In this article I attempt to define what branding is in the context of our consumer experienced lives, and how we come to make our on-the-spot choices when under pressure. I posit that buying choices are generally made by a combination of emotional responses to the product or service masked as rational thinking, and our ignorance, needs and wants. Furthermore, that branding agencies know how and do manipulate these in order to ‘nudge’ us towards their products, which is ultimately, if we are honest, what we want and need them to do in order to help us live our lives.

Define brand

A standard definition of brand:

“The emotional and intellectual associations people make with a specific person or thing.”
Dirk Knemeyer, – Involution studios

Therefore from the above we can deduct:

A thing is a brand.
A person is a brand.
A thing is a person.
A brand is a person

A brand is a human being. Like a voodoo doll that has imbibed the living soul of an absent person, a brand is filled with the characteristics, traits and hopes of a living member of our race. A box of Kellogs Cornflakes is not a cardboard box filled with tasteless bits of corn residue, it is a hopeful happy person who meets the dawn of a new day with a smile and exclaims ‘I can do it’ at the rising sun before setting the table neat and tidy in preparation for the joyous awakening of the perfect family. And like a voodoo doll, brands control us, in order to help us make the choices that mark our daily lives.

Without brands we would wonder around supermarkets endlessly, not knowing who we are. Brands perform an important service in our modern Western societies – they allow us to define ourselves, differentiate ourselves and better ourselves in ways that were never available to previous generations. Brands are the role models we never had and through brands we display our values and differences, our tribes and beliefs. In many ways we only have names and histories because of the brands we buy into – we are remembered by the choices we made, the jumpers we wore, the shoes we left, the cars we liked, the films we cried at.

More than voting, more than philosophy, more than fighting – brands define the human experience. Brands define the post-modern world more than any historical event, political movement or war. History will no longer be written by the winners, it will be written by the brands – bite-sized ‘rational’ encapsulations of our ‘irrational’ emotional thinking. Our inner subjective worlds formed and packaged for us to experience as objects in order for us to feel ourselves effectively mirrored and held. Like our mother used to.

Brands are our all new surrogate mums and dads. Like God used to be. Amazon is the new New Testament. With next day delivery. Amen.

Emotional thinking and brand choice – how personality patterns can determine buying behaviours.

“A brand is a person’s gut feeling about a product, service, or organization.”
Marty Neumeier – author, The Brand Gap

A lot of consumer choices are determined by price. Others by availability and other factors like race, nationality, politics etc. But some are determined solely by brand. So the question is: why when faced with a choice between two similar products at similar prices do we choose one above the other? Why does one type of branding get to us, and others don’t? Furthermore, how does my personality (my environment and genetics combined to form my particular version of a human being) affect the type of brands I favour? Why do I surround myself with particular brands and not others? Nike over Adidas? Volvo over Audi? Heinz over Campbell’s? We can all most probably give rational explanations for choosing one brand over the over, explanations which would include references to quality, packaging and price. But generally these would be the explanations of the rational conscious buying decisions created by emotional thinking.

Emotional thinking refers to the unnoticed automatic emotional responses we have to people and objects which are then almost immediately and imperceptibly translated into thoughts and behaviour. These automatic emotional responses (AERs) are caused by unconscious base triggers which are seeded by past events, experiences and genetic temperaments. These base triggers are accessible via the AERs which sit in the preconscious (what is not unconscious but sits just outside of consciousness), and can be summoned with a bit of skill and prior knowledge.

Controlling emotional thinking in consumers is the key to controlling their buying behaviour. By triggering and manipulating those base unconscious feelings and AERs through advertising, packaging and product innovations, advertisers can set-up a chain of thought which leads to a rational buying decision (even though the decision is in fact based on a hidden emotional response to the memory of past experience or personality trait). There are many variations in the way brands can use a consumer’s past to nudge them to a buying decision. Two popular brand roles are the ‘personal loss filler’ and ‘personality trait amplifier’. A brand may either act as fillers for the bad/sad missing bits in our personalities, or may accentuate the good/demanding parts by adding to them or temporarily solving them. These can be used interchangeably. Below I detail a couple of examples of how advertisers have used consumer personality patterns (created by their backgrounds) in order to manipulate their buying behaviour. The two now relatively old ad techniques use almost universal consumer family backgrounds – the divorced/insecure family and the over-achieving, ambitious family.

1. An example of a personal loss filler brand would be Volvo. It is sold as a secure and solid space to sit in and the designs are purposely boxy to accentuate the feelings of complete impenetrable safety of the cars. People who choose Volvo would generally choose brands which they perceive to offer what they are missing internally – a safe place. Their backgrounds may be from divorced or bereaved families, or those who had parents who were financially insecure or unable to provide a safe and stable enough environment for them.

2. An example of a personality trait amplifier brand would be Nike. Nike is sold as an addition to an already present skill or talent. The basketball shoes don’t make you good at basketball, you are already good says Nike. The shoes make you better. Nike sponsors over-achievers, people who never give up and who are never happy with their current success. They want more. People who choose Nike would generally choose brands that challenge them, push them, and are constantly being updated. By buying Nike they feel they are on the road to achieving what is expected of them. Their backgrounds may be very socially mobile parents who expect their kids to emulate them and succeed at everything they do. The parents would be very hands on and demanding, almost smothering their children with their ambitions for them.

The breakdown of the Emotional Thinking could look something like this:

Consumer A
Ad: Volvo logo, car and image depicting happy family in or around car
Base Unconscious Trigger: Insecure family background
AER: Quick feeling of yearned for internal security and stability / Volvo will protect me and keep me safe
Rational Chain of Thought: Happy family – stability – personal happiness – safety for my family most important part of buying decision – best car for me is safest car – buy Volvo

Generally the only part of the Rational Chain of Thought that the consumer would remember when asked would the last three: safety for my family most important part of buying decision – best car for me is safest car – buy Volvo.

Consumer B
Ad: Nike logo, Nike basketball shoes and NBA star spectacular dunk/shot/play
Base Unconscious Trigger: Need to achieve continually and consistently underachieving
AER: Quick feeling of never being good enough at anything / always being behind brother/sister / Nike knows I am good enough
Rational Chain of Thought: Super star – achiever – I want to be like him/her – latest shoes – I am an achiever too – buy new Nike shoes – Nike believes in me.

Generally the only part of the Rational Chain of Thought that the consumer would remember when asked would the last three: I am an achiever too – buy new Nike shoes – Nike believes in me.

Branded vs Generic

There seems to be no better example of the power of branding than the choices between branded and generic identical products. One is full of life, hopes, love and life – the other is flat, utilitarian, anti-brand, frugal, straight forward. It is almost as if the generic is telling us we should forgo the pleasures of a fuller life and refuse that which we want but know is just an illusion. An illusion we desperately need but refuse to give up even in the face of the facts. Or, if we want we can refuse the whole concept of branding and buy non or anti-brands. But of course, these are brands themselves because of their opposition to branding and we buy them because of this opposition. Brands are in fact not outward shows of status, but internal states of being – states of being that even allow us to buy non-branded products but still experience the buying of a brand, or wear non-branded clothes but internally still feel the feeling of brandness and hope to be judged by others on the basis of our (non)brand choices.

Nurofen vs Ibuprofen

Why when given the choice between generic ibuprofen and Nurofen do we pay nine times more for Nurofen? Is it because we are ignorant of the facts? There is no constituent difference between the two – they are identical. The difference is millions of pounds in branding.

The buying behaviour here seems perplexing. Almost inexplicable. But it is the ultimate proof of the power of branding in determining consumer buying behaviour. The question is: what are the factors behind this behaviour that favours the branded over the generic?

1. Ignorance
Ignorance is a good excuse for bad choices. There are two types of ignorance in this case: ignorance through lack of availability of information, and ignorance by choice. The former exists in imperfect markets where information is misrepresented, withheld or misinterpreted. The latter is caused generally by denial, otherwise known as brand blindness. This can happen when consumers have too much of their own self-worth invested in the ‘specialness’ of their brand.

2. Needs
Consumers have needs which they want solved. The more specific the solutions, and the more tailored to the need, the better. Consumers prefer targeted products, rather than general.

3. Wants
An internal need to feel special, individual, and in need of special care and attention when ill. The level of these needs will depend very much on family histories and the more troubled these are the more susceptible certain consumers will be to solving their individuality needs through brands.

Nurofen is a great example of all of the above. The adverts claim it is the best at pain relief even though it can not be any better than generic ibuprofen at the same dosage (ignorance). The brand has also been broken into further sub-brands aimed at particular areas of the body such as back and joint pain, period pain, migraine, child fever (needs). The ibuprofen sold in these sub-brands is again exactly the same as that sold in the standard Nurofen packages and in the generic ibuprofen. Most importantly of all Nurofen is sold as an over-the-counter pain relief drug that consumers can trust, is safe and that will deliver pain relief (wants). In contrast to Nurofen, the generic ibuprofen makes no claims about its effectiveness, about its ability to help with all different types of pain or about its safety and efficacy. These are taken as givens because the information needed to make an informed decision is freely available.

What the Nurofen example seems to confirm is that we consumers want and expect branding. We do not want generic products and we will pay a lot more for branded products that pretend to understand our needs and wants and solve them quicker, better and with more care. It is therefore not the function of ibuprofen we want (the pain relief), it is the form that that pain relief takes. We have moved away from products that work and fulfil their functional promise. We now expect products to do the emotional work for us by allaying our fears, making us individuals, and solving our identity problems by fulfilling our dreams of completeness. Products now have to fill the holes in our being left by our past and the imminent future of old age, illness and death.

Conclusions

As the world fills up with more individuals who all want to be as individual as possible we will have a problem: how to allow all of them to express their personal specialness but at the same keep the system working? Society must keep us happy with our specialness in order for us to keep society stable and productive. How will this be possible? Through the creation and management of more and more brands.

Brands will be everything. They will be what we sign up to, buy, sing to, fight for, cry for, live with, die for. We will have multiple brands for life, and each will satisfy a particular need of our human dilemma. The brands will allow us to feel creative, intelligent, insightful, incorporated, excluded, banished, in control, out of control, in power, powerless – internally, without physically being in that state. Any emotional need you have will be covered. Brand management will be the key to a stable society. Brand management will be government. There will be cover-ups and corruption, but because there will be nothing else left for human beings to believe in, it won’t matter. Brands will always recover because we will need them to. Society will no longer be able to offer real world avenues for the creative exploration of our selves. Brands will do this for us. We will no longer need to worry about achieving our inner desires. We will no longer have any outside of brand.

The USA has been selling a brand experience very successfully since the 1950s. The American Dream, whether it be 1950s home appliances and freedom from communism, love, democracy for all, free enterprise, or a return to 1492 values – it has worked. The ultimate brand experiment has managed to produce a majority of Americans, united under one logo, who work, believe, vote, and die with no questions asked. This is what the brand managers of the future will aim for – but without all the messy politics attached. Pure brands are only accountable to their own brand values.

Brands will soon no longer be physical products or services. They will be external manifestations of internal states of being. Branding started as a way of identifying ownership of cows by farmers, and will finish as a way to identify ownership of human beings by brands on an overcrowded planet.

‘The designer of today re-establishes the long lost contact between art and the public, between living people and art as a living thing….There should be no such thing as art divorced from life, with beautiful things to look at and hideous things to use. If what we use every day is made with art, and not thrown together by chance or caprice, then we shall have nothing to hide.’

Munari’s book read in 2011 comes across as an affront to the cognitive, UCD and UX focus group obsessed design so loved by corporations. Munari advocates a more emotional and empathetic response to the objects we design for people. Less User Centred Design and more Object Centred Design. He implores us to design from our humanness, from the being that is our culture and which we cannot escape. No greatness ever came from designing by numbers, a multitude of opinions or ROI analysis. It comes from form, from empathy for the function, from understanding and from the risk of being wrong. Taking risks is the key – if you dare not design without knowing what your audience says they want now then you will never design what they may want in the future. You will never make the leap of greatness. You will design within the ‘styles’ of the day, never to break out of the monotony of nowness.

‘A leaf is beautiful…because it is natural, created in its exact form by its exact function. A designer..does not smother his object with his own personal taste but tries to be objective. He helps the object, if I may so put it, to make itself by its own proper means, so that the ventilator comes to have the shape of a ventilator.’

It is as if Munari is telling us that the big push to ‘prove’ designs are the ‘correct’ ones for a certain market or user group through statistics is the beginning of the end of design. It is the flabby middle, middle of the road, middle aged, middle class and middle Britain/ America/anywhere type of design every artist come designer would have run a mile from some time ago. But today, with budget cuts and constraints, fat cats and skinny jeans, digital everything and analog fashions, it seems design and art, the separated at birth siblings, have been reunited, not in the joyous reunion hoped for by Munari in his book, but in the house of the Man. The Man, that evil personage from the past so hated by the hippies, has now become the sugar daddy of us all, and no longer do we mind or winge about asking for his patronage (sucking satan’s dick as Bill Hicks put it), we actively pursue it, running after The Man as he jogs his early morning power run, pleading for a job because he is the one holding the key to the golden chalice of our times – financial security.

Munari foresaw the complete capitalization of design and art, where both become just an obedient mouthpiece of the corporation’s economic choices for art and culture. It seems we are no longer able or willing to make sacrifices for our art. We either ‘make it’ and pay off the mortgage, or we go do something else. X Factor is proof of how beauty has disappeared with the masses. It may be time for a return to Munari’s future where we design for beauty’s sake, and everything else takes care of itself.

This is of course no coincidence. Sudjic (currently the Director at the Design Museum in London) writes about today?s vision of design linked to branding and used to create feelings of need and want in order to make us buy. Design is in danger of becoming a mere plaything of consumerism he says, pulled this way and that in order to convince us existentially empty consumers that this or that product will add some meaning to our lives. He contrasts this with his understanding of design as it once was, linked to objects that lasted, were lived with and passed down to future generations.

Sudjic sees us as drowning in a world of mass produced objects for which we have no use except to fill the void that western capitalism, and its bastard son consumerism, have opened up in us.

“Like geese force fed grain until their livers explode, we are a generation born to consume. Geese panic at the approach of the man with a metal funnel ready to be rammed forcibly down their throats, while we fight for a turn at the trough that provides us with the never-ending deluge of objects that constitute our world.”

Are designers of mass produced objects just putting the lipstick on the gorilla? Or is this the time for them to stand up and be counted by designing products that last, live and can be left for the next generation? Here there seems to be a choice for every newly trained designer emerging from their cocoon-like training into the big bad world – either be a force for good in the world, or be a force for nothing. Which will it be?

In this manic early-decade confusion I propose that a new type of Agency is emerging – the Creative Tech Agency – which is digitally creative, innovative, agile and hungry. I also propose that the traditional Advertising Agency is soon to become a symbol of what we will very quickly look back on as the bloated past of pre-digital communication channels. The future is small, specialized and digital.

The Hole in Most Digital

There’s something wrong with a lot of digital. It seems off-centre, incongruent, lacking in fluency. Much of it seems to miss the point. But what is the point of digital? The point is that digital is a channel in it’s own right. It is no longer an after-thought, it is the key to almost all marketing campaigns because we don’t just visit online, we all live online now. Therefore all digital products and services are brand experiences now. Digital is no longer just functionality, it is an all encompassing touch point which must match and enhance the non-digital version. This is the potential of digital, but it is obvious that so many Agencies (Advertising/PR/Marketing/’Digital’/Marketing) have failed to grasp this. Proof of this is easy to find in all the high profile but barely designed or unresolved websites with a total lack of offline-online brand continuity, lack any thought for the user experience or interaction. But it isn’t just websites, it is apparent in badly executed mobile apps, unusable back-end systems, incomprehensible software interfaces and quick ROI social media campaigns. It seems everyone and anyone has jumped into digital without much thought or experience of how to do it. But how and why is digital creative so different from non-digital creative? Why is it that some of the best offline agencies have found it so difficult to do digital?

Linear and Non-Linear Thinking in Digital

There is a type of thinking that I am going to call Linear Thinking and another type I am going to call Non-Linear. They could also be called Logical and Intuitive, or Left hemisphere and Right hemisphere. Or even simply Thinking and Feeling. What ever you want to call them the difference between them is well known – one follows a pre-ordained linear ‘appropriately logical’ path and is based on cognition, the other jumps about laterally on a non-linear path and is based on emotion and feeling. Both are needed in non-digital and digital creative work, but there is a crucial difference between them – in digital non-linear thinking must be in a much tighter relationship to linear thinking than is the case in non-digital. This is because digital is experiential and must be based on user interaction underpinned by interfaces underpinned by digital technology. In non-digital this is less of the case – creatives go off and come up with their ideas and pass their ideas ‘over the wall’ for the non-creatives to implement. And here is the key to why some Advertising Agencies turned Digital Agencies have such a hole in their digital – they pass their creative ‘over the wall’ to their Tech team without any involvement of an interaction designer, UX consultant or coder. Even worse, in a lot of agencies the Tech Team isn’t even part of the same company and the creative is biked over with instructions to just build it. It is obvious what this approach results in: unresolved, incongruent digital which provides no brand experience value and can actually damage brand perceptions. The other version, (in reverse), produces slightly better results – a Tech Agency builds the technology and then buys in the creative to be stuck on at the end  – and is the exact digital example of what designers complain about in product design, nicely summed up by the saying ‘putting the lipstick on a gorilla’. The digital produced is generally functional, robust but again lacks the necessary innovative and experiential elements needed to hold up the brand expectations of customers. Many of the uninspiring iphone and ipad apps currently available will have followed this kind of process, and when using one of these apps it is very clear what is missing – the user experience. The app works fine but it provides nothing other than the functionality. This is the case with a lot of digital knocked out by Advertising and PR agencies at the moment – it works fine but does nothing more. It adds nothing, creates nothing, dreams of nothing. So what is needed to create interactive emotional digital that competes and transcends the best offline creative work? Equal collaboration between Advertising Agencies and Tech Agencies is one possibility. Or better still, a new type of agency which incorporates great tech and great digital creative in parallel internal processing. This type of agency is beginning to emerge from the maelstrom – and I call it the Creative Tech Agency.

The Creative Tech Agency – creative, technical, collaborative, digitally hungry

A new breed of Agency, specific to digital, is emerging with all the necessary skills to deliver innovative and robust digital for their clients. These agencies are generally small, agile, digitally born and extremely collaborative. They begin from extreme tech and seamlessly, without friction, incorporate creative into that tech. These agencies approach digital with a binocular vision – they have one eye on the tech and one eye on the creative  – as they continually match creative ideas to creative tech solutions. The human being is the centre of everything via interaction design, user experience, behavioral economics, usability, digital branding, heuristics. Creative and Tech exist together, in a symbiotic embrace, one unable go very far with out the other. This is what I call digital creative  – a qualitative mixture of linear and non-linear thinking, the former led by technical constraints and digital innovation, the latter by human experience and brand. Generally because the Creative Tech Agency is born into digital, and has a solid tech background, it has the confidence and the understanding to produce work that engages and interacts with audiences and pushes past the limitations of traditional offline advertising in order to reinvent what advertising can do in the future via emerging online channels. Tech is the key driver for success in this  type of Agency as everything is built on top of new and bold technology. A Creative Agency that incorporates a Tech Agency will not deliver the same quality of creative digital because non-digital creative will lead with non-linear thinking first, and will therefore encounter all the problems traditional Advertising Agencies are encountering now when they try to buy in non-native Tech.

The Future – Guerilla Digital and Specialization

The future of advertising is already here. Advertising has no home, it most move with us where ever we go. From newspapers to magazines to radio to television. And now into digital. But digital is fragmented and comprises many new and yet to be invented micro-channels. It is easy to see why the traditional Communications Agencies are in disarray. You can almost hear the screams of incomprehension as smaller, hungrier, more agile ‘guerilla’ specialized digital agencies win more and more accounts from them. And as they turn their large bows into digital, they will keep turning and never find the steady course of digital they are so used to and so want because as they turn digital has already moved on, evolved and been reborn. Over-bloated and standardized, large traditional Agencies are set to become a reminder of what we are leaving behind as we enter a decade of fragmented-unified digitally led advertising, conceived and executed by Creative Tech Agencies. Let’s get ready to rumble.

It is easy to dismiss the things we don’t understand

It is easy to dismiss the things we don’t understand as irrelevant and of no use to us. Take Twiiter – it’s just a load of pointless chatter about nothing. Or Facebook – just a load of needy people collecting online friends because they have none offline. Or YouTube – a load of silly banal videos. Or blogging – wannabe journalists and writers writing their diaries online for all to see in a pathetic attempt to get someone interested in their little lives.

Although some of that is true of all of the social media platforms in part, these criticisms are very blinkered, and defensive. In fact, Twitter is an amazing platform for businesses to network, build real connections with customers, push innnovation and be ahead of the market. And Facebook is a great touch point where customers can easily interact with brands on their terms,  YouTube is the second largest search engine in the world, and blogging is a great way of creating relevant sticky content, becoming experts in a field and increase SEO ranking.

But most importantly of all, the decision to ‘do’ or not to ‘do’ Social Media today is not about what will happen in the next 3 months, or next year. It is about what will be happening in 5 years time.

Ask yourself

1. Where will Digital will be in 5 years time?

2. Where will your company will be in relationship to that?

3. Where will your customers be in relation to Digital and Social Media? Will it be part of their lives?

The answer which should come into your mind all flashing and big is: How can I afford not to  get into Social Media?

How can I afford not to get into Social Media?

Below, for those who like a good list, we give you a list of reasons (eleven) why you cannot afford not to get into Social Media:

1. It is a logical extension of business networking allowing your employees and your business to learn, express, share and interact

2. Gives your brand narrative

3. Creates sticky content and therefore reasons for your customers to return to your site

4. Is a critically important touch point (and the easiest and fastest)

5. Creates brand ambassadors

6. Drives innovation in your business

7. Improves staff morale and internal brand value

8. Adds dynamism to static brands

9. Is the best feedback loop ever invented

10. Is now expected by your customers

11. Your future customers are growing up with it

My article entitled Design and Psychoanalysis: Siblings in Empathy is in this month’s Design Thinkers at www.design-thinkers.co.uk.

http://www.design-thinkers.co.uk/design-and-psychoanalysis/

The App store – over a billion downloads, more than 200,000 apps and lots of PR and profit for Apple. But is there any profit in it for anyone else?

Certainly there are some high profile cases of apps that have and are making their developers a load of money. But how about the standard developer or company that spends £20k on an app? Are they able to get a slice of the pie? Can they make any money? Or is it just luck and the whim of Apple and their ‘What’s Hot’ choices that do it? I guess the question we are asking is:

Is it possible for a good quality cheap app to make a profit?
We can start by qualifying the word cheap. In the App Store everything is cheap when compared with other markets for software ( or any other market for that matter). The average price for an app is around 59 pence. Generally apps are priced between 59 pence and £5.99 with some specialist apps priced much much higher. So generally everything on the App Store is cheap i.e. the price of the product is not an indication of its quality and/or the cost of development. It is an indication of a value frame that has been created by Apple when it set up the App Store which seems to have its roots in the cost of a song on iTunes (99 cents). In this sense developers have walked into a rigged market, Apps marketed  and enjoyed like candy, cheap suck it and see bits of software which generally have no more value than the length of a visit to the toilet. The original App Store, launched by Apple in 2008, was aimed at attracting as many downloads as possible in a very short time in order to create a massive positive PR storm and help launch the iphone as a game changer in the mobile phone market. And of course, it worked. The customers were enthused and anyone who was everyone produced an app, and the press went wild.

Now for the reality check.
The average earnings of an app on the App Store are estimated at £2000. Only 10% of the Apps sell more than 100,000 and 56% sell less 10,000. If the average cost of a decent app is £20k, and the average price is 59 pence, how many sales are needed to break even? (read more about the Economics of iPhone apps in Tomi T Ahonen’s bloghttp://communities-dominate.blogs.com/brands/2010/06/full-analysis-of-iphone-economics-its-bad-news-and-then-it-gets-worse.html)

£0.59 x 70% (30% goes to Apple) = 41 pence
£20,000 / £0.41 = 48, 780 sales for break even.

However, these figures do not include any kind of marketing budget which you will need in order to generate those sales. Yes, you might get lucky and catch a wind, or Apple might pick you out, but here we are talking about the business case for creating an app. Let’s put £10k in (some PPC, a You Tube Video, some PR, a small amount of offline advertising etc) for marketing meaning the App costs £30k which means we need to sell  73,170 apps to break even. What we can conclude from these figures is that even for a modest outlay of £30k in order to make any amount of profit the app has to be in or close to the top 10% and sell over 100,000. Profit from 100,000 sales is only £11k, and that is gross profit. It seems impossible that this could continue. A lot of commentators are saying just that, advising businesses to look at the  more profitable Mobile Web market instead. (Read more about the Economics of iPhone apps in Tomi T Ahonen’s blog http://communities-dominate.blogs.com/brands/2010/06/full-analysis-of-iphone-economics-its-bad-news-and-then-it-gets-worse.html.)

So what’s going on?
How can a market sustain itself if the general majority of producers are making a loss? One could argue that app market is international and the iphone uptake is growing everyday and therefore there are massive opportunities to quadruple those kind of sales figures – – just look at Angry Birds and Bejewelled. And then there is the Android market fast catching up. Well, yes and no. Angry Birds, and before it Bejewelled, are massive winners, but they and a few like them are one offs up there through a mixture of a great app, Apple’s endorsement and a fortuitous knack of catching a buzz. But a few winners cannot keep the App market going on their own, and the more apps that are uploaded to the App Store the less likely it is that most of them will make any money due to the numbers and lack of distribution channels available. In fact, there is only one distribution channel and that is the App Store. The App Store, in its current form,  is like having only one Tesco in the whole of London in which you can sell your product, and it isn’t one of those big open stores, it is small corner shop with a few items displayed in the front and a massive warehouse attached behind it. For your customers to find you if you are not displayed in the front they need to either know that you exist (through other channels), or they can aimlessly search through the 200,000 page catalogue. If you’re lucky they may by chance find you. It is not hard to foresee the App Store turning into a horror shop of bad coding, terrible design and useless apps because the companies who want to make a major investment in great intuitive genre pushing apps go elsewhere due to the impossibility of making a return.
How can the App be saved from itself? How can it secure it’s position as a credible alternative to the unboundaried Web? How can the future of the App Store as a vibrant and innovative software developer’s channel to market be secured?

We think it is pretty simple.
The answer is to charge a real price for the apps based on the quality, functionality and design of the app. And redesign the App Store to be more like the Amazon website and open it up to the user community so they can create more of the reviews, lists, and help identify and source the quality.

The Apple App Store is a strange beast.
The more time and effort  spent on it looking for particular solutions to problems in app form, the more frustrating and useless the App Store seems. The reasons for this are the subject of another blog post, but it is enough to say that as the number of apps grows the whole design of the store needs to be rethought.

Something has gone wrong with our value judgements.
Pricing an app that costs £20k at 59 pence with estimated total sales of less than 50,000 is not a loss leader, it is a loss follower. It is not sustainable and is bad business. The pricing of apps need to take into account that the app is only bought once, for life, and updates are expected.

Pricing Example 1 : Guardian App
A very good example of erroneous pricing is the Guardian App. Sold at £2.39 it just about replaces the need to buy the newspaper in the morning (and is much easier to read on the tube). It is a life long app and in itself generates no other revenues for the Guardian (it carries no advertisements) except brand value. It is a very well designed app with a substantial amount of money and time invested in it. How was the price calculated? Figures are a bit sketchy but by February of 2010 they had passed the 100,000 downloads mark. We can probably safely guess that has doubled since then. So on 200,000 downloads the Guardian would have turned over around £500,000 minus the cost of development, maintenance and marketing. Let’s estimate £100,000 leaving a nice gross profit of £400,000. Not bad, until you realise that this a one off. Just a little more thought and it is obvious to anyone that such an app, which after all will have some negative effect on newspaper sales, should be either an annual subscription or 3 times the price if it is a one off payment.

Pricing Example 2 : Things
An example of how to price is Things, the to do list. There are a large amount of free and 59 pence to do list apps, all pretty much doing the same thing. Things however sell their ipad app at £11.99, the iphone app at £5,99 and interestingly the Mac version at £44.95 (something odd about the fact that the ipad version is one quarter of the Mac version – a behavioural economics nudge perhaps?). How come they feel they can charge so much more than the competition? The answer is the usual one. Design. Things have put a lot of effort into the look & feel of their products and because of this they believe in the value of their products to their end users. And therefore because they believe their products are worth more than a packet of chewing gum, their customers believe that too. And they value the app.

What are we saying exactly?
We are saying  – don’t put your app in the bargain bucket by pricing it at 59 pence or even 99 pence, unless it is aimed at that market. Charge what the app is worth – and never charge less than £5 because if you do you devalue your app and create an expectation in the customer that apps of that quality are worth very little (note: the higher your price the more imperative it is you offer a lite/free version in order to allow customers to try before they buy – don’t expect them just to trust you). Instead of concentrating on what competitors are charging, concentrate on developing great quality experiences on the iphone and ipad that a customer wants to return to again and again, apps that create value and change.

Just to put some figures on this idea.
If it costs £30k to produce and market an app, and we charge £9.99 for it (instead of 59 pence) the break even point is 4,291 sales.
£9.99 x 70% = £6.99
£30,000 / £6.99 = 4,291 sales for break even.
That seems achievable for an app that solves a problem in an innovative and beautiful way with the added benefit of valuing the work, effort and creativity put into the development.

You get what you ask for.
Generally, and this is borne out by quite a few behavioural economics studies, you get what you ask for. If you ask for 59 pence, that is the value that will be assigned to your work. Therefore, the quality and value of future apps is dependent on customers’ altering their perception of the costs and value of a good app. And this perception will only change if App developers’ start valuing their work more by charging real prices, and letting the rest fight it out in the bargain buckets.

When one walks the streets of London looking for the unsung heroes of low income design one sees some unexpected things. Who would think you could find  a great example of logo design on Rye Lane, Peckham?

Netto, a supermarket in the vain of LIDL, has a wonderful little identity going on. A little scottie, holding a basket, black on yellow. Simple but engaging mark. Nice strong typeface with the scottie incorporated into the N – maybe  a tad unnecessary. But still, in the dessert of design that is low income supermarkets, this is a jewel.
Compare it to LIDL, Morrison and Aldi – it has character, likability, reassurance. In short, it has most of what most brands yearn for. So it comes as a surprise to see that they have dropped the poor doggies from their logo in their new shops. Now the words ‘Netto’ feel very much less empathetic.

I for one feel less inclined to shop at Netto’s now. As I am at Aldi, Morssions and Lidl. If only they put more effort into making me feel held (like my mother held me in her arms) I might change my buying behaviour.

Looking at these 4 logos reminds me of a recent question about working class design. Now I know the words ‘working’ and ‘class’ together open up a minefield, especially here in the UK where we are generally of the opinion that if we don’t talk about class it will go away. So maybe we can use the term ‘CDE Design’ in relation to brands marketed solely at the lower demographic groups.




Or maybe we can be even more specific and use the term ’low income design’.

The 4 logos (except for the Netto dog which is the odd one out) have a similarity to each other  which makes me wonder whether someone somewhere has decided that the low income shoppers out there need strong colours and heavy fonts in order for them to remember a brand. This is a ‘smack you over the head’ style of branding which attempts to burn the logo into the retinas of anyone who looks at it for too long. Are those with low incomes not deserving of more empathy? I wonder whether all of these companies are underestimating the brand sophistication of their customers? Or are they correct in assuming that the one thing that connects all their customers at this end of the market is a lack of care for design? Does not everyone want to feel held, loved and cared for by a brand – and is this not the exact reason why so many people love Waitrose?

Waitrose is a surrogate mother for many. Could it be true that the middle and upper classes need a lot more love from branding (and their surroundings) than the working classes? Do they surround themselves with beautiful objects because internally they are bereft of such things? Is it true that someone who can live happily in a house over-looking a motorway is a stronger and more adapted version of the human than those who need 10 acres, trees, art and silence to just get through the day? Will the latter die out as the planet becomes more crowded and urban?

Would this then mean that any money put into emotion based ‘low income brands’ is a waste? Or is it just an orthodoxy that has taken grip and been incorporated by the actual low income shoppers themselves who display skepticism of any ‘middle class’ brands? Brands are then used in a class war of ‘us’ and ‘them’. Argos vs Jon Lewis for example? Is there not a need then for a more democratic design that speaks to us all irrespective of our backgrounds and income?

Another good example of a brand that works at the lower end of the market is Argos. In some ways  the logo is a copy of the most universal brand of all, Coca Cola. But without the aspirational or inspirational history. However, I would class it as an aspirational brand. Their catalogue is somewhat of a low income bible, a progression chart of material needs and successes. One can mark out ones achievements by what one has being able to afford to buy from the Argos catalogue, and what one would buy if ‘money was no object’. Argos’ advertising is very functional, devoid of much emotion.  They seem to buy into the idea that emotional empathetic branding is a waste at this end of  the market. ‘You want it, we’ve got. Come in and get it’ seems to be their message. The Argos ‘experience’ in their shops is similar to the UK post office experience. Somewhere between East Germany under Communist rule and 1970s Britain.

A definitive hero of ‘low income branding’ has to be Krispy Kreme. Their  logo and donut box designs with the green pimples are a beauty to behold. The logo itself has not changed much since 1937. The combination of the words crispy and cream can make whole nations of sugar addicts salivate at the thought of that nirvana, fried sugar! Krispy Kreme prove without a doubt that products aimed at lower income groups can still be branded beautifully with feeling and love and most importantly can still add a little bit of goodness to our visual environments.


So listen up Netto, bring back the Scottie and let the little doggy help us with the burden of our urban lives!