Digital Darwinsim and why brands die

Brian Solis is the author of The End of Business as Usual. He is also a principal analyst at Altimeter Group, a research based advisory firm in San Francisco where he studies the impact of new media on business and consumer behavior.

Think of your favorite brand, and the first thing to come to mind is likely a logo, such as the Coca-Cola scripting, a tag-line, such as Nike’s “Just do it,” or a jingle – remember the Oscar Mayer bologna song?

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These may be the aspects of a brand you remember, but they are no longer the most important aspects of branding today. Identity, persona, essence and promise, are the new kings and queens of the branding kingdom, thanks to technology and the deeper connections it creates between brands and consumers.

Markets, consumer behavior and how businesses connect with customers are all directly impacted by technology. The erosion of Blockbuster’s business model, clearly illustrates the impact technology can have on consumer behavior.

Consumers, in search of certainty, rely heavily on a brand’s symbolism and significance. We don’t have to look much further than Netflix – the company that gained the most from Blockbuster’s decline – for a recent example of what happens when executives misread the impact of technology and consumer demand and, in turn, make decisions that negatively imapct the business and the brand. But, any form of market research or customer engagement program that analyzed conversations in social networks would have revealed the state of consumer needs. Netflix now must focus on rebuilding its brand to earn and re-earn trust before it can take another aggressive move into the future.

Brands that fail to instill this level of confidence in consumers run the risk of falling victim to digital Darwinism. The brands that survive this era of economic disruption, will be the ones that are best able to evolve, because they recognize the need and opportunity to do so before their competitors.

Survival of the Fitting

Digital Darwinism is the evolution of consumer behavior when society and technology evolve faster than some companies’ ability to adapt.

The point of natural selection is that only some businesses will survive. “An analysis of Fortune 1000 corporations shows that between 1973 and 1983, 35 percent of companies in the top 20 were new,” note Edward Lawler and Christopher Worley in their book, “Built to Change.”

Their work showed that the number of new companies rose to 45 percent between 1983 and 1993. That number increased to 60 percent between 1993 and 2003. And, as they asked, “Any bets [as] to where it will be between 2003 and 2013?”

To further their point, a recent ad produced by Babson College cited a rather humbling statistic: “Over 40 percent of the companies that were at the top of the Fortune 500 in 2000 were no longer there in 2010.”

We’ve witnessed the demise of seemingly invincible brands in the U.S., such as Circuit City, Borders Books, Wherehouse, Tower Records, Pontiac, Saturn, and Palm among others. Meanwhile, grim predictions show that the pattern has no end in sight. In June, 24/7 Wall St. published its annual list of “Ten Brands That Will Disappear in 2012.” The publication predicts the demise of some of the world’s most recognizable brands, including Sony Pictures, American Apparel and Nokia.