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This reminds me of a fascinating article in The New Yorker called "Twilight of the Brands." [0] The author's basic argument is that brands have historically fil

This reminds me of a fascinating article in The New Yorker called "Twilight of the Brands." [0] The author's basic argument is that brands have historically filled an information gap. Before the Internet, when consumers didn't have tons of on-demand info about products, brands were a compass that pointed them in the right direction. If the last Sylvania TV you bought worked well, you might buy another one without hunting down reviews for the new model. Now that product info is ubiquitous, the author says, the role of brands and traditional advertising is declining. So, when I hear critiques about a particular form of online advertising, I think about the broader, more subtle ways in which websites influence our purchases. Companies are starting to pay more attention to online forums and social sites, which are more persuasive to consumers than traditional banner ads. [0] http://www.newyorker.com/talk/financial/2014/02/17/140217ta_talk_surowiecki http://www.newyorker.com/talk/financial/2014/02/17/140217ta_...

josu 12y ago
I understand the point he is making, and I agree that the importance of advertising is declining. However, I wouldn't be able to explain Samsung's success without looking at advertising.
- baddox 12y ago
  How about economy of scale in manufacturing, and (mostly) competent design and engineering teams?
  - josu 12y ago
    From a consumer's perspective all I see is a bunch of high end cell phones with very similar features and priced the same. Nevertheless, many people decide to buy the Samsung flagship phone over the Sony, LG or HTC. Better economies of scale could be the reason if they decided to price their phones lower, but they don't. So that it's not the reason why people are choosing Samsung. About the competent design, I don't see the Galaxy being superior to the HTC one or the Z2.
    - baddox 12y ago
      An economy of scale doesn't necessarily mean they price their phones lower. It could mean they offer more expensive products at the same price and with the same profit as their competitors, or offer equivalent products at the same price but higher profit than their competitors.
      - josu 12y ago
        That's right. But they do not offer a better product, the flagship phones are all pretty much the same. And there is no reason why a higher margin should turn into a higher market share.
- Zigurd 12y ago
  If that were mostly attributable to advertising, I think you would see an equivalent success built on a horizontal brand - that is, an OEM without Samsung's vertical integration. Otherwise an equally valid conjecture is that Samsung bought-in to the idea that the only way to consolidate success is through establishing a brand. As Intel did, for example. But I don't think anyone could argue that Samsung's ad campaigns are mostly cost-effective, coherent, and well-targeted. In other words, I don't think one can articulate a set of hypotheses that links the vast majority of Samsung's ad spending to Samsung's market success. Contrarywise, there is a pretty good theory that Samsung succeeded in PCs, before they cranked up the ad spending, by being vertically integrated in almost all high-value components except CPUs.
  - josu 12y ago
    I agree that establishing causality is very difficult and especially when it comes to the advertising business. Nevertheless, my point is that when it comes to high end Android phones it is starting to look like a commodity market. So in my opinion the only way to explain Samsung's success is either their ad spending or sheer luck, which may as well be a really good explanation.
    - Zigurd 12y ago
      My point is that, as with PCs, which have been commoditized for decades, Samsung's success is mainly a product of vertical integration. In fact I'd cite their recent mobile handset launch events as a prime example of marketing and advertising spending gone off the rails. I also compared them with Intel for a reason. Intel wins because they can simultaneously push chip and chip fab technology. That's an explanation that can put most people to sleep by the fourth word. And yet, once it was a small enough part of their budget, they went into the ad market, spent tens of millions, and bought brand recognition. It was a check-off item.
  - xenadu02 12y ago
    Huh? Samsung pays kickbacks to sales people and carriers. At least with regards to their top of the line phones, that's how they have muscled out all their Android competitors. It's a vicious cycle that you can't sustain unless you're a huge company that can subsidize the strategy with cash from profitable businesses. When the minimum-wage salesperson at the carrier store or mall kiosk gets $25 in their pocket for selling the top line Samsung phone and $0 for any other phone, the "choice" is clear: customers will be walking out with Samsung phones. That is a majority of their marketing budget, though they go through great lengths to bury the lead in what little numbers they release. Part of the reason Apple gets so much organic press is they're the only one to release actual hard numbers on a regular basis, though they are certainly coy in some areas.
- davemel37 12y ago
  Really? I could just as easily explain their success to an insane amount of press coverage.
- rimantas 12y ago
  Well… http://83-136-248-155.uk-lon1.host.upcloud.com/wp-content/uploads/2012/11/Screen-Shot-2012-11-29-at-11-29-7.22.07-PM.png http://83-136-248-155.uk-lon1.host.upcloud.com/wp-content/up...
baddox 12y ago
I wouldn't think that the role of brands would be declining for products that are not very differentiable in a blind test.
LiweiZ 12y ago
Well, I have to say that there are many labels call themselves brands. And a brand is actually more like a notion in one's mind, if there is any, connecting the cognition and the outside world. It helps people quickly get their answers from their brain "HDD" without extra time/energy cost. We often call this "impression" or something like this. ad banner is just one of those channels to deliver the information to your target audience. It is a way to deliver your message to help build the notion in people's mind. So I think they are different things. Hope this helps.
gerbal 12y ago
For medium scale purchases with many interchangeable competitors, this may be true. But for cheap impulse purchase and for high-end commodities, brand still matters quite a bit. Apple and Samsung are two great examples of higher end companies whose products aren't appreciably superior or inferior to most of their competitors, but through relentless advertising, they have made themselves seem distinct from their competitors. A significant function of advertising is to reinforce decisions. Very few people buy a car because they saw an ad for it, or a iPhone, for that matter. But the ad serves to reinforce the decision of those who already bought the product, decreasing buyers remorse. It's the reason most higher end car ads are selling the idea of a car rather than the car itself. Ditto with the older iPhone and iPods ads. And a similar thing is true for low end, cheap products. People buy Coca Cola over store brand cola because of the brand identity coca cola creates. They may be totally unaware of it, but it's just enough of an impetus to push someone to spend the extra $1.50 on a 12 pack of Coke vs another brand.
- jseliger 12y ago
  Apple and Samsung are two great examples of higher end companies whose products aren't appreciably superior or inferior to most of their competitors I'm not sure this is true: Samsung is not a (particularly) higher-end company, and their phones at least are lower cost than Apple. In the case of Apple, their phones were appreciably better up until two years ago or so. Their laptops have been physically better in fit and finish for at least a decade (http://paulgraham.com/mac.html http://paulgraham.com/mac.html).
  - gerbal 12y ago
    I didn't mean that Apple doesn't make good products. They make pretty damn good products. But the products are only part of Apple's marketing strategy. Much of what has made Apple successful is the idea of what a Mac, an iPod, or an iPhone is. For most of the iPod's lifespan it was not the best product on the market, it was just the best marketed. In the case of macbooks, the hardware has been roughly on par with equivalently priced competitors for several years. But they sell the idea of what it means to be a 'mac person'. They get you invested in the idea that macs are better regardless of the reality. And that strategy is as much about reassuring people who already own Apple products (fighting buyers remorse, and grass-is-greener impulses) as it is about selling more.
hga 12y ago
One big issue for me is that brands have become drastically less useful in predicting product quality. Very few of the major brands that were big when I grew up in the '70s haven't thrown away their quality in favor of ... I'm not sure. Sony is a good example, even good through the '80s as well, as long as you didn't get something manufactured in Mexico with cold soldier joints, as my family back in SW Missouri did, fortunately they knew how to deal with that problem. Today every purchase I make is proceeded by research, caution or whatever to make sure I'm still getting the same thing, or that the New And Improved version isn't significantly worse, or that the manufacturer hasn't thrown away quality in their new model. For me, outside of some rare exceptions like Amazon, or some providers of higher end products, brand equity is all but dead. No amount of advertising can counteract the facts on the ground for someone who's been around long enough, and I'll bet even young whippersnappers are getting wise to this new scheme of things.
- x0x0 12y ago
  I think people underrate how much this benefits apple. While I'm sure there are people with different experiences, apple in general, and in my experience, don't sell shit products and stand behind what they sell. With a full motherboard changeout available at a local apple store if necessary. Contrast to hp: we had a hp laptop w/ a next business day in-home warranty that nonetheless spent a week or more in hp's repair shops on two occasions. I've also gotten new power bricks outside of warranty basically by asking nicely at the local apple store. It may be because I do spend a lot of money on apple gear, but I used to do that w/ dell and dell never gave a shit. The brand I'm most surprised about is sears. They used to make great appliances and stand behind them until the private equity thieves fucked that all up. My partner runs a medium-sized apartment building; the owner is happy to pay for quality, and if sears cost less on the 10-15 year time frame they'd buy it. But sears is the same cheap crap, so they just buy whatever is close to cheapest at home depot. When brands throw away their brand name and turn into the same cheap shit, you can't blame consumers for shopping just on price.
  - hga 12y ago
    Well, Sears never actually made their white goods appliances, but they used to do a very good job of sourcing their Kenmore brand ones. That's what my mother, something of a Laundry Nazi, used when she was washing for my father, who hunted and did other things that got clothes dirty, and me, my sister ... and my two younger brothers. Serious cleaning required, which I helped with. Hummm, ditto refrigerators. Now it's a don't even bother with them. I don't know about your private equity compliant; are you referring to the late 2004 deal with K-Mart? I'm pretty sure Sears had already "lost it" by then, although I'd have to check to be absolutely sure about Kenmore appliances. If so, it took them only two years to completely lose it, because I bought a washer and dryer in 2007, started looking in Sears and then went with GE (in part because my family has a special relationship with the local dealer). Of course I learned my own Laundry Nazi style from my mother.... "When brands throw away their brand name and turn into the same cheap shit, you can't blame consumers for shopping just on price." Bingo. There are times when I just give up trying to get something I have confidence in being good and roll the dice with price being a major factor.
superuser2 12y ago
One place where marketers have gotten around this quite adeptly is Windows PCs and laptops. Try searching for reviews on a laptop you find at Best Buy. There are none. The model number is 10+ random characters and completely meaningless. Comparison shopping between laptops on the basis of reviews is impossible. Consequently, they have you buying on 1) brand and 2) specs, which is right where they want you, and completely ignoring things like build quality and MTBF of parts which might be revealed by long-term reviews. This is one of the (many) refreshing things about Apple. Macbook Pro is Macbook Pro until the next refresh.
- josephcooney 12y ago
  I think Best Buy and co. do that to prevent them having to make good on "price matching" promises - everyone sells a different model (that really only differs by the model number), so since no-one sells "the same" model they can SAY they price-match without ever actually having to. I believe they do this for TVs too.
- lelandbatey 12y ago
  I noticed this as well, but it just pushed me towards those kinds of companies that use reliable identifiers like Lenovo. I find that if a company is doing this kind of weird naming, they're probably not in the business of selling things based on quality.
- Nursie 12y ago
  Ummm... I love my MBP but it's no way 'the' Macbook Pro until next refresh. I got a choice of two form factors and multiple hard drive/SSD, processor and RAM configurations. The build quality is great, but don't pretend for a moment Apple don't play the specs game.
  - blairbeckwith 12y ago
    I think you know this isn't what he meant.
  - superuser2 12y ago
    This isn't about meaningful variations. Go to Dell and HP's websites and see how many different ways (with different model numbers and sometimes even prices) you can configure a laptop with the same screen, processor, RAM, and hard drive. I tried it at one point and stopped counting after around 10.
larrys 12y ago
"Now that product info is ubiquitous, the author says, the role of brands and traditional advertising is declining" Declining but still very important. All else equal someone will make a purchase from a brand that they have used, know, or trust, over another brand which they have less or no experience with. I would also argue that even on a lesser feature set the existing brand has a clear edge. And there are other issues like wanting everything to look similar (say with kitchen appliances) or other tie ins. Let's look at YC as a brand. My guess is that even if statistics were shown that another place was "better" for a startup (if better could be defined) the edge, because of the "brand", would go to YC. Now if YC is not "in your face anymore", say HN declines in popularity, that brand could easily suffer.

josu 12y ago

I understand the point he is making, and I agree that the importance of advertising is declining. However, I wouldn't be able to explain Samsung's success without looking at advertising.

baddox 12y ago
How about economy of scale in manufacturing, and (mostly) competent design and engineering teams?
- josu 12y ago
  From a consumer's perspective all I see is a bunch of high end cell phones with very similar features and priced the same. Nevertheless, many people decide to buy the Samsung flagship phone over the Sony, LG or HTC. Better economies of scale could be the reason if they decided to price their phones lower, but they don't. So that it's not the reason why people are choosing Samsung. About the competent design, I don't see the Galaxy being superior to the HTC one or the Z2.
  - baddox 12y ago
    An economy of scale doesn't necessarily mean they price their phones lower. It could mean they offer more expensive products at the same price and with the same profit as their competitors, or offer equivalent products at the same price but higher profit than their competitors.
    - josu 12y ago
      That's right. But they do not offer a better product, the flagship phones are all pretty much the same. And there is no reason why a higher margin should turn into a higher market share.
Zigurd 12y ago
If that were mostly attributable to advertising, I think you would see an equivalent success built on a horizontal brand - that is, an OEM without Samsung's vertical integration. Otherwise an equally valid conjecture is that Samsung bought-in to the idea that the only way to consolidate success is through establishing a brand. As Intel did, for example. But I don't think anyone could argue that Samsung's ad campaigns are mostly cost-effective, coherent, and well-targeted. In other words, I don't think one can articulate a set of hypotheses that links the vast majority of Samsung's ad spending to Samsung's market success. Contrarywise, there is a pretty good theory that Samsung succeeded in PCs, before they cranked up the ad spending, by being vertically integrated in almost all high-value components except CPUs.
- josu 12y ago
  I agree that establishing causality is very difficult and especially when it comes to the advertising business. Nevertheless, my point is that when it comes to high end Android phones it is starting to look like a commodity market. So in my opinion the only way to explain Samsung's success is either their ad spending or sheer luck, which may as well be a really good explanation.
  - Zigurd 12y ago
    My point is that, as with PCs, which have been commoditized for decades, Samsung's success is mainly a product of vertical integration. In fact I'd cite their recent mobile handset launch events as a prime example of marketing and advertising spending gone off the rails. I also compared them with Intel for a reason. Intel wins because they can simultaneously push chip and chip fab technology. That's an explanation that can put most people to sleep by the fourth word. And yet, once it was a small enough part of their budget, they went into the ad market, spent tens of millions, and bought brand recognition. It was a check-off item.
- xenadu02 12y ago
  Huh? Samsung pays kickbacks to sales people and carriers. At least with regards to their top of the line phones, that's how they have muscled out all their Android competitors. It's a vicious cycle that you can't sustain unless you're a huge company that can subsidize the strategy with cash from profitable businesses. When the minimum-wage salesperson at the carrier store or mall kiosk gets $25 in their pocket for selling the top line Samsung phone and $0 for any other phone, the "choice" is clear: customers will be walking out with Samsung phones. That is a majority of their marketing budget, though they go through great lengths to bury the lead in what little numbers they release. Part of the reason Apple gets so much organic press is they're the only one to release actual hard numbers on a regular basis, though they are certainly coy in some areas.
davemel37 12y ago
Really? I could just as easily explain their success to an insane amount of press coverage.
rimantas 12y ago
Well… http://83-136-248-155.uk-lon1.host.upcloud.com/wp-content/uploads/2012/11/Screen-Shot-2012-11-29-at-11-29-7.22.07-PM.png http://83-136-248-155.uk-lon1.host.upcloud.com/wp-content/up...

baddox 12y ago

I wouldn't think that the role of brands would be declining for products that are not very differentiable in a blind test.

LiweiZ 12y ago

Well, I have to say that there are many labels call themselves brands. And a brand is actually more like a notion in one's mind, if there is any, connecting the cognition and the outside world. It helps people quickly get their answers from their brain "HDD" without extra time/energy cost. We often call this "impression" or something like this. ad banner is just one of those channels to deliver the information to your target audience. It is a way to deliver your message to help build the notion in people's mind. So I think they are different things. Hope this helps.

gerbal 12y ago

For medium scale purchases with many interchangeable competitors, this may be true. But for cheap impulse purchase and for high-end commodities, brand still matters quite a bit. Apple and Samsung are two great examples of higher end companies whose products aren't appreciably superior or inferior to most of their competitors, but through relentless advertising, they have made themselves seem distinct from their competitors. A significant function of advertising is to reinforce decisions. Very few people buy a car because they saw an ad for it, or a iPhone, for that matter. But the ad serves to reinforce the decision of those who already bought the product, decreasing buyers remorse. It's the reason most higher end car ads are selling the idea of a car rather than the car itself. Ditto with the older iPhone and iPods ads. And a similar thing is true for low end, cheap products. People buy Coca Cola over store brand cola because of the brand identity coca cola creates. They may be totally unaware of it, but it's just enough of an impetus to push someone to spend the extra $1.50 on a 12 pack of Coke vs another brand.

jseliger 12y ago
Apple and Samsung are two great examples of higher end companies whose products aren't appreciably superior or inferior to most of their competitors I'm not sure this is true: Samsung is not a (particularly) higher-end company, and their phones at least are lower cost than Apple. In the case of Apple, their phones were appreciably better up until two years ago or so. Their laptops have been physically better in fit and finish for at least a decade (http://paulgraham.com/mac.html http://paulgraham.com/mac.html).
- gerbal 12y ago
  I didn't mean that Apple doesn't make good products. They make pretty damn good products. But the products are only part of Apple's marketing strategy. Much of what has made Apple successful is the idea of what a Mac, an iPod, or an iPhone is. For most of the iPod's lifespan it was not the best product on the market, it was just the best marketed. In the case of macbooks, the hardware has been roughly on par with equivalently priced competitors for several years. But they sell the idea of what it means to be a 'mac person'. They get you invested in the idea that macs are better regardless of the reality. And that strategy is as much about reassuring people who already own Apple products (fighting buyers remorse, and grass-is-greener impulses) as it is about selling more.

hga 12y ago

One big issue for me is that brands have become drastically less useful in predicting product quality. Very few of the major brands that were big when I grew up in the '70s haven't thrown away their quality in favor of ... I'm not sure. Sony is a good example, even good through the '80s as well, as long as you didn't get something manufactured in Mexico with cold soldier joints, as my family back in SW Missouri did, fortunately they knew how to deal with that problem. Today every purchase I make is proceeded by research, caution or whatever to make sure I'm still getting the same thing, or that the New And Improved version isn't significantly worse, or that the manufacturer hasn't thrown away quality in their new model. For me, outside of some rare exceptions like Amazon, or some providers of higher end products, brand equity is all but dead. No amount of advertising can counteract the facts on the ground for someone who's been around long enough, and I'll bet even young whippersnappers are getting wise to this new scheme of things.

x0x0 12y ago
I think people underrate how much this benefits apple. While I'm sure there are people with different experiences, apple in general, and in my experience, don't sell shit products and stand behind what they sell. With a full motherboard changeout available at a local apple store if necessary. Contrast to hp: we had a hp laptop w/ a next business day in-home warranty that nonetheless spent a week or more in hp's repair shops on two occasions. I've also gotten new power bricks outside of warranty basically by asking nicely at the local apple store. It may be because I do spend a lot of money on apple gear, but I used to do that w/ dell and dell never gave a shit. The brand I'm most surprised about is sears. They used to make great appliances and stand behind them until the private equity thieves fucked that all up. My partner runs a medium-sized apartment building; the owner is happy to pay for quality, and if sears cost less on the 10-15 year time frame they'd buy it. But sears is the same cheap crap, so they just buy whatever is close to cheapest at home depot. When brands throw away their brand name and turn into the same cheap shit, you can't blame consumers for shopping just on price.
- hga 12y ago
  Well, Sears never actually made their white goods appliances, but they used to do a very good job of sourcing their Kenmore brand ones. That's what my mother, something of a Laundry Nazi, used when she was washing for my father, who hunted and did other things that got clothes dirty, and me, my sister ... and my two younger brothers. Serious cleaning required, which I helped with. Hummm, ditto refrigerators. Now it's a don't even bother with them. I don't know about your private equity compliant; are you referring to the late 2004 deal with K-Mart? I'm pretty sure Sears had already "lost it" by then, although I'd have to check to be absolutely sure about Kenmore appliances. If so, it took them only two years to completely lose it, because I bought a washer and dryer in 2007, started looking in Sears and then went with GE (in part because my family has a special relationship with the local dealer). Of course I learned my own Laundry Nazi style from my mother.... "When brands throw away their brand name and turn into the same cheap shit, you can't blame consumers for shopping just on price." Bingo. There are times when I just give up trying to get something I have confidence in being good and roll the dice with price being a major factor.

superuser2 12y ago

One place where marketers have gotten around this quite adeptly is Windows PCs and laptops. Try searching for reviews on a laptop you find at Best Buy. There are none. The model number is 10+ random characters and completely meaningless. Comparison shopping between laptops on the basis of reviews is impossible. Consequently, they have you buying on 1) brand and 2) specs, which is right where they want you, and completely ignoring things like build quality and MTBF of parts which might be revealed by long-term reviews. This is one of the (many) refreshing things about Apple. Macbook Pro is Macbook Pro until the next refresh.

josephcooney 12y ago
I think Best Buy and co. do that to prevent them having to make good on "price matching" promises - everyone sells a different model (that really only differs by the model number), so since no-one sells "the same" model they can SAY they price-match without ever actually having to. I believe they do this for TVs too.
lelandbatey 12y ago
I noticed this as well, but it just pushed me towards those kinds of companies that use reliable identifiers like Lenovo. I find that if a company is doing this kind of weird naming, they're probably not in the business of selling things based on quality.
Nursie 12y ago
Ummm... I love my MBP but it's no way 'the' Macbook Pro until next refresh. I got a choice of two form factors and multiple hard drive/SSD, processor and RAM configurations. The build quality is great, but don't pretend for a moment Apple don't play the specs game.
- blairbeckwith 12y ago
  I think you know this isn't what he meant.
- superuser2 12y ago
  This isn't about meaningful variations. Go to Dell and HP's websites and see how many different ways (with different model numbers and sometimes even prices) you can configure a laptop with the same screen, processor, RAM, and hard drive. I tried it at one point and stopped counting after around 10.

larrys 12y ago

"Now that product info is ubiquitous, the author says, the role of brands and traditional advertising is declining" Declining but still very important. All else equal someone will make a purchase from a brand that they have used, know, or trust, over another brand which they have less or no experience with. I would also argue that even on a lesser feature set the existing brand has a clear edge. And there are other issues like wanting everything to look similar (say with kitchen appliances) or other tie ins. Let's look at YC as a brand. My guess is that even if statistics were shown that another place was "better" for a startup (if better could be defined) the edge, because of the "brand", would go to YC. Now if YC is not "in your face anymore", say HN declines in popularity, that brand could easily suffer.