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Learning lessons from dot coms' multimillion-pound branding spree

At the beginning of this year I wrote in this column about the impact that the dot com revolution was having on the workload of commercial architects in New York. Times there were tough, but also rewarding, with everyone working long hours converting buildings of all types for clients with no taste but plenty of money and a deadline six weeks away.

Just how much that hectic period really meant in terms of square-footage on the ground, before what is euphemistically known as the 'market correction' of June 2000 put an end to it, may never be known. However, what it cost in venture capital is no longer a secret. In the year to 'correction', the dot coms spent US$7 billion (£4.8 billion) on branding - not online, but through the socalled traditional media such as radio, television, newspapers, magazines and, yes, architecture and interior design. This sum, though modest by comparison with the US$166 billion (£114 billion) spent on all advertising in the US over the same period, represented nearly a quarter of all business-to-business advertising.

So what is to be learned from these facts and figures - other than the burned-fingers trick learned by the dot coms themselves in the fallout from June?

First and foremost, that the emphasis on online branding - including the advertising of new offices, warehousing and distribution centres - did not work nearly as fast as many of the most promising e-companies thought it would. Since then, analysis has shown that most of the dot com startups that did survive had one thing in common.

They consistently poured 40 per cent of their turnover into offline advertising because they knew that three-quarters of their customers came to them through offline sources.

Finding architectural relevance in this sort of market information is, of course, a hazardous business, but there are enough similarities between the dot coms themselves and the architecture firms that did their warehouse makeovers for them to attempt it. Not least because, through its lingua franca of drawings, architecture - like music, software, literature and art - really is a downloadable digital product, not just any old business with a digital component, like ticketing to the travel trade.

It is when we look at the '40 per cent of turnover' figure that we find that there is a considerable difference between 40 per cent of the turnover of a metropolitan, multimillionpound incorporated, multidisciplinary practice, and 40 per cent of the turnover of a sole practitioner. Somewhere between the two there is a grey area in which there are a lot of small- to medium-sized practices that should undoubtedly revise their ideas about what constitutes relevant advertising and be prepared to spend a lot more on it, but this is not the case with the two extremes. Where the sole practitioner needs what the Americans call 'zero-based marketing' (meaning no-cost promotion), big practices often have too much promotion for their money.

One need only consider the careers of those household names in the profession whose exquisite work not only dominates the glossy magazines, but whose errors also adorn the news and business pages of the daily papers, and whose private lives appear in the gossip columns too. Three strikes and you are in perhaps, but in architecture it is also a way of accumulating competitors, rather than raising barriers to hold them off.

True branding, as American advertising men like to say, is like making a three-legged stool: one leg is awareness; one leg is service; and the last leg is profit. Leading off with profit may be possible in architecture through the competition system, but creating awareness on its own is a wasted effort.

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