Budgeting, Google, innovation, kaizen, Marketing innovation, Milward Brown, Product development, Worlds best brands

The Rule of 70-20-10

According to Milward Brown, the ranking of Most Valuable Brand in 2008 is as under.

1. Google…. 86,057 Mln$
2. GE (General Electric)… 71,379 Mln$
3. Microsoft… 70,887 Mln$
4. Coca Cola… 58,208 Mln$
5. China Mobile… 57,225 MLn$
6. IBM… 55,335 Mln$
7. Apple… 55,206 Mln$
8. McDonalds… 49,499 Mln$
9. Nokia… 43,975 Mln$
10. Marlboro… 37,324 Mln$

(Courtesy Milward Brown Optimor Brandz Top 100 Most Valuable Brands Ranking 2008)

It is indeed surprising to find Google at the top, a brand with almost 0$ advertising. One other striking things about the world’s most valuable brand is that very few of them are FMCGs, which dominate the traditional mass media and advertising, known as the most potent way to create brands. The inclusions in this list are Coca Cola, McDs & Marlboro. Differences aside, Google is still on top, with a growth of 30% over last year.

Google’s promise to adhere to the promise of “providing world’s information and make it universally accessible and useful” is uncompromising. Google’s growth was led by word of mouth and recommendation. In a research, 44 percent of internet users bonded with Google and 73% agreed that it returned the most relevant information. In comparison to Yahoo, which was recommended by 21% , Google was recommended by 43% to others. What is again more interesting is that the growth was contributed by almost 0$ advertising. Google’s young, innovative and playful image is it’s most cutting edge advantage over competition. So, you might be thinking that this is another article on Google story and accolades and blah blah.

Well, that was not the idea of this article, but to introduce the concept of Kaizen, the Japanese word which connotes continuous improvement in work place. In the fast paced world of bottomlines and quarter ends, such concepts are hard to find. However, Google incidentally has been always been able to push the limits by continuous and consistently improved products and innovative new products. In addition to providing relevant and more accurate search results, Google has introduced e-mail, Piccasa (Photo-sharing application), online documents and other tools. Google in incidentally world’s no.4 in the list of best places to work.

It comes to the point again that the company culture is the first step to create a long term brand equity and word of mouth.

So, you might say sounds interesting and is a technology or a R&D concept. And there is also the fear that only one in 10 new products are a success. It has always been a great challenge for Marketers, where should one focus their energies.

In addition to the customary answer, “It depends…” there is a science to go about it, which I first came across in the book- What Sticks by Briggs and Stuart, and is called 70-20-10 solution. In his talk to MSN, Eric Schmidt shared the classic Silicon valley mix 70-20-10 and therefore its implication for marketers…

70% of budget/resources should go into marketing strategy that are proven to work and you know will work, supporting existing the product/line of business

20% of their time in extending their existing product for “sustaining” innovation. That is, figure out whether there are opportunities to better the ROIs.

10% on “wild skunk-work” ideas for new products or disruptive innovation.

Well, it is this 20+10 percent that will give an edge with the competition. Doesn’t require huge energies, but consistent effort and persistent vision. Some said- Common sense is not that common. In our effort to streamline bottomline and target pressure, we tend to forget the obvious.

Business battle is not fought in the design labs but the market place and consumer’s mind. Those marketers who are able to learn and innovate, learn faster and deploy the intelligence more effectively have more chances to win. Devote, say one week in a month for disruptive innovation, to get under the skin of the consumer. Cajole him/her, tickle them; drive engagement. Or the other choice is to cross your finger and wait for the miracle to happen.

I think, the former is a better bet.