Majority of companies trapped in a ‘brand doom loop’: Is AI making the problem worse?

Most business leaders worry about competitors, economic uncertainty and technological disruption. Far fewer worry about something quieter but potentially just as damaging: brand drift. According to new research from Gartner, 84 percent of companies are caught in what analysts describe as a “brand doom loop” – a cycle where organisations underinvest in brand measurement, lose confidence in the value of branding, and subsequently reduce investment even further. Companies caught in this cycle were found to be only half as likely to exceed their growth targets.

The findings arrive at a time when artificial intelligence is changing how customers discover, evaluate and engage with businesses. For brand strategist Karen Tiber Leland, president of Sterling Marketing Group and author of 12 business books, the issue is not that brands are failing. Instead, many are simply becoming less relevant without realising it.

When brands stop keeping up

Historically, companies have often treated branding as a major project undertaken every decade or so. A new logo, refreshed website and updated marketing materials were viewed as signs of reinvention. Leland argues that this approach no longer fits the pace of modern business.

Markets evolve rapidly and customer expectations change. Further, new competitors emerge. Most importantly, AI is increasingly acting as an intermediary between businesses and their customers. Search results are changing; recommendation engines are becoming more prominent and generative AI tools are beginning to shape purchasing decisions long before a customer reaches a company’s website.

The result is that a brand designed for yesterday’s marketplace may gradually lose its effectiveness in today’s environment. The challenge is often difficult to detect because nothing appears visibly broken. Sales may remain stable, customer relationships may continue and marketing campaigns may still perform adequately. Yet under the surface, a gradual loss of distinctiveness and discoverability can occur.

The rise of AI-driven discoverability

The impact of AI on branding extends beyond advertising and content creation. Increasingly, consumers interact with intelligent systems when researching products, selecting suppliers and evaluating services. Rather than navigating directly to a company’s website, a potential buyer may ask an AI assistant for recommendations. This creates a new competitive environment where visibility depends not only on traditional marketing channels but also on whether AI systems recognise, understand and recommend a brand.

Gartner predicts that by 2028, more than 80 percent of companies will make significant changes to elements such as mission, brand and culture in response to the growing influence of AI on their markets. This suggests that organisations are already recognising the need for adaptation.  For many companies, however, the issue is not whether to change but how.

Why rebranding may not be the answer

When companies recognise that a brand has lost momentum, the instinctive response is often to start over. However, Leland suggests that wholesale rebranding is frequently unnecessary and can sometimes create additional problems. According to her forthcoming book, Re-Up Your Brand, many organisations would benefit more from a structured reassessment than a complete reinvention.

The distinction is important. A business may have built a successful brand that served it well for years. The challenge is not that the original strategy was flawed but that circumstances have changed. In this sense, brand management becomes less about periodic transformation and more about continuous maintenance. Rather than asking whether a brand should be replaced, leaders may need to ask whether the brand is still aligned with current markets, customer expectations and technological realities.

One of Leland’s more striking observations concerns what happens when organisations lack a clear branding strategy. Without a disciplined assessment process, companies can become susceptible to reactive decisions driven by trends, competitor activity or internal enthusiasm rather than evidence. The result can be a fragmented brand identity and inefficient expenditure. In highly competitive markets, these reactive decisions can dull differentiation and further obscure what makes a business unique.

Leland’s framework focuses on three interconnected qualities: findable, followable and unforgettable.

• Findable: The first challenge is visibility.If customers cannot locate a business, neither product quality nor customer service will matter. In an era increasingly shaped by AI search and recommendation systems, discoverability has become more complex than traditional search engine optimisation.Companies must ensure that their expertise, products and value propositions are clear enough to be recognised by both human audiences and AI platforms.
• Followable: Being discovered is only the beginning.Potential customers need a reason to remain engaged once they encounter a brand. This requires consistency, relevance and a clear understanding of customer needs.Businesses that attract attention but fail to maintain engagement often experience high marketing costs without corresponding growth.
• Unforgettable: The most successful brands establish a distinctive position that competitors find difficult to replicate.This does not necessarily mean being the biggest or most visible company in a sector. Rather, it means occupying a clear and memorable space in the minds of customers.Whether through innovation, expertise, values or customer experience, the goal is to create meaningful differentiation.

The issue of brand drift is compounded by growing executive turnover. Chief marketing officers have experienced declining average tenure in recent years, while many organisations have also faced elevated CEO turnover. Frequent leadership transitions can result in repeated shifts in strategic direction. New executives often introduce new priorities, new campaigns and new metrics. While some change is beneficial, constant repositioning can lead to inconsistency and confusion.

Brands may struggle to develop long-term momentum if strategy changes faster than customer perceptions. This challenge highlights the importance of establishing brand governance that extends beyond individual executives.