Traditionally, when a company wanted to grow, it had a few choices open to it. It could grow with a growing market sector; it could grab market share from its competitors; it could spread itself geographically; and less convincingly, it could simply buy other companies in related or sometimes very different sectors. And there is another option that has always been open to the companies with the strongest brands - they can extend their brands to cover new types of business. It’s the last one that is the most interesting.
Traditionally, when a company wanted to grow, it had a few choices
open to it. It could grow with a growing market sector; it could grab
market share from its competitors; it could spread itself
geographically; and less convincingly, it could simply buy other
companies in related or sometimes very different sectors. And there is
another option that has always been open to the companies with the
strongest brands - they can extend their brands to cover new types of
business. It’s the last one that is the most interesting.
One of the classic examples is Virgin. It’s a music and book retailer,
an airline, a bank, a record company, a tour operator and a clothing
You can even drink Virgin Cola. This is not one company with many
brands, each identified with a particular category of product. It is one
overarching brand that embodies, across all these sectors and
categories, largely the same values and associations.
Virgin didn’t need the Internet to spread itself in this way. But have
you noticed how brands are becoming much more mobile in the Internet
Some of the most aggressive of these all-conquering brands were spawned
by the Internet. Think of Yahoo! or Amazon. Yahoo! began as a search
engine, and search is probably still the reason most people go to the
site the first time. But it’s also a visa card, a place to find or
advertise a job, it’s an online auctioneer, an investment aid, a news
service, somewhere to go shopping. Amazon started out as a bookshop. Now
it also retails music, toys and games and is an online auctioneer and an
Brands like Yahoo!, Amazon and Virgin are known as ’nomad’ brands.
That’s probably a bit of a misnomer. To the traditional, rather
slow-moving occupiers of the sectors these brands descend on, they’re
probably a bit more like the marauding Mongol hordes, raiding market
sectors and conquering territory as they go. The Internet enables nomad
brands to move faster and to occupy more unlikely market territory than
companies could in the past.
For nomad brands, there is no such thing as a core business. Their core
business is getting as much of what a consumer will spend as possible in
as many areas of their life as possible, over as long a period of time
as possible. The yardsticks here are not just market share, which
measures businesses in very narrow vertical sectors, but also things
like share of consumer or even ’share of life.’ These businesses want to
know that they touch more parts of the life of a consumer, and more
often than their competitors. It’s about measuring the lifetime value of
a consumer: how much they’re likely to spend from the time they make
their first contact with you until the day they die, rather than any
immediate purchase they’re likely to make. Looked at from that point of
view, some of the high figures that Internet companies pay just to
acquire customers don’t seem so stupid after all. This kind of brand
mobility is also one of the reasons why it is so attractive for
retailers and consumer companies to tie their brands to Internet access
provision. It is an increasingly important key to many aspects of
The point of this homily is that when it comes to nomad brands, there is
one thing they are interested in above all else: gaining the trust of
consumers. It is this trust that enables these brands to move into new
markets and to take customers away from the other players, seemingly
effortlessly. And loss of that trust is the point on which they are all
most vulnerable. And trust is about reputation.
There’s a selling point in this for PR professionals.
- Stovin Hayter is editor of Revolution. All e-mails should be sent to