Seven Principles for Challenger Brands

Seven Principles for Challenger Brands

Danielle Veldre

FOR strategy planner and author Adam Morgan, Madonna exemplifies what a challenger brand needs to be: constantly evolving, reinventing and setting the agenda, all in a manner which reflects the zeitgeist, without appearing contrived.

Speaking at the Advertising Federation of Australia’s Advertising Effectiveness Awards, Morgan addressed the value of strategy planning to an agency’s offering while promoting his book Eating the Big Fish: How Challenger Brands Can Com pete Against Brand Leaders.

Morgan said agencies are facing competition for their strategy planning services from corporate consultancies that can “talk the talk” with company CEOs, not just the staff in the marketing department.

Morgan began his career at BMP, one of the agencies claiming to have invented strategy planning. His latest role was as TBWA’s strategy planner for Europe before he launched his own strategy planning consultancy in London, called Eatbigfish.

Morgan’s research on challenger brands has afforded him a position of authority on the topic of brand strategy. He argues that agencies need to respond to the challenges of the corporate consultancies by investing time and resources into becoming “experts” in the area of strategic planning. However, he readily admits that multinationals are unlikely to make that type of investment in a climate of bottom-line budget planning.

“Agencies have neglected the research and development of brands because budget restrictions and a drive for profit has caused them to concentrate on getting new business,” he told B&T.

Morgan points out this is the best way an agency can educate its clients of the value of charging for the service which it has hitherto given away.

“Agencies give their strategy planning away in the pitch...how can [they] start charging for something that [they’ve] given away for free for so long?”

One way of doing this is to “argue in a language that these people respect—profit and loss”.

Morgan says agencies also need to look at the fundamental question of whether or not everything they do has to result in advertising, in other words, re-assessing core objectives.

Dramatic changes in the advertising landscape have altered the face of competition, with corporate consultancies moving in to join those agencies whose core business is advertising. Morgan believes the Australian advertising pitch of the future won’t be a roll call of the top agencies in the land, but will include corporate conulstancy companies such as McKinsey, as well as small independent specialists merged to offer a full range of services.

Currently researching the follow-up to his first book, Morgan draws a florid analogy, likening his business and the business of challenger brands to a peach. The outside flesh is the product or service on offer and the stone of the fruit is the philosophy and strategy behind the brand. He says that too much concentration on the flesh will mean the stone will wither, and while you can’t do anything particular with the stone, it is vital to the health of the flesh.

Again Morgan says there needs to be a significant investment in the core brand in order for it assume the mantle of the challenger brand.

He also speaks about a sense of “intelligent naivety” necessary in the philosophy of the challenger brand which enables it to ask the questions to circumvent the rules of the brand category. He sites Richard Branson of the Virgin empire as a good example: when launching his Virgin Atlantic airline, Branson asked the fundamental question “Why is flying boring?” and was able to build a brand strategy around that question.

While Morgan believes Virgin embodies the essence of the challenger brand, he says it is now at a cross roads where it is in danger of getting into too many things, such as its struggling rail arm in the UK.

In his presentation at the Advertising Effectiveness Awards, Morgan pointed to the example of the international car-rental firm Avis as a classic example of a challenger brand. When Avis went to its agency DDB, it laid down a set of principles in order for the brand to actually progress and become one of the hire care industry’s most significant players instead of a pretender to the throne. The principles were:

1. Avis will never know as much about advertising as DDB, and DDB will never know as much about the car rental business as Avis.

2. The purpose of the advertising is to persuade the frequent renter (whether business or pleasure) to try Avis.

3. A serious attempt will be made to create advertising with five times the effectiveness (see #2) of the competition’s advertising.

4. To this end, Avis will approve or disapprove, not try to improve, ads that are submitted. Any changes suggested by Avis must be grounded on a material operating defect (a wrong uniform, for example).

5. To this end, DDB will only submit for approval those ads that they as an agency recommend. They will not ‘see what Avis thinks of that one’.

6. Media selection should be the primary responsibility of DDB. However, DDB is expected to take initiative to get guidance from Avis in weighing of markets or special situations, particularly in those areas where cold numbers do not indicate the real picture. Media judgements are open to discussion. Conviction should prevail. Compromises should be avoided.

7. All ads will be approved by the CEO of Avis and the agency will secure approval in writing from [Avis fleet provider, Ford] on each advertisement.

Armed with this information, go forth, advertise and conquer challenger brands