Brand wars or collabs? This drives the most ROI

In the noisy, competitive, oversaturated marketing landscape, are companies better off waging war with the competition? Or is a better strategy to “go high” and develop friendly partnerships with non-competitive companies and head toward a co-branded Shangri La?

In a world where attention is at a premium, companies might be considering one of these potentially high-profile approaches in an effort to change consumer habits, inform purchasing decisions, and ultimately gain recognition, favorability and market share. But which one actually works? Below we break down the data and explore whether brand wars or civil peace will reap better rewards.

This means war

The world of marketing and advertising is fiercely competitive, for emerging and well-established brands alike. And in many cases, “competitive” is a nice way to describe how some brands go after their rivals. But the truth is, comparative advertising strategies can be successful in winning over consumers. Whether brands want to playfully poke fun at their competition (“I’m a Mac, I’m a PC”) or are busting out the claws (“Genesis does what Nintendon’t“), brand wars have become a common phenomenon in the modern marketing landscape.

Coke vs. Pepsi

The most legendary example of all-out brand wars is undoubtedly between Coca-Cola and Pepsi-Cola. The epic throw-down known as the “Cola Wars” has raged since the early 1900’s, when the two companies began aggressively vying for market share. Slogans like “Americans’ Preferred Taste” and “Taste That Beats the Others Cold” made clear that there were no holds barred when it came to taking jabs at the competition. For decades, Coke enjoyed a tight grip on market share as the cool, classic, OG cola with a loyal fanbase and a killer distribution system. Pepsi trailed as the scrappy NKOTB with an edge and something to prove, but the brand struggled getting through to Coke’s loyal legion.

Enter one of the most brilliant marketing coups of all time: the Pepsi Challenge. In 1974, activations at malls across America invited folks to participate in what was simply a blind taste-test of Coke vs. Pepsi. The results were tremendous. To the underdog’s delight, most consumers, in fact, preferred the taste of Pepsi. Wasting no time to broadcast the news, Pepsi evangelized their new-found insights, designing campaigns that “proved” theirs was the superior product. Pepsi watched their market share climb while Coke’s flattened. And while the war has raged on to modern day, there is no doubt that in this case, the battle was won. Pepsi clearly benefited from taking Coke to the mat.

Avis vs. Hertz

If there is anything that history has shown us, it’s that brands of all categories and sizes have shown a willingness to take up marketing arms. In the 1960s, car rental giant Hertz had held a stronghold on its industry for years. Their closest competitor at the time was Avis, who, even as their biggest rival, was trailing far behind. Hertz had a lead that seemed insurmountable.

In search of a new marketing campaign, Robert C. Townsend, Avis’ President, sat with the company’s marketing agency to best determine the brand’s differentiators and elevate their brand equity. When asked typical questions like, “Do you have cheaper rates, better cars, more locations?”, Townsend answered no. But, after some thought, he famously said, “but we do try harder.”

From that meeting came the brand’s infamous tagline: “When you’re only No.2, you try harder. Or else.” By embracing the reality of the place they were in, Avis positioned themselves as the David to Hertz’s Goliath. The campaign was an instant success, and after a decade of losses, the company went from an annual loss of $3.2M to $1.2M in profit. The “We Try Harder” tagline has become iconic and became one of the first case studies to prove the value of brand authenticity. It also showed that using comparative marketing strategies can result in positive benefits – in this case, millions of them.

Saddle Up Partner

As much as we love to see a healthy (albeit ruthless) rivalry, there is a lot to be said for the immense potential and sheer ingenuity when two brands come together and play nice. There are dozens of famous pairings: Bonne Bell and Dr. Pepper, Taco Bell and Doritos, GoPro and Red Bull. When brands form collaborations they can share resources, tap into each other’s existing audiences, and streamline efforts while driving meaningful and efficient campaigns around shared value.

Uber and Spotify: Soundtrack for Your Ride

In 2014, these two well-established behemoths were already disrupting their respective markets when they announced an integration that allows passengers to listen to their own music when taking an Uber. Spotify premium subscribers can connect their accounts to the Uber app and customize their audio experience – before their car even arrives. During the ride, passengers-turned-DJs maintain control wirelessly via either platform until reaching their destination.

Successful? Oh yeah. Wildly, and for a handful of reasons. Their services offered are different but highly compatible and, foundationally, both companies are modern, technology based and innovative. They achieved success by leveraging those commonalities and providing a personalized, on-demand user experience for their customers. While Spotify saw a significant spike in new paid subscriptions shortly following the partnership, Uber provided added value – a personalized experience – sans reinventing the wheel. And in a time where the ride-share company has seen its fair share of challenges, this partnership was music to everyone’s ears.

Casper & West Elm: Test a Casper Mattress

Casper, the original D2C bed-in-a-box company, is another category disruptor, turning the multi-billion-dollar mattress industry on its ear since its launch in 2014. Millennials quickly embraced the brand thanks to the convenience, affordability, and perceived quality that it offered. And when you add in a 100-day, full-refund trial period, the brand became irresistible. Reported earnings in year one landed around $100M.

But even though consumers were loving Casper’s products sight-unseen, the company knew there was value in try-before-you-buy. In 2016, Casper and West Elm launched a year-long exclusive partnership that gave customers an opportunity to test out and purchase Casper’s innovative, “one perfect mattress” at any of West Elm’s 70+ locations nationwide.

Both brands quickly learned that sweet dreams really are made of this. The millennial-leaning home furnishings brand was selling everything but mattresses (unlike rival Ikea) – let alone, THE mattress – so providing an improved holistic retail experience for new and existing customers was a no brainer. Meanwhile, Casper was able to provide an effective way for consumers to test their product without compromising value or investing in a brick-and-mortar of their own. This strategy became a blueprint for success on which both have since continued to execute.

Conclusion

In the end, both fiery conflict and kumbaya collaborations can give brands the fuel they need to gain market share, build brand equity, and increase sales. But brand wars or collabs simply for the sake of doing so guarantee nothing. In each success we list above, the brands that came out on top consistently demonstrated self-awareness. They knew who they were. They embraced it. Sometimes they took disadvantage and flipped it into an underdog story. Or they understood the limitations of their product or service and, rather than try to evolve in a way that was out of their lane, they sought out a partner that could elevate their value prop for them.

These companies, with a deep understanding of both their brand identity and their consumers’ needs, delivered campaigns that drove impressive results. The moral of the story? Knowing thy (brand)self is the first step to success, no matter if you are a lover or a fighter.