Shireen Smith: Welcome to the brand tune podcast, David. I'm delighted to have you here today. Tell us a bit more about what you do and what's currently occupying you.

David Aaker: I see. Well, I am. I kind of like to think through a brand perspective. I got into brand equity, gosh, 25-30 years ago now. And when I was interested in strategy, and came to the belief that people need to build assets instead of being focused on short-term financials then, I decided that if I was going to participate, the brand equity is sort of my niche. And so, I wrote a book, which I defined it called the “Vanity Brand Equity” and another on how to manage it, called “Building Strong Brands”. And since then, I've written four or five more books, and it got to be so many books. I wrote a book called “Ochre and Branding”, it sort of summarized everything. And since then, I've gotten interested in the power of story. So, I wrote a book, “Creating Signature Stories”. And then I tried to take a branding view of disruptive innovation and what a brand brings to the party, and I wrote a book called “Owning Game-Changing Subcategories”. And now I'm working on a book about how about branding? how planning can help firms that want to develop social programs?

Shireen Smith: Okay, that's interesting. So, I was…I've been writing about intellectual property and the fact that it's not really taken into account by a lot of people I come across in the branding industry, which may be the smaller business end of the market for nearly 10 years. And it's only recently occurred to me that there is no training provided for marketers and business MBA students in intellectual property. Is that the same in the US?

David Aaker: Yeah, that's one of my blind spots. I have developed several models or ideas, and I never registered their trademarks. And I've been completely derelict and I've had really nobody to tell me that until you came along. But yeah, and my book is copyrighted because of the…an article…is because of the publisher and so on. But yeah, I just have really a blind spot in that area. And I think you're absolutely correct that it needs to be…it needs to have more focus, more expertise.

Shireen Smith: Yeah. I'm just wondering why it's not included in the training programs like especially for brand managers.

David Aaker: It is because I think it's because people like me that are doing the, you know, intellectual, sort of work, don't have any background in it. And so, it's sort of a chicken and egg thing. If we don't have any background, we don't even recognize it's a problem or a need.

Shireen Smith: Right, and does Prophet create brands for people. Your agency, do they create brands? What sort of work do they do for clients?

David Aaker: Well, brand strategy, and sort of building brand equity is, is sort of our core offering and it’s sort of our legacy offering. That's how we are glad to be known. We now do, we now do design, we do naming but we also do, helping people do digital transformations, helping them understand change, how to change their culture, we do analytical things we do customer experience. And so, we now do quite a broad set of offerings, but it's still maybe brand strategy is at the core of a third or a half of what we do.

Shireen Smith: Okay, so when a name is being proposed for a client, are you aware of what sort of checks are made? Or whether you involve lawyers in the process?

David Aaker: Yeah, well, we have a naming group within our company. And, and I don't get involved in that, but there's no way that you can avoid the legal aspect of naming, which is, of course, you know, pretty complicated since most of the brands need to have a global brand and they need to own a globally.

Shireen Smith: Are you aware of whether they have lawyers on their team, or whether they outsource, how they work with lawyers?

David Aaker: No, I don't know how they do it. But there's no, there's no question that that's one area in which the legal side is known by everybody to be needed.

Shireen Smith: Yeah. I guess what I notice is that often brands are not created using symbols and characters, maybe there's a little fear in the industry that there will be some sort of infringement problems, maybe because people don't know how to search and, you know, do due diligence. They're just aware there might be a problem. I don't know. That's what I…

David Aaker: I don’t know either. We have a design team of 30 or 40 people and naming team of half a dozen, and I don't know what…I'm not ever been involved in what they do. But I'm, I wouldn't be surprised if they're a little more knowledgeable than I am.

Shireen Smith: Okay. So, if I wanted to try and get MBA schools to take IP on board, who is the person who's creating the curriculum? I mean…

David Aaker: Well, that's the problem. There is nobody.

Shireen Smith: What, nobody's creating the curricula?

David Aaker: Well, not of IP. Not of the legal side of IP ownership.

Shireen Smith: Yeah, well, this is why I've written this book, and I hope to, you know, send it to MBA schools and try to raise awareness that it's really important when you're creating a brand to be aware of the IP dimension, because even though marketers/designers are not going to be expected to deal with…with the IP themselves, you need to know what you don't know, and when you need to bring others in. It's not just clearing names, or, you know, there's all sorts of ways in which IP can cause problems aren't with identifiers that are chosen.

David Aaker: I think I'll give you some free advice which is probably not worth much. But putting a book out there is not gonna do it.

Shireen Smith: Yeah. Well, what do I do? What should I do instead?

David Aaker: You need to have some vivid stories about disasters, where people have failed to do their legal homework and this resulted in disaster. You need about six or seven of those and then you have to get a…you know, a way to get them out there. And so, with all due modesty, I recommend my book “Creating Signature Stories”.

Shireen Smith: Okay.

David Aaker: Because I think what you need is a signature story. A book is a good place to establish credibility and provide a place for people to go for more information. But it's not going to change anything.

Shireen Smith: Yeah, I have got a number of stories I could share. And I have created videos on it, because…But I don't want to be seen as somebody always talking about disasters really, because it…but you think it's important too?

David Aaker: I think that's the only way. I think that the book is not gonna do it. And so, I've written books that didn't do it. So, I have some background.

Shireen Smith: You’ve written a lot, haven’t you?

David Aaker: Yeah. I mean, a book can, again, establish credibility for yourself and for your ideas. And, and so when you, when you have a platform, it won't be as easily ignored. But you need stories, I think.

Shireen Smith: Okay, well, I will be sure to get that book. So, you create stories and you share them on video.

David Aaker: Well, there's…you have to find the stories. And then you have to present them in a professional way. And it might be on video, it might be on articles. And then the third step is you have to get them in front of people's eyes, and that's a big communication problem.

Shireen Smith: Yeah.

David Aaker: So, you have to find a vehicle, you have to find a way to break through the clutter, the information overload, and so on and make sure that it gets out there.

Shireen Smith: Well, one story which is out there is Tesco, for example. They paid quite a big agency to come up with a name for their loyalty program, and the name chosen was Clubcard. They spent at least a million raising awareness around Clubcard, but they haven't been able to register that as a trademark. It can't function as a trademark, it's too descriptive. And when that happens, it means that everyone else can begin using Clubcard and they can therefore benefit from the advertising that Tesco put into it.

David Aaker: Can't they only name Tesco Clubcard?

Shireen Smith: They can and that's what they've had to do. But the problem is that they were trying to create a unique name for their loyalty program. But in the process, all they did, because they didn't find a unique name, they found a name that everyone else is using and benefiting from. So, they raise the profile of loyalty programs by spending so much money on promoting Clubcard when it's basically promoting something generic that other people can have. Which is, you know…There are subtleties like that around IP, which makes it difficult to actually explain why this is a disaster, you know, that you have a name that you can't uniquely own is actually such a waste of resources that went into creating that name. If they'd come up with something like, I don't know, a totally unique name that they could own straightaway, then all that advertising promotion that went into their campaigns would be uniquely, would belong to them, and therefore their loyalty card would be more well known, than, you know, than other people. Other people would have had to start calling their loyalty cards by some other name, plus loyalty card, they couldn't have benefited from Tesco making people aware that, you know, loyalty cards are a good thing, for example. So, there's quite a loss for an organization that can't register a trademark for as a unique identifier. And this happens all the time with other elements as well. Like if Coca-Cola had just created a unique bottle, but not bothered to protect it in the right ways. They just wouldn't have had unique use of that Coca-Cola bottle. Other competitors would have been able to use the same bottle shape, which would have then meant that they wouldn't get so much value from it. You know. So, it's really part and parcel of what you create is to protect. So, the brand equity, tell me a bit more about how you work with brand equity.

David Aaker: Well, brand equity is, as I define it is it consists of three things. One is the visibility and credibility of the brand. And that is, do you would you think of it when you want to consider what brand to buy? Do you think that it's not only comes to mind, but you think in your mind that, “yeah, that could work”. And it could be one you'd consider. The second thing is a brand image. And that is got all the things that come into how you perceive the brand. It's maybe the organizational values, the brand personality, the brand attributes, the brand benefits, how it's used, the kinds of people that use it, the…whether it's, if you sort of inspired by it. Are you impressed by it? Do you respect it? That all is part of the brand image. And the third thing is a brand loyalty, and that is, how many people are really part of the brand community? They really…they'll always buy it, they'll talk to other people about it, and, and they'll share information about it. And so, if you have a core loyal group, that's really an important part of the equity of a brand.

Shireen Smith: Yeah, so obviously, copying is a big problem. Because if you develop a positioning, and competitors begin to offer the same benefits as you offer, then maybe you just have a point of parity after a while and there's nothing unique in your positioning. So…

David Aaker: What talk about in my disruptive innovation book: Owning Game-Changing Subcategories, I talked about the role of the brand, and one of the roles of the brand is to build barriers, to competition to prevent just what you're talking about. And there's different kinds of variables, I mean, just gaining a loyal customer base is a huge barrier, because they're not going to be tempted by somebody that pretends to duplicate what you do, even whether they do or whether they don't. And a second thing is that you can just continually innovate so that you're always a moving target. And it's pretty hard for somebody then to say, “okay, you want a Prius like car, well, we're making one”…and, Prius and their informed consumers will go, “well yeah, that's what they made two years ago, but that's not what they're making now”. The third…another thing you can do is to brand the innovation. And so, if you…a hotel chain had something called a Heavenly Bed. And so, people rush to copy it. Although other hotels copied it, but there is only one Heavenly Bed because they own that brand.

Shireen Smith: Yeah, you see, that's where intellectual property comes in. Because it does create barriers to entry through the name. People can't say, “we've got heavenly like beds”; they have to find other names.

David Aaker: Yes.

Shireen Smith: So, it protects the brand.

David Aaker: That’s right. So, that's…what you have then is two levels of branding, you know, the brand itself, the name of the hotel, and then you have a branded feature.

Shireen Smith: Yeah.

David Aaker: And like the retailer, Uniqlo has something called Heattech which is a kind of fabric that keeps in the heat. They also have something called AIRism, which is fabric that breathes and makes it really cool in the summertime. And they you know; they own those names. And they…and so again, all these retailers are trying to copy those qualities but they don't…they can't access the brand name. They can't call it AIRism they can't call it Heattech.

Shireen Smith: And it's possible, they also have patents. If it's a particular type of fabric. So, I'm curious…

David Aaker: They…they develop this…Well, they may have patents, I don't know. But they, they have partners in the industry that develop these that might own the patent. But they own their use of it. And so, I don't know about the whether they own the patents or not, they might or might not. They do own the branded feature.

Shireen Smith: Yeah. So, you say that you're not very alive to IP in terms of…because it hasn't been something that you've considered.

David Aaker: What I said was that I'm not very attuned to the legal side of it.

Shireen Smith: Hmm. So, you know, the importance…

David Aaker: I’m very much involved with IP.

Shireen Smith: You're involved with…so you would be able to choose a name that, you know, is likely to function as a trademark is…?

David Aaker: Well, IP is the idea that you're trying to put a name on. It's not just the name.

Shireen Smith: No, no. It's copyright, it’s patents, it’s designed.

David Aaker: I’m talking about substance. I'm talking about, you know, what…what my model of brand equity is, what my model of developing brand equity is. And, and…and that, they both have names. But anyway, it's a lot more than a name.

Shireen Smith: Sure, yes. I mean, like, a lot of what you said around image can be protected. But some of elements can't be…or loyalty, some aspects of loyalty can't be protected. But some would be like, if you've got a special site, where consumers can discuss what, whatever it is that the brand offers, then that site is going to be unique to the brand and others would have to copy…they wouldn't be able to use that site. So, there are ways in which IP…I think that might be the problem, actually, the definition of IP. People have different perceptions of what IP actually means. There's IP, like your knowledge and expertise. But in terms of legally, it's really about for brands its, trademarks are the most important IP. And whether or not you can trademark something matters a lot for brands. So, you know, brand like Adidas, for example. They start out with their logo, which is very distinctive. They can register that as a trademark. But then they want to have the stripes and they want to have a monopoly over use of stripes in a particular location of the shoe. So, it can be more and more challenging. But a lot of brands who are very successful, managed to get quite of a big monopoly over their brand elements like that. So…

David Aaker: Even the color has been trademarked, isn't it?

Shireen Smith: Yeah, color is very difficult to trademark. But you know, for those who succeed, that's, you know… Again, you've got to choose the color carefully. Because if you choose an industry color, that's not going to be distinctive, you're never going to be able to trademark that color for your brand. Because it's rather like using a generic name. The law basically will only grant a monopoly right over elements that other traders in that space don't need to use. So, using an industry term or an industry color is just the wrong approach to trademarks, and choosing names, you know. People often want to describe what it is that their products or services offer, but that's really the wrong approach from a trademark perspective. No, bit like Clubcard. But I'd love to know how it happens for an agency, which has, you know, someone like Tesco as a client to end up choosing a name that can't function as a trademark. I guess I ought to approach them and ask them how that happened.

David Aaker: Yeah, I don't know. I'm sure that whoever did the naming for Tesco probably has a legal assistance and maybe they thought Clubcard was such a strong, descriptive name that they would go with Tesco Clubcard which probably is protected.

Shireen Smith: Well, they tried hard to register Clubcard on.

David Aaker: Oh, did they?

Shireen Smith: Yeah. And they didn't succeed. So now it's gone to Tesco Clubcard. I don't know my…

David Aaker: I think another example is Apple iPhone. Wasn't that owned by somebody else?

Shireen Smith: iPhone, it might have been. But when you…basically brands that have a lot of money can buy out other people's rights. you know.

David Aaker: Umm, I think that Steve Jobs actually introduced iPhone without having the rights. And he, he just…I suppose he relied on all that money that he could somehow steamroll over the opposition. But yeah, I think he introduced iPhone without having the rights to it.

Shireen Smith: Right. Well, it happens quite a lot. In my experience, there's a, there isn't always communication between different departments, and things don't happen in the way they should ideally happen.

David Aaker: Well, he didn't do it because he didn't know. He did it deliberately and knowingly.

Shireen Smith: Oh, well, because he knew someone else had the rights to it?

David Aaker: Yes, he did. And he decided he would do it anyway, I guess, gambling that he could end up either winning the legal fight or buying them out.

Shireen Smith: Yeah, that's often a good strategy as long as you're aware of what it is you're doing, and you know, that can be your strategy that you will litigate, you will buy someone's rights out. It's very difficult to actually find names that are available. And there's always a risk element. So, I think…

David Aaker: You know he had the iPod, and he had the iPad, and he thought that the iPhone was so important that he would take…undertake whatever risks were involved, and of course, he's pretty confident guy, he was, he's passed away.

Shireen Smith: Yeah. He was a brilliant marketer. Yeah, so…good. Okay. Well, thank you very much indeed, for appearing on the podcast. Can you give me an example of any brand names that you think are really good, have been well-chosen?

David Aaker: Oh, that's a good question. I'm sorry about that. I tell you one thing, that my theory on names is…yet the outside, you have to make a choice. You have to make a choice as to whether you want a name that will describe what you do. Because if you don't, that becomes a big communication problem. The name kind of gets in the way. Or you have to decide a name that's completely general. And that allows you the flexibility to strategically do anything you want. And my favorite example is Amazon. When Amazon came out, people thought, “Boy, if this company ought to be called books.com”, because then they would have a home run. They would…they would be able to dominate the whole space they're in which was books. Instead, they call it Amazon. Well, that made the initial business entree, very difficult. I mean, Amazon's got nothing to do with books. And they're trying to say, this is where you go to buy books. Amazon is a huge river in South America, and it's, it's the most powerful river in the world. And it has tributaries everywhere. And, Jeff Bezos was…was a…you know, had a long-term vision that he wanted to sell everything. He didn't want to call it books.com. So, he called it Amazon.

Shireen Smith: I think even if he had wanted to just sell books, it would have been a very bad option from an intellectual property point of view, to go…

David Aaker: Well, that was his business. Then for a long time. His business was selling books, that was it.

Shireen Smith: Yeah. But Amazon, you see, he trademarked that straight away. Because it's, it's the only way to have customers who are looking for you to find only you. As soon as you use names like books. You know, you have so much competition because other people will have sites like books.co.uk or, or books, whatever that…you know…

David Aaker: I disagree. I disagree. If you wanted to make a name for yourself as an e-commerce bookseller. There's nothing better than books.com, nothing. And, and that would give you a big advantage. But my, from my general point, is that this appears in almost every starting business. Every starting business has a choice. They can use a name that will represent what they're then doing, or they can represent a name that's more general, and doesn't mean really anything. And that's…everybody has that choice books.com or Amazon. And you can make an argument for both ways.

Shireen Smith: I don't think, from an IP point of view, you can actually. So many of these businesses that use names like pets.com, you know, they raised loads of money, and they went bust, because you can't get all the business that's destined for you when you're using a generic name. You know, therefore, it's like having a colander instead of a container of the brand value. You know, this is why IP is so important and use…

David Aaker: I disagree with you. I think that if you want to start out a business, and you're selling pets over the internet, e-commerce, there is no better name than pets.com. Now, there's a lot of reasons pets.com failed. And it's not because of the name, I don't think…

Shireen Smith: Well, there's a really good book: The 22 Immutable Laws of the Internet, I think it is, by the people who wrote positioning.

David Aaker: I disagree with their fundamental premise. Their fundamental premise, you should never extend your brand. And that's just doesn't make any sense. I once was it…I know both the Ries, and they're wonderful people, and they made great contributions to branding. But I think they made a big mistake in their fundamental belief that you shouldn't extend the brand, that you keep the brand within the confines of where it started.

Shireen Smith: Yeah, I mean…

David Aaker: I want to ask them, “would you call…”, “if you were starting a theme park in the 50s, and you were Disney, would you call it Disneyland?” And they said no because Disneyland made cartoon movies. They wouldn't call it Disneyland. That's just crazy.

Shireen Smith: Yeah. But if I wanted to be known as an IP lawyer, for example, and I got IPLawyer.com, I would just get lost in a sea of sameness, because you can't uniquely own something like ip.com. That's why a name like Clubcard was such a problem, and books.com would have been the wrong strategy…is…I know from an IP point…

David Aaker: But if you own pets.com, nobody else can own pets.com, because you got, you own the URL.

Shireen Smith: Yeah, but it's not just about the URL, there's business out there, apart from you know, online, and hotels.com tried to register hotels.com as a trademark, they haven't managed to, because it's really important to have unique ability to use your identifiers. So, when you've got a name that can't uniquely belong to you, I mean, yes, maybe you have hotels.com, but you can't uniquely own hotels.com in terms of offline, other people could say, we are hotels.com, you know, and you can't stop them.

David Aaker: Well, if they were doing…they would be shooting themselves in the foot, if they did that, because of the people that they convinced, let's say, “Well, I'm really interested [inaudible]…, and I'm going to go to hotels.com”. And they will reach the competitors.

Shireen Smith: But the people don’t [inaudible] like that anymore for things, you know. Often people will be given a URL that they can just click to and go to, and it might change when you get to the site. It might no longer be called the domain name that you had put as the URL. So, you could still pretend that your hotels.com but when people click it will actually go to something else. And they probably will.

David Aaker: I don't think I can argue with you on the legal side. Because I don't know anything about the legal side. And you do. But I can say, from a branding naming point of view, there's…when you start a company, you do have to make a choice. If you want a name that helps you describe what you do, or if you want a name that allows you to have flexibility to go a whole bunch of different directions.

Shireen Smith: Yeah. Well, my advice to people pool is usually when they're trialing the concept to use a descriptive name because you don't then come up against the problem of trademarks, you can have books.com as your domain, and tradersbooks.com. But a time comes once you've proven the concept, when you need a brand name, and so you would just redirect your books.com to Amazon, say if they've started out as books.com, it's fine as a starting point. But it should never be the ultimate where you end up because you can't have a unique brand. So, you just change to have a brand at some point…

David Aaker: Changing a brand is very, very difficult.

Shireen Smith: Yeah, which is okay in the early days when it's just generic. When you use books.com, and you trial your concept and you see it works, then you can become Amazon.com. And you still own…

David Aaker: It’s very hard, it's very hard to change from books.com to Amazon, it's very hard.

Shireen Smith: It's very well known. Yes, so…

David Aaker: Well, that's the whole point, if you don't become very well known, you're probably not going to be successful.

Shireen Smith: Well, you can still see whether it will take off or not. I think there are signs, you know, within three, four months that…

David Aaker: Well, if takes off, then you're stuck with that name, you…

Shireen Smith: Well, you can still use it, you could still say…because people could still go to you as books.com. But they would arrive at a site that has a name and gradually get to know the true name of it. It's like calling a dog “dog”. If you get a dog…

David Aaker: I wouldn't, I wouldn't. I wouldn't advise anybody to go into something with the idea that when you get successful, you're gonna have to change your name.

Shireen Smith: Well, then I think they shouldn't start with a generic name. Because that really limits the potential of a business.

David Aaker: It's not a matter. Is it generic or not? I mean, pets.com is a…is a…, but you can have a name that suggests that pets or…

Shireen Smith: If it's Pets R Us, that, that's a trademarkable name, like Toys R Us, that's a really good name. It's distinct….

David Aaker: Not if you want to become Amazon.

Shireen Smith: Umm, no. If your long-term aspiration is to sell everything, then obviously it shouldn't be Books R Us, it would have to be something else.

David Aaker: It's not…strategically not obvious, because you, if you call it Amazon, you might never get started.

Shireen Smith: Yeah. But I think it’s…

David Aaker: So, it’s a trade-off.

Shireen Smith: Easier to be Amazon than Google or, you know, totally made-up name because at least it suggests something. You know, people are familiar with the name, whereas a totally made-up name is even more difficult. You've got to put more advertising spend into it.

David Aaker: I agree with that.

Shireen Smith: Good. Well, it's been really great talking to you, David.

David Aaker: Thanks. Well, I've been glad to be introduced into the, to the, you know, your world of trademarks, and, and so on. I asked to…I learned something.

Shireen Smith: Yeah, I've learned something as well. But you know, I'm really surprised that somebody yourself who knows so much about branding, would think that a descriptive name is a good choice. So, I've learned from that, too.

David Aaker: That's not what I said.

Shireen Smith: No?

David Aaker: No, I said, you have to make a trade-off.

Shireen Smith: Yeah. Yeah. As to whether you want it easier for…

David Aaker: Yeah. If you're going to, it's going to be better if you're going to stick to that area forever. And it's gonna be more difficult but better long term if you're, if you plan to expand your scope.

Shireen Smith: Yeah. Which means you really need to have an idea of your long-term strategy and you know, what you want to achieve for the business. Great, okay, both…umm…how can people get in touch with you if they want to contact.

David Aaker: You can reach my blog at davidaaker.com or Aaker on Branding actually is probably better. If you just Google Aaker on Branding, you'll go to the…my blogs, and you can see what I’ve written.

Shireen Smith: Great. Lovely to meet you. Thank you very much for appearing on the podcast.

David Aaker: Okay. My pleasure.

Shireen Smith: Bye.