And then it all started to change. Tiny independent brewers began to spring up all over the USA. They started brewing distinctive, beautiful ales of every possible variation and inclination. These beers first appeared around the periphery of American liquor stores and independent beer shops. Then they started to pick up distribution in local bars. American palates that had been raised on watery, indistinct, mass-produced tedium suddenly started to get a taste of local, diverse, fresh, brilliantly made beer – and they liked it.

I will say this and you can shoot me later. A typical bar in any major American town is now going to offer you a wider array of better local ale than the equivalent location in England, Germany or even (deep breath) the Czech Republic.

The age of making jokes about American beer is long over. A typical bar in Chicago, San Diego or Boston now offers a mesmerizing selection of different local ales. I sat recently in a small dive bar in Deerfield, Illinois, gazing in wonder at the dozen different draft beers before me with a look that blended admiration, incomprehension and the absolute and inevitable realization that there was too much good beer in this small bar to get through in the evening ahead.

AB InBev is rapaciously acquiring its independent rivals to ensure that, while it keeps one hand in the big beer business, the other increasingly works on the boutique side of things.

The man sitting next to me at the bar was struck by my countenance and we started a conversation. Despite being half my age he taught me about a dozen things about hops and yeast I did not know in the 60 minutes that we sat there and – in the age-old tradition of American bars – had a few.

This is all great news for consumers of beer but not such a wonderful development for AB InBev – the world’s largest beer company. Created from a merger of the behemoths that once owned Budweiser, Miller and a host of other mass-manufactured global beers, AB InBev still owns 45% of the entire American beer market. But that proportion is now in free-fall as American drinkers switch from big to boutique beer and imported alternatives in their millions.

AB InBev has a solution to this problem, one that probably will not surprise you. It is rapaciously acquiring its independent rivals to ensure that, while it keeps one hand in the big beer business, the other increasingly works on the boutique side of things. In true big corporate style AB InBev has housed its newly acquired craft beers in a newly created ‘High End’ division. So far, that division encompasses 10 much loved, formerly independent beer brands and includes such iconic names as Goose Island, 10 Barrel, Elysian Brewing and – its most recent acquisition – Wicked Weed Brewing from North Carolina.

With this growing stable of High End brands in place, AB InBev is understandably now investing in them. The company recently announced a massive $2bn investment – much of which will be devoted to its long term goal of growing its presence in the craft brew sector. Funds will almost certainly be used to acquire more craft breweries but also to scale up production and allow AB InBev to manufacture much greater amounts of its newly acquired beer brands, presumably from centralized production facilities.

The Issue Of Brand Architecture

Experienced marketers will begin to spot a potential problem in all of this: brand architecture. If target consumers become aware of the parentage of AB InBev’s growing stable of former craft beer brands, it could undermine the brand image of the brews and result in their widespread rejection in the market.

Before we go any further let’s make it abundantly clear that this is a very rare event. Typically, customers do not have the faintest clue about the organizational parentage of brands they may have had an enduring purchase history with.

Very few customers realize that Lamborghini is owned by VW or that Fiat owns Ferrari (along with Maserati, Alfa Romeo and Jeep too). Consumers spend hours reviewing prices for their next holiday by switching between Expedia, Trivago and Hotels.com entirely ignorant of the fact that all three belong to the same company. Standing in Boots they compare Pantene shampoo with Head & Shoulders and Vidal Sassoon unaware that all three options are manufactured by Procter & Gamble. At a bar they order a Baileys on the rocks and a Guinness for their partner, oblivious to the common link back to Diageo. And at the end of the night they debate whether to order from Pizza Hut or KFC, ignorant of the fact that the two brands are both part of the Yum! Brands group.

Brand architecture is a magic trick that allows big companies to proffer the illusion of choice to customers, constrain competitors’ access to all-important distribution channels and position different brands in a portfolio that can cover every corner of the segment map.

But there is a catch. Brand architecture only works if the magic trick remains a secret. Usually the combination of consumer indolence and competitor equivalency means no-one draws attention to the secret connections and shared parentage of brands. But there are special factors at work in the beer market that make this situation far riskier for AB InBev than most might anticipate.

The consumers who buy craft beer buy it because of its craft. They prefer their beer local and independent and made by a slightly mad bloke who takes his beer far too seriously. If I whisper into the ear of the woman in boots holding Pantene in one hand and Vidal Sassoon in the other that they are both made by the same company she is likely to shrug and then call security. But if I tell craft beer loving patrons that the Goose Island ale they are lovingly imbibing is actually made by the same company that brought you Bud Light, you are likely to humiliate these drinkers in a manner that ensures they don’t buy it again. When much of what you are buying is independence and craft, a parent that stands for the opposite is a killer of a brand association.

Second, the brands in question that AB InBev has purchased were positioned on their absolute and total revulsion for AB InBev and everything it stood for. That might sound like an overstatement but, trust me, it’s not. Prior to its acquisition, for example, Seattle-based Elysian Brewing used the slogan ‘Corporate Beer Still Sucks’. They emblazoned it across their six packs. Clearly, the biggest corporate beer company of them all buying an independent beer brand that positions itself as hating corporate beer companies is the kind of conundrum that will keep your marketing department up at night.

Clash Of Cultures

Then there is AB InBev and its own marketing strategy. The company has positioned its own brands aggressively against craft beers in the past by openly making fun of the precious and involved manner in which craft beer lovers consume their ale. Their infamous, and rather well executed, TV spot for Budweiser during the 2015 Super Bowl for example, is exactly the right corporate approach if you want to position big beer against craft beer, and exactly the wrong approach if your company is about to go on a craft beer acquisition spree.

Already there are signals that the craft beer industry is not taking AB InBev’s incursion into craft beer lying down. Industry bible Brew Studs has listed 14 formerly independent craft beers that it now recommends consumers boycott because of their big beer acquisition. Independent distributors have begun to delist any formerly independent beer brand now owned by the big beer companies.

Formerly friendly beer brands have moved fast to isolate and abandon any links with their newly acquired peers. In the month after its acquisition was announced, for example, Wicked Weed was banned and uninvited from a series of different craft brewing events. The brand had its local membership of the North Carolina Craft Brewers Guild revoked almost immediately and has been widely shunned by the local beer making community.

What emerges from all this is inarguably one of the great brand challenges of recent years. Can AB InBev pull off the dual marketing feat of maintaining its big brands while nurturing its newly acquired craft labels at the same time? The company certainly has the brand strategy capabilities but it will require an exceptional period of careful planning and execution to pull it off.

There is always the potential danger that a company famed for its economies of scale and mass production does the unthinkable and starts mass-producing and mass-marketing their growing stable of craft beers with unthinkable consequences. That might sounds like a ridiculously dumb thing to do but most big companies tend to keep doing things the way they’ve done things in the past. Acquiring a boutique brand does not always mean you also accept their approach to marketing and manufacturing.

American beer quality has improved dramatically over the past decade and with it the knowledge and discernment of American beer consumers. Maybe it’s time for brand management to follow suit in America and raise its game too.

This thought piece is featured courtesy of Marketing Week, the United Kingdom’s leading marketing publication.

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The fact that the report was written by Forrester, one of the few firms to understand properly and objectively the intersection of marketing and tech, did slightly re-balance things. But not enough to avoid the very loud “harrumph” I uttered as I read a summary of the report last week.

For as long as we have had advertising there have been ex-agency personnel and futurologists predicting the imminent demise of the ignoble profession. A Google search for the “end of advertising as we know it” will reveal a best-selling book from 2000, a series of inane conference presentations from 1990s and, more recently, a whole raft of tech-based attacks that portray traditional communications as being a dead marketing man walking.

Quite clearly advertising has evolved tremendously in the past 20 years. A surprising amount of it also hasn’t changed at all by the way, but we don’t talk about these things in marketing lest we be seen as ‘old-school’ and not sufficiently understanding the startling new world of digital marketing. But change is not what the Forrester report is about. The co-authors are truly dead-set on a prediction that the end is very much nigh.

Aversion To Interruption

The big insight on which Forrester is basing its “declaration” that 2017 is the year that advertising as we know it comes to an end is the increasing intolerance we all have for interruptions. That is, after all, the name for the small uncomfortable corner of experience where advertising lives and occasionally emerges from to occupy your consciousness for a few tantalizing moments of engagement.

Forrester point outs, not without accuracy, that consumers are spending less and less time “doing interruptible things on interruption-friendly devices”. Despite their current domination, Google and Facebook’s model for success is disarmingly old-fashioned. Google makes billions interrupting your search with paid suggestions. Facebook interrupts your social interactions with paid messages. Clearly, once we navigate the issues of brand safety and measurement, the next big bump for digital media is the fact that this is a singularly inappropriate context to try and interrupt a user’s experience for even a second.

The active-finger, multi-screen, double-click world of your smartphone makes it just about the most impossible 10 square inches imaginable to break into and garner attention, let alone drive action. There is a reason that you need to show the average digital display ad to 2,000 people before one of them will click on it.

The great irony of Mark Zuckerberg’s vision for Facebook ads back in 2007 – in which he too claimed an end to advertising as we knew it and proposed engaging organically with consumers in conversation as equals – was that, although it did not actually work, it was the ideal approach to get past the always-on, never-interrupted digital audiences of the 21st century. It’s ironic because Zuckerberg quickly gave up on organic conversations and opted for an all too familiar model of display advertising, much like the one he had set out to disrupt a few years earlier.

And, of course, not only is the digital consumer pretty much out of bounds from an attention point of view, the device she is using is equally uncooperative. The advent of ad blockers, as Forrester notes, is increasing not because the ads are weak but because any sane human being, given the option of free extinction, will click the ad blocker button in an instant. Whether we want to admit it or not, the ancient technology of interruption sits uncomfortably in the age of digital media.

AI Could Bypass Brands

But before the laughs of the so-called traditional media get too loud, it’s worth noting that the end of interruptions is by no means an exclusively digital phenomenon. As households grow used to smart TVs and DVR content their ability to zip through advertising with expert aplomb grows ever more concerning. Once again technology plays into the consumer’s hands too with an increasing proportion of DVR devices around the world now able to not only pre-record your favorite shows but also re-present them without ads too.

For Forrester the only hope for advertisers is to see the end of interruptions as the end of advertising itself and ship money across town to artificial intelligence (AI) and smart assistants. It recommends that “marketers take billions of dollars out of digital display advertising to make this investment”.

There is something delicious in seeing the big tech disruptors of the 21st century, Facebook and Google, suddenly threatened with a digital disruption of their own. But this recommendation to pull back from digital and go deep into AI seems a knee-jerk one to me – a bit like seeing a gust of wind then rushing off to the supermarket in panic to buy cans of beans and water.

There is a fascinating future appearing on the horizon in which our smart personal assistants handle most of our purchases for us. It’s a scary world for marketers because those smart devices won’t be watching ads but rather using a complex array of calculations and predictive modeling to make the optimum purchase.

Low-involvement consumer decision-making will become a contradiction in terms and with it all the brands and campaigns that populated our early consumer consciousness will fall foul of evolution. If Amazon gets Alexa right the future won’t look anything like the past or present.

It is brands as well as advertising we are talking about. As marketing professor Scott Galloway has recently noted, in the world of proper AI, basic categories could well replace brands in our verbal requests. Let the machine work out which one to get; I just need toothpaste.

And it’s not just average brands that lose out. Google, for all its power and heft, operates a two-step model of consumer information. I search for information on pen refills with Google, then I visit the site and make the purchase. That’s radically more efficient than having to go down to the pen shop and talk to someone about pens for an hour.

But that old pen shop experience is exactly how our children will see our current use of Google. They will laugh as we talk to them about ‘typing’ a request into a ‘search engine’ to find possible pen retailers and ‘clicking’ on the best options. The little black disc on the bookshelf that orders stuff for my future 22-year-old daughter with one verbal command is where things are going.

Disruption Is Slower Than You Think

Before we get completely caught up in all of this, however, let us pause and consider what we know about marketing revolutions. Inevitably, we overestimate the impact of new technologies and we underestimate how long it will take for them to take hold. Forrester appears to be of the belief that it’s time to jump ship now, declare advertising dead and start working on an AI strategy. If we have learned anything thus far in marketing it’s that these revolutions occur with much slower speed than anyone expects.

While it’s headline-grabbing to declare all advertising is over, the truth is that the interruption extinction event only threatens certain media, not others. Yes, it’s a big problem for the agile, mercurial audiences that populate digital media. But while TV is struggling with its own interruption issues the simple laziness and passivity of the TV audience ironically makes it far more immune to the interruption issue.

Many years ago I studied a bunch of families in their own homes and looked at why and how they actually viewed TV advertising. When I finished my research an army of agencies all asked me the same question; which ads pull best? My answer was a disappointment to them. It was clear from thousands of hours of watching families watching advertising that the ads themselves were a relatively tiny force in the overall advertising equation.

Only agencies would think their ads were somehow the main factor in driving attention. The real, ethnographic truth was that a host of more mundane factors explained why a family did or did not pay attention to ads. Where they with someone else they could chat to in the break? Did they need to use the bathroom? Were they exhausted? Could they find the remote to change the channel?

All these years later, the fundamental quotidian exhaustion of a TV audience remains its biggest strength. It might look great to have young, eager audiences devouring digital at 400 clicks a second. But try getting them to watch a 15-second spot.

When butts sink into couches across the US and turn on a TV, however, they do so with an inbuilt ability to accept interruption. The slightly overweight and exhausted army that make up most TV audiences might not look good on a brochure for the National Association of Television Program Executives or NATPE but they have one certain advantage over the young, hip trendies whizzing through hyperspace: they can’t be forced to change the channel because the remote is way over there. So they endure.

And then there are all those other media that no-one mentions anymore. Both cinema advertising and outdoor are almost immune to the interruption issue because they intrude at such a gigantic, macro level they look set to avoid the issue almost entirely. It’s pretty hard to ignore a billboard when you are driving past it.

The more I think about outdoor advertising and the renewed lease of creative and client life it is getting from becoming digitized, the more bullish I become about this most ancient of advertising forms.

So is advertising as we know it about to end? No, it is surely not. What is going to happen is that all those hot little startups like Google and The Facebook that grew and came to enjoy the fruits of global success are now going to experience the other side of the sword. That’s the part where young, arrogant tech heads spy weakness and money in equal measure and spend the rest of their youth in a basement building something to disrupt the former disruptors.

But Google can rest easy for a while longer. Advertising as we know it may be changing – I’d argue it has not stopped changing since its invention – but it’s not dead or dying or about to be replaced by a black disc. And even if it is, how do consumers get to know about the AI in the first place? Surely someone will have to make an ad to start the revolution.

This thought piece is featured courtesy of Marketing Week, the United Kingdom’s leading marketing publication.

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At one of our meetings he informed me that his newly arrived CEO had just given him notice that he was no longer needed at the company and he was about to be replaced. Half drunk and stung by the news, I railed for several long minutes about the injustice of pushing out such a proven, talented marketer.

When I had exhausted the rant my senior friend rested his hand on my arm with a wry smile and asked: “Have I ever told you the story of the Scorpion and the Frog?” I shook my head and, after pausing to order another two Negronis, he told me a tale that I still, to this day, remember. It’s a simple but powerful parable that can be used in innumerable situations to explain the apparently inexplicable and satisfy even the most troubling empirical conundrum. And that’s why I tell it to you now.

A scorpion is scurrying across the parched desert floor when he hears the unmistakable and entirely remarkable sound of a droplet of rain landing on the dry sand bed next to him. A few seconds later another one lands. Then another. And another.

Before the scorpion knows it, a torrential rain storm is upon him and very quickly the arid desert is transformed into a fast-rising river bed. Alarmed and acutely conscious of his inability to swim the scorpion heads for a small area of elevated ground. He reaches it but is surrounded, and with the water almost reaching his legs, the scorpion prepares for the end.

Suddenly, over in the distance, he spies movement. As the blurry image comes closer he recognizes a frog swimming across the newly formed river with very apparent glee. “Hey!” shouts the scorpion. “Swim over here and let me get on your back. I need a lift over to the higher land over there”.

The frog pauses. The scorpion is her mortal enemy and she fears the arched sting that he carries in his tail. But she approaches and looks, not without sympathy, at the apparently doomed arachnid.

“If I come any closer you will sting me,” she says.

“Nonsense,” the scorpion replies. “If I get on your back and then sting you I will die as surely as you in the water”. The frog ponders the situation for a moment and then, cautiously, swims over and allows the scorpion to climb on to her back. The two unlikely partners turn and swim towards the higher land off in the distance.

A few yards before they reach higher land the scorpion pulls back his tail and strikes deep into the frog’s neck. Stunned the frog looks up at her passenger and, as the poison starts to paralyze her system, she has just enough time to utter a single word: “Why?”. As the paralyzed frog and her passenger sink to their deaths beneath the water the scorpion shrugs his shoulders and says: “It’s just in my nature”.

When my marketing mentor got to this punchline he paused, drained his glass and gave me another sad smile. His point was that his talent, experience and track record were all meaningless in the face of a new CEO who was always going to clean house and bring in his own new team. Some things in business, some things in life, are simply unavoidable, irrespective of the situation or the data at hand.

I learned that story a quarter of a century ago. These days I am the old weary marketing professor using it to explain the way of the world to bright-eyed young MBA students. I tell it to you now because it’s the best and simplest way to explain the extraordinary data that emerged from the World Federation of Advertisers (WFA) last week. The WFA surveyed 50 of the world’s top marketers who, in terms of combined marketing spend, represent a potential $82bn of global ad spend.

Despite the fact that 45% of all marketers can’t see the value of digital advertising, 75% aren’t convinced of its effectiveness and 72% think marketers have over invested in digital, a massive two-thirds of that same sample expect to move more of their marketing money in to digital next year –  many by as much as much as 40%. The majority will spend more on digital advertising next year.

Yeah I know. 75% aren’t convinced of its effectiveness yet 66% will invest more next year. Pause, consider this data, and gulp.

The legendary marketing professor Christine Moorman has been publishing the same finding for many years in her annual Duke University CMO Survey of senior marketers. Her pie chart of marketers invariably shows around two-thirds unable to show the business return on digital marketing and unconvinced of its ultimate value. But her next pie chart shows a similar proportion of marketers determined to invest more in digital marketing channels in the year ahead.

These empirical results are as illogical as they are consistent. Most marketers will continue to switch more and more of their budget to digital marketing and away from so-called traditional channels. They will do that not because traditional media is losing share or engagement or because digital media metrics actually make sense or impress anyone. They will do it, quite simply, because it is in their nature to favor the new over the old. The digital over the traditional.

And the Scorpion and the Frog and everyone else on board will taste water, a surfeit of it, before this decade is over as a result.

This thought piece is featured courtesy of Marketing Week, the United Kingdom’s leading marketing publication.

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A year later and the success of the initial business led her to extend her brand into women’s footwear, then accessories and finally fashion. Distribution in the top American department stores followed and by 2013, only six years after she launched her brand, the company was reportedly generating $250m in revenues.

And then her dad became President and everything changed.

Ivanka Trump might have thought that the first 10 years of her Ivanka brand were tumultuous, but nothing could have prepared her for the past six months. First, her father was recorded extolling the virtues of grabbing women by their genitals. In response, a San Francisco based web designer, Shannon Coulter, started a campaign called #grabyourwallet. Coulter listed each and every brand that had any formal business connection with Donald Trump and his family and encouraged angry women to boycott all of them until those links with Trump were severed.

Among the brands targeted was Ivanka and, despite the fact most high-end stores stocked some of the brand’s products, it was the department store Nordstrom that quickly became the main target for female ire. Initially the store defended its right to offer shoppers a choice. Then it announced in February that due to the brand’s poor sales performance in 2016, it would not be buying any Ivanka stock for the upcoming season.

President Trump was unhappy with this turn of events and resorted to Twitter, first from his private account and then from his official presidential account. He tweeted that his daughter had been treated “unfairly” by Nordstrom and that the outcome was “terrible”, exclamation mark.

Trump’s senior political advisor Kellyanne Conway was challenged about the apparent ethical quandary of a president wading into a trade dispute involving his own daughter. Conway responded by openly promoting the Ivanka brand on live national TV.

“Go buy Ivanka’s stuff, is what I would tell you,” Conway exhorted a clearly alarmed political interviewer. “It’s a wonderful line. I own some of it. I fully…I’m going to just, I’m going to give a free commercial here: go buy it today, everybody. You can find it online.”

Political Storm

Nordstrom, the usually low-profile department store, was increasingly and uneasily finding itself entering the eye of a political storm. The company’s decision to delist Ivanka was rapidly becoming one of the most debated topics on American news and was even discussed during presidential press briefings. In apparent desperation Nordstrom released a statement describing the “great relationship” the company had with Ivanka Trump but pointed out that sales of the brand in 2016 had “steadily declined to the point where it didn’t make good business sense for us to continue with the line for now”.

But it was too late for rational, objective argument. This, after all, is America 2017. For left-wing anti-Trump zealots the Nordstrom/Ivanka case was clear evidence that the President continued to defy ethical requirements to separate his business interests form his presidential affairs. For right-wing Trump supporters it was another example of liberal bias against Trump and his daughter and they applauded his defense of his child.

Saturday Night Live weighed in with sketches in which Trump’s press secretary is seen hawking Trump merchandise on live TV and a more serious take-down in which Scarlett Johansson plays Ivanka in her own perfume ad, which, as the ad reveals at the very end, is called Complicit.

With so much negative publicity and the boycott beginning to have a genuine influence on distributors there has been widespread speculation that the Ivanka brand is “in crisis”. As the Washington Post asked in February: “How exactly did the Ivanka Trump brand fall so hard, so fast – particularly in the Nordstrom ecosystem? And where does the brand go from here?”

Given that Ivanka’s target market is young professional women aged 25 to 34 and that this demographic is two thirds opposed to the Trump Presidency those questions do appear to be pertinent.

Awareness Trumps All

But dig a little deeper and it’s clear that the Ivanka brand is going to win big not despite, but because, of the scandal that now surrounds the brand. Ivanka Trump is about to triumph for two major reasons. First, most marketers underestimate the power of brand awareness.

Your average CMO is so obsessed with missions and beliefs and purpose they have entirely overlooked the most important brand building block of all: awareness. If the customer does not know you exist then all other perceptual and behavioral bets are off. Most brands have tiny brand awareness among their target market but they are unaware of this deficit because they do not measure or track their brand properly in the first place.

Even if you have awareness, whether the brand is salient to a shopper as she gazes around a department store or looks at the blinking cursor against a blank box on Amazon is an entirely different matter again. Put simply, unless you’re a brand like Ford or Apple, most of your target customers do not know that you exist.

The Ivanka scandal has propelled the brand to extremely high levels of brand awareness. For a brand that prior to last year would have been looking at sub-1% unaided awareness among its target shoppers that is a rare and invaluable coup.

At this point, however, you might want to argue that awareness might be high but the associated image that new-found awareness is attached to will turn off a significant number of these newly cognizant customers. And you’d be right. If the polling numbers are correct around two thirds of the target market who now know about the Ivanka brand are also repelled by it.

But so what? There are 20 million women in America aged between 25 and 34. Until now almost none of them knew about the Ivanka brand. We can now assume that most have heard of it and most disapprove. But that still leaves us with a fertile, brand aware and entirely positive army of just under seven million American women who are suddenly hell-bent on buying Ivanka items.

Triumph Through Targeting

That sudden surge might explain the remarkable spike in sales that Ivanka recently experienced. At the start of the year, for example, the brand languished in 550th place for orders on Lyst.com – the largest fashion ecommerce site in America. But by mid-February, when the Ivanka debate was propelling the brand to its “crisis”, it became the 11th most popular brand on the site. “We’ve never seen such a large uptick,” a Lyst spokesperson explained earlier this week. “Typically, she’s not in our top 100 sellers.”

Orders of Ivanka branded goods on Lyst.com, February 2017 (Chart: Lyst)

Again, there is a good lesson here for marketers. Don’t try to make everyone happy. You’ll end up becoming vanilla and while nobody hates vanilla, it’s never the flavor that anyone chooses when there a dozen options at the ice cream shop. Too many marketers practice their art too conservatively. You can’t make everyone happy so focus on the people you can delight.

Ivanka Trump does not need everyone to love her brand. What she needs is everyone to know it exists, to know it stands for something and for a small segment of the market to find that something attractive enough to make a purchase. And that’s exactly what happened in February. She created enormous awareness, enormous antipathy and enormous desire and made money as a result.

The only catch, and of course there has to be one, is that the Goddess of Marketing giveth and taketh away in equal measure. The political firestorm about scandals and boycotts is fading as America becomes desensitized to the Trump presidency. And as the furor fades, so too does brand awareness. Apparently after a gigantic February, sales of Ivanka products have dropped somewhat, although they are still significantly ahead of 2016 numbers.

Perhaps a new scandal is what’s needed to create the next sales spike.

This thought piece is featured courtesy of Marketing Week, the United Kingdom’s leading marketing publication.

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But what I do have, in increasing amounts, is an appreciation for the company and the way it does business. Specifically, I like very much how it handles brands and the egalitarian manner in which it manages its tax affairs.

On the brand front, Unilever has been playing second fiddle for as long as it has been in business. Despite proving a notable pioneer of marketing since its formation in 1929, Unilever has had the unfortunate challenge of squaring up with the American consumer goods giant Procter & Gamble for almost 90 years.

No one does branding better than P&G. The Cincinnati-based behemoth literally invented brand management back in the 1930s and has been ahead ever since. But with dark rumors swirling that P&G might not survive 2017 in its current state thanks to shareholder impatience and the growing attention of a certain Mr Nelson Peltz, this could finally be Unilever’s time.

The other reason to feel bullish about Unilever’s branding capability is that it appears to have a core competence that most of its big, billion-dollar rivals lack. Starting with the acquisition of Ben & Jerry’s back in 2001, Unilever has proven a master of acquiring kooky, high-potential brands and then (and this is the tough part) not screwing them up.

More recent notable purchases like Australian tea retailer T2 and economy razor company Dollar Shave Club both appear to be highly prized acquisitions but also ones that a giant, bureaucratic consumer goods company could easily destroy. The fact that they now belong to Unilever suggests they will not only survive acquisition but become more successful because of it.

The way that Unilever sent in its executives to work with Ben & Jerry’s and restructure its systems, while retaining the essential elements of the brand and its operational culture, continues to be studied at almost every top business school as best practice. To be able to pick, acquire, integrate, grow and then sustain smaller, independent businesses is a core competence that almost every consumer packaged goods company, from Coca-Cola to Mondelez, now prizes above all others. And Unilever appears to have the magic formula.

Broken Promises

In contrast, consider Cadbury, which was acquired by Kraft in 2010 (before its merger with Heinz and before its confectionary business, along with Cadbury, was spun off as Mondelez). There are many who believe the Cadbury brand was significantly weakened after Kraft took control. Broken promises about manufacturing plants, changes in product formulation and bizarre attempts to co-brand Cadbury products with its new parent company’s offerings (Cadbury chocolate with Philadelphia cheese anyone? Ritz crackers in your Dairy Milk bar?) have combined to leave Cadbury weaker than it once was.

And it isn’t just branding in which Unilever excels. Despite the deluge of fluff that corporate social responsibility programs and brand missions have become in recent years, there is significant evidence that Unilever really does represent the acceptable face of responsible corporate capitalism. CEO Paul Polman is often caught sounding far more like a liberal Dutch politician than the boss of one of the biggest businesses on the planet and Unilever remains one of the most admired businesses for the way it handles its corporate affairs.

In particular, the company has an explicit policy on tax avoidance that sees it pay significantly more than most of its peers. That’s not saying much given the dreadful state of corporate tax affairs at most of the world’s largest companies but Unilever remains, if not perfect, the precept for how a big multinational company can manage fiduciary responsibilities without being tax dodgers.

I still recall the tension I felt when the ‘Lux Leaks’ revealed a veritable ‘Who’s Who’ of corporations that had funneled billions of revenues through Luxembourg to achieve an effective tax rate of just 1% on their sales. Almost every major company, each with their bright shiny brand purpose and CSR statements, was present. From Apple to VW, the list of allegedly implicated companies was in the hundreds. I remember the dread of first thinking, ‘Oh God I’ll bet Unilever is on the list’, and then the relief in seeing it absent under the U column.

Again, we could contrast what happened at Cadbury since its takeover by Kraft. You’d have to look a long way to find a family that gave more back to their community than the former and current heirs to the Cadbury family name. But the company, after its acquisition, has pursued a very different path. In 2015 Cadbury generated just under $62M in profits from its UK business and managed to pay not a penny in corporation tax. Where can I sign up for a similar arrangement?

In truth these two distinctive competencies of Unilever – a more mature, progressive approach to corporate responsibility and an ability to acquire and then run smaller brands superbly – are very much connected. The era of brands emerging from products built in laboratories with unique selling propositions that a company can then promote to the market using scale advantages and mass marketing is coming to a close. We are entering interesting new territory in CPG in which small, cool startup brands with a back-story, distinctive founder and a proper brand mission are now seriously threatening the global behemoths of the 20th century.

Unilever’s ability to be the relative good guy when it comes to corporate activity, combined with its notable track record of understanding and respecting the nascent values of the brands it has acquired, will create a formidable advantage in the very different era for CPG that awaits. It’s something the likes of Coca-Cola, which now faces the decline of its cash cow Coke and the immediate need to acquire well and acquire quickly would love to be able do as well as Unilever. It may even be one of the driving reasons for the approach from Kraft Heinz because that company, as efficient as it is, will surely struggle to acquire these meaningful big brands of the 21st century with the reputation it currently holds.

In the era of ‘ROI marketing’ it’s very easy to see everything purely as a matter of profit. Perhaps from that point of view the Unilever acquisition really made sense to Kraft Heinz. But I’m delighted the deal has fallen through and the company gets to continue its operations. It’s a great manager of brands and an honorable company to boot. This no-deal is a true win for responsible business.

This thought piece is featured courtesy of Marketing Week, the United Kingdom’s leading marketing publication.

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