I'm holding in my hands right now. And it's probably the most influential book on branding, which. Where every claim is backed by real data. And today I'm going to pick his brain on everything I've always wanted to know about branding, especially how the principles from his book apply to software companies like ours. Professor Byron, welcome to Ahrefs podcast.

Speaker B: Thank you, thank you. Thank you for that introduction. It's very, uh, nice.

Speaker A: So where I want to begin is to talk about the very, very fundamentals, uh, and specifically, like, what is a brand? How do you define what a brand is? How do you know you have one? And what is the purpose?

Speaker B: If people don't know what they're buying, they can't be loyal, they can't repurchase. So we talk about branding as just looking like you, as in not looking like someone else. Right. So someone can go, oh, yeah, I like that. You know, I'll buy that one again. Or, this restaurant's good. Yeah, I'll let that. And so it's true then, that there are, um, a lot of. If you go into a supermarket, even in categories that you buy and you might be familiar with, there are a lot of brands that, ah, sort of aren't brands in the sense that in, uh, Australia, we have, we. The classic, I would say, is Italian tinned tomatoes. Um, every supermarket sells usually several brands of Italian tinned tomatoes. And if you ask most people what do they buy, they go, I buy, you know, the Italian tin tomato. And they have no idea. Right. You know, and so I, I would say that's not a brand in the. For a lot of consumers, it's just the category. And the supermarket swaps one out, puts another one in. They don't even notice. So a brand is something that people would notice. Uh, so people might think, I'm very happy buying Coke or Pepsi. They're both collars, they're both nice, but they don't get them confused. They know that they've got a Coke in their hand or a Pepsi in their hand. They are different brands.

Speaker A: I have this story in my head about the purpose and why, uh, we need brands. Uh, I didn't remember where it came from. So when I was preparing for this interview. I tried to use AI to look up the origin. The story goes like this. Uh, if there is, like, a shop in some village and they sell bags, uh, of sugar, uh, and those bags of sugar are produced from different sources, they come from different places, and, uh, they are not labeled with anything. So there is no brand, nothing. They're just like, sugar, one kilogram or something. And you buy a bag from a random place, a random bag, and it's bad. And then next day you come, you buy another bag, and it's good. And without branding, there is no way to differentiate it?

Speaker B: No, no. The brand becomes just the store, right? Uh, sugar from so and so's.

Speaker A: No, no, no, no. But the store is sourcing sugar, uh, from the. But you cannot differentiate which is which. So this story seems to be coming from the Sims, the lab skin in the game. But, uh, do you agree with this kind of definition of why brands matter?

Speaker B: There is a really interesting story about brands in the Soviet Union, where they didn't have brands. Right. You know, the state just made it. And people, um, learned, like, so if you're lucky enough to buy a television set in the Soviet Union, um, people learned that there were some factories that produce good TVs and some that produced rubbish. And so they learned from the serial number on the back of the tv. And so the serial numbers on the back of the TV became the brands. Yeah, yeah, That's a lovely story. It's like. Well, it reminds you that consumers get value from a brand, like being able to distinguish, uh, differences in quality. Now, some people would say, oh, but in a modern consumer society, you know, products are tested and, you know, you don't get huge. You know, sugar's sugar. It's good whether you buy it from Aldi or whatever. Yeah, yeah. But brands still form a useful purpose for people in that they speed up their shopping. It's like, you know, I've been told to get sugar. Where's our sugar? Oh, yeah, there it is. What one's that? We. Well, it's blue. We always. I always see in our pantry the blue one. So I bought the blue one. It might seem trivial, but that's very useful for a consumer because, uh, we have lives. We need to get on with our lives.

Speaker A: Another kind of idea in the same vein of why we need brands. I picked it up from a book by Rory Sutherland, uh, called Alchemy. And he was making a point. That brand is essentially the reputation that you have to lose. Because if there is no brand, people there Is no, uh, kind of repercussions. There's no consequence for you doing something bad for the people. But if there is a brand.

Speaker B: Yeah, yeah, okay. Yes, I agree that from the. Well, this thing in Soviet Russia, right, the factory that didn't produce sort of defective tv, you know, the problem was it had no consequences of that. And, uh, yeah, and probably it was being judged by a government inspector who said, have you made enough TVs? You know, like, and just counted them. There were all sorts of stories of that of, like, factories that produced, um, umbrellas that, you know, would disintegrate in the rain and things, you know, and the point is, there were no consequences because the, the business wasn't. When a business has a brand, yes, it has a reputation to keep. I. I often point out because people love, um, complaining about, you know, big brands of the world, you know, so McDonald's will be hated and things, but in actual fact, um, a company like McDonald's is actually going to be far less likely to hurt the environment, far less likely to underpay their staff. I mean, they're going to do good things. Whereas the local burger shop, who's worried about being in business next year, will they pour, you know, will they pour oil down the drain? Yeah, McDonald's would never do that because, you know, they get caught or beyond the newspaper, they've got a brand to protect. So that's Rory's point, and it is a very good one.

Speaker A: Uh, I learned from our research of your, uh, previous podcast interviews that you're into wine. Is that correct?

Speaker B: I have a large wine cellar. It has been a hobby for a long time. Yes.

Speaker A: So branding in wine has always been a mystery to me because whenever I go to a wine shop, I never remember any brands I might pick by the country. Okay, Australian wine, New Zealand wine, whatever. But, yeah, maybe buy, like, the grape type, but the actual brand of the bottle. So tell me a little bit about the branding of, like, from the wine world. How does it work there? Do they even care about the brands in wine?

Speaker B: There are some very famous wine. Champagne would be, I think, a classic example. Right. I mean, it is an absolute marketing success story that this sparkling wine from a tiny region in France, which is so cold that, uh, you know, they have to only make sparkling wine because they couldn't make anything else, uh, has managed to get into the wine lists of every restaurant in the world. And, yeah, amazing physical availability. Um, but, yes, you're quite right. There are lots of other very mediocre brand builders in the wine Industry. And it's tough because it's a weird category. There aren't many other categories where you walk into a store and there's 14,000 variants of uh, ah, exactly the same product.

Speaker A: Yes. So it has always been a mystery to me how they kind of survive, how they go about building their brand. Do they even need to invest in it?

Speaker B: Yeah, they do. And the payoffs for those who have achieved is just astonishing.

Speaker A: Yeah. Which brings me to the next point. Uh, when your colleague Justin Cohen was visiting Singapore.

Speaker B: Yeah, he knows one. Yes.

Speaker A: Yeah, I get a chance to meet him personally. And uh, we were at the dinner, uh, discussing marketing and all of that stuff. And I made a point. Uh, I think that bigger brand is essentially a consequence of bigger budget. So just spend more money into advertising and you would have a bigger brand. And uh, basically all night we were arguing, or rather I was arguing with the entire table. They were giving me their arguments why I am not correct. But I tried to give them my argument. So I wonder what you think about it. Isn't brand is just a function of advertising? So you pour a lot of money into ads everywhere people know you and therefore you have a big brand.

Speaker B: No, advertising is a really weak force. Um, people who work in advertising love to think it's a sort of wonderful, powerful thing. When you're, uh, when you're a new brand. New brand, yeah. And you start, uh, off then obviously the gaining some mental availability is astonishingly valuable and advertising can help you do that. But it's not the only thing. With lots of brands in the world that have become quite famous without any advertising at all. Um, it's. And advertising is quite hard, like to build mental availability can be quite hard. Why do firms. Well, classic I always say is, uh, it's perfectly possible to go from being a tiny brand to a sizable brand without advertising. But once you are big and you want to stay big, then it's hard to get away with not using some advertising. Uh, but advertising itself. It's hard to think of any brand that you would really say it was built by advertising.

Speaker A: I'm creating a hypothetical scenario. Uh, yeah, I do absolutely agree with you. It is possible to build a brand with very little advertising, where people want to naturally talk about you, spread the word, or where you have amazing creative, where on every dollar that you spend on advertising, this creative it amplifies because people like it so much and it resonates with people. But, uh, my point is, uh, if I have unlimited money and you have.

Speaker B: Everyone has limited money.

Speaker A: No, no, no, no, no. Like, this is just kind of a thought.

Speaker B: You've got a tiny budget.

Speaker A: Uh, yeah, I have unlimited money. Uh, and you have all the creativity, all the cool things about your product. I win. So this is my point, because you can essentially, uh, again, now we're transitioning into the concept from your book, which is called mental availability. And my point is that you can pay your way to mental availability.

Speaker B: I don't know. You're absolutely right that to grow, you need mental availability, and you need to be easy to buy, purchase availability. And the more of that you can get for more people, then you will get more sales. And it's impossible to be big or to grieve and grow without growing those two assets. Right. Mental availability, purchase availability. I totally agree with you. Um, but advertising is, uh, it's like, it's better at keeping the plane up when it's already up than it is of driving the plane up there in the first place.

Speaker A: What is the best way to drive the plane up?

Speaker B: Well, it's to think about, oh, I really need to build mental availability and purchase availability, and to think of all the wonderful creative ways that you can do that. Um, there's an institute report, quite an old one, um, from the Aramu Bass Institute, which was called, um, advertising is creative publicity. But you can flip it around the other way. Um, publicity is advertising. So it's just. It's just anything that throw. That throws a spotlight on the brand. And, you know, a lot of big brands are big because of serendipitous, you know, events like, uh, um, you know, the government decided, you know, it's a war, and the government decided that it would give troops all, you know, this brand of chewing gum and their rations or something like that. Uh, or they were the first. I mean, there certainly are brands that were, like, the first to use radio, the first to use tv, and that gave them a big advantage. Um, so I'm sort of agreeing with you, but no, I mean, it is people who work in advertising massively over and estimate its effect. And your thing of having a bigger budget. No, if you've got two brands and they each and, uh, one suddenly gets double the budget that year, virtually nothing happens. It's quite amazing. All the academic studies, you know, split test experiments and things showed like. Like doubling the weight really does something. So which. Which makes me. I. When marketers say, oh, no, you know, my budget's not as big as I would like it to be, or my budget's been cut, I'm like, I'm not I don't worry. I don't worry about big brands having slightly smaller advertising budget. What worries me more is about the little tiny brands that have none of them. It's okay to have a small budget, uh, but zero is. Then it just becomes hard to build your mental availability.

Speaker A: I absolutely agree with your point and it resonates with me a lot that, uh, some kind of marketing campaigns and some messages just stick better and live longer than others. One of my favorite examples is Omega Watch when they sent one to the moon when the, uh, astronaut was wearing it. And now they still have series of Omega moon watch and people are buying and it's iconic and they're still like using it in their marketing decades later. So yeah, I do agree that some messages just naturally land better in some serendipity.

Speaker B: Yeah. I had a colleague who once said, when people say, you know, why are these brands big? And he said, if you really want to understand why that brand is big, you probably have to look at history, not about what they're doing in their marketing. Um, why brands stay big is about their marketing.

Speaker A: Which brings me to another interesting question, which I like discussing with marketers. So everyone knows Coca Cola. Everyone. Big, small, old, young, everyone knows Coca Cola. And yet they're spending, what, tens of millions, hundreds of millions of advertising around the world?

Speaker B: Yeah.

Speaker A: Why, like, don't they have mental availability already? Why do they need to keep advertising? And what would happen if they stop?

Speaker B: Okay, because. And uh, this is a fundamental finding of marketing science. Um, even the biggest, most famous brands in the world are. Most of their customers hardly ever buy them. A very typical. The biggest group of Coca Cola buyers are people who buy like once a year. You know, I had lunch today, I didn't have a Coke. I didn't even think of having a Coke at all. I mean, you know, like, I don't, uh, you know, sometimes I do. Most times I don't. So, uh, everyone knows about Coca Cola, but its mental availability is still terribly low. So many other things that we think of and when it comes to drinks, of course, we do drink an awful lot of different drinks because they all work right. Most of them are pretty nice and they quench out thirst and we're happy with, even with water. Right. So, uh, the reason Coke spends on advertising is to keep that big, they've got to sell. I think was it Coke sells something like a billion serves of drink. As a corporation, they have a lot of brands, but it's something like a billion serves every day or something. So something crazy. It's like, wow. And so people, whenever someone says, I don't have the budgets of Coca Cola, it's like, okay, yeah, but you also don't have their sales targets. Their sales targets are daunting, aren't they? And so they advertise to keep the plane in the air. And so what would happen if Coca Cola stopped advertising? Now that's a really good question. Coca Cola has a. Does have though. You know, it's a amazing brand, has lots of mental and physical availability. So if they stopped advertising for. Which they did actually during COVID During COVID they went, you know, we're only now selling in the supermarkets. Like all those other places are all shut. You know, we know we're going to take a sales, um. So they went, we're stopping advertising. And what happened? Well, nothing at first. But if Coca Cola stopped for a

Speaker A: couple of years,

Speaker B: we're suddenly getting so much harder to hit. Those sales targets stopped for three. So slowly the plane does start to lose altitude and almost immediately Coke's share price would go down because investors would think, oh no, the future doesn't look so bright.

Speaker A: So mental availability is not just the function of how many people know you and can recall your brand, but also a function of like how often they are reminded of your existence, how often

Speaker B: they think of you when they could buy you. So for a brand like Coca Cola, you think, well, people probably have a drink about at least three or four times a day. So three or four times a day they could think of Coca Cola. And mental availability is a, uh, share thing of like, well, how often do they. And I bet on that, then Coca Cola's share of total mental availability for drinks might be a few percent. I mean, fortunately it's spread across 7 billion people, so they get to sell a lot. But it's still quite low, isn't it? And there are some times I actually did point this out to Coca Cola's chief growth officer. There are some situations and a classic one, which is what I said to him is coffee shops. Coffee shops sell drinks, caffeinated drinks actually. And it's very low chance that someone sits in a coffee shop and thinks, oh, I could have a Coca Cola. Because you probably could. They probably do stock it. So they have to build that link to build the mental availability in that environment. I think if we're at the beach, much more likely to think of Coca Cola.

Speaker A: Yeah, it's like uh, I think it's a concept from neuro linguistic programming where you have what anchors, like for example, uh, every Time you hear this song, you get reminded of, I don't know, your wedding party or something like that. So it's almost like building an anchor that every time I go to coffee shop, I like to drink. Uh, like, uh.

Speaker B: Yeah, it's about links to cues. Yes, exactly. And so mental availability. I mean, I think our contribution. I mean, shout out to Stephen Holden, who was actually an Australian academic. Yeah, he wrote this beautiful conference paper. And, um, it was something, I can't remember something. And it said, let me give you a clue. But the L and the Q was in brackets. It was like, let me give you a Q. And it was all about how different cues bring up different brands. Yeah. And our job as marketers is to build links to the cues that most often fire in people's heads.

Speaker A: There's another interesting psychological concept which I learned, uh, quite a few years ago and have been kind of using or referencing, uh, in my own marketing. Uh, it's mere exposure effect, uh, which says that the more people are exposed to a certain thing, the more they are inclined to choose it among the alternatives. But now, from our conversation, what I'm figuring out, because previously I thought it's the function of, uh, seven touch points with the brand, or whatever was the number. You get those seven touch points and suddenly a person, uh, wants more to buy. But now, as we're talking as mental availability over time, it seems that if you're not appearing on people's radar consistently, the original touch points get lost. So it's almost like you need to have this mere exposure effect within a certain time frame. Am I thinking in the right direction?

Speaker B: Well, it's one of the advantages that a big brand has in that they will get more. So a brand like Coca Cola. Um, most of your exposures to Coca Cola are actually, uh, seeing someone else drink it, seeing it in fridges, uh, seeing a bottle lying on, you know, an empty bottle lying on the street is probably far bigger than actual Coca Cola ads. Um, but they all add up. All those exposures do. And when a salesperson says, I don't know, here's this brand of washing machine. And a consumer replies with, um, oh, yeah, I've heard of that one. That is a buying signal, isn't it? We're much happier buying things that we've heard of that we're familiar with.

Speaker A: I kind of want to bring back my point as you're saying that, uh, if someone is picking a washing machine and they, oh, like I've heard this brand, it's the function of just run Some TV ads, whether they're good or bad, a person would probably recall that they've heard this brand because they haven't heard anything else.

Speaker B: You're right if it does build mental availability. But it's actually terribly hard for categories like washing machines because we're amazingly good at screening out and so we see an ad and, uh, I don't know, uh, it was washing machines. What brand? I don't know, who cares? I've got a washing machine and funny thing is like, well, I'll do it to you. Do you know what brand your washing machine is?

Speaker A: Uh, not sure. My wife does for sure.

Speaker B: Yeah. So, uh, yeah, it's hard, isn't it? Um, but what it shows is that in categories like that, where people really screen them out for most of their lives, if you can get into people's heads, it's worth an awful lot of money.

Speaker A: Let's talk a little bit about physical availability, because in, in kind of consumer goods kind of thing, where you go to supermarket, the function of it, it's quite clear you, you see the thing, especially if you have mental availability, you get reminded, you pick it up. But we, uh, are in the software industry and they believe the majority of listeners of this podcast are in the software industry. Uh, so I wonder, in your opinion, how does uh, physical availability manifest, uh, itself in online software in the world?

Speaker B: Well, this is where you have to stop and think and go, right? How do people buy us? How available are you to purchase? How easy are, uh, you to purchase? Um, I listen to a podcast and um, I've noticed that they've changed just recently. They always have the spiel in the podcast about if you sign up, you can get ad free and you know, forums and things like this. And they've just started mentioning, and if you're listening on the Apple app, you can sign up with one click, right? That is an improvement in purchase availability. Uh, I have a colleague who's on a bit of a crusade for all sort of online, uh, uh, for all things that sell online. He loves going, do you take PayPal? Do you take PayPal? And people go, oh, uh, no. And he's like, why, why do you make it hard for people to buy? You know that taking PayPal improves your purchase availability. So you have to creatively think, in selling my software, how can people buy this? How can I make it easier for people to buy it? Um, you know, offering a free version, does that make it easier for them? Um, you know, making it one click download, you know, does it make it easier for them.

Speaker A: Yeah, this is, this is exactly what I wanted to bring up. Free version. It seems that free uh, version is kind of a tool for online brands to grow their brand. Because like uh, like you're saying in the book, brand is mental availability plus physical availability. And if you're uh, getting your brand out there and it's easy for people to sign up at least for a free version, what it means that your brand is growing.

Speaker B: Yeah, it's one's one way to make purchase availability easier. And so you need to do the research that tries to work out what are, what are the barriers that make it hard for people. You know, maybe it is that they, you know, we don't take PayPal or um, we're asking them m to put their credit card details in or um, you know, why can't they buy with one click? Uh, you know, just think of how can I make it more easy for all sorts of different people? Um, you know, and, and is all sorts of different people, right? Different people have different issues. Like if you're selling to corporates, they have all sorts of different requirements that you have to know. You have to be on a preferred supplier list and you have to do this and well, uh, that's all. If you don't do that then you don't get the sale. If you do do that, it's an asset. So purchase availability and mental availability are they're assets. Bigger brands have more. That's why bigger brands are much more valuable.

Speaker A: I don't remember what author this story was about. I think it was Paolo Caelio. Have you heard of uh, this fiction writer? So basically the story was that in one interview uh, he was asked that his uh, books are being pirated a lot, uh, especially again in countries like Russia. And they said what do you think about it? And I think that's good for me because in the countries where I see more pirating of my books I also see more sales. Yeah.

Speaker B: Years ago I saw some American academic from Austin, Texas. Yeah he did some research on this and showed a certain amount of, for it was lost for software. A certain amount of piracy was beneficial to the brand. It was in effect increasing your mental and physical availability.

Speaker A: Uh, let's talk about the marketing funnel, uh, all the top of the funnel stuff, bottom of the funnel, uh, and moving people down the uh, unaware, problem, aware, solution, aware framework. Uh, as far as I know you're not a big fan of this kind of framework.

Speaker B: I'm just a bit dismissive of it because I look at that and Go. Everyone talks about the top of the funnel. And you're like, so at the top of the funnel you're trying to build mental availability. It's like, yes. And then the bottom of the funnel, it's like, okay. And then you're trying to build purchase availability. Right. So why are you talking about funnel? You're talking about mental availability and purchase availability. It's. You're not funneling people along road. Uh, no, you need both. You need both and you need to be working on both all the time. And it's um, a, it's very hard to describe people's individual journeys. And for a lot of brands you repeat buying. Right. So, so what happens is someone's gone down the funnel and they purchased and then they, they're going to come back and purchase again. So where are they on the funnel? Like, it's, I don't think it's a terribly useful. And I do notice everyone just talks about top of funnel. They go, we're doing top of funnel work and bottle of funnel work. Right, good. Mental availability, purchase availability, good. Uh, it's not a funnel, but

Speaker A: I also, I'm also not a supporter of this framework, but for a somewhat different reason. The way I think about it is if some action, some marketing campaign or a piece of content is top of the funnel, from my perspective, it doesn't mean that the person isn't going to buy because a good piece of content can actually walk a person from not even knowing they have a problem to actually wanting to buy something. And uh, there are so many like, impulse buys. When you see an ad on Instagram for, I don't know, uh, uh, what's it called? Um, treadmill, like portable treadmill that you can store at home. And you're like, I want this. And it says, oh, it's a discount. Buy now within like two hours and you'll get it. And the person suddenly goes like, falls, tumbles through the funnel. Three minutes of watching that.

Speaker B: Some people, it's the same. Yeah. So my colleague John Dawes is in the office next door, um, to try to explain this to people, came up with this 90, uh, 5, 5 rule, which, uh, just, I mean what it essentially says is most people, 95% or more are not in the market at the moment. And for them you need to build mental availability. So when they do come into the market, which is probably at a time when you can never predict you get a chance to be purchased. And then the uh, the small percentage who are in the market at the moment, well, and probably that person with the treadmill. They were sort of in the market, you know, they were uh, you know, they were a bit predecided. You got lucky that day though. You got your ad in front of them and, and, and you made it easy. They could just click, you know, Fantastic. You get the sale, you're going to get both of those things happening. Um, but you need to, you need to think carefully about. I need to have stuff for the people who I could catch today who are going to give me my sales today. I also need to have things for the 95, 96, 97% of people who, it doesn't, you know, it doesn't matter if I tell them we've got a, ah, discount or they get free delivery today, they're not going to buy. Um, but they will one day. Yeah, they will.

Speaker A: Framework, by the way.

Speaker B: Yeah, I saw a great presentation a few years back, um, from DocuSign, uh, you know, the people who do the online signing of contracts thing and they, they show that virtually all businesses, if you, when you ask them are you going to move to electronic signing of contracts? They pretty much all said, yeah, we are. But a lot of them take 10 years to get around to it

Speaker A: because

Speaker B: they're running their business and the paper contracts still sort of work. Right. So you've got to understand this, you've got to, okay, we're not going to be able to just magically convert everyone. Uh, okay. But let's get in their heads so something will happen one day that probably won't be anything to do with us. Right? Like a big new customer will say to them, oh no, we only deal with electronic signatures. And that will be suddenly they will very quickly move and we've got to be in their heads when they do.

Speaker A: Uh, another topic that I know you're skeptical of, uh, is differentiation.

Speaker B: I'm not skeptical, I'm just very realistic about it.

Speaker A: Yeah, let's call it realistic. Tell me how realistic you are about differentiation.

Speaker B: Well, I have uh, a lovely saying that like if you want to know if your brand is differentiated, like ask like an 8 year old kid and if, if, if they go, I don't know, then you probably aren't. I mean it should be, it should be blindingly obvious, right? Like, so if you took an 8 year old kid and you showed them Toyota Corolla, which is like one of the world's biggest selling cars, and you showed them a Ferrari which only sells like I don't know, 5,000 a year, and you said are these differentiated? That Your kid would go, oh, yeah, Ferrari is amazing. Like, you know, and then you can tell the kid, yeah, well, the Ferrari costs half a million dollars. And, you know, that's why, you know, it should be obvious. Um, so what I don't like is the, um, is. So it's in the advertising industry, right, this idea that you can differentiate, um, brands that are, you know, like, um, you know, whether it's, um, McDonald's or Burger King, you know, um, we can differentiate it massively from it. It's like, no, you can't. There's a little bit of difference between those brands, but they compete pretty much head on. Uh, and they compete very much about mental availability, purchase availability. Then there's stuff like pricing and, you know, what they're offering today. But the big battle is mental availability and purchase availability. Um, it's not about being differentiated or, you know, even, you know, they're competing with, say, Domino's Pizza, you know, and you go, that's really different. Right? It's not burgers. No, it's not. But they're still competing. Yeah.

Speaker A: In, in that vein, uh, I've heard another interesting kind of, uh, framework ideology, I don't know how to call it. So in the beginning, when, uh, kind of a new product or a new category emerges, uh, it starts from just, let's say one thing. Uh, there's one thing and only one company does it and it's unique. Uh, and then another competitors emerge and they try to compete. Oh, like we went from, I don't know, horse carriages to cars. Now like the, the, uh, we have automobile, and now our automobile has like this amazing engine. So it seems that in the early days there is a lot of real differentiation. Oh, have these wheels. I have these wheels. But as the category matures, it seems that all the products are becoming more or less the same. If you take BMW, Mercedes, Audi, all of them have essentially the same feature.

Speaker B: Yeah, yeah, well, yes, because this is called. Yeah, I mean, competition forces brands, right, to, to. Well, quickly. If, if the competitor does, does something good, like adds, you know, ABS breaking, then if you don't have it, then you are now suddenly differentiated, but in a bad way, and so you quickly match. Yeah, but, uh, but actually, even. Even though when, when categories start, you can get a lot of like, so. So AI Chatbots at the moment, what we've got like Gemini, Claude, uh, Chat, GPT. Um, they're quite similar. Yeah, I mean, you can ask the same question to like, what did I say, four or five there? And sometimes you get different Answers, but sometimes you get very same answers, and they're certainly fulfilling the same, uh, function for the consumer. So that's a very new industry. And yet there isn't what they're all battling to be is to be good and to build mental and purchase availability. In the end, those are like public chat bots. I guess in the end, there'll be four or five global chatbots that will be the big brands. One will probably be much bigger than the other. Uh, but even right at the start of the industry, there's not actually a lot of differentiation. The battle is not about being differentiated. In fact, the battle is about not being differentiated, not falling behind, being just as good as the others.

Speaker A: Uh, you talk about distinctive brand assets in your book. Aren't distinctive brand assets a tool for differentiating your brand?

Speaker B: No, they are. We're now circling back to the start of our conversation. They're just looking like you so that when, when, when a consumer, when there is a touch point, they realize which brand it is. Um, and so of those, of those AI chatbots. Yeah. the moment, there's not a lot of branding, is there? There's not a lot of, um, they, they have a battle on their hands to builds distinctiveness so that people, people don't just say, oh, I'm using AI. It's like, which one are you using? Like, you know, chat GPT, I guess, is first out. It's probably the most famous one. Yeah. But, uh, it could easily. I mean, this is sort of industry where, you know, could rapidly change.

Speaker A: But what's so challenging about, uh, creating distinct brand assets? Like, all you need to do is slap, uh, a logo that is different from other logos in your industry, and you're distinct. Yep.

Speaker B: And then you got to get that into people's heads.

Speaker A: With advertising.

Speaker B: Yeah, with advertising and other things, but yeah, yeah, with advertising, with publicity, with disciplined use of it. Um, one of my favorites has to be the, you know, the American insurance company Geico, which Warren Buffett is a big investor in. Very, very successful insurance company. And if you say Geico to anyone, they go, uh, oh, yeah, the Geico lizard or Gecko or.

Speaker A: Yeah.

Speaker B: You know, and, and then you say, Right. You know, name another insurance company or it's. Yeah, Geico. It's like, that lizard must be worth so much money to that company.

Speaker A: Yeah.

Speaker B: I mean, really, if I was starting insurance company in the US And I, and I could, like, grab that lizard, that would, uh, so valuable. Yeah.

Speaker A: Koala, maybe, or wombat. Yeah.

Speaker B: But then the thing is, you have to get it into people's heads. But on that, uh, yes, if I launch an Australian insurance company or whatever. Yes. Using something that people already associated with Australia would probably be quite sensible. And there was a, there was a. Actually, it's an interesting story. There was this, um, so there was a back to wine. There was a very large Australian wine company that was one of the biggest exporters into the US and uh, their big brands were things like, uh, Lindemann's, um, and they, they fired or they got into a dispute with their distributor, their ma. The US Is a difficult market for as all sorts of different laws for different states. And they lost their distributor. And another, a small family owned but very scalable winery signed up with that distributor and they custom. They made a wine. Uh, it was, it was a cheap, A cheap wine, right? And they put this logo which was a kangaroo and the brand was yellowtail, and the kangaroo had a yellow tail. And so it was very easy for people to learn very quickly. Right? People would go back into the wine store and go, oh, we had this Australian wine. Um, it had a kangaroo on it. And you know, the wine store knew instantly what that was. So they got, they stole another. Well, not stole, but they got given another company's physical availability overnight. And they built mental availability very quickly because they had an uh, amazingly distinctive brand that was very easy to get into people's heads and they went from nothing to a million cases a year. Just astonishing. Uh, so it shows, yeah, mental and physical availability. I mean, I don't think their wine was any better. Uh, in fact, considerably think it was probably, if anything, it was not better. Okay, it was not better, but it was not more expensive and it had mental and physical availability and it just stormed the market.

Speaker A: So again, yes, circling back to, uh, everything that we discussed about, um, uh, mental availability, about the mere exposure effect that I said, where people need to see you a certain amount of time times, and like you said, count in their brain. What distinct brand assets allow you to do is increase the chances that people would make a count when they see you that they would recognize, oh, it is you. Exactly like you said about Coke, which you pointed out. I didn't think of it, but it makes so much sense. Even when they see like a can of Coke in the trash can, it is still, oh, this is the brand. Someone is drinking Coke. Maybe I should. So basically that's the goal of distinct brand assets to make those interactions with the brand instantly recognizable and kind of memorable so people won't second guess what they're seeing.

Speaker B: Yeah. And, uh, in a software world, you know, I notice like on my, you know, when I go into my phone, um, I'm navigating, you know, very visually. And by the thing being same place, I mean, obviously my brain has learned where things are and, uh, that, you know, so for the apps that have got on my phone, they have a huge advantage. They're there. Yeah.

Speaker A: Uh, another kind of hot take, uh, that you have is about the brand purpose, which kind of similar to differentiation. So what you're saying is that brand purpose doesn't really help to grow a brand.

Speaker B: Yeah, we did, we released research on this recently. You're absolutely right. Uh, it is an attempt to differentiate, to add a social cause thing of like, you know, if you buy this brand of shoes, you're also helping, you know, we're making donations to Bangladesh or Sudan or something of shoes. So we're a good company, you should support us. Um, and we took the, you know, probably some of the most famous purpose brands in the world, ones that have been doing it for 10, 20 years and with very big budgets, and they've been doing it consistently. And we just surveyed in, um, the United States and in Europe and Australia, how many people, you know, knew what the brand's purpose was. And it was, even for these brands, it was astonishingly low. Um, and Tory, who led the research, was clever enough to put in some fake purpose statements like, you know, ah, nice, like sponsors while watching and things. And, uh, some brands scored almost as high on those as their real purchase. So you clearly, you know, some respondents were just guessing, they didn't know. Um, so it's not a big part. It's.

Speaker A: Those are the best.

Speaker B: They've spent the most money, been doing it for decades. And even for them, most of their sales are, uh, just nothing to do with purpose at all. So if you're a new starter and you thought this is some magic way that it's going to win me business. No, it's probably going to lose your business. Right. Because it's going to take your eye off the ball of communicating the things you really need to communicate to build mental availability. Um, purpose certainly does not build mental availability. No one goes into a shoe store and goes, I want to buy the shoes that help Africa. Or, you know, like that. It's a, it's a, it's an image thing that you might notice afterwards if you've looked at that brand. It might give you a warm feeling afterwards. But, uh, it doesn't, it doesn't build mental availability. You know, I need insurance for my car. I need to buy the most socially responsible insurance brand. Like, no, you don't. You think, who does car insurance? The one with the lizard.

Speaker A: Uh, and speaking of the service that you've done, this brings me to kind of the last section of our conversation, which is measurement. Uh, marketers are being pushed to be data driven and we're talking about those things. Mental availability, physical availability, uh, what can you put into a number? How can you measure a brand? What is the, what are the measurements we can use?

Speaker B: Okay, um, look, I'm a big fan of people being evidence based, like following the science. Um, but you can get a bit too carried away with wanting to put numbers on everything and measure. Right? You know, operate in large with the science and it will be right. Um, and particularly for small brands, I say, you know, like, find something simple to measure that tells you you're going in the right direction. So in the Ehrenberg Bass Institute, we, uh, we have, you know, you can, this is free, right? You can go into Google and you can say, tell me how many people you know, like in your Google searching, like, you know, mention, you know, write an article and mention the name Ehrenberg Bass Institute or Byron Sharp or how brands grow. And, and Google will tell you, and you get numbers every month that just tell you, uh, you know, are we still famous? Like, is our fame growing? Is it, is it growing in new countries and regions? Really, you know, really simple metric. And, and, and so I really encourage a lot of small companies to, to do that. If you're, um, if you're selling stuff that, I don't know, sells in, um, physical stores and things go out, take photos. Where are we on the shelf? How often are we not on the shelf because we haven't made a delivery and we're out of stock? Just keep an eye on that stuff. You don't need to spend big money to be able to measure your two biggest assets, which are mental availability and purchase availability.

Speaker A: This was kind of, uh, a loaded question from my end because measuring a brand is one of the functions of our software. So what we do is we measure the search volume so we can see how many people in Australia search for Byron Sharp or Ehrenberg Bus Institute. We can see how many people in us search for that. And we also, because we crawled the entire web, we also see all the mentions, how often people mention those brands, uh, on the web pages. And yeah, we are educating, uh, the marketing community that these are the metrics you should be using increasingly. So in the AI world, because AI pulls information from multiple sources. So the more you mentioned around the web, the higher the likelihood that you're going to be mentioned. And also a fun observation, uh, like I said in the beginning, about Ehrenberg Bass Institute, it's a bit challenging to spell, which is exactly the case of our own brand, Ahrefs. We have so many misspellings of our brand. Makes it a bit hard to measure how many people are searching for us because we need to account for all the misspellings.

Speaker B: Yeah. Uh, but it actually gives. There's a slight advantage too. Over the years, when I travel around the world, I noticed a qualitative thing that was happening in that people were introducing and they were saying the name correctly. And it's like, you know, because it is a difficult name, if they're saying it correctly, that means they've had more exposures, you know. So, yeah, it's useful.

Speaker A: We're actually, uh, talking with Jason, uh, with Justin Cohen, uh, if we can collaborate with you and give you some data to study along these lines. So maybe some interesting research would come out of some kind of collaboration between us. And before we go into the Rapid Fire round, where I have three questions, Rapid fire. I wanted to quickly ask you about the program that you're running. Um, how brands grow live. This is something you were supposed to run, uh, in Singapore in April. And this interview was supposed to be in person. But tell me about the program. Where do you. I believe you run it? Around the world. Right. And what.

Speaker B: Yeah, yeah, it's a, it's a really, it's a, it's very, um, transformative premium, you know, career changing executive development program. And it was developed inside. So Irma Bass is sponsored by corporations around the world. Some of them that you've mentioned, you know, the Ikeas and Coca Cola's and things of this world. Um, and so we would do this in house, right? So we go to General Motors and do how brands go live for, you know, 40 executives all in a room. Um, and then we thought, well, what about, you know, individual people? The classic is, uh, well, you know, we thought of someone who wants to, you know, become the chief marketing officer one day. And so, you know, wants to transform the career. But we actually had a lot of people from startups and a lot of CEOs from small companies who go, you know, I really, I want to get marketing. Right. Um, and so this is, you know, what is that? $10,000 in three or four days of my life. That, that's a pretty Good way of m. Massively upskilling. Um, so that's where it sits in the market. And so we do that in Singapore, in Bordeaux in France, and in Boston in the United States every year. Okay.

Speaker A: And I'm sure people can find it if they would be able to spell Ehrenberg Bus Institute in, uh, Google. Yeah.

Speaker B: Or how brands grow live. I think probably it's easy.

Speaker A: Okay. Uh, rapid fire round. Just three questions.

Speaker B: Okay.

Speaker A: Uh, can you just name, like, a super personal brand that you fall for? Uh, I can tell you Tic Tac. Whenever I go to a supermarket and they want to buy mints, I'm like, I'll take in TikTok. I don't even want to try other things. TikTok is my thing. What's this kind of thing for you?

Speaker B: I don't know. I'm going to name. See, I'm going to name South Australian brands that you've never heard of.

Speaker A: Well, still, maybe someone from South Australia is listening. Tweedvale Milk.

Speaker B: Oh, okay. Adelaide Hills. You know, uh, you're not going to know that.

Speaker A: Okay, uh, let's go to the next one. Uh, what's a marketing buzzword that makes you cringe?

Speaker B: Oh, that's a good question. And there are quite a lot of them. I really would like it if Marcus would stop talking about things like short term, long term. Top of funnel, bottom of funnel. Oh, brand activations. Um, like, they're activating because, you know, I activate. This is purchase availability and mental availability. And an activation is. Is catching the people who are, you know, buying today. You're not activating them. We love to fool ourselves. Right. Like, it sounds good. We made people buy. It's like, no, there are a whole lot of people are about to buy the category. And. And we did good work, hopefully to catch more than our fair share of them, but we didn't make them buy. We nudged them over to our brand.

Speaker A: Final question. Uh, best wine under $20.

Speaker B: Uh, is it under $20? No, it's not under 20 US.

Speaker A: $50.

Speaker B: Under $20 US. Uh, wins Black Label Cabernet from Australia is certainly. Yeah.

Speaker A: How do you spell it? Uh, W, I, N, D Winds.

Speaker B: No W, Y, N, N, S. It's Winds of Cunoira. It's very old, but it's, um, in recent decade has been transformed. It's high volume, so, uh, it's underpriced because it suffers from a lack of mental and physical availability. And they've got a lot to sell. And so they've been struggling to raise the price for 15 years and it just does not work because until they increase mental and physical availability they're not just not going to get a price increase uh, or unless they half the amount that they have to sell. But of course they don't want to do that either. They've got the vineyards, they make the wine so it's a bargain for consumers.

Speaker A: I'll see if I can find it in Singapore or maybe.

Speaker B: No, see it probably won't be available, that's their problem. But when you next visit Australia you will be able to buy it.

Speaker A: Awesome. Professor Byron, uh, thanks a lot for the conversation. I uh, think we covered a lot of ground and I personally learned quite a bit validated some of my assumptions, uh, had some of uh, the things that I believe in, uh, refactored so to say uh, but overall I thoroughly enjoyed it. Thank you.

Speaker B: Cool. I did too. Thank you very much.