Storytelling vs. signaling: the invisible battle for attention

Why do some brands charge ten times more without any obvious functional reason? The answer lies in two different ways of creating value that are often mixed up: signaling and storytelling.

Both are powerful, yet they work in very different ways. Here’s a closer look at how each operates and what it means strategically.

Understanding Signaling and Storytelling

Signaling: Positioning on Existing Value Scales

At its core, signaling is a way for brands to make invisible qualities visible.
It’s how they communicate reliability, exclusivity, or competence when those traits can’t be directly verified by the audience. By doing so, signaling reduces what economists call information asymmetry — the gap between what a brand knows about itself and what others can observe.

The concept was first formalized by economist Michael Spence(1), who showed that diplomas act as costly signals of competence: they don’t prove skills directly, but demonstrate the ability to bear the effort and cost required to obtain them. The signal is credible precisely because it’s costly to fake.

In branding, the same logic applies. Signaling works through visible cues that audiences instinctively recognize and decode, operating through two complementary mechanisms:

• Instant recognition — visual or material cues trigger immediate associations (e.g: a logo, a color palette, etc.).
• Cultural decoding — shared conventions allow audiences to interpret these cues effortlessly within existing hierarchies of value.

A Rolex or a business-class flight doesn’t tell a story — they signal an implicitly understood message: financial success. The sight of the Rolex logo alone conveys meaning through instant recognition, while leather seats, generous space, and personalized service in business class activate shared cultural codes of achievement

Storytelling: Creating Meaning Through Narrative

If signaling tells us what something is worth, storytelling tells us why it matters.
Where signaling relies on shared codes, storytelling goes beyond positioning on pre-existing scales. It doesn’t just use agreed-upon signals — it creates meaning through narrative, by connecting these signals into a coherent story. This approach leverages the fundamental power of stories: to make sense of the world and enable identification.

In branding, storytelling translates a company’s identity, vision, and values into a compelling narrative. The product or service — the signal — is staged within a story that captures attention, evokes emotion, and helps consumers imagine themselves in a particular life experience or social position.

Nike doesn’t just signal athletic performance — it tells a universal story of self-transcendence, transforming a sportswear label into a cultural mindset. Airbnb, in turn, builds a narrative that celebrates authenticity and connection over the standardized comfort of hotel chains.

Storytelling turns a brand’s output (products, services, digital content ) into narrative assets. Consumers no longer just own objects or use services, they inhabit a piece of the story, integrating values that resonate with their identity.

Why This Distinction Changes Your Approach

Escaping the Price War

Distinguishing between signaling and storytelling reveals a crucial insight: the difference between competing within existing value frameworks and creating new ones.

When every brand in a sector relies on signaling with the same codes, they enter what game theory(2) calls a zero-sum game: consultants all signaling “expertise,” coaches signaling “transformation,” designers signaling “aesthetic quality” — they all compete on the same semiotic field. When signals become interchangeable, differentiation collapses, and price becomes the only remaining lever of competition. The market then slides into a price war, where only those with the resources to outsignal competitors survive.

Storytelling turns this into a positive-sum game. A brand that invents a new desirable narrative doesn’t take value from others; it creates new meaning and new desires. A career coach can tell the story of “strategic career shifts,” another of “fulfilling personal transitions” — the audiences may overlap, but the narrative territories are distinct and complementary.

Inventing your own value category changes competitive dynamics. Instead of fighting for slices of an existing market, brands mastering storytelling redefine the categories themselves, creating their own legitimate spaces.

Spotify didn’t compete with iTunes in the established music purchase market; it created a new category — unlimited access to an infinite catalog. By shifting desire from ownership to accessibility, Spotify reframed the question from “Which song should I buy?” to “Which music should I listen to now that everything is available?”.

Choosing the Right Time Horizon

Here’s a key point: there’s a temporal asymmetry between signaling and storytelling. They operate on different timelines, which shapes their strategic relevance.

Signaling operates through immediacy: recognizable logos, price positioning, and visual codes trigger near-instant associations. This immediacy makes it an effective lever for short-term market entry and rapid audience recognition.

Storytelling is a long-term investment: building a brand mythology isn’t a one-off effort. It unfolds over years, with each campaign, product, and experience adding a new layer of meaning. Over time, that layered consistency becomes a moat difficult for competitors to cross.

Neither approach is inherently superior; they answer distinct temporal challenges. Signaling offers immediate traction, while storytelling builds a defensible long-term advantage. The strategic question becomes: Which time horizon matters most for your brand?

Balancing Audience Size and Engagement Quality

Beyond value creation, signaling and storytelling trigger radically different engagement dynamics.

Signaling: Broad Recognition, Instant Engagement

By relying on instantly recognizable codes, signaling lets brands connect quickly with broad audiences, making it a powerful lever for short-term visibility and rapid adoption.

The trade-off is that engagement tends to be shallow and transactional. Signals facilitate buying decisions but rarely build lasting attachment or spontaneous advocacy.

Storytelling: Narrower Audience, Deeper Engagement

Storytelling transforms the audience relationship. Where signaling seeks universal recognition, storytelling naturally selects a narrower audience — those who resonate with the narrative. Not everyone will identify with your story, and that’s the point.

In return, this smaller audience develops qualitatively stronger engagement: they don’t just decode signals — they inhabit the narrative, enrich it, and propagate it.

Consider Stanley Cups. After a viral video showed one of their bottles surviving a car fire(3), the brand turned the incident into a narrative: the essential lifestyle accessory for the active millennial woman. Users co-created the story, developing their own Stanley culture — colorful collections, morning rituals on TikTok, shared aesthetic codes. They transformed a simple container into a generational symbol, generating content that fuels brand desire.

This active involvement builds something signaling alone can’t: a community that feels personally invested in the brand’s success. But it means accepting that your story won’t resonate with everyone.

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Strategic Implications for Creators

Diagnosing Your Current Approach

Start by determining whether your strategy is signaling or storytelling.
Ask: Are you using the same keywords and visual references as competitors? Is your value defined relative to established sector criteria? Do clients compare you directly to existing alternatives? If so, you’re likely in signaling territory. Not inherently problematic, but it exposes you to head-to-head competition and price wars.

Identifying Narrative Opportunities

Storytelling Opportunities

Authentic stories emerge from experiences or visions your sector hasn’t explored yet. Particularly rich territories include:

• Regulated industries — such as banking, insurance, or healthcare, where brands usually focus on functional benefits, leaving room for unexpected narratives.
• Immediate-consumption sectors — like food or beauty, where stories can add emotional depth beyond the product itself.
• Emerging markets or technological disruptions — when no dominant narrative exists yet, giving your brand a chance to define the story.
• Transitional moments in a sector — when old codes lose relevance and new narratives can take their place.

Go beyond functional features: what deeper transformations or aspirations does your offering enable?

Signaling Opportunities

Signaling works best where social codes are already clear and instant recognition matters, such as:

• High-status sectors — such as luxury, where legitimacy is conveyed through high-quality materials, craftsmanship, and signature creative touches.
• Established B2B markets — where adoption depends on conforming to sector standards (certifications, client references, recognized technologies).
• Product launches requiring quick traction — activating the right signals ensures immediate positioning before a narrative is built.

The choice isn’t binary. The question is: does your sector value conformity or narrative differentiation? Often, both approaches coexist, depending on your time horizon and goals.

Anatomy of Effective Storytelling

Brands naturally turn to storytelling to drive long-term loyalty, but building authentic, aligned narratives takes time. Effective storytelling requires(4) :

• Mythical aesthetics: the emotional architecture of a brand’s story — a coherent world shaped by its values, tone, and symbols, where audiences can project and recognize themselves.
• Repetition: shared symbols and rituals anchor messages and foster belonging.
• Dramatic nodes: revelation, transformation, climax — these structures differentiate stories from mere signals.
• Sharing and engagement: stories must be heard to be powerful; virality and audience resonance are key.

This is an investment, not a quick fix. When immediate results are needed, signaling remains a relevant lever — as long as its codes are mastered.

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Pitfalls to Avoid

Shallow storytelling

Authentic storytelling requires more than simply adding narrative elements to a signaling strategy. It must be coherent, aligned with the brand’s identity, and resonate with your existing audience.
Ignoring your current followers in favor of a new story risks alienating loyal customers and undermining long-term engagement.
Storytelling without fundamental coherence is tactical flair, not strategic transformation.

Poorly executed signaling

Signaling has its own set of risks when signals are poorly chosen or executed:

• Generic signals: When every brand in a sector uses the same cues (consultants all signaling “expertise,” tech startups all signaling “innovation”), the signal loses its differentiating power and no longer sets you apart.
• Inconsistent signals: When a luxury brand suddenly experiments with codes that contradict its heritage, the message becomes confusing. Jaguar’s 2024 rebrand illustrates this risk: by abandoning its historic codes abruptly, the brand risked alienating loyal fans while trying to attract a new audience.
• Signals devoid of meaning: Even high-budget signals fail if they lack authenticity or relevance. Pepsi’s 2017 campaign with Kendall Jenner attempted to convey unity but was widely criticized for trivializing social justice movements, leading to a swift backlash.

Both storytelling and signaling fail if there isn’t fundamental alignment between the narrative or signal and the actual value of the offering. Authenticity and coherence are essential.

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Orchestrating Both Approaches

Mature brands don’t choose between signaling and storytelling — they compose with both.

Mastery lies in orchestration: keeping coherence without falling into rigidity, making sure every cue, story, and medium reinforce each other across time, context, and audience.

Temporal Sequencing — Knowing When to Shift

The art of orchestration starts with timing.
Every signaling system eventually erodes: what once felt aspirational turns ordinary. Recognizing that inflection point is crucial.

Disruptive brands often begin with storytelling — they build myth before recognition. Once the story gains traction, they layer recognizable signals to anchor legitimacy. Established brands, by contrast, may start from the opposite end: injecting fresh narratives into aging codes to regain depth and emotional pull.

Formula One’s Drive to Survive exemplifies this well.
The sport had long relied on aging signals — speed, prestige, technical performance — while its fan base was shrinking. By transforming these into a narrative of rivalry, vulnerability, and human ambition, F1 reframed its codes. The series didn’t abandon the sport’s signals; it recontextualized them within a story that broadened appeal and reignited global interest.

Orchestration is about evolution, not replacement.

Semiotic Coherence — The Closed Loop

Timing alone isn’t enough. Brands need a semiotic architecture — a system where storytelling and signaling reinforce each other through repetition and coherence.
Every cue, from product design to tone of voice, should echo the same underlying myth, forming a structure where symbols and stories continually mirror one another.

In the early 2000s, Disney’s integration of Pixar didn’t simply add new content; it extended Disney’s symbolic universe. Pixar’s stories of imagination, courage, and emotional growth aligned with Disney’s founding myth of family wonder. The coherence between the two brands was not cosmetic but structural: the signals — Pixar’s distinctive animation style, emotional tone, and recurring motifs of mentorship and discovery — anchored the meaning already embedded in Disney’s identity. Meanwhile, the narrative patterns — journeys of transformation, moral clarity, and renewal — reasserted Disney’s timeless emotional core.

When storytelling and signaling work in unison, they form a closed loop of recognition and resonance — the invisible architecture of enduring brands.

Contextual Calibration — Adapting Without Fragmenting

Today, brands no longer communicate from a single stage. Their messages circulate across fragmented ecosystems — a TikTok trend, a press release, an investor deck, a campaign film — each with its own rhythm, grammar, and audience. In this dispersion, storytelling and signaling rarely appear in pure form; they overlap, collide, and complement each other.

A press release may seem like a rational exercise in signaling credibility, yet its tone, imagery, and framing still tell a story about the company’s identity and ambitions.

Unlike the controlled media landscapes of the 1960s or 1980s, brands today cannot fully dictate how their messages are received. Meanings circulate, mutate, and are co-authored by audiences.

That’s why coherence matters more than control.
When a brand’s semiotic architecture is clear — when every touchpoint expresses the same symbolic logic — even spontaneous interpretations reinforce the intended identity rather than distort it.

The strongest brands design communication systems where each element — from a meme to a manifesto — plays a defined semiotic role. Signals generate visibility; stories give it substance.

Conclusion

In a world awash with signals, here’s the strategic imperative : know when to signal and when to tell a story.

Signaling redistributes attention according to established codes — efficient, fast, measurable. Storytelling generates new attention by inventing narrative territories — heavy investment, delayed return, but lasting competitive advantage.

Mastery lies in leveraging both according to context: resources, market maturity, and differentiation goals. The brands that succeed are those that can create desire while remaining recognizable, shaping both immediate perception and long-term loyalty.

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NOTES & REFERENCES

1 : Developed in the early 1970s, Spence’s signaling theory became a cornerstone of information economics. It formalized how individuals and organizations use costly signals to overcome information asymmetries — showing that credibility in markets often depends less on what is said than on what one can afford to signal.
Source: Michael Spence (1973), “Job Market Signaling,” The Quarterly Journal of Economics, Vol. 87, N°3, pp. 355–374.

2 : In game theory, a signaling equilibrium (or pooling equilibrium) occurs when different players use identical signals, making it impossible to distinguish between them. The concept originates from Michael Spence’s signaling model (Job Market Signaling, The Quarterly Journal of Economics, 1973) and has been expanded in strategic management and marketing theory (see: Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: A review and assessment. Journal of Management, 37(1), 39–67).

3 : In November 2023, a TikTok video by Danielle Lettering went viral after showing her car completely destroyed by fire, with her Stanley bottle surviving intact and still containing ice. The video amassed over 60 million views, capturing the brand’s attention. Stanley’s president, Terence Reilly, responded by gifting Danielle a new car and additional products. This incident reinforced Stanley’s reputation for durability and generated renewed enthusiasm for its products.

4: Drawing on Roland Barthes’ insights, Mythologies (1957), who analyzed how cultural objects and practices — ranging from wrestling to wine — become “myths,” carrying ideological meanings under the guise of naturalness. He describes myth as a semiological system in which a sign (image, object, or practice) conveys a broader social or cultural narrative. This perspective parallels how brands construct storytelling: symbolic elements and structured narratives create shared meaning that resonates beyond the product itself.