Volume 64: The future of branding lies in packaging.

1. The future of branding will come from packaging.

tl;dr: Branding needs to think differently about the Internet.

Back in the day, we used to look down our noses at packaging. The whole CPG/FMCG world at the time was the lowest form of branding (some of it still is). Polluting the aisles of drugstores and supermarkets with acres of crappy swooshy fonts and garish colors, bad names, and comedy smiling people leaping in the air at the sheer delight of their freshly scented and newly clean clothes/hair/dog/teeth (delete as appropriate). The budgets were low, the strategic requirements nothing more than filling in the blanks of whichever triangle, circle, or Greek temple framework was in vogue at the time, and the visual output was as uninspired as it was uninspiring to work on for the armies of design graduates churning out packaging mechanicals in dreary offices in Cincinnati.

All told, it was grim. And while P&G is still where graphic design goes to die, the broader environment has moved on so massively that it really merits our attention. Today, I’d argue the most interesting branding design is happening in the packaged (and adjacent) environments.

This is important because, whereas technology firms have led the most influential branding over the past ten years, I think the next ten's most influential branding will have its roots in packaging.

Let me explain.

The modern branding environment is an existential contrast between two kinds of design, each of which exists to do a different job. On the one hand, there’s brand design, where the job is to be distinctive and different and unique and stand out from the competition. On the other, there’s UX design, where the job is to be familiar and easy, and accessible and usable for the consumer.

Between the two lies a natural tension. A tension that should be fertile creative turf for brands to play within but it isn’t. Instead, UX design and its pattern libraries and reusable components has taken over and co-opted brand design. Creating a world where inertia inexorably draws every brand toward the same exact place. A phenomenon I refer to as “Helvetica in Pastels.”

Driving this has been our over-obsession with the big tech companies' design practices, their huge design budgets, and their comprehensive design systems. (Is there a design agency in the world that hasn’t done at least one project for Google?) The problem is that none of the “big tech” firms operate within the kinds of competitive markets that most brands face. Instead, the likes of Apple, Google, Amazon, and Facebook are all unregulated monopolies, which means nothing they’re doing with the design of their brands actually means all that much anymore. You don’t need to stand out and be interesting if your customers have literally no other option but to use you. You have the luxury of being utterly boring instead.

However, this uniquely monopolistic dynamic does not exist for the vast majority of brands. Instead, they really do need to stand out, be unique and catch people’s attention. And where in the Darwinian environment of Capitalism do we find brands that are being forced to exhibit these very characteristics to survive? Yes, it’s in the packaged environment where brands are duking it out online daily just to catch a glimpse of our attention.

As a thought exercise, let’s forget about Google and Apple and Facebook for a second, and instead, let’s re-think the way the Internet and its platforms, such as Instagram, have actually become drivers of commerce instead. This isn’t about some vague concept of being a ‘digital’ brand (whatever the hell that is) as much as it is competing for attention across an infinitely scrolling shelf that every brand gets to sit on. And if you’re competing for attention on an infinite shelf, what do you do? That’s right; you’re forced to figure out how you’re going to stand out, be attractive, and be instantly recognizable from the crowd, which is a far cry from what we see from the likes of Google or Facebook.

Now, this isn’t rocket science. It’s branding basics. But what I am saying is that if you want great brand design rather than half-assed UX masquerading as branding, you should seek inspiration from those who are succeeding within today’s most competitive commercial environments, not those dominating the least.

If I were a client considering a brand design program today, I definitely wouldn’t be talking to the usual suspect agencies responsible for digital commodification. Instead, I’d be talking to kick-ass packaging specialists who know how to duke it out across the infinite shelf.

2. “Die Hard with a Plus.”

tl;dr: Plus isn’t about us. It’s about Wall Street.

For the longest time, the biggest irony in naming was the sheer preponderance of products called “One,” which unintentionally created the problem that there were so many “Ones” that there was, in fact, no one, “One.” As a result, I used to joke that just calling your product “Two” would instantly make it more differentiated and interesting.

Now “Plus” has supplanted “One” for the sheer volume of usage, becoming something of a catchall for any media company intending to offer a subscription. You pretty much know the shark has been jumped when even Verizon is doing it, as with this week’s announcement of “Yahoo+.”

You might be forgiven for asking why now with all the pluses? The answer is actually pretty simple; it has almost nothing to do with us and everything to do with Wall Street.

Boiled down, Wall Street currently rewards companies that have recurring revenue business models (like subscriptions) with a higher valuation multiple than companies that earn the same amount but are more transactional in nature. In other words: same revenue, higher stock price.

As a result, traditional media companies that’ve been in the doldrums for years are seeing an opportunity to goose their valuations by shifting to a subscription streaming model. After being tied to their terrestrial television deals built atop TV advertising revenues, dependence on cable bundling, and having been the victims of cord-cutting, they’ve had to watch seemingly slack-jawed as the likes of Netflix and Amazon have absorbed the market’s capital at their expense.

However, the success of Disney+ combined with COVID-enforced lockdowns has shown that media company catalogs are more valuable than perhaps anyone thought and that a combination of great brands, media franchises, and content can absolutely drive streaming revenues. So now everyone is jumping in and launching their version of “Plus,” too. Why? Because as soon as you say “Plus” to anyone on Wall Street, they’re going to think “recurring subscription revenue” in the same way that movie producers used to hear “Die Hard, but on a plane/train/automobile” and think “box office smash.”

And it worked, at least initially. ViacomCBS, owners of the recently re-released “Paramount+,” saw their share price soar 600% in the past twelve months before sharply dropping 23% on worries about execution.

This tells us that there’s no guarantee all these new “plus” businesses will succeed. Instead, this is more like the stock market spread-betting on future outcomes because it doesn’t yet know who will win.

There are all sorts of challenges ahead in building streaming revenues, not least because very few of these media companies have any real and meaningful competence either as consumer brands or consumer marketers. I mean, I’m sure Paramount+ is great, and all, but what even is Paramount, and why is Paramount+ somehow better than the “CBS All Access” it supplanted? And what on earth was that anyway, other than a place to watch Star Trek?

And that’s before we even touch the pesky reality that they’re trying to build out a new business model that’s cannibalistic to their existing model, which is a notoriously tricky strategy to pull off.

Anyway, there will be winners, and there will be losers. Just don’t think that sticking a “plus” in your name is going to make your product any more likely to succeed than if you don’t because it won’t.

Oh, and just to finish, the biggest move in this space happened last week. Amazon paid a bunch of money to stream the NFL on Prime (note, Prime, not Plus), which guarantees one thing: the demise of the cable bundle as the primary means of watching television just got accelerated.

3. Stripe is the future of the Internet.

tl;dr: A welcome sign of a post surveillance Internet.

With a new infusion of capital, Stripe just hit a $95bn valuation. Not only is this significant because it catapults the business to a new record valuation for a private company but more importantly, how it got there.

You see, the previous record valuation for a private company prior to IPO was Facebook a decade ago, where the business model was predicated upon building the most invasive surveillance infrastructure in history. Its commercial success, along with that of Google, inspiring a decade-long flood of VC capital into surveillance, labeled “ad-tech,” which brought us to where we are today; Toxic social media, underperforming digital advertising, massive volumes of ad-fraud, and a whole slew of negative societal externalities.

Stripe is different. It’s not built atop a surveillance infrastructure at all. Instead, it’s creating a commercial infrastructure for the Internet that makes digital transactions simple and easy to execute (no mean feat, it turns out).

This means that while you may never have heard of Stripe if you’ve ever paid for anything on the Internet, you’ve almost certainly used it.

In the big scheme of things, while online advertising can (and does) drive huge revenues for a vanishingly small number of companies, the overall economic opportunity in online commerce is vastly greater. At nearly $5trn, global e-commerce revenues already dwarf total global advertising of $569bn. If you’re taking even a small slice of these transactions, your potential scale becomes vast. Hence $95bn.

This really matters to you and me in how it makes the world of capital rethink the way the Internet works. Online advertising at this point is largely game over. Google and Facebook won. Everyone else gets to dine on the scraps. The only interesting things happening here over the next few years will be the Apple/Facebook duel over privacy, government anti-trust action, and the continuing consolidation of under-scale ad-tech firms seeking to turn scraps into morsels. There’s nothing even remotely interesting to the people who direct the world’s capital in any of that.

But, with Stripe now being valued at $95bn, combined with the huge rise in the value of PayPal, Shopify, Square, and others, the next ten years are much more likely to be driven by advances in Internet commerce rather than Internet advertising.

And this is significant because the more capital that pursues the opportunity, the more incentive will exist for innovators to pursue an alternative monetization path for Internet businesses. This won’t just signal a shift away from surveillance advertising but very likely the rejection of surveillance entirely as a part of the overall value proposition.

I, for one, think we desperately need a healthier Internet that isn’t dominated by just a few firms, their surveillance infrastructures, and their toxic societal externalities.

That’s why Stripe matters. It’s leading the way, and a lot of capital is going to follow.