Of all the practical implements common to the Texas ranchman and cowboy, nothing equalled the branding iron in matters of ownership on the open range. The cattle brand was the key to ownership in a business where ownership was everything. Vincent C. D'Amico
What is it with Red Hat? Why, in the world's most open and choice-rich technology market, does Red Hat have Microsoft-grade market shares? If Linux distributions are bottled water, why does Red Hat move so much more digital H2O than Caldera, Debian, TurboLinux and the rest of them?
The answer, by acclaim, is that Red Hat has "branded" itself better than anybody else. Okay, it helped that Red Hat made installation easy with the Red Hat Package Manager (RPM), now used by pretty much everybody. And maybe it helped that Red Hat used Python as the scripting language for their system-administration tools. But the prevailing perception is that Red Hat's is a branding success.
That success is extremely enviable. In fact, we are witnessing a record tide of brand envy right now. The whole dot-com world is gaga over this ancient and brutal marketing notion, and Red Hat is offered as a huge case in point. Thanks to the success of "brands" like Red Hat, "branding" is a huge marketing fad, fueled by apparently limitless billions poured through start-ups and into the media from swelling vats of venture capital.
This flood of dot-com advertising dollars is driving up the price of traditional media, and driving out the traditional advertisers along with it. A billboard on Silicon Valley's Highway 101 now rents for upwards of $100,000 per month: more than double the price just one year ago. Gone are ugly ads for car dealers and office supply stores, replaced by artful ads for WhatEver.com, which is no doubt "branding" itself.
This begs the question, just what is "branding," anyway?
Search for the subject at About.com and youll find links to nearly three hundred pages, all but one of which is devoted to body art (branding & tattooing). The remaining page is a set of marketing links, among which you wont find a word or a link to a word about what branding is, where it came from, or why its so hot in the dot-com world.
The FAST search engine <http://www.alltheweb.com> finds 1,699,630 pages with the word brand, and 92,288 with the word branding. Oddly, few of those pages are about artful skin burns. Or maybe all of them are. Because both brand and branding come to marketing from the cattle business, by way of the first company to adopt the term brand, and the one that still understands it best: Procter & Gamble.
P&G's brand management system began to take shape in the late 1920s, says the company's own History page. In 1931, Neil McElroy, the Company's Promotion Department Manager, created a marketing organization based on competing brands managed by dedicated groups of people. The system provided more specialized marketing strategies for each brand and Procter & Gamble's brand management system was born."
This development coincided with the birth of commercial broadcasting, which P&G did much to fund and define. In 1923, P&G's Crisco was one of the first radio program sponsors. In 1933, P&G's Oxydol sponsored the radio serial "Ma Perkins." By sponsoring other shows with other detergents, P&G helped create the label "soap operas."
In 1948, McElroy took over as president of Procter & Gamble. By then P&G was was already what they still call themselves today: the world's top branding company. P&G now has over three hundred brands, dozens of which are #1 or #2 in their categories. Tide, Cheer, Vicks, Pringles, Crest, Pampers, Tampax, Ivory and Clearasil are all P&G brands. And what makes them "brands" is the fact that their identities have been burned into our brains.
But brand management isn't for cowboys. It's a military job. Companies like P&G are in constant battle for shelf space, often pitting the company's own brands against each other. Because the fundamental nature of that battle has not changed for generations, the principles of branding are long since proven. Always show the package in the first eight seconds. Always repeat the name at least five times. Always promise a benefit.
When an advertising campaign breaks the rules, the rules it breaks are the ones P&G still teaches along with the secrecy, the protectiveness, the paranoia, the company song (yes, like IBM, they have one), and all the other vereties from the canons of brand management.
While it's safe to say that most dot-com marketing folks don't come from this kind of mind set, it is also untrue. Marketing has always modeled itself on warfare. The verb "market" is a transitive verb. It acts on a direct object. Since markets tend to be competitive, and we conceive competition as a kind of warfare, it is no surpise that marketing is thick with military thinking. In Markeging Warfare, Al Ries and Jack Trout write, "The true nature of marketing today is not serving the customer; it is outwitting, out-fighting and out-flanking, out-fighting your competitors. In short, marketing is war where competition is the enemy and the customer is the ground to be won." No wonder so much marketing treats customers like dirt.
Most of marketing and branding rhetoric today is of a kinder, gentler sort. But it is also kind of vague. "Identity, personality, and reputation, while related, are not synonymous," one correspondent wrote to me. "Branding encompasses parts of all of them." Buzzwords are like that. They emcompass, but they don't define.
If you can't define what you mean, at least use a good metaphor. That's something Red Hat's Bob Young has always done very well. In his book Under the Radar, he writes, "Our goal had always been to become the Heinz ketchup of the Linux world low cost, high quality, reliable, and predictable."
Bob Frankel, whose Big Time Branding site <http://www.frankel-anderson.com/> ranks high on most searches for "branding," has this definition of the subject: "Branding is not about getting your prospect to choose you over your competition; it's about getting your prospect to see you as the only solution." Clearly, Red Hat does that. And they do it in a way that works in the open source world, where there are plenty of other equally appetizing varieties of ketchup.
Again, why? I think it has to do with trust. My old partner David Hodskins once defined brand as "the capitalized value of the trust that exists between a company and its customers." As I write this, the capitalized value of Red Hat is $14,632,710,582, give or take the few hundred million Red Hat gains or loses on any given day. That's a lot of trust.
It so happens that natives of the open source world put a very high value on trust. You earn that trust (as you do anywhere) by being as open and honest as possible. I believe this is manifest in the high market valuations of highly trusted Linux companies. Agreed: the stock market is a very different place than the market for open source code. But the stock market is also proving highly intuitive. It assigned high valuations to Netscape, Yahoo and other Internet stocks long before the rest of the business world realized that the Net really was going to goose up the whole economy. And now it is doing the same with Linux stocks.
What do they trust? It's more than just a few Linux "brands." It's the explosive potential of what can't be owned, but can be shared.
So maybe Red Hat succeeded because it was on the radar all along.