A Sad State of Brand Affairs

Last week there was a USA Today article on the emergence of state-sponsored ad campaigns targeted at corporations, enticing them to move their headquarters for the financial and tax advantages. States such as Nevada, New Hampshire and Indiana were cited for the aggressive promotion of their economic and lifestyle features, and their unapologetic bashing of their neighbor state’s shortcomings. From this, a curious question began to circulate around observers as to whether this strategy could be called “state branding” or “place branding”.

It is a stretch to call these campaigns a deliberate act of branding, even though there are elements of brand meaning associated with any discreet geography. What is interesting is the intentional friction the state-sponsored campaigns produce by rubbing together two highly-charged emotional issues: (1) economic advancement and (2) geographic tribalism. Each state that promotes this strategy is betting that its corporate audience will care so much about attaining #1 that they will abandon their ties to #2.

The flaw in the strategy is that #1 is a temporary opportunity...once the market recovers people will quickly want to return to status quo and their long-standing values. As eager as a company may be to improve their economic bottom line, they must care more about their organizational considerations, and specifically on the impact corporate relocation would have on the lives of their employees. Take New Hampshire as an example: it's fine for the state’s economic development team to promote its tax incentives, but how does it hide the fact that NH ranks 50th out of 50 states in per student capita investment in public schools, and have student test scores whose national ranking reflects that investment strategy? Would any company be excited about moving the families of their top management team from Massachusetts, a state that has always been on the high-end of the educational performance spectrum? Whatever economic argument can be pitched is quickly overwhelmed by the social and cultural forces that are hard to quantify in monetary terms but easy for a CEO to appreciate and accept as decisive reasons to stay put.

We will probably see more of these state promotional campaigns, for nothing says opportunity like collective misery. I would predict a low, low return on investment for the ad money spent, however. What would make a difference is if the governor of any state (the erstwhile CEO) would employ a bona fide branding strategy, i.e. to identify a compelling and differentiated benefit for any person or company choosing to reside in that state, and then aligning all its resources, programs and policies to reinforce its brand promise. It will look at its state's brand in a holistic manner, integrating the economic, social, cultural and environmental realms with an eye towards long-term sustainability. Instead of robbing Peter to pay Paul, there will be such growth and wealth created by the massive population influx into the state that Peter and Paul will both get to retire comfortably.

Sadly, Professor Kotler is correct in that through their very narrow lens, state governments are only able to see the opportunity as a zero-sum game. Innovative and visionary leadership, and immense courage and stamina to take on the infinite number of interest groups, is a critical requirement for any state leader to achieve this winning strategy.