Signalling, heuristics and accountability: British Brands Group's annual lecture

Last Monday, this Kat attended the 2011 Brands Lecture, organised by the British Brands Group. This year's lecture was given by Rory Sutherland, who is the Vice-Chairman of Ogilvy Group UK. The title and write-up of the lecture on The British Brands Group's website sounded intriguing: “Accountability is not enough….” - “is there a way to gain the engagement of the accountants, rather than just their amused tolerance?”

Like most IP lawyers, this Kat very much sees trade marks from a legal perspective, so that this talk gave her an interesting insight into the world of branding and marketing, even though she feels that her summary does not quite do it justice. Speaking from a marketing perspective Mr Sutherland’s talk was intriguing for this Kat as it explained the different facets of a brand, many of which lawyers rarely ever think about.

After a short and concise introduction by John Noble, Director of the British Brands Group, Mr Sutherland started his lecture by stating that there should be a change of vocabulary when it comes to marketing and brands, in particular when it comes to the question of “accountability”, which comes into play when branding and marketing experts [or indeed trade mark lawyers] interact with “accountants” and other management (i.e. people that think in numbers). Mr Sutherland then defined “accountable” as “what you try to be if you want to spend your life speaking to accountants”. He went on to say that the language of marketing and branding may sound impenetrable (“similar to astrology”) when overheard by people that do not share it. Something that perhaps just as much applies to the various legal concepts related to trade marks (“dilution”, “detriment”, “likelihood of confusion”, etc.). So what other language could potentially be used when talking about brands?

Signalling -- or branding?
The first concept he mentioned was a concept from biology - “signalling”: like a peacock showing his feathers, companies investing in branding and advertising show that they are investing “long term” in the reputation of their brand, which shows to consumers that they will stick around permanently (“you have to be wasteful to be meaningful”). I.e. if something goes wrong with the brand, then the company has something to lose, similarly to giving your fiancee an engagement ring ahead of marriage. Brands work pretty much in the same way, Mr Sutherland added rather convincingly, by stating that investing in your brand is a demonstration of commitment.

The next concept he mentioned related to the behavioural economics idea of “loss aversion”: “satisficing” (as in: satisfy/suffice) versus “maximising”. Mr Sutherland mentioned the slogan “No one ever got fired for buying IBM” as an example of this concept. While many companies try to market their products as the best possible purchase, Mr Sutherland argues that most of the time however consumers will be happy (“satisfice”), with “a pretty good product and at a reasonable price”.

Another intriguing concept Rory mentioned was “heuristics”: the rule of thumb approach (Gerd Girgenzer) when making a decision of any kind, such as “the brand I have heard of before, is most likely the better brand” or “if something appears to be rare, then consumers are more likely to pay more for it” (whether it is any good or not…). Mr Sutherland also explained price heuristics, i.e. the way consumers are influenced by the other choices available. If there are three options, we will most likely go for the one that is in the middle.

Another interesting concept was that of “framing”, how one brand (e.g. Coca-Cola) “needs” another (e.g. Pepsi) and the idea of "path dependency" and complimentary goods that are ideally sold together (cinema and popcorn). As to accountability, Mr Sutherland concluded that he had “issues” with how the term was used as it was “too apologetic and defensive”. Bearing in mind that the talk had lasted a good 45 minutes longer than scheduled and after some learned Q &A, John Bebbington closed the session just as concisely as John Noble had opened it.

At the end of this lecture, this Kat for once felt that she had a genuine idea of what the “advertising function” of a trade mark might mean to non-lawyers but still wondered whether she was now equipped to talk to accountants about trade marks.

If you are interested in hearing and watching this genuinely entertaining talk, do check the British Brands Group website: the event was filmed and will eventually be posted on the British Brands Group’s website.

Many thanks go to Adam Smith (World Trademark Review) for giving this Kat some extra note paper during the talk. To read Adam’s summary of the lecture, click here.
Signalling, heuristics and accountability: British Brands Group's annual lecture Signalling, heuristics and accountability: British Brands Group's annual lecture Reviewed by Birgit Clark on Monday, July 04, 2011 Rating: 5


  1. Signalling - yes, like a peacock but also like a cuckoo. The problem with signalling is asymmetic information - I'm thinking angler fish here.

    The difficulty with metaphor is to determine its limits aka lying. All those years ago when I did an MBA I was struck how in economics we were told that the market drives products/services to their long run marginal cost of production and in our marketing class we spent our time learning how to deploy techniques to prevent that happening including the development of "brands"

    So let me go back in further in time to the days of 5.25" floppy discs. (For the youth reading this they were one of the few means of archiving data in the days when a 20Mb - yes M - hard drive was fairly classy) One company sold these discs at a premium along with a lifetime guarantee. They never fail or we replace them. So, we were suckered. One failed (rest assured the data was more expensive) so I put the guarantee to the test. "Have you got your purchase receipt, no, well sorry we can't replace it"

    I prompty switched to a non-premium non-brand because they were about four times cheaper and I kept two copies.

    As with an engagement ring a brand is a signal but you only discover whether it's a promise when you've lost your bargaining position.

  2. Rory Sutherland's lecture was interesting but last year's Brands lecture "Brand New: Innovation in a challenging world." by Fiona Dawson of Mars Chocolate was superb on the theory of brands. A registered trade mark has a potentially infinite life but the brand with which it is associated requires much more than renewal fees to be kept alive. Fiona gave many examples of brand revitalisation including many variations on the "Mars Bar". Copies of the lecture can be obtained from British Brands. [A bonus was a World Cup Mars bar for everyone attending!]


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