Buzzing on brands: never has image made so much difference in business. From logos and corporate identity to consumer trust and perceived value, the buzzword is "brand". (Special Advertising Section; Advertising, PR and Branding).

IN TODAY'S CORPORATE WORLD there is surely nothing as incorporeal and yet so crucial as a company's brand. Difficult to quantify but now acknowledged as a key determiner of a corporation's profitability, brands and branding have gravitated to the top of the business agenda. Yet even finding an accepted definition of what constitutes a company's brand is a challenge. One way a brand can be viewed is as the set of impressions that stakeholders have of a company. This description encompasses the fact that it is not just customers but also employees, business partners and investors who will have a range of reactions to a company, which will be emotional and intuitive as well as rational. Hence everything that a company and their representatives do, or are even perceived as doing, goes toward the ever-changing notion of that brand.

Yet as brands are becoming increasingly treasured within the business community, they are simultaneously becoming the focal point of enmity for those who see them as symbols of all that is wrong with 21st century global capitalism. From considered critiques such as Naomi Klein's No Logo: Taking Aim at the Brand Bullies, to the less considered concrete-block-through-Starbucks-window, which is now apparently de rigueur at anti-globalization demos, brands are also under attack. (It's interesting to note the apparent shift in protestor's targets from politicians, governments and institutions to McDonalds, Nike and Starbucks -- or does their omnipresence just mean they are easier to access?) The spate of corporate scandals over the last few years has also shattered faith in big business across large swathes of the consumer population. At a time when cases of financial wrongdoing are coming to light so frequently that people are beginning to think CEO actually stands for Chief Embezzlement Officer, the building and maintaining of trustworthy brands has become a more challenging task than ever.

There is no doubt that brands wield a huge influence in today's society, but it is this very fact, it is argued, that empowers both consumers and activists of various shades. Companies that are seen to be damaging the environment, involved in dubious business practices, associated with exploitative employment conditions, or a host of other sins, suffer crippling damage to their brand and thus ultimately to sales. Nike was so concerned about the 'sweatshop' tag successfully attached to them by protest groups, it undertook a major review of conditions at manufacturing sites in developing countries. This is one of an increasing number of cases where a company has been forced to react directly to potential harm caused to brands by pressure from activists; in some ways this ends up greatly increasing accountability.

Here in Japan, the reaction to Snow Brand's myriad of misdemeanors has been a collapse in trust (more vital in the food industry than perhaps any other) and subsequently in sales. Flying Color, a marketing consultancy concentrating on helping leading brands in Japan integrate interactive media, Internet, mobile and email into their marketing and branding initiatives, is taking a strident approach to the issue. CEO Todd Newfield says, "We as an organization have made it policy not to work with any brand that lacks a social and environmental consciousness -- and we have a 10 point checklist to decide. We have also recently launched a new retail/advocacy brand called BlueSky. It's a triple bottom line organization (meaning we look at profits, social contribution and environmental contribution equally). BlueSky is building an advocacy 'agents of change' network among 30-40 year olds married with kids, educated women in Japan; marketing only products and services that meet the triple bottom line and promote a bett er world now and for future generations. We expect to reach the one million strong Advocate mark in 3 years -- and, through consumer activism and purchase decisions, send a big message to brands and organizations that those who lack substance and responsibility will not be tolerated, no matter how cute their logo and TV ads are."

Beacon Communications, an agency established in 2001 through the merging of Leo Burnett and D'Arcy Japan operations along with a business unit and a significant number of employees from Dentsu, sees the issue as companies' response to problems that arise. According to Beacon president and representative director, Michelle Kristula-Green, "Brands that are honest can survive huge problems and come back strong. However, in many instances companies dissemble, refuse to comment or even lie. They lose the public trust. That is what kills the brand, i.e. Firestone tires, Enron."

The concept of brands is at the heart of Beacon's entire approach. Beacon's Kristula-Green states, "What differentiates Beacon from other agencies is the way we build brands. The brand is central in everything we do and the way we organize ourselves. Each floor is dedicated to a customer: male, family, female. Cosmetic brands like SKII and Max Factor or hair-care brands like Vidal Sassoon are on the female floor. Scotch whisky is on the male floor. Rather than organize by function, we organize around the brand. The people working on a specific brand, whether they are an account person, planner or creative, sits with the other members of that team, rather than in a departmental silo." Beacon's executive director of strategic planning, Han Van-Dijk, also sees the techniques of retail and consumer branding being increasingly employed in the business-to-business marketing arena. 'Traditionally, brand building in the B2B environment has been more of a left-brain exercise. Arguments were rational and factual, total ly functional and to-the-point. Today, however, we see B2B branding adopting more emotionality in their approach. Corporate marketing especially is using more of the techniques from the consumer marketing world."

While the Japanese economy has stalled and sputtered its way through the last decade, one sector has appeared impervious to any negative factors: the high-end fashion brand market (although high-end must embody a different nuance here when every high-school j girl is dripping with LVMH). Despite the global penetration of brands, companies that fail to attune their marketing to local tastes will inevitably suffer the consequences. Sensu, a Tokyo-based marketing agency who works almost exclusively with fashion/lifestyle-related foreign firms, specializes in helping companies avoid such pitfalls. Sensu has, through its comprehensive research unit, witnessed the brand dilution experienced by companies that engaged in ill-chosen joint ventures, licensing agreements or distribution deals. Michael Causton, a senior partner, explains, "Many now have their own operations here. Why? Brand control. Many were concerned by brand dilution in the past, as well as inappropriate licensing which sometimes damaged the brand. To day they are in control, and overseas brands are now better known -- and more correctly understood -- than ever before. It doesn't hurt that successful, direct operations are also significantly more profitable than joint ventures or licensing." Sensu's deep understanding of the Japanese market, as demonstrated through their monthly Japan Consuming and annual Retail Japan reports, can facilitate new brands, market entry and continued growth in the world's second largest consumer economy. Sensu regards Japan as a land of opportunities despite the well-documented economic problems. "This goes against the grain, but in our opinion, the Japanese consumer market (as opposed to industry or finance) remains relatively untapped. Branding still hasn't been applied to a vast number of sectors. For example, how many Japanese brands of non-sports shoes can you think of that you can immediately describe what the brand represents?" inquires Michael Causton.

TBWA Japan, a full-service marketing agency with 180 staff formed when the European company took over Nippon Advertising in 1998, also reckons that Japanese companies and agencies have a lot of catching up to do when it comes to branding. Bob Kerwin, executive vice president, says, "Historically, brand-building was an area of little interest to companies who concentrated almost exclusively on their corporate identity, but it is now experiencing a surge of interest from companies becoming aware of the power of brands. The key issue is that domestic agencies are generally not well qualified to advise on brand-building, having followed their clients' lead for so many years -- there is some poor advice out there."

There seems to be a consensus that the gap between advertising for consumers and that for B2B is narrowing, with techniques and styles from the former being employed in the latter. TBWA's Kerwin also sees the reverse happening. "B2B is more about one-to-one communication that is fact based, while the consumer environment is more driven by concepts, perceptions and ultimately emotions. However, there has been considerable convergence between the two environments outside of Japan in the past 15 years, with communications tools being used interchangeably. This is especially true on the consumer side, where the concept of 'mass' has eroded and a greater focus on connecting with individuals and relationship-based groups has evolved." Despite the recent hard times experienced across the board, Kerwin remains optimistic about the branding industry in particular and advertising in general. "Branding is already growing. The current advertising downswing will turn upward with a vengeance within 18 months."

One of the challenges facing any company attempting to break into a new market is competing with entrenched domestic behemoths; nowhere is that as true as it is in Japan. Bates Yomiko, who had been in Japan as Bates since the 80s before they linked up with Yomiko, has the experience of being David to the domestic Goliaths in their own industry. They are able to employ this know-how to help foreign firms establish their brands through fully integrated marketing communications approaches. "In 1999 we launched 141 -- a sales promotion, event and sponsorship brand management specialist arm -- and recently expanded our CRM capability." In tough economic conditions and facing much larger competition, working smarter is the only option. David Meredith, president at Bates Yomiko says, "With the exception of 2000, advertising expenditure has declined for the past five years. I see no change in this trend. What it therefore means is that every budget has to work that much harder. More for less. The days of sheer impact through blitz are over, and communication will have to be smarter -- hence all the talk now of branding. And the growth in alternative forms of communication to TV, magazine and newspaper. We will also see growth in the areas of collaboration where brands appealing to the same target can work together to heighten the brand experience and reach the customer more efficiently and with greater impact."

If the value of a brand is more than just immediate sales figures, then the quantification of that asset produces an interesting conundrum. How can return on investment (ROI) be reliably measured by companies wanting to make the best use of increasingly tight marketing budgets? Douglas Faudet, CEO of DDB Japan, part of the DDB Worldwide network, says, "This is an increasingly important question but one that is still difficult to answer. It's like asking an electronics manufacturer how to measure the ROI on R&D. There are two ways to do this. The first is to measure the effect on business performance. DDB increasingly bases our compensation on a fee basis that often provides for a performance bonus. This ties our success directly to our clients' success and provides for bottom line accountability. Furthermore, we work with most of our clients to set objectives, goals, strategies and measures. Then we track performance against these measures. This is very much a packaged goods approach to business, and we belie ve that results are all that matters with advertising. This is the basis of our company motto: 'Better ideas. Better results.'"

There may never again be the kind of money poured almost indiscriminately into marketing as there was during past stock market and booms -- not without concrete measurable results. According to DDB's Faudet, "In some ways the 'Branding business' is still suffering from a hangover from the 'dotcom' party. We hired too many people, spent too much money on unfounded business models and silly ideas and focused too much on TV because it was the easiest way for an ad agency to make money. When the bubble burst, the only costs we could shed were our people, and a lot of seasoned (and more expensive) talent was let go and less experienced (and cheaper) people retained. In turn, clients lost confidence in us because the miracles promised by advertising didn't come true." He adds, "I think that the market has bottomed out and we're starting to recover -- in a more intelligent way."

On May 28th at the Four Seasons Hotel in Tokyo, the Second Roundtable on Branding in Japan, will convene under the auspices of The Economist Group, sponsored by top international advertising agency McCann-Erickson and supported by J@pan Inc. As always with Economist Conference events, top class speakers from both the corporate and academic worlds will engage in a frank and thought-provoking debate that will go to the core of the issues.

Hopeton Undo, senior manager of Economist Conferences in Tokyo, recently commented, "This event takes place at a time when many companies are reviewing their business strategy due to slowing economies -- particularly here in Japan. Many firms are realizing that brand management can contribute significantly to future success. To demonstrate how firms have been achieving success, we have assembled an impresive lineup of speakers, including: Peter Maslen, president of Starbucks Coffee International; John Elkins, chairman and chief executive officer of FutureBrand Worldwide; and Kevin Allen, executive vice president, director of corporate development, McCann-Erickson WorldGroup. As major brand holders ourselves, we aim to bring real content and challenging opinion to this fascinating debate."

Although those who disparage brands claim they are omnipotent monsters imposing a global hegemony, the truth is that the rate at which dominant brands come and go is accelerating faster than ever. Consumers, too, are becoming more sophisticated and cynical. The result is that the battle for mind-share will require more discerning and discreet brand building techniques to form and maintain deeper relationships with more demanding and informed consumers.

RELATED ARTICLE: We're looking for enemies.

Not your average enemy.

If you're an enemy of the people, we don't want you. People are the most important asset in any company.

If you're an enemy of progress, we don't want you. No company can survive without change.

If you're an enemy of persistence, we don't want you. Nothing worth achieving comes easily.

But if you're an enemy of the ordinary, well then, you're our kind of enemy.

An enemy of the ordinary is impatient with the status quo; avoiding the comfortable, living for the unexpected. And never for the sake of being different, only for the sake of finding a better way.

If you're ready to fight the usual, ready to think, ready to care, then call Douglas Faudet or Masami Okamura at DDB Japan on [phone].

We'd like to make friends with some new enemies.