Interbrand Corporation

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Interbrand Corporation

130 Fifth Avenue
New York, New York 10011
U.S.A.

Telephone: (212) 798-7500
Fax: (212) 798-7501
Web site: http://www.interbrand.com

Wholly Owned Subsidiary of Omnicom Group Inc.
Founded: 1974 as Novamark
Employees: 1,000
Sales: $140 million (2003)
NAIC: 541611 Administrative Management and General Management

Interbrand Corporation is a subsidiary of Omnicom Group Inc., the world's largest advertising conglomerate. Interbrand is devoted to all aspects of branding, helping clients to develop new brand names or reposition existing ones through proprietary research methodologies. The company also designs the necessary graphics, and offers assistance in introducing brands across markets, protecting them, and determining their market value. In addition to its headquarters in New York City, Interbrand maintains more than 40 offices in 25 countries around the world.

Founder Becoming Involved in Branding in the 1970s

Interbrand was founded by John Murphy, a native of Essex in the United Kingdom. In 1962 he received a degree in geography at the University of Manchester, then turned his attention to business, becoming a marketing manager at Lessona Corporation. He returned to school at Brunel University, where he earned a technical degree in business management in 1966. Murphy's interest in branding began during his tenure at Dunlop Corporation, a longtime leader in the tire industry. Murphy joined Dunlop's corporate planning and marketing department in 1970 just after the company made the ill-fated decision to merge with Italian tire manufacturer Pirelli. The Italians were worried about conditions in their country, where the Mafia held sway and the Communist Party was making strides politically, and management looked to British control as a harbor in the storm. As for Dunlop, its chairman was bent on creating a global empire but his management team and the board of directors were not up to the task. Murphy, serving in his role as corporate planner, had an up-close view over the next four years of the unfolding disaster at Dunlop, watching—as he told Brand Strategy in 2001 —"a great old British brand destroyed by incompetence. Decisions were made on the old-boy network, and nobody ever took any blame. I couldn't bear it." Murphy offered an even harsher assessment of Dunlop to Marketing in 1994: "The management there were complete idiots." But his work at Dunlop provided him with experience in branding when he was assigned the task of naming a new product.

Murphy found that naming a product, while difficult, was gratifying work. In 1974, at a time when his wife had completed her own education and was beginning to earn an income, Murphy decided to leave Dunlop and launch a product-naming consultancy, which he named Novamark. Initially working out of his London apartment, Murphy was soon joined by another disgruntled Dunlop employee: Mike Grant, Dunlop's trademark agent. The two divided the workload, with Grant handling the legal searching and trademark registration, while Murphy was in charge of sales and marketing. One of Novamark's important early clients was the Post Office, for which the firm created the Prestel brand name for a new teletext service. When the British government then decided to break off the telecommunications aspect of the Post Office, Novamark was hired to handle the naming of the new organization and created the British Telecom name. Moreover, the firm was asked to serve as British Telecom's trademark attorney, thereby adding legal work to Novamark's capabilities. It was a natural progression for clients to ask Novamark to take on the graphic work as well. Murphy was reluctant to move that far afield from his original plan—to serve as a wordsmith. In addition, he did not want to offend the design studios with which he worked. His opinion began to change, however, when he discovered that some of the design groups to whom he referred clients were charging five times as much as Novamark, which was doing the more important work. The final straw came when two of these studios announced they were launching their own brand naming companies. As a result, Murphy no longer felt any compunction about adding design capabilities to Novamark.

Murphy's major break came in 1979 when struggling automaker British Leyland hired Novamark at the last minute to help in the naming of a new vehicle, which represented a make-or-break moment for both Leyland and the British automobile industry, struggling to compete against European and Japanese imports. Leyland was satisfied with the car it designed but could not decide among the thousands of possible names they collected. Novamark narrowed down the possibilities to three: Match, Maestro, and Metro. The idea was to create some marketing continuity over a range of cars and the Metro name was ultimately chosen to serve that purpose. The first car in this line, the Mini Metro, was introduced in 1980, became an instant success, and ultimately gained the distinction as the United Kingdom's bestselling small car, with more than two million produced over the next 18 years.

A New York Office and a New Name in the Late 1970s

It was also in 1979 that at the behest of its clients, in particular the Mars candy company, Novamark decided to open a New York office, but under a new name, Interbrand, reflecting a shift in emphasis for the firm. No longer focused on naming and registering trademarks, the company was now involved in the more encompassing activity of branding, a seldom used word at the time. It was still a very small operation as it entered the 1980s, employing ten in London and just three in New York. The U.S. branch struggled in the early years and depended on funding from the London office. In 1986 Murphy hired Charles E. Brymer, an advertising veteran from the Batten Barton Durstine & Osborn agency, to serve as president, and he was instrumental in making the New York operation a success.

During the 1980s other international offices were opened—including Tokyo and Frankfurt in 1983, Milan in 1987, and Los Angeles and Melbourne in 1988—all of them offering a full range of branding services: naming, legal searches, and graphic design. By going global, Interbrand, almost out of necessity, developed abilities to deal with cross-language and cross-cultural branding. In many respects Interbrand remained a small company, but it had become increasingly difficult to run, given the wide range of talent employed: from lawyers to linguists to marketers to graphic designers to computer programmers. Murphy grew less comfortable with the operational responsibilities, preferring instead to concentrate on the more creative aspects, developing brands and pitching for business. To handle the day-to-day chores of making the firm work, he hired Michael Birkin, who had a law degree and was a trained accountant, to serve as managing director in London. Another important role player during the 1980s was finance director Paul Stobart.

During the 1980s Interbrand enjoyed a number of noteworthy achievements, including the 1984 naming of Prozac as well as Hobnobs, a popular English biscuit. A year later Interbrand coined the Slice name for Pepsi's new lemon-lime drink. The firm developed new award-winning packaging for the Boots United Kingdom drugstore chain in 1988, the same year that it named Land Rover's Discovery sport-utility vehicle. It was also during the 1980s that Interbrand developed the important concept of brand evaluation. Murphy explained to Brand Strategy in 2001 that the need for such a methodology arose because there was "a huge buying and selling of branded-goods businesses where what was essentially being bought and sold was brands. But nobody knew how to value brands." Sensing an opportunity, Interbrand proclaimed itself an expert in the field, despite never having attempted before to place a monetary value on a brand. In 1987 it announced that it had developed a proprietary methodology for brand evaluation and a year later completed its first project, valuing 50 brands for Ranks Hovis McDougall, one of the United Kingdom's largest flour millers. Then in 1989 Interbrand conducted the evaluation of the Pillsbury brand for the Grand Metropolitan PLC acquisition of Pillsbury Co., a milestone achievement in the branding industry. According to Brand Strategy, Interbrand's approach to brand evaluation consisted of three steps: "First, analysis of the brand's market, its management and its strength. Second: analysis of the brand's earnings, isolating those attributable to the brand rather than its parent company. . . . Third: a multiple is applied to brand earnings, based on the quality of the brand."

Surrounded by talented executives, Murphy entered the 1990s as the head of a small company facing a difficult decision in how to suitably award its chief lieutenants, given that he was not interested in giving up his job to any of them. They thought about taking the company public, but rejected that idea. In the meantime, the firm continued to take assignments from high-profile clients, including the design of packaging for Breyers ice cream, creating a new corporate identity for Compaq Computers, developing brand names for new SmithKline Beecham drugs, providing a global valuation of the IBM brand, and creating the Zeneca brand name for the life sciences business spun off from Imperial Chemical Industries PLC.

Company Perspectives:

Since our founding in 1974, we have challenged our own ideas of what a brand can be, pioneering new ground in branding and growing through the diversity that surrounds us.

New Ownership in the Early 1990s

In late 1993 Murphy agreed to sell Interbrand to Omnicom, a deal that rewarded all ranks of the firm's staff, which now numbered about 600. Murphy agreed to stay on for two years to help in the transition, during which time he developed a new business interest: running a brewery. He resigned as Interbrand's chairman in April 1996. During the transition phase, the company opened a branch office in Seoul, South Korea, in 1994 and expanded by way of acquisition, adding Schechter Group, a New York brand consultancy and packaging design firm. Its founder, Alvin H. Schecter, would succeed Murphy as Interbrand's chairman, a post he held until retiring in 1999. Interbrand also gained a presence in Singapore by acquiring Design Counsel. The two companies previously had landed a contract together for the Singapore Broadcasting Corporation, which was undergoing privatization, and had worked well together. Interbrand bought a 40 percent stake in Design Counsel, then in 1996 bought the rest of the company. Also in 1996 Interbrand opened an office in Osaka, Japan; added a branch in Zurich, Switzerland, through the purchase of identity group Zintzmeyer & Lux; and acquired the New York design firm of Gertsman & Meyers. Some of the noteworthy work conducted by Interbrand during this transitional period included the positioning of the Deutsche Telekom brand, and the valuation of the Guinness brand.

Following Murphy's departure, Brymer as CEO carried on the task of growing Interbrand, adding the chairmanship after Schecter's retirement. In 1997 the firm opened offices in Jakarta, Indonesia, and Mexico City. It also acquired another firm, London-based Newell and Sorell. Interbrand opened an office in Johannesburg, South Africa, in 1998, and added a branch in Buenos Aires, Argentina, by acquiring the design firm of Avalos and Bourse. Interbrand closed out the 1990s by opening an office in Santiago, Chile. Some of the important work the firm completed in the final years of the decade included the creation of new corporate identities for insurer Nationwide and the accounting firm of PricewaterhouseCoopers; redesigning new looks for Quilmes, a popular South American beer, and Grupo Financiero Bancomer, one of Mexico's major banks; and creating the Imation brand for a 3M spin-off. Interbrand also became involved in publishing, offering several titles: Trademarks, a book on brand protection; Brands: The New Wealth Creators; Brand Valuation; Co-Branding; and The Future of Brands.

In the early years of the 21st century, Interbrand continued its worldwide expansion. In 2000 it opened offices in Sao Paulo, Brazil, and Munich, Germany, and moved into Toronto, Canada, by acquiring Tudhope Associates, a design consultancy. Also in 2000 Interbrand acquired Cincinnati-based Hulefeld Associates, a 70-year-old design firm boasting major Midwest clients such as Procter and Gamble and the Kroger supermarket chain. Interbrand established a presence in China in 2001, opening a Shanghai office. In that year it also completed a pair of acquisitions: New York-based Wood Worldwide, involved in pharmaceutical brand name development, and the Paris-based design group Gerard Barrau. In 2002 Interbrand acquired Dayton, Ohio-based Design Forum, a firm specializing in branding through store design. An office in Bangkok was added in 2003 and Moscow in 2004. The firm continued to do work for some of the most high-profile brands in the world, including Heinz ketchup, the Subway sandwich chain, the Cooper Mini automobile, Samsung, and Nikon. Interbrand also did work for notable clients such as the Girl Scouts of America, redesigning its look and packaging, and the 2002 FIFA World Cup soccer tournament in Japan and Korea.

Although many product category leading brands were developed in the United States—the likes of Kodak, Wrigley, Kellogg's, Nabisco, Del Monte, Singer, Campbell's, and Gillette—and had been at the top since 1920s, there was reason to believe that other parts of the world, in particular Asia, were developing equally strong brands. Regardless of any shift in branding power from the West to the East, Interbrand was well positioned to retain its role as the leading brand consultancy for years to come.