Are Algorithms Destroying Brands?
Sawewa batteries, Dentex toothpaste, Voguestrap watches. Ever heard of these brands? No, we’re the same. But lots of us buy them anyway. While browsing, an algorithm brings them to our attention – they look ok, the price is right and positive customer reviews are the decider.
For some, that’s just the way it’s done. It’s the way we shop online. The question is, has the nifty algorithm stripped the value away from brand equity? Can all the trust built over years of strategic brand positioning and creative advertising campaigns be swept away by a Google search and a handful of five-star ratings?
But first, what exactly is an algorithm?
Although they are complex from a technical point-of-view, the job of an algorithm is actually pretty simple. They use a series of rules and equations to tailor search results based on what we’re looking for. In essence, they are a short-cut to the stuff we want. They make life easier. For the user. For the seller. And, certainly, for the Amazons, Googles and eBays of this world.
In a blink of an eye, they scan, read and analyse billions of bits of data.
It’s very clever.
But perhaps the key word here, is ‘data’.
Because while very clever – just like a calculator is ‘clever’ – no search algorithm can ever be all-knowing. Shopping is a human activity. Exactly what makes someone click ‘add to basket’ can’t be measured easily. And the influence brand and advertising campaigns have on this process can’t be replicated by an algorithm.
And that’s where great brands come into their own.
Of course, there are times when algorithms rule
Sometimes, Google is all you need.
A quick search. A quick purchase.
And when the risk’s low and there’s little to lose, it’s a match made in heaven. Even a little understanding of how algorithms work can help ‘undiscovered’ brands come out on top.
It’s the same if there’s no emotional connection to a product – or no status attached to it. Why spend time researching, say, paper plates, when “that’ll do”?
And, sometimes, you simply don’t have a ‘go-to’ brand. Search, scan the reviews, compare prices and it’s in the basket. But even with this approach, there’s one thing you’re looking for – even at pace.
Can I trust what I’m about to buy?
It’s part of what great brands offer, but no means the only thing.
Where brands rule
There are certain moments when people are happy to pay more for products. Take walking gear for example. Most of us would happily buy no-name waterproofs to toddle down the park on a drizzly Sunday, but what about when we head to the great outdoors? Who wants to find out the limits of their knock-off North Face in the middle of a blizzard? So, for these occasions we look to brands like Berghaus, North Face and Patagonia – they have an identity, a reputation, and a story to tell.
Brands can protect themselves by finding ‘deal-breakers’ – the moments where people are happy to pay a premium for peace of mind. Typically, that comes from deep brand equity: building up associations with quality, performance and expertise over a number of years.
A brand can tap into these moments and create something an algorithm can’t: A picture in people’s minds.
Imagine doing your weekly supermarket shop and having to make a rational decision about everything you put in your trolley. Having to consider hundreds of products, one by one. It would take all day. Luckily for us, experience and emotion are powerful shortcuts to decision-making.
A recent study by ThinkBox showed how people reacted when their favourite brands were swapped for white-label replacements. They felt uneasy. Not because the product was of a lower quality: they had a like-for-like replacement. It was a gut-feeling. One of the participants was asked what she felt about her bottle of unbranded water. She said, “I’m not sure what’s in it, I don’t trust it”. It was water.
We all do this. You can’t underestimate the value of familiarity: we learn to love and trust what we know. There’s a name for it in psychology: The mere-exposure effect. This is why much of the power of advertising lies in repetition: repeating a strong, distinctive message in creative, memorable ways.
The Audi A4, the VW Passat and the Skoda Superb are basically identical. They’re built using the same platform, which means they have the same design, engineering and production. The Audi A4 is a ‘Skoda in a frock’, you might say. But if you could have any, which car would you pick?
Beyond trust, familiarity and price, lies something more intangible: how a brand makes you feel. When you get it right, a positive association becomes intuitive for your customer. And that’s the sweet spot all brands are looking to hit.
Does branding only beat the algorithm on big ticket, luxury goods?
We certainly don’t think so. Look at Heinz. The baked beans we reach for time and again. Even if it’s sat on a shelf right next to a supermarket own-brand that’s half the price.
Marmite too. Marmite can charge a 90% mark-up over own-brand yeast extract purely because of the emotional pull of its brand. You would have thought building an emotional connection to yeast extract would be hard… but they have. Very successfully. And their advertising campaigns are based on the simplest of human truths. It’s a flavour you either love or hate. And yet, would you fancy your chances picking out the Marmite in a blind taste test?
So how can your brand take on the might of the algorithm?
Start by finding out what your customers really care about. Search for a human truth or nugget of insight to help your brand build a connection. Once you’ve found your brand’s emotional value, amplify it with great creative. You don’t need them to become a ‘fan’, you just want them to get a positive vibe from your brand. So that next time they’re shopping and they have to choose between products, it’s your brand they pop in their trolley.
Put another way, people buy things that make them feel safe, happy, and validated. Finding that sweet spot will be the hallmark of success for a long time to come.
And that’s the power only a great brand can bring.
Also published on Medium.