Looking at branding in the AI era, do you believe that branding has become more important or less important in the AI era?

I think it's more important.

I mentioned in the 80s there was a time where short-termism went out, and it went out because there was a model, the BCG matrix, which... which said that strategically you needed to build market share.

So people did that, even though they did it in a way that destroyed brands.

And also we had scanner data came in.

So this was, everybody thought now we can run marketing scientifically.

It's not seat of the pants anymore because we have scanner data.

Why do purpose-driven brands outperform the transactional brands over time? And of course, I know you've touched on short-termism as well, right? So why do the brands that, you know, are purpose-driven outperform the transactional brands over time?

Looking at branding in the AI era, do you believe that branding has become more important or less important in the AI era?

I think it's more important.

I mentioned in the 80s there was a time where short-termism went out, and it went out because there was a model, the BCG matrix, which... which said that strategically you needed to build market share.

So people did that, even though they did it in a way that destroyed brands.

And also we had scanner data came in.

So this was, everybody thought now we can run marketing scientifically.

It's not seat of the pants anymore because we have scanner data.

Why do purpose-driven brands outperform the transactional brands over time? And of course, I know you've touched on short-termism as well, right? So why do the brands that, you know, are purpose-driven outperform the transactional brands over time?

Mm

... just a nice cr- uh, crisp, clean thing like, "Here's one fact and here's another fact.

Let's go, let's move on." Because the more you argue about it, the more visible it is, and there's so many people that will not listen to, uh...

They won't listen to the content of your argument, they will just recognize there's an argument.

And if there's an argument, that means that there's some people that believe there's a problem, and that's kinda what they're left with.

A good example is Audi.

They had a sudden acceleration problem that was, uh, where they were accused of having defective engineering, and they proved that wasn't the case.

Mm.

All right, back to the conversation.

I think today the significant organizational problem is precipitated by the development of or the reassurance of short-termism, which is a sort of a demand internally for short-term results to emerge.

And that puts a lot of risk on brands because people that are charged with that can tend to do things that can damage or destroy brands.

And I tell a story out of history about the 80s, which was the decade, in my view, of short-termism.

It was at its peak.

It was driven by two sort of theories.

One was the BCG matrix.

When you talk about brand portfolios, one of the elements, how does the Asahi dry fit into that? What are the things we should be looking for there? Yeah.

If you look at the environment, what's happening right now? The

world is much more dynamic than it was even 10 years ago.

It's always been the case that the only way to grow, really, if you look at it empirically, the only way to grow is with disruptive innovation.

And I mean, you go back to Michael Porter, who said one of the ways to grow is to be differentiated.

Well, disruptive innovation is the ultimate in differentiation.

And so that's always been true.

And the big surges in growth is almost always can be interpreted in terms of the disruptive innovation that's involved.

But given the current scenarios right now, how can a brand really still earn attention right now and trust, I would add? without just shouting louder and just fighting for space, because space doesn't guarantee anyway that.

Then, Marcus, I'd like to get your reaction to what David shares about this framework for building strong brands in 2025.

Well, it starts with I got into brand equity in the late 80s when the when the concept emerged and it emerged as a reaction to the short termism of the P&G model and that probably P&G had long drifted away from, but nobody else had, and scanner data influence, and more than anything else is BCG.

BCG was used by half the companies in America, and they emphasize that it's all about market share.

You just have to gain market share, and then the experience curve will give you a cost advantage, and you'll win.

And so everybody would try to buy market share.

And I did some research that nobody saw that showed that if you buy market share, that in fact doesn't create profits or anything else.

But anyway, so at the end of 80s, people kind of realized that the strategy of the day wasn't working.

David, let's bring you into the conversation.

and that was really more of a growth model than it was a branding model right yes but it said the way you grow

and the way you thrive is to increase market share you then there's a you go down the experience curve and and you get economies of scale and on and on so um And the basic idea of cows and stars was created by Peter Drucker 10 years before that.

And it's a perfectly sound model.

But what's not sound is the idea that market share drives.

and so in 1990 people were ripe for uh for having brand equity enter the scene and they said we this isn't working and so let's look at something else and they said brand is an asset makes sense and and uh then i wrote that first book on uh that defined brand equity and what i did was say brand equity includes brand loyalty and when you do that and you say it's not just a communication thing it's uh it's everything that touches a customer it's product development it's it's a customer journey and and so on then uh everything changes then you get a seat at this at the at the c-suite and not uh you're not a middle manager anymore and and you bring to the c-suite customer insight and segmentation and and so on and and that just got planted in the 90s and it grew and grew and got stronger and stronger until almost everybody has a a marketing person at the c-suite now and uh and you think well that battle's over well it turns out that it's uh there there's uh it's not over it's not even close and yeah and and uh well i think there's been a revival of short-termism and it's come under it's really well branded it comes under the label brand marketing or performance marketing now who could be against you know, building brand demand or who could be against high performance.

And so it's saying that, well, you've got a brand, you got brand marketing and you've got demand marketing and, you know, we can't let demand marketing take a backseat because that's driving our business next week, next month.

And we need leads, we need sales.

I was at Procter & Gamble then.

So do you have any other reflections on the historical importance of brand equity and kind of this time in history?

In writing this book, I was reflecting on that and I sort of connected.

the evolution of brand equity to what had been going on in the 1980s.

The 1980s was characterized by the strategic model of the day was driven by the Boston Consulting Group's market share growth matrix.

It was developed actually in 1971 in the famous article.

But that was so influential.

And what it said was market share is the driver of success.

So I'm wondering if maybe we could talk about them in the context of the 5Bs and if you could tell the story of Dove's evolution as a brand and how Unilever has managed that brand.

area of focus professionally?

It happened in the late 1980s, actually.

Now that's over 30 years ago.

Sort of all the stars were aligned.

For one thing, there was a strategy sort of model, the gross share matrix by BCG, that was sort of dominating people's strategy.

And they saw empirically that if you increase market share, you'll increase profitability.

And they believed that because large market share companies made more money than small ones did.

How was it adopted by the industry? Was this book an immediate hit? Was it adopted by companies as well? Or what was the impact of this book?