What’s in a name?

PEOPLE have been debating reputation since the beginning of history. The Bible says that a “good name is rather to be chosen than great riches, and loving favour rather than silver and gold.” Others have dismissed reputation as insubstantial—a “shadow” in Abraham Lincoln’s phrase, or an “uncertain flame” in James Lowell’s. Shakespeare provided material for both sides: Cassio described reputation as “the immortal part of myself”, while Iago dismissed it as “an idle and most false imposition: oft got without merit, and lost without deserving.”
Today’s management-theory industry has no time for such equivocation. For its acolytes, reputation—or at least the corporate kind—is a “strategic asset” that can be “leveraged” to gain “competitive advantage”, a “safety buffer” that can be called upon to protect you against “negative news”, and a stock of “organisational equity” that can be increased by “engaging with the stakeholder community”.
On April 17th Gibson Hall—a wonderful Victorian edifice near the Bank of England—echoed not with the sound of Shakespeare (which would have suited it), but management speak. The Reputation Institute, a consultancy, revealed the results of its latest “Reptrack” Corporate Reputation Survey. And various spokespersons hammered home the importance of managing reputation. Reputation is so important these days, they said, that we live in nothing less than a “reputation economy”.
The launch of the British corporate-reputation survey was only one of a number of similar launches around the world: the Reputation Institute has offices in 30 countries. And it is only one of many consultancies that plough this particular furrow. Plenty of other organisations offer firms “holistic” advice on improving their reputations, such as Perception Partners in the United States or specialised divisions within many big consultancies. And a rapidly growing number of niche consultancies, such as ReputationDefender, give people advice on managing their reputations online. For example, they offer tips on how to push positive items up the Google ranking and neutralise negative ones.
It is easy to see why so many bosses are such eager consumers of this kind of advice. The market value of companies is increasingly determined by things you cannot touch: their brands and their intellectual capital, for example, rather than their factories or fleets of trucks. The idea of a “reputation economy” makes intuitive sense: Facebook is worth more than General Motors. At the same time, reputation is getting ever harder to manage. NGOs can turn on a company in an instant and accuse it of racism or crimes against the environment. Customers can trash its products on Twitter. Corporate giants such as Toyota and BP have seen their reputations collapse in the blink of an eye.
How successful are reputation consultancies in rendering the intangible measurable and manageable? The Reputation Institute has produced some intriguing results. Americans and Britons are more impressed with “old-economy” firms than “new-economy” ones. The three most reputable companies in America are General Mills (which sells food), Kraft Foods and Johnson & Johnson (drugs and household goods). The top three in Britain are Rolls-Royce (jet engines), Dyson (vacuum cleaners) and Alliance Boots (drugs and prawn sandwiches). In Britain the overall reputation of the corporate sector has declined since last year. In 2011 it looked as if British firms were recovering from the reputational catastrophe of the financial crisis. But outrage over bosses’ bloated pay and phone-tapping by big media companies—particularly News Corporation—have reversed that trend.
Nevertheless, there are three objections to the reputation-management industry. The first is that it conflates many different things—from the quality of a company’s products to its relationship with NGOs—into a single notion of “reputation”. It also seems to be divided between public-relations specialists (who want to put the best possible spin on the news) and corporate-social-responsibility types (who want the company to improve the world and be thanked for it).
Reputation as a by-product
The second objection is that the industry depends on a naive view of the power of reputation: that companies with positive reputations will find it easier to attract customers and survive crises. It is not hard to think of counter-examples. Tobacco companies make vast profits despite their awful reputations. Everybody bashes Ryanair for its dismal service and the Daily Mail for its mean-spirited journalism. But both firms are highly successful.
The biggest problem with the reputation industry, however, is its central conceit: that the way to deal with potential threats to your reputation is to work harder at managing your reputation. The opposite is more likely: the best strategy may be to think less about managing your reputation and concentrate more on producing the best products and services you can. BP’s expensive “beyond petroleum” branding campaign did nothing to deflect the jeers after the oil spill in the Gulf of Mexico. Brit Insurance’s sponsorship of England’s cricket teams has won it brownie points in the short term, but may not really be the best way to build a resilient business. Many successful companies, such as Amazon, Costco, Southwest Airlines and Zappos, have been notable for their intense focus on their core businesses, not for their fancy marketing. If you do your job well, customers will say nice things about you and your products.
In his “Autobiography” John Stuart Mill argued that the best way to attain happiness is not to make happiness your “direct end”, but to fix your mind on something else. Happiness is the incidental by-product of pursuing some other worthy goal. The same can be said of reputation.
http://www.economist.com/node/21553033

The consumer decision journey

Consumers are moving outside the purchasing funnel—changing the way they research and buy your products. If your marketing hasn’t changed in response, it should.

If marketing has one goal, it’s to reach consumers at the moments that most influence their decisions. That’s why consumer electronics companies make sure not only that customers see their televisions in stores but also that those televisions display vivid high-definition pictures. It’s why Amazon.com, a decade ago, began offering targeted product recommendations to consumers already logged in and ready to buy. And it explains P&G’s decision, long ago, to produce radio and then TV programs to reach the audiences most likely to buy its products—hence, the term “soap opera.”
Marketing has always sought those moments, or touch points, when consumers are open to influence. For years, touch points have been understood through the metaphor of a “funnel”—consumers start with a number of potential brands in mind (the wide end of the funnel), marketing is then directed at them as they methodically reduce that number and move through the funnel, and at the end they emerge with the one brand they chose to purchase (Exhibit 1). But today, the funnel concept fails to capture all the touch points and key buying factors resulting from the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer. A more sophisticated approach is required to help marketers navigate this environment, which is less linear and more complicated than the funnel suggests. We call this approach the consumer decision journey. Our thinking is applicable to any geographic market that has different kinds of media, Internet access, and wide product choice, including big cities in emerging markets such as China and India.

We developed this approach by examining the purchase decisions of almost 20,000 consumers across five industries and three continents. Our research showed that the proliferation of media and products requires marketers to find new ways to get their brands included in the initial-consideration set that consumers develop as they begin their decision journey. We also found that because of the shift away from one-way communication—from marketers to consumers—toward a two-way conversation, marketers need a more systematic way to satisfy customer demands and manage word-of-mouth. In addition, the research identified two different types of customer loyalty, challenging companies to reinvigorate their loyalty programs and the way they manage the customer experience.
Finally, the research reinforced our belief in the importance not only of aligning all elements of marketing—strategy, spending, channel management, and message—with the journey that consumers undertake when they make purchasing decisions but also of integrating those elements across the organization. When marketers understand this journey and direct their spending and messaging to the moments of maximum influence, they stand a much greater chance of reaching consumers in the right place at the right time with the right message.

How consumers make decisions

Every day, people form impressions of brands from touch points such as advertisements, news reports, conversations with family and friends, and product experiences. Unless consumers are actively shopping, much of that exposure appears wasted. But what happens when something triggers the impulse to buy? Those accumulated impressions then become crucial because they shape the initial-consideration set: the small number of brands consumers regard at the outset as potential purchasing options.
The funnel analogy suggests that consumers systematically narrow the initial-consideration set as they weigh options, make decisions, and buy products. Then, the postsale phase becomes a trial period determining consumer loyalty to brands and the likelihood of buying their products again. Marketers have been taught to “push” marketing toward consumers at each stage of the funnel process to influence their behavior. But our qualitative and quantitative research in the automobile, skin care, insurance, consumer electronics, and mobile-telecom industries shows that something quite different now occurs.
Actually, the decision-making process is a more circular journey, with four primary phases representing potential battlegrounds where marketers can win or lose: initial consideration; active evaluation, or the process of researching potential purchases; closure, when consumers buy brands; and postpurchase, when consumers experience them (Exhibit 2). The funnel metaphor does help a good deal—for example, by providing a way to understand the strength of a brand compared with its competitors at different stages, highlighting the bottlenecks that stall adoption, and making it possible to focus on different aspects of the marketing challenge. Nonetheless, we found that in three areas profound changes in the way consumers make buying decisions called for a new approach.

Brand consideration

Imagine that a consumer has decided to buy a car. As with most kinds of products, the consumer will immediately be able to name an initial-consideration set of brands to purchase. In our qualitative research, consumers told us that the fragmenting of media and the proliferation of products have actually made them reduce the number of brands they consider at the outset. Faced with a plethora of choices and communications, consumers tend to fall back on the limited set of brands that have made it through the wilderness of messages. Brand awareness matters: brands in the initial-consideration set can be up to three times more likely to be purchased eventually than brands that aren’t in it.
Not all is lost for brands excluded from this first stage, however. Contrary to the funnel metaphor, the number of brands under consideration during the active-evaluation phase may now actually expand rather than narrow as consumers seek information and shop a category. Brands may “interrupt” the decision-making process by entering into consideration and even force the exit of rivals. The number of brands added in later stages differs by industry: our research showed that people actively evaluating personal computers added an average of 1 brand to their initial-consideration set of 1.7, while automobile shoppers added 2.2 to their initial set of 3.8 (Exhibit 3). This change in behavior creates opportunities for marketers by adding touch points when brands can make an impact. Brands already under consideration can no longer take that status for granted.

Empowered consumers

The second profound change is that outreach of consumers to marketers has become dramatically more important than marketers’ outreach to consumers. Marketing used to be driven by companies; “pushed” on consumers through traditional advertising, direct marketing, sponsorships, and other channels. At each point in the funnel, as consumers whittled down their brand options, marketers would attempt to sway their decisions. This imprecise approach often failed to reach the right consumers at the right time.
In today’s decision journey, consumer-driven marketing is increasingly important as customers seize control of the process and actively “pull” information helpful to them. Our research found that two-thirds of the touch points during the active-evaluation phase involve consumer-driven marketing activities, such as Internet reviews and word-of-mouth recommendations from friends and family, as well as in-store interactions and recollections of past experiences. A third of the touch points involve company-driven marketing (Exhibit 4). Traditional marketing remains important, but the change in the way consumers make decisions means that marketers must move aggressively beyond purely push-style communication and learn to influence consumer-driven touch points, such as word-of-mouth and Internet information sites.

The experience of US automobile manufacturers shows why marketers must master these new touch points. Companies like Chrysler and GM have long focused on using strong sales incentives and in-dealer programs to win during the active-evaluation and moment-of-purchase phases. These companies have been fighting the wrong battle: the real challenges for them are the initial-consideration and postpurchase phases, which Asian brands such as Toyota Motor and Honda dominate with their brand strength and product quality. Positive experiences with Asian vehicles have made purchasers loyal to them, and that in turn generates positive word-of-mouth that increases the likelihood of their making it into the initial-consideration set. Not even constant sales incentives by US manufacturers can overcome this virtuous cycle.

Two types of loyalty

When consumers reach a decision at the moment of purchase, the marketer’s work has just begun: the postpurchase experience shapes their opinion for every subsequent decision in the category, so the journey is an ongoing cycle. More than 60 percent of consumers of facial skin care products, for example, go online to conduct further research after the purchase—a touch point unimaginable when the funnel was conceived.
Although the need to provide an after-sales experience that inspires loyalty and therefore repeat purchases isn’t new, not all loyalty is equal in today’s increasingly competitive, complex world. Of consumers who profess loyalty to a brand, some are active loyalists, who not only stick with it but also recommend it. Others are passive loyalists who, whether from laziness or confusion caused by the dizzying array of choices, stay with a brand without being committed to it. Despite their claims of allegiance, passive consumers are open to messages from competitors who give them a reason to switch.
Take the automotive-insurance industry, in which most companies have a large base of seemingly loyal customers who renew every year. Our research found as much as a sixfold difference in the ratio of active to passive loyalists among major brands, so companies have opportunities to interrupt the loyalty loop. The US insurers GEICO and Progressive are doing just that, snaring the passively loyal customers of other companies by making comparison shopping and switching easy. They are giving consumers reasons to leave, not excuses to stay.
All marketers should make expanding the base of active loyalists a priority, and to do so they must focus their spending on the new touch points. That will require entirely new marketing efforts, not just investments in Internet sites and efforts to drive word-of-mouth or a renewed commitment to customer satisfaction.

Aligning marketing with the consumer decision journey

Developing a deep knowledge of how consumers make decisions is the first step. For most marketers, the difficult part is focusing strategies and spending on the most influential touch points. In some cases, the marketing effort’s direction must change, perhaps from focusing brand advertising on the initial-consideration phase to developing Internet properties that help consumers gain a better understanding of the brand when they actively evaluate it. Other marketers may need to retool their loyalty programs by focusing on active rather than passive loyalists or to spend money on in-store activities or word-of-mouth programs. The increasing complexity of the consumer decision journey will force virtually all companies to adopt new ways of measuring consumer attitudes, brand performance, and the effectiveness of marketing expenditures across the whole process.
Without such a realignment of spending, marketers face two risks. First, they could waste money: at a time when revenue growth is critical and funding tight, advertising and other investments will be less effective because consumers aren’t getting the right information at the right time. Second, marketers could seem out of touch—for instance, by trying to push products on customers rather than providing them with the information, support, and experience they want to reach decisions themselves.
Four kinds of activities can help marketers address the new realities of the consumer decision journey.

Prioritize objectives and spending

In the past, most marketers consciously chose to focus on either end of the marketing funnel—building awareness or generating loyalty among current customers. Our research reveals a need to be much more specific about the touch points used to influence consumers as they move through initial consideration to active evaluation to closure. By looking just at the traditional marketing funnel’s front or back end, companies could miss exciting opportunities not only to focus investments on the most important points of the decision journey but also to target the right customers.
In the skin care industry, for example, we found that some brands are much stronger in the initial-consideration phase than in active evaluation or closure. For them, our research suggests a need to shift focus from overall brand positioning—already powerful enough to ensure that they get considered—to efforts that make consumers act or to investments in packaging and in-store activities targeted at the moment of purchase.

Tailor messaging

For some companies, new messaging is required to win in whatever part of the consumer journey offers the greatest revenue opportunity. A general message cutting across all stages may have to be replaced by one addressing weaknesses at a specific point, such as initial consideration or active evaluation.
Take the automotive industry. A number of brands in it could grow if consumers took them into consideration. Hyundai, the South Korean car manufacturer, tackled precisely this problem by adopting a marketing campaign built around protecting consumers financially by allowing them to return their vehicles if they lose their jobs. This provocative message, tied to something very real for Americans, became a major factor in helping Hyundai break into the initial-consideration set of many new consumers. In a poor automotive market, the company’s market share is growing.

Invest in consumer-driven marketing

To look beyond funnel-inspired push marketing, companies must invest in vehicles that let marketers interact with consumers as they learn about brands. The epicenter of consumer-driven marketing is the Internet, crucial during the active-evaluation phase as consumers seek information, reviews, and recommendations. Strong performance at this point in the decision journey requires a mind-set shift from buying media to developing properties that attract consumers: digital assets such as Web sites about products, programs to foster word-of-mouth, and systems that customize advertising by viewing the context and the consumer. Many organizations face the difficult and, at times, risky venture of shifting money to fundamentally new properties, much as P&G invested to gain radio exposure in the 1930s and television exposure in the 1950s.
Broadband connectivity, for example, lets marketers provide rich applications to consumers learning about products. Simple, dynamic tools that help consumers decide which products make sense for them are now essential elements of an online arsenal. American Express’s card finder and Ford’s car configurator, for example, rapidly and visually sort options with each click, making life easier for consumers at every stage of the decision journey. Marketers can influence online word-of-mouth by using tools that spot online conversations about brands, analyze what’s being said, and allow marketers to post their own comments.
Finally, content-management systems and online targeting engines let marketers create hundreds of variations on an advertisement, taking into account the context where it appears, the past behavior of viewers, and a real-time inventory of what an organization needs to promote. For instance, many airlines manage and relentlessly optimize thousands of combinations of offers, prices, creative content, and formats to ensure that potential travelers see the most relevant opportunities. Digital marketing has long promised this kind of targeting. Now we finally have the tools to make it more accurate and to manage it cost effectively.

Win the in-store battle

Our research found that one consequence of the new world of marketing complexity is that more consumers hold off their final purchase decision until they’re in a store. Merchandising and packaging have therefore become very important selling factors, a point that’s not widely understood. Consumers want to look at a product in action and are highly influenced by the visual dimension: up to 40 percent of them change their minds because of something they see, learn, or do at this point—say, packaging, placement, or interactions with salespeople.
In skin care, for example, some brands that are fairly unlikely to be in a consumer’s initial-consideration set nonetheless win at the point of purchase with attractive packages and on-shelf messaging. Such elements have now become essential selling tools because consumers of these products are still in play when they enter a store. That’s also true in some consumer electronics segments, which explains those impressive rows of high-definition TVs in stores.
Sometimes it takes a combination of approaches—great packaging, a favorable shelf position, forceful fixtures, informative signage—to attract consumers who enter a store with a strong attachment to their initial-consideration set. Our research shows that in-store touch points provide a significant opportunity for other brands.

Integrating all customer-facing activities

In many companies, different parts of the organization undertake specific customer-facing activities—including informational Web sites, PR, and loyalty programs. Funding is opaque. A number of executives are responsible for each element, and they don’t coordinate their work or even communicate. These activities must be integrated and given appropriate leadership.
The necessary changes are profound. A comprehensive view of all customer-facing activities is as important for business unit heads as for CEOs and chief marketing officers. But the full scope of the consumer decision journey goes beyond the traditional role of CMOs, who in many companies focus on brand building, advertisements, and perhaps market research. These responsibilities aren’t going away. What’s now required of CMOs is a broader role that realigns marketing with the current realities of consumer decision making, intensifies efforts to shape the public profiles of companies, and builds new marketing capabilities.
Consider the range of skills needed to manage the customer experience in the automotive-insurance industry, in which some companies have many passive loyalists who can be pried away by rivals. Increasing the percentage of active loyalists requires not only integrating customer-facing activities into the marketing organization but also more subtle forms of organizational cooperation. These include identifying active loyalists through customer research, as well as understanding what drives that loyalty and how to harness it with word-of-mouth programs. Companies need an integrated, organization-wide “voice of the customer,” with skills from advertising to public relations, product development, market research, and data management. It’s hard but necessary to unify these activities, and the CMO is the natural candidate to do so.
Marketers have long been aware of profound changes in the way consumers research and buy products. Yet a failure to change the focus of marketing to match that evolution has undermined the core goal of reaching customers at the moments that most influence their purchases. The shift in consumer decision making means that marketers need to adjust their spending and to view the change not as a loss of power over consumers but as an opportunity to be in the right place at the right time, giving them the information and support they need to make the right decisions.

https://www.mckinseyquarterly.com/Marketing/Strategy/The_consumer_decision_journey_2373

 

What's killing Citigroup -- slowly

"We have turned the corner," Citigroup (C, news, msgs) Chief Financial Officer John Gerspach said as he announced Citigroup's first-quarter 2010 financial results April 19.

But I have to ask: What corner is he looking at?

Can't be the corner of 40th and Broadway near my office in Manhattan. There, a dingy Citigroup branch with beat-up ATMs is barely hanging on in competition with a refurbished JPMorgan Chase (JPM, news, msgs) branch down the block (with ATMs that deposit checks without a deposit slip) and a new Capital One (COF, news, msgs) office up the block.

Can't be the corner of 104th and Broadway, near my house, where a new Sovereign Bank branch is siphoning off accounts from local small businesses that used to be Citigroup customers.

Can't be the corner of my desk, where I've got my JPMorgan Chase mortgage bill stacked near my Fidelity credit card bills. I get regular annoying phone calls from Chase asking me whether I want to refinance my mortgage. I can't remember ever getting a mortgage marketing call or letter from Citigroup. And my wife and I once had a Citigroup mortgage, and we have an account with the bank.

And this is what's happening in the bank's home market and what was once its core business of consumer and commercial banking. If Citigroup has trouble on this turf, you know it's in trouble everywhere.

The truth is that Citigroup has indeed survived. As hard and desperate as that struggle was, it may have been the easy part.

What's left and what's leaving

It's hard to see a future in which Citigroup is anything more than an also-ran. Just name me one line of business where, within five years, it's plausible that Citigroup will be one of the best 10 banks in the world.

While the global financial system is better off today because Citigroup didn't fail in 2008, the world of 2010 and 2011 doesn't need Citigroup for much of anything. With apologies to Irving Berlin, anything Citigroup can do, some other bank can do better.

On April 19, Citigroup reported its first operating profit -- 14 cents a share -- since the third quarter of 2007. The bank charged off only $8.4 billion in loans in the quarter -- a huge number but still 16% lower than in the fourth quarter of 2009. Its Tier 1 capital common ratio, a measure of the strength of a bank's most conservative kind of capital, stood at a huge 9.1%. It was just 3% at the depths of the financial crisis.

I don't think there's any doubt that the bank will survive. And that's a huge achievement. This is a bank that required $25 billion in capital from U.S. taxpayers in October 2008 and an additional $20 billion in December of that same year.

But look at the bank still left standing.

Citigroup's strategy has been to split itself in two.

All the really bad businesses -- and some simply outside Citigroup's core business -- have been sold already or lumped into a group called Citigroup Holdings for eventual disposal. The list of businesses that Citigroup has sold includes the Smith Barney brokerage unit, rolled into a joint venture with Morgan Stanley (MS, news, msgs) but headed for eventual sale; Nikko Securities, the third-largest brokerage company in Japan; and insurance company Primerica, partly spun off in an initial public offering in March.

But Citigroup Holdings still contains about $500 billion in assets. That's about 25% of Citigroup's total assets, and it includes subsidiaries the company wants to unload, including CitiMortgage, consumer-lending business CitiFinancial, and various toxic mortgage, credit card and loan assets.

The Citi of tomorrow

But let's not focus on the stuff Citi is jettisoning. Instead let's look at the business it wants to keep. There will be a scaled-back investment bank. A private banking business. Branded credit cards. And the big core business of global consumer and commercial banking.

I can name the current leaders in most of these businesses. And it's hard to see how Citigroup will effectively compete with most of them. In investment banking, for example, I don't see Citigroup even in the same league with Goldman Sachs (GS, news, msgs), JPMorgan Chase or Bank of America (BAC, news, msgs), especially now that B of A owns Merrill Lynch. In credit cards, I expect Citigroup to lose share against the other big banks, including B of A -- which bought credit card giant MBNA in 2005 -- JPMorgan Chase and Capital One Financial. And it's hard to see how Citigroup's travails have burnished its brand in private banking.

No, when it comes down to the future of Citigroup, it pretty much hinges on global consumer and commercial banking.

That was once Citigroup's glory. And I'm sure that if I were in CEO Vikram Pandit's shoes I'd build my strategy for Citigroup's future around these areas. The business is certainly still formidable, with about 4,000 branches in 39 countries. In 2009, 68% of revenue came from outside North America, so you'd have to say that Citigroup has a good chance at grabbing a big hunk of the banking business in the world's developing economies.

That was once the plan for the bank's future. Back in the days when John Reed, who pioneered consumer banking innovations such as the ATM, was CEO of what was then Citibank. Before a merger with Sandy Weill's Travelers Group ushered in the era of the financial supermarket -- and ushered Reed out the door in 2000.

But the world has changed. And new and stronger competitors have emerged in consumer and commercial banking while Citigroup took its strategic detour into the financial supermarket.

So, for example, while Citigroup's global network of 4,000 branches in 39 countries seems formidable, competitor HSBC (HBC, news, msgs) now has 8,000 branches in 88 countries, and hard-charging Banco Santander (STD, news, msgs) has 13,600 branches, including those of Sovereign Bank. According to the Brand Finance Banking 500 study of the world's top bank brands, released in February, HSBC is, for the third year running, the top bank brand in the world. Bank of America is No.2, Banco Santander No. 3, Wells Fargo (WFC, news, msgs) No. 4 and Citibank No. 5.

I think that rating is deceptively high. Trends are running strongly against all the developed-market banks, and the next few years are likely to see top-20 developed-economy banks such as Société Générale (SCGLY, news, msgs), Credit Suisse (CS, news, msgs) or Citigroup giving way to rising developing-economy banks like Brazil's Banco Bradesco (BBD, news, msgs), Industrial and Commercial Bank of China (IDCBY, news, msgs) or Bank of China (BACHY, news, msgs). The survey notes that Industrial and Commercial Bank of China is already the world's largest by bank deposits.

U.S. and European banks face another stiff challenge over the next decade due to regulatory changes that are going to limit the amount of capital that banks can raise or borrow in the financial markets -- the preferred source of funds for developed-world banks before the financial crisis -- and raise the importance of gathering deposits from customers as a way to raise funds. That will penalize banks that have neglected their consumer networks and reward those that have built deposit-gathering machines such as Banco Santander and HSBC. (For more on the regulatory changes facing developed-economy banks, see my blog post of April 23.)

That, of course, brings me full circle to the Citigroup branches in my work and home neighborhoods in Manhattan. These are the kinds of branches that a company pinning its future on consumer and commercial banking runs. They look like the branches of a bank that's going to give up market share point by point over the next decade.

If I'm wrong, you'll be able to see it physically in Citigroup's branches in the not-so-distant future.

There's quite possibly a branch near you. Take a walk or drive over. Does that branch look like the future to you?

Citigroup isn't the only company to have come out of the Great Recession with major damage to its brand. There is, in fact, a lot of that going around -- and not all the damage is occurring for the same reason. In Thursday's column, I'm going to take a look at what happens when a brand takes a hit. My examples will include Toyota Motor (TM, news, msgs), Nokia (NOK, news, msgs) and Google (GOOG, news, msgs).

http://articles.moneycentral.msn.com/Investing/JubaksJournal/what-is-killing-citigroup-slowly.aspx?page=3

How Philanthropy Builds A Brand

David Ogilvy founded the agency that bears his name in 1948. Today it is a global leader in advertising, marketing and public relations. From 1996 through 2008 Shelly Lazarus was chief executive officer of Ogilvy & Mather Worldwide, and since 1997 she has been chairman. A protégé of David Ogilvy, she shared in his belief that the purpose of advertising was to build great brands. Under her leadership that has remained the centerpiece of the company's philosophy, extending across regions and marketing disciplines and attracting some of the world's largest and most respected businesses, including American Express, BP, Coca-Cola, IBM, Motorola and Unilever, among many others.

Lazarus sits on the boards of corporate and philanthropic organizations ranging from General Electric ( GE - news - people ) to the Committee Encouraging Corporate Philanthropy. I talked recently with her about building brands and the critical role in it of corporate philanthropy.

Forbes: Can you tell me about what you learned directly from David Ogilvy?

Shelly Lazarus: David had a point of view about almost everything. And 60-plus years into our corporate life, the principles that he articulated are still more present than ever among us. He would say, "We abhor toadies." He was English, but all I have to do is say that to someone and you know exactly what the ethic is within this company.

He also said, "It isn't creative if it doesn't sell," and, "We sell or else." Advertising is not just nice to do; it has to drive the client's business forward. And to this day total accountability is core to our business. The mission at Ogilvy & Mather is to build brands for our clients, and that hasn't changed that much since David's time, which I think is why we still have a strong brand.

What advice do you have about building brands?

First, you have to determine what you want your brand to stand for. I have been in more meeting rooms with senior clients sitting around the table and you ask them what is their brand, what does it stand for, and there will be six people sitting around the table with six different answers.

Understand that brands are built on everything. The great advertising man Jeremy Bullmore said, "People build brands the way birds build nests, from scraps and straws they chance upon." And a brand must be translated into everything a company does. The most sophisticated companies, that are sophisticated about brands, audit and pay attention to every point of contact between the brand and the people who use it. We call that 360-degree branding. Once you decide what your brand stands for, then you have to figure out whether you're communicating the brand at every place it comes into contact with its public, down to philanthropy, down to charity and to what you support in the community.

What is the role of philanthropy in building a brand?

Philanthropy is fascinating. It's a lot deeper than what we traditionally called philanthropy, which was very often just writing checks to cultural institutions. All companies purport to be market-driven. They are driven by the forces of the marketplace and what customers say. Well, the customers have spoken and have said that they care whether a company is a good citizen. A company's philanthropy tells you what it is at its core. So companies have to think seriously about how to use their marketing dollars to do things out in the world that make a difference to the people who are part of their brands.

Can you give me an example of philanthropy used in brand integration.

Unilever, on behalf of the Dove brand, took its philanthropy dollars and put them to a single end--an initiative, a drive, to build self-esteem among young girls in the 10- to 14-year-old range. We ran a commercial on the Super Bowl that was not about Dove as a shampoo or a soap but was all about the effort to raise young girls' self-esteem. People responded remarkably. And since we live in the 21st century now, the way they responded was by going to the Dove Web site and starting conversations about what is real beauty, and don't we have to help our daughters, and isn't it remarkable that Dove is taking on this effort--all in tandem, of course, with the Dove Campaign for Real Beauty.

What is the role of social media in branding?

I work with many CEOs who get so frustrated because they read what people are saying on blogs about them, things that they hate or feel are untrue. I keep saying to them, "Don't get frustrated. Start conversing with these people, because they're going to continue to talk. The only question is whether or not you want to join in the conversation, and if I were you, I'd join in."

What are you most passionate about as a leader?

Ideas. There is nothing more exciting to me than when I get a call on a Monday morning from a creative director who says, "I had an idea over the weekend. Are you around? Can I come up and tell you this idea?"

I always say to clients, before they spend a lot of money on their research, if you go to a focus group with an idea and 10 people start to rip their clothes off, you probably don't have to go to 10,000 more to know that it's a good idea. There are certain ideas that people just get really excited about.

From the practical standpoint, though, ideas are fragile. You have to defend them, believe in them and drive them with all the emotion and intellect you have, because otherwise they're not going to live. It's really easy to kill an idea, especially in the early stages. So someone has to be its defender. Someone has to stand in front of a group of people and say, this idea is fantastic, we have to do it.

http://www.forbes.com/2010/03/01/shelly-lazarus-ogilvy-leadership-managing-interview_2.html