Watch CBSN Live

The Name Game: Rebranding Is Expensive and Pointless, Which Is Why Ad Agencies Love It

Ogilvy is to rebrand and rename a Kenyan cellphone company, which is changing its name for the fourth time since 2004, in an example of exactly what not to do if you want to build a brand's equity. The history of Zain Kenya is almost comical: It started as Kencell, which spent $30 million on a rebranding to become Celtel in 2004. Then in 2008 Celtel spent $40 million to become Zain Kenya. Now Zain is owned by Indian Telco Bharti Airtel, which wants the company renamed after it. (It's doing the same thing to Zain Ghana, and as Zain has a presence in 15 African countries I'm guessing that the rebranding will eventually take place in all of them.)

Needless to say, this will be expensive. In addition to new advertising from Ogilvy Kenya, The Brand Union (brand migration), Millward Brown (market research), Hill & Knowlton and Ogilvy PR (both PR) have attached themselves to the client's wallet roster. Will it work? Who cares. Rebrandings are like a full employment act for marketing services companies.

Think about Verizon (VZ). Do you have warmer feelings for the company because it is no longer called NYNEX or Bell Atlantic, its two previous monikers?

By definition, you cannot build brand equity if you keep renaming your brand. Brands can be turned around without walking away from their name recognition. Apple was an also-ran in the computer business in the 1990s. When Steve Jobs returned as CEO in 1997, should he have renamed it? Of course not. Yet often that is what clients and their agencies insist on doing.

Agencies themselves are barely conscious that this is the equivalent of a scam, given how often they put themselves through pointless rebrandings. There was a time when JWT was J. Walter Thompson; when DraftFCB was plain old Draft Direct (or even Kobs & Draft); when TBWAChiatDay was the more easily punctuated Chiat/Day; and GSD&M Idea City was the perfectly serviceable GSD&M.

Most egregiously, Ogilvy & Mather -- arguably the most venerable advertising brand still in existence -- appears to be in the throes of rechristening itself "Ogilvy." An odd move, given that the double-barrelled version was good enough for founder David Ogilvy while he was still alive.

So, good luck Bharti-Airtel-Zain-Celtel-Kencell-whatever. You'll need it. All five of your agencies are owned by WPP (WPPGY), and I'm sure CEO Martin Sorrell will enjoy the incremental revenues you're going to be giving them.

And finally: Enjoy this history of AT&T's many incarnations from Stephen Colbert, sent in by a reader:


Image by Flickr user Natalie Maynor, CC.
View CBS News In