Is nothing sacred?
Is nothing sacred? Will Advertising Age change its name to AA? Hopefully not, but you never can tell. Initialitis has infected the world of branding.
What drives a company to abandon a perfectly good name in favor of meaningless initials? There are two reasons. One is a change in the nature of the marketplace. The J. Walter Thompson name is associated with traditional advertising and the agency obviously wants to broaden into nontraditional media like the Internet.
The second reason is the "shorter is better" argument. In today's fast-paced world, a long name is a handicap.
In the case of J. Walter Thompson, both reasons are questionable. By using the initials JWT, the agency forever locks itself into its J. Walter Thompson heritage.
It is almost impossible to create a separate perception for a set of initials. Rather, initials tend to remind people of the names they originally stood for. When consumers see a KFC sign, they tend to think "Kentucky Fried Chicken" in the same way seeing "GE" conjures up "General Electric" or "IRS" the Internal Revenue Services
When a consumer sees a set of initials, his or her first reaction is: "What do those initials stand for?" And if they don't stand for anything, the consumer is unlikely to remember them.
If you make your name famous, you can use your initials as a nickname. (Think JFK or FDR.) If your name isn't famous, using initials alone is almost certain to keep it from being famous.
Royal Philips's NXP
So Royal Philips Electronics has selected "NXP" as the name of its newly independent semiconductor company. What does NXP stand for? Nothing, but according to the company's chief executive, the name communicates "vibrancy and entertainment."
Wishful thinking, in my opinion.
What about the "shorter is better" argument? It's true that consumers almost always prefer a shorter brand name to a longer one. Just look at brands lining supermarket shelves: All, Cheer, Crest, Lay's and Pledge.
But there are two kinds of shorter. Visually shorter and verbally shorter. Advertising agencies tend to be visually oriented so, as you might suspect, they tend to emphasize the visual. The JWT name is visually much shorter than J. Walter Thompson.
But it's not verbally shorter. Both are exactly the same length -- five syllables.
Importance of verbal length
Oddly enough, the verbal length of a brand name is more important than its visual length. That's because brands are built primarily by word of mouth. The shorter the verbal length, the easier it is for a consumer to pass along the name of the brand to friends, neighbors, and relatives.
As a matter of fact, consumers invariably try to shorten brand names to make this pass-along easier. Chevy and Caddy instead of Chevrolet and Cadillac, for example.
In my experience, J. Walter Thompson was never known as "JWT." It was always called "J. Walter." (And Doyle Dane Bernbach was never "DDB," it was always "Doyle Dane." Likewise Foote, Cone & Belding which was "Foote Cone.")
Why? Because J. Walter, Doyle Dane and Foote Cone are all verbally shorter than the initials of those agencies.
So should J. Walter Thompson have changed its name to J. Walter? No, not at all. There's another important principle that many brand builders forget.
Two names needed
Every powerful brand needs two names. A real name and a nickname. Why is this so? Because the use of nicknames help consumers establish closer relationships with the brands they admire.
Notice, for example, that two people who are exceptionally close almost never use their real names when they talk to each other. It's always "sweetheart" or "honey" or "dearest" or some similar expression.
If your spouse changed his or her real name to "Sweetheart" because that's the name you usually used, then guess what? You'd have to invent a new nickname.
JWT has just lost its nickname. What do we call the agency now? "J?"
Words are more powerful than initials. The best proof is the superiority of acronyms over initials: radar (radio detecting and ranging); laser (light amplification by stimulated emission of radiation); AIDS (Acquired Immuno Deficiency Syndrome); GAAP (generally accepted accounting principles).
Prefer words to initials
When given a choice, almost everyone prefers words to initials. You could pronounce the initials A.I.D.S., for example, but almost nobody does. Instead, most people just say "aids."
Why is this? The word "aids" is shorter (one syllable) than the initials (four syllables.)
Notwithstanding these arguments, the initialization of corporate America continues unabated. In February of this year, the $3.8 billion Computer Associates International changed its name to CA Inc.
CA is a nice nickname, but unfortunately it already has been taken by the state of California.
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Al Ries is the author or co-author of 11 books on marketing, including his latest, The Origin of Brands. He and his daughter Laura run the Atlanta-based marketing strategy firm Ries & Ries. Their website is Ries.com.