Rebranding fiasco costs millions

After noting my previous post about the MTS rebranding fiasco in Russia, Anaezi Modu, of ReBrand asked me a very good question, "Do you know how much it cost them?", she said, pointing out that the losses involved in an unsuccessful rebranding went beyond the cost the of the project itself.

Reputation, trust and credibility were also damaged, when this kind of mistake occurred, and it would take more than money, and time to rebuild and recoup the damage to the MTS brand.

Online I found this article written in May 2006 by Alex Shifrin, and here are the relevant snippets,

Rumor
has it that WO [Wolf Olins] charges in the neighborhood of 60,000 pounds sterling per month, six months
minimum, for their services. For those counting, that’s nearly half a million pounds.
Minimum.

And it gets worse. According to Shifrin, WO apparently used the exact same strategy for MTS as they’d done for their direct competitors, BeeLine, last year, to great success. In Shifrin’s words,

The funniest thing of all is that it appears WO hasn’t even bothered trying to be
original this time around. When WO re-branded Alfa Bank, they turned Alfa’s dated designs into a simple "A" on a flat white background, with a small line underneath it. It gave a
sense of New Economy, progress, e-banking. The re-launch program consisted of a month long
teaser campaign, followed by a full blown launch.

When WO turned their magic wand onto BeeLine, the result was, once again, a simple
design, then a month-long teaser campaign, before turning to a full launch over the whole
country.

What we’re seeing with MTS so far is the exact same strategy. You’ll see the billboards
everywhere you look — a white egg, on a red background Even their slogans haven’t strayed
too far from WO’s original Power Point presentation-esque slogans for Alfa and BeeLine: as
MTS’s reads, "Ingeniously Simple or Absolutely Simple," playing on the Russian word
        prosto. BEE-LINE’s slogoan is currently prosche govorya (simply speaking).

Think about it. A single Power Point presentation that has wielded WO likely over 1.5
million pounds. That’s nearly $3 million,

And while there is much I could have said, I find that it doesn’t need to be said, so much as pointed out and thought about, as Alex Shifrin ends his article with,

It’s difficult to decide where to point your finger and chuckle first. Do you start with
Sistema, who, in an effort to differentiate themselves from their key competitor, has in
effect managed to create a uni-brand with Alfa and BeeLine, and will continue to both
reinforce and dilute their competitors’ positions on this market for the immediate future?
       

Do you turn to Wolff Olins, who must be slapping their knees back at their London West End flats, recently purchased thanks to their Russian customers? How about Alfa, for bringing
these guys to market in the first place?

Tough call here, but we’re laying bets that this
is far from the end for Wolff Olins in Russia. Five years from now, you can expect WO to
unleash their entire arsenal of basic geometric shapes to re-brand Russia into one, big, simple sucker.

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