Jim Cramer made an interesting point on CNBC this morning which made me think about branding towards investors.
He was speaking about Apple and Google. Apple began selling iPhones in China in partnership with China Mobile today, opening up its distribution to China Mobile’s 870 million subscribers. Jim says that Wall Street is “lukewarm” about the deal.
Yet, Google announces the possibility of an innovation in 5 years (a smart contact lens for diabetics – eye contact lenses that can measure your glucose levels) and all talk is about how innovative Google is. According to Jim, Apple can do nothing right and is under constant scrutiny, while Google constantly is a star.
Now, Google has performed financially well, proving to be a great investment for many. But it did make me think about branding in a financial space vs consumer branding.
Apple is the darling of marketing case studies from a consumer perspective. Yet, as an investment, Jim implies that Apple’s brand is not where it could be.
Where does a strong investment brand come from?
From my un-expert perspective, I see two main avenues for attracting investment:
1) Trust: Established stocks which provide a consistent return and little risk are a strong brand for investors to buy into. Ex. P&G
2) Innovation: Or hype. Companies with game changing products (often startups) are the source of many stock market bubbles, but they do make many investors rich if they buy into the right stock early Ex. Snapchat, Netflix
Google, amazingly, has both. Since its startup days, Google has grown into a massive corporation that is embedded into everyday life, giving it little risk of losing your money. Yet, it has kept its innovation edge. Google packaged the new eye contacts under its “Google X” department, known for creating seemingly impossible products. I think Google X is more than a consumer branding strategy. Its an investment branding strategy, that tells investors that Google, while now huge, is still a way for you to hop on a rocket ship.
Apple, once the most valuable company in the world, has lost some of its trust with the loss of Steve Jobs. And while its entry to China Mobile is worth potentially billions of dollars, it is not the kind of tech innovation that brands Apple as a game changer.
Of course, business models matter too.