The Brand Optimization Weblog

Brand Reputation is a discipline separate from that of traditional branding campaigns. Brand Reputation recognizes that due to increased transparency and access to information, ’traditional branding’ whether through mission statements, marketing or affiliations can easily be verified and evaluated. Thus reputation plays an increasing role in keeping organizations honest and forcing them to take definitive actions, rather than simply making public statements. Both consumers and employees are getting into the game.

Brand Reputation is sort of like ’Brands 2.0.’ Until recently brands had largely been considered ’intangible’ concepts. Accounting contributed to this conception by identifying ’goodwill’ as the excess over the book value one company was willing to pay for another. That excess was brand value.

Times have changed. More than ever before brands are increasingly the key element of any business model. Much of this power is because people view brands as a means of personal identification. Brands now trump actual products in terms of importance. For example, Abercrombie & Fitch used targeted branding and outreach to drive incredible revenues despite its products being of questionable quality. Brands now must interact with an audience, as explained by the brothers Heath in ’Made to Stick.’

Another shift has been organizations coming to embrace themselves as brands. For example, the university one attends, or the organizations one affiliates are increasingly recognizable and monetizable. Knowing that someone attended a certain college, or is affiliated with certain brands conveys all sorts of ethnic and class related information. Globalization has further complicated branding due to differences in cultural and geographic interpretations.

Still, the primary catalyst for these changes is the ever increasing prominence of the internet. As consumers have been given greater access to information they have become empowered (better informed) to decide how and where they spend their money. This empowerment has resulted in creating greater accountability on the part of businesses and organizations alike. Even Congress and international legislators have begun to demand increased accountability and sustainable practices partially as a result of online advocacy and scorecard groups who have now found an audience.

In business school we learn that the ’goal of management’ is to increase shareholder value. As it turns out, the definition of a ’shareholder’ is increasingly broad and can encompass anyone from a holder of company equity to management to employees to vendors. While traditional business practices have focused on the bottom line, a shift toward focusing on brand reputation takes a more holistic approach and recognizes that revenue and corporate social responsibility are not mutually exclusive. In fact, quite the opposite is true. Think Patagonia, think Ben & Jerry’s. Think of the amazing things you hear about working at Google.

Recent business trends have proven that brands by themselves are of increasing importance. Business leaders and financiers are recognizing that a strong brand can ultimately be monetized down the road. For example, MySpace, Facebook and YouTube are all companies with exceptionally strong brands but whose revenue streams (in recent memory) have been low or non-existent. Nevertheless, these companies all either received buyout offers or additional investments at valuations unrelated to actual cash flows. That says something.

Brand Reputation is community driven. Its appeal is often on a more human or emotional level and is acted out through user-engagement. It is greatly enhanced by the interactions of community members with the brand itself and by community members interacting with other community members. As discussed previously, Brand Reputation Optimization has both internal and external components. The strongest brands are grown organically and start with a focus on building internal relationships - allowing collaboration to flourish and building passion to drive the organization’s mission and objectives. After establishing such internal buy-in, the potential for building a strong brand is limited only by the degree of external engagement a firm builds into its online presence, marketing and CRM efforts.

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“Brand Reputation Optimization” is a new term that I am coining. I encourage you to read this introduction, to email it to a friend and to discuss it with me. I will also be publishing a more detailed white paper on the same subject.

Brand Reputation Optimization (BRO for the acronym lovers!) refers to how an organization best positions its brand for long-term sustainability and success. Success in this case refers both to the bottom line and to applying socially responsible business practices sometime referred to as corporate social responsibility. Since the web is now the preferred method by which people receive and digest information, BRO focuses primarily on online practices though it often complements, or is a catalyst for offline engagement.

Search Engine Optimization (SEO) taught us that we can be proactive in helping people to discover companies and information online. However, now that every company has established an online presence, and given that the internet is increasingly the medium by which people receive their information (thus evolving their perceptions and first impressions) the “key test” becomes that of brand distinction and differentiation. As it turns out, like search engine optimization there are best practices and concrete actions that can be taken to distinguish and optimize your brand.

The most important aspect of BRO is to recognize that people build brands and brands drive revenues. Many a company and business fails to capitalize on its most valuable asset – its own people. Social networks have taught us the power of passionate users and social media tool have helped us to unleash the power of collective intelligence often by breeding innovation organically. Passion drives engagement.

Brand Reputation Optimization has two central applications: Internal and External. Traditionally (and bound to continue going forward) is the primary focus of brand optimization on the external (such as interactions with media, the public and customers). Still it is important to reiterate that brands are in fact internally driven. If an organization’s own people to do not believe in the underlying objectives and ethics, the brand will never flourish.

External optimization can be further segmented into Proactive and Reactive Actions. Traditionally, brand development has focused more on reactive actions such as responding to customer complaints, providing warranty services after the sale, or increasing transparency practices after Sarbanes Oxley. However, thanks to new technologies (in particular social media) we now have the opportunity to focus on building brands proactively.

This new era in brand building is largely made possible by an unprecedented ability to provide online engagement in a way never before possible (think Ajax interface and social media functionality). Following Metcalf’s Law, “the more people using a given system, the more valuable it becomes.” Now that much of the World’s population is embracing the internet as their primary medium for interactions (shopping, dating, research, collaboration, etc…) the need for organizations to humanize and to appeal to people on more of an emotional level (as opposed to simply through the use of static text and image) is paramount.

The importance of Brand Reputation Optimization should not be underestimated and I look forward to seeing new applications of this concept going forward.

-This post was written by Sam Huleatt. If you enjoyed this post, please consider subscribing to LeveragingIdeas.com

The Brand Optimization Weblog was created by Johns Hopkins Graduate Student, Sam Huleatt in 2006. This blog is intended to be a central repository for my research and notes on Brand Optimization and Internal Corporate Social Responsibility. I will continue to update it with relevant research, links and articles even after graduation. You can also visit my main blog, Leveraging Ideas, where I focus on analysis of early stage investments, startups and social media culture.