Which are the similarities and differences between public and private sector branding?
Yet another valuable question from one of our readers (want to propose a question? Here’s how). Below the answers of our panel of place branding specialists (in alphabetical order – highlighted respondents are available for consulting, research or as speakers).
A few key takeaways:
- Private brands are built to benefit a few. Public brands are for everyone.
- The private sector has more control over the brand touch points than the public sector, which has to deal with and coordinate a multiple and diverse array of stakeholders.
- Private branding requires fewer layers of approval. Budgets are not as fixed.
- Both public and private sector branding require the same rigor to develop and project – in terms of research, honesty in interpreting results, and creative storytelling. Both must be based on substance, to establish credibility.
- Public sector branding is more time-consuming to develop, harder to ensure focus, and more open to media criticism and public vilification.
- Private brands tend to be owned by companies; whereas public brands are owned by no-one but emotionally invested in by almost everyone.
- Private sector branding is essentially about a commercial transaction. Place branding usually serves territory revitalization.
Places are very complex and “alive” – in every sense of the word (the subject of the branding process are also people – inhabitants of a given territory). Therefore, designing and implementing a territorial brand differs from the private sector.
The territorial brand must originate from the DNA of the place, be rooted in its history. Therefore, creating a territorial brand is reminiscent of an archaeologist’s work, less of a creator.
The difficulty is that the branded core of a given place should be shaped so that it does not lose its credibility and can gain competitiveness. It is aspirational and oriented towards the future, not the past. Finding this subtle balance between the historical identity and this aspirational-competitive one is extremely difficult and there are still few specialists who can do it properly.
Some of the key characteristics of place brands:
- A much more complex decision-making process
- A large variety of offered products (tangible goods, investments, services, events, tourist products, people, etc.)
- Multiple recipients of marketing activities (institutions, non-profit organizations, companies, residents, media, investors, etc.)
- The multitude of decision-makers and their mutual difference
Let me begin with the differences by way of an example, namely, the Brand India Pharmaceuticals campaign that began as a Government initiative and later involved the private sector.
Public good and national interest are central to public campaigns, whereas private branding almost always layers the public interest messaging with differentiators such as technological achievements, innovations, etc., that make them distinct vis-a-vis competitors.
The latter are also highly focused and targeted at an audience in their messaging, keeping an eye on market and sales.
A multitude of stakeholders will be involved in revealing a nation, city or downtown brand, and this will depart from the accepted path for branding privately held corporate products and services.
One reason for this variation is the composite nature of places. They are a compilation of many independent and competing businesses, products, and experiences that are owned and managed by many different entities.
There’s no single custodian or owner of the brand. Public brands have different forms of accountability, funding and value structures. Community leaders who are aware of the differences in branding places and consumer goods are in a much better space to adapt to these challenges when they become evident.
Public and private sector branding practices respond to similar challenges when we think of the process of brand community steering and management. In this regard, same tools for building the brand community, such as social media and ‘instagrammable’ physical scenes are utilised. This means brand communities – in both public and private domains – rely on the practice of sharing symbols and ‘meeting places’ embedded both in the digital and the physical space.
The second point of similarity is the expectation within both public and private sector brand communities that brands are institutions mirroring and representing a shared set of collective values and repositories of ethical principles.
Points of differences instead concern the nature of the branded object. Such different nature implies that for public sector branding it is not viable to shape the brand according to purely market needs and expectations.
Secondly, the relation of public and private brands with change are necessarily different. While the path of brand change is usually slow for credible private brands, in the public sector branding a degree of path dependence is unavoidable in order not to cause forms of brand alienation within, for instance, a local community negatively reacting in front of a radical and sudden manipulation of its history and identity.
Change in public domain branding usually consists in a sophisticated reinterpretation of stories and symbols, which need time to be collectively defined and metabolised by the brand community.
Public has to be more accountable with funds, but sometimes timidity leads to either luke-warm place brands or rebelliousness in brands that upsets taxpayers.
Place brands, when done well, are similar to the most effective corporate brands in budget or execution. In fact, place brands should become more professional and benchmark corporate budgets, to keep costs down.
Paying 5 million for a logo out of date in 7 years is a real world example of not doing this.
IBM, Apple or Microsoft is timeless by contrast.
- Marketing mix tools
- Relevant to image and identity
- Stakeholders (more diversified and complicated in place branding)
- Conflicts of interest
- Public diplomacy
- Place branding is connected to natural sources, urban planning, geography, local cultures…
The principles of branding are identical between the two. The application differs. An analogy I’d offer is the principles of branding are identical between the soap and prescription drug categories, but there are clearly aspects of uniqueness in the application of those principles between the two categories.
Having worked in a few private sector projects (PSP), I see six significant differences from public projects (PUP.)
- Control: PSP has a clear chain of command. Everyone knows who controls the process and the project. That’s not the case with PUP, where (luckily) no one stakeholder can control the place.
- Speed: Some of the PSP projects are completed within a month. In PUP, you are looking at longer timelines.
- Process: PSP focuses on stakeholder consultation and engagement. PUP must also pay attention to change management.
- Result: PSP prioritizes the bottom line. For PUP, it’s the quality of life of the citizens that matters. Everything else is a mean, not the goal.
- Brand: PSP prioritizes the creative-side of branding. They are more interested in brand identity. PUP, however, tries to change complex perceptions that exist. They focus on brand image.
- Land: PSP treats land as a space to be developed -a geographical/mathematical concept. PUP, on the other hand, sees land as a place with a soul, whose story must be told -a psychological concept.
Simply put, private sector branding is much, much easier. Companies tend to exist for one reason and communicating an organisation’s values and brand proposition around that one reason is much easier than something as diverse and complex as a city, region, or country.
Moreover, there are far fewer decision-makers and vested interests involved. Decisions get made faster in the private sector, as companies are ultimately answerable only to their staff, owners, and shareholders.
For places, they need to coordinate across a range of different agencies or ministries, they need to set a vision that can distill the complexity of a place and its people into a compelling brand identity. They also need to bring citizens and residents along with them on the ‘brand journey’.
Commercial brand versus place brand:
- Simple management – complex management
- (markets) – (citizens)
- Commercial transaction – territory revitalization
- Private sphere – public sphere
- Specific public – diffuse public
- Short term– mid/long term
Private brands are built to benefit a few. Public brands are for everyone.
Since place branding is a joint effort and responsibility from all place stakeholders (public and private), all have a role and can contribute to branding and promoting a place. While the public sector usually has the leading role in promoting place branding, the private sector is also a key stakeholder in terms of building and delivering the right, aligned experiences with the brand (image) that the place wants to build.
What may make the difference is that, usually, the private sector has more control over the brand touch points than the public sector, which has to deal with and coordinate a multiple and diverse array of stakeholders.
Mostly the terminology used. When working with places, most of this terminology are rhetorical devices rather than their directly applicable counterparts.
Place branding is different from other public sector branding exercises though. For example, I’d argue that there’s a profound difference between a place brand strategy for a city (the place) and a corporate brand strategy for the municipality of said city (the government/civil service).
The core steps are the same: defining the meaning of their work and expressing it. Yet, with public sector branding, there is much more waltzing around compared to private.
Most public bodies are managed rather than owned, they deliver not a product but a service that is also usually free. This means that the funnels of both decision-making and consumers can be very wide.
Decision-making is much more complex and has to balance out factors such as relative weight of particular officials, which seemingly have nothing to do with the branding process. So the more you know about the intricate balance of power in the organization, the better.
It is also harder to measure the impact of your work in place branding, as it does not derive from direct sales.
Project deliverables are more vulnerable to personnel changes.
Similarity: the need for long-term planning. Brands are very slow to build, change and to show impact.
Differences: while private sector branding is mostly about reducing complexity to a “brand core”, place brands take complexity into account and don’t reduce to a common denominator (as those would be too generic for places).
Also, the managers of place brands have less or nearly no control over the brand. It is therefore not possible to manage a brand top-down. Rather, the aim of the brand manager is to nudge place stakeholders in the same direction.
The biggest difference we experience is that public branding, driven by governments, is wrought with political positioning, multiple layers of approval and red tape. City staff are motivated by budget, perception of their personal performance and whether they checked all the boxes.
When a community brand is driven by a tourism entity, they are motivated first by economic growth and secondly by the political environment. There are less layers of approval but still may be affected by government oversight.
In both cases, there are regulations and permitting requirements that can be daunting and slow down the process. In the US there are requirements to issue a public RFP to invite all qualified firms to submit proposals. They usually hire a designer based on a score which is largely determined by cost. It is not uncommon for a project to be shelved and never deployed. Creative innovation is often cobbled by political agendas and disconnected authority.
Private branding requires fewer layers of approval. Budgets are not as fixed and the motivation is primarily to strengthen their marketing efforts and their identity in order to attract and retain customers. Their main goal is to make money. They usually hire a designer based on their quality and experience. Less boxes to check. Creative innovation thrives in private branding initiatives. Private clients have more freedom to extend contracts, alter scope and protect the resulting brand.
Similarities: Both require the same rigour to develop and project – in terms of research, honesty in interpreting results, and creative storytelling. Both must be based on substance, not hope or wishful thinking, to establish credibility. As David Ogilvy said “The consumer is not a fool – she is your wife”.
Differences: Private sector branding usually only has to satisfy one stakeholder group – company bosses. Some might say it has to satisfy shareholders; but they’re generally only interested in performance and profitability, without paying much attention to the link between this and branding.
Public sector branding, on the other hand, has to satisfy an often irreconcilable multitude of stakeholders – from place managers to politicians, a wide range of tourism industry players, city managers and national agencies, environmental organisations and social enterprises, the media and the public and many more – because they all have a stake in its success and, usually, a view on how they should be represented through the way their place or country is projected.
This makes a public sector brand more time-consuming to develop (through extensive stakeholder consultation), harder to ensure focus (because different views and vested interests pull it in all directions, often in spite of research evidence), and more open to media criticism and public vilification (which can erode political commitment and public trust in the brand).
The other major difference is that private brands tend to be owned by companies; whereas public brands are owned by no-one but emotionally invested in by almost everyone – especially a place.
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