I've always been fascinated with dinosaurs.

Bigger-than-life creatures, stomping around Mesozoic earth, eating everything in their path, and ruling the planet for 180 million years. Then, suddenly, they were gone. Paleontologists are still debating what actually killed the dinosaurs 65 million years ago.

Theories abound.

Some point to a meteor that struck Central America, and turned the earth's atmosphere into a toxic fog. Others suggest that plants evolved into something the herbivores couldn't stomach, leading to their starvation-and ultimately to the starvation of the predating carnivores. Still others theorize that a SARS-like virus spread as the continents shifted and connected previously separate dinosaur species via land bridges. And some believe it was simply the inevitable climactic changes that did them in: creatures that big evolve too slowly to adjust to dramatic shifts in the environment.

Brandasauras Rex?
Conventional wisdom today suggests that brands-and branding-have gone the way of the dinosaur. And the parallels are uncanny.

Bigger-than-life entities stomping around the globe, trampling every competitor in their path, and ruling the landscape for well over a century. Then, suddenly, they were irrelevant.

Theories abound here, too.

Some point to a tremendous market implosion-the bursting of the dot-com bubble-poisoning the economy with a toxic gloom. Others suggest that nervous consumers lost their taste for brands, which led to a glut of low-priced products, which led to worker layoffs-which ultimately killed off the companies that owned the brands. Still others theorize that a plague known euphemistically as "ROI" spread across the globe, and tried to connect branding to quarterly earnings reports-with disastrous results. And some believe that it was simply the inevitable climactic changes that did them in: brands-and branding---just couldn't evolve quickly enough to remain relevant in the rapidly-shifting environment.

Mass Extinction
T-Rex is long gone, along with his food source-and foe-Triceratops. But most scientists today will tell you that not all the dinosaurs were killed off in the mass extinction; some, in fact, still exist today.

Birds.

As counter-intuitive as this is, it appears that ostriches, eagles and sparrows are descendants of the great beasts of prehistoric times. The threat of extinction apparently was the catalyst for an extreme evolution by the most adaptable and resilient of the species.

The same is true-in a manner of speaking-for branding.

Yes, the Pets.com sock puppet is gone, along with the $50 million annual budget that fed him. And e-trade sent its dancing chimpanzee off into space, hopefully never to return. In truth, neither of these icons of dot-com madness ever really had much to do with branding anyway. They were symbols of the excess of an era that did irrevocable damage to the notion of brands and the science of branding.

The sock puppet and chimpanzee were among the more visible examples of attempts at branding by people who didn't understand how to build brands. The notion was hatched somewhere in the VC-money-driven haze that if a company threw enough money into clever-albeit irrelevant-ad campaigns, brands could be created overnight.

So branding came to be incorrectly defined as "advertising." Brands were mistakenly believed to be mass-market imagery. Agencies made obscene amounts of money, as did media vehicles named after obscure breeds of fish. VCs and their limited partners burned through billions of wasted dollars; and the companies they funded died.

The mass extinction had begun.

Evolution of the Species
Today it's hard to find a CEO anywhere other than a consumer packaged-goods company who will admit to doing anything to build his company's brand. In the new era of fiscal accountability, every expense must be measurable, and must contribute a meaningful ROI.

In that kind of environment, it's hard to justify "branding." It's too expensive. It's too hard to measure. And it's too hard to manage. Better to focus on sales activities-they contribute to the bottom line. If marketing activities are funded, they should be strictly for the purpose of generating leads-something that can be measured, and can support sales. Since branding activities are hard to link directly to these sorts of sales metrics, they simply can't be supported. Branding-in the minds of these executives-is a thing of the past.

In a sense, this sort of over-reaction is inevitable-like a drinking binge followed by a pledge of sobriety. But it's unfortunate, short-sighted, and possibly fatal. It's fixing the wrong problem. And these companies are probably the most likely to be foraging around for a fresh fern leaf when the meteor hits.

What most of these CEOs haven't quite figured out yet is that their companies are, in fact, brands. And their ability to manage those brands-to help them evolve-is the difference between survival and failure. The difference between evolution and extinction.

What Brands Are
David D'Alessandro, the CEO of John Hancock Financial Services, offers this definition of brands in his book, Brand Warfare:

"Brand is everything, the stuff you want to communicate to consumers and the stuff you communicate despite yourself. By definition, "brand" is whatever the consumer thinks of when he or she hears your company's name."

The bottom line is that every company has a brand-and in the case of B2B and technology companies, more often than not the company is the brand. The question is how to manage the brand-how to effect what the customer thinks when he or she thinks of your brand.

In technology marketing, customers buy companies, not products. They buy Dell, not an Inspiron ®. They buy Oracle, not a financial application. The higher the risk, the lower the tolerance on the part of the buyer-which is why "Nobody ever got fired for buying IBM."

The brand-the corporate brand-is what reassures the customer, and mitigates risk. The customer trusts your company to deliver on its promise, and to be there if he or she needs support. At the end of the day, your brand is the set of perceptions and expectations your customer has for your future performance. The business implications are mind-boggling.

Why Brands Matter
1. Functionally, a brand is a competitive differentiator that does three things:

• Helps you gain market share at prevailing prices
• Helps you maintain market share at a premium price
• Helps you claim a premium price for your products and your stock

This is classic consumer behavior. When shopping for an item, a consumer will always buy a preferred brand if the price is the same as a competitive brand; and nearly always buy a preferred brand if the price is marginally higher than that of the competitive brand.

The same behavior takes place in B2B and technology. Does Intel actually make microprocessors that are twice as good as its competitors'? Is Oracle's database worth 10 times more than Sybase's? Of course not. But Intel can charge twice as much as most of its competitors for a product that performs a similar function. And Oracle's stock price trades at many multiples of Sybase's.

In both cases, and numerous others, it's the strength of these brands that allows them to command the multiples.

2. From an internal perspective, good brands also serve three useful purposes:

• The best people want to work for companies with strong brands
• Strong brands help employees focus and make decisions
• Strong brands, well-communicated, motivate employees

How much easier is it to recruit and retain the best, brightest, most talented employees if you're hiring for Microsoft or Apple than if you're hiring for Novell or Acer? How many engineers at Volvo wonder if it's ok to make a car safer?

Brands can drive a company if they clearly communicated and understood, and if they reflect the company's mission and vision. This makes the company more effective-and operationally more efficient. Arthur Anderson forgot that their entire business was built around one word: TRUST. Once that bond was broken, the brand was destroyed. Employees-and management-who clearly understood that concept never would have allowed the company to get sucked into the Enron debacle.

3. Brands provide useful context for customers:

• They save time
• They project the right image
• They provide an identity

The single most valuable role a brand plays in the day-to-day operations of a business is that it gets the company into the consideration set when a customer is making a buying decision. Shopping for PCs? Which companies come to mind? Dell? HP? SONY? Gateway? The strongest brands always at least get into the consideration set-always at least get a chance to compete for the business.

What's the ROI on that?

And the value of a brand goes well beyond that for customers. Brands often become a featured component of the customer's offering. Intel Inside® is probably the best example of that. As a B2B marketer, it's important to remember that your brand may very well have an impact on the brand of your customer, making it easier-or more difficult-for your customer to make a sale.

4. Finally, and for the benefit of CEOs and CFOs who have read this far, a brand is the single most valuable financial asset a company owns. No less a source than Business Week notes that:

"Intangible assets, such as patents, customer lists and brands are the keys to shareholder value in a knowledge economy. You won't find balance-sheet entries for those assets, even though they may account for the bulk of overall value"

In fact, across the entire Fortune 500 over the past four years, these "intangible assets" averaged nearly 70% of the total market cap. That means that almost 70% of the total value of those companies is off the balance sheets. It's the market's perceptions and expectations for those companies' future performance.

In short, it's their brands.

And yet, companies focus thousands of hours and millions of dollars trying to extract every nickel of value from the 30% of the company that's on the books, while relegating the 70% of the company's value to someone in the advertising department.

Sort of like looking for a fresh fern in a meteor shower.

Brands-and branding-aren't dead. In fact they're more relevant, more important than ever.

The shift away from mass marketing to relationship marketing; the growing importance of contextual branding; the continuing transfiguration of established media vehicles; all of these will have an impact on how branding programs are executed. And brand management as a science-particularly in B2B and technology markets-is still in its early stages of development.

The evolution continues.

Rick Sharga is the President a & CEO of CJ Patrick Company, an organization that helps CEOs leverage corporate brands to increase shareholder value, grow their businesses and improve operational efficiencies. For a copy of his free White Paper on branding, contact him at rsharga@cjpatrickcompany.com.

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