Branded Utility

There is a thought-provoking article over at Jack Cheng’s blog where he picks up from a theory that has been developed by Johnny Vulkan of Anomaly and then Benjamin Palmer of Barbarian Group.

The basic idea behind branded utility is that in order to remain relevant brands should become or offer useful services. Jack Cheng says that brands however, over stretch themselves and try to compete with services that already exist. Jack argues that it’s better for brands to invest in useful applications and widgets then try to build the next Flickr, Slide or YouTube:

On one hand, brands and their agencies are struggling to engage people and make themselves relevant and useful. On the other hand, small startup teams are building cool and useful applications but still struggling to find a viable business model.

Right now brands have a tremendous opportunity, because they can build these applications and give them away for free! Or… they can step in and support a cool existing application (one that might not be able to generate is own profit) and even make it more widely available to the public. Web 2.0 is still on the fringes of mass culture, yet brands can tip web 2.0 into the mainstream. The cost to these brands could be as little as a fraction of their multi-million-dollar marketing budgets.

Brands 2.0: Branded Utility – Jack Cheng