The secrets of successful challenger brands were laid bare at the Cannes Lions Festival this week with a session hosted by PHD Worldwide and eatbigfish entitled “The Rule Breakers’ Rule Book: 5 Commandments of Challenger Thinking”.
Adam Morgan, founder of consultancy eatbigfish, and Malcolm Devoy, PHD’s chief strategy officer for EMEA, took to the stage at the Debussy Theatre to unveil the lessons of PHD’s new book ‘Overthrow II – 10 strategies from the new wave of challengers’.
Morgan first talked about challenger brands in his 1999 book ‘Eating the big fish’. He told the session that in the past few years, there has been an explosion of interest in challenger thinking as more start-ups have disrupted sectors such as consumer goods, entertainment, banking and insurance. Driven by the democratisation of technology, the rise of the challengers looks set to become a permanent feature of the economy in coming decades.
Overthrow II uses interviews with 18 entrepreneurs from challenger brands to uncover their secrets and examine the common ground between them.
Devoy outlined five key areas that the challengers have used to build their success.
1. They understand the difference between effectiveness and efficiency.
While effectiveness is the extent to which a brand achieves its goals, efficiency is the method used to achieve those outcomes and is often based on cost cutting. The challenger brands focus heavily on effectiveness; for instance, spending heavily on advertising through expensive media channels to tell their story. While this might seem inefficient in the short-term, challengers are focusing on creating strong connections with consumers rather than saving money.
Devoy gave the example of Copa90, a social media platform for football fans. “They talked about being an anti-algorithm brand. They talk about not wanting to dance in the traffic. They want to genuinely connect with and engage fans, they don’t want to take short cuts with efficiency measures like algorithms to create relevance,” said Devoy.
2. They value attitude over targeting.
“They all have a defined attitude and are willing to put it out there regardless of whether they feel it might polarise opinion or not, and they tend to reach everybody even with a divisive attitude,” Devoy said.
For instance, “punk” brewer and pub chain BrewDog has nurtured its rebellious attitude but does not focus on craft beer drinkers, it takes on the big beer brands. “They are drawing huge numbers of buyers to them despite being seemingly divisive,” said Devoy.
3. They promote creativity over relevance.
“These brands aren’t trying to be different things to different segments. They have the unapologetic confidence to be one thing to everybody and they tend to feel that pays off much better by creating brand fame, so everyone knows the same thing about them,” said Devoy. They use creative methods to tell their stories rather than trying to be relevant to different consumers.
For instance, Tony’s Chocolonely is a Dutch chocolate brand founded to campaign for the eradication of child labour exploitation in the chocolate supply chain. The brand uses creativity to make its point. The segments of its chocolate bars are unequal, to demonstrate the inequalities that exist in the global supply chain. A serious message is delivered in a playful way. “They are not in the persuasion industry, they are in the entertainment industry,” said Devoy.
4. Humanised technology.
This must be employed in a human way – “tech below the surface,” as PHD calls it. Personalisation through technology should be applied to a product, but not to the advertising of that product. Personalised advertising is viewed by the public as breaking the contract of privacy.
Insurance app Lemonade has revolutionised the way insurance is sold using Artificial Intelligence. The app uses friendly language, offering efficiency in a human way.
5. Distinctiveness is vital.
Share of voice is easy to measure, but distinctiveness is hard to gauge. “These brands we’ve studied have less budget than market leaders, but they have disproportionate effect. These brands are true iconoclasts – they reject cherished beliefs, they are rule breakers. They look at every convention in their category and tear it up in a way that makes them stand out,” said Devoy.
Morgan wrapped up the session by pointing to the growth of investment companies that focus on challenger brands such as The Craftory in London and Verlinvest in Belgium. These funds argue that challengers will be a key feature of the consumer economy for years to come.
“The challenger mindset is no longer the province of a small group of young challengers. It is becoming a prerequisite for anybody aiming to survive in a much more volatile, fast moving world,” said Morgan.
