Branding: It Starts Offline

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Opinion Research Polls routinely find that one in four Americans are aware of the biggest Internet companies—AOL, Yahoo, and Amazon.com—and that these same companies also have high levels of recognition among non-Internet users (most of whom are going online at a rapid pace). AOL was recognizable to close to 80 percent of those surveyed, giving it the highest recognition...well before the movie "You’ve Got Mail" was released in 1998. Based largely on the movie, AOL added awareness and, more importantly, shoppers and subscribers.

Despite all its offline advertising, longevity, and word-of-mouth advantage among a broader group of netizens, Yahoo weighed in at a distant second with more than 50 percent recognition, and Amazon.com was third with more than 33 percent of Internet users.

Amazon.com spent any profit margin it "might" have gained from online sales in promoting its brand over the past five years. The offline marketing sales figure, as pulled from the firm’s 10K, is virtually equal to its losses. This is not to suggest that the company could have been profitable had it not spent so extensively in offline marketing practices. Rather, it is illustrative of the power and necessity for making branding a fully integrated experience for the company.

In fact, if one looks at a much broader context for spending and branding, some startling numbers emerge. The company with an offline, or brick-and-mortar presence moving online with what some refer to as click-and-mortar is at distinct advantage compared to its dot com brethren. The multi-channel merchant with both an offline and online component to its presence has the advantage of a brand, good or bad. The online merchant with little to show but a Web site must start from scratch.

This is expensive. The cost of customer acquisition for the dot com venture is almost twice that of the click-and-mortar operation. And this does not ensure that branding occurs, let alone the communication of the values and attributes desired!

Hotjobs spent close to $2 million on one Super Bowl spot in early 1999, and the same amount in 2000. By advertising standards, both were mediocre efforts. Branding did not occur, though name and site promotion did. It and 16 other dot com ads during this high-visibility event did little to even create a buzz in 2000, and did much less in establishing sorely needed recognition for those online companies. But little else. Monster.com, one of the online advertisers that day, continued to run its spots during the year, providing some incremental exposure to their Super Bowl offering. Hotjobs didn’t, garnering some publicity for the dubious distinction of spending 100 percent of its annualized revenue on one spot in the first year, 1999! There was no follow-on hype for 2000, and little residual benefit from either play.

First off, a definition: the brand is the name of the company and what it and/or its offering represents to the customer; branding is the process of establishing, demonstrating, and expanding equity in what the venture is. Note that the brand is the result of customer perception, not the intent of branding programs.

We are assaulted by brand messages and attempts at branding constantly—more than 50,000 messages a day hit the average American. We wear brands on our shirts, see them in billboards, hear about them on radio, and interact with them online. Many brands are supported by fancy graphics, making them logos. Others are built with tag lines, which often are as common as the brand names (7-Up: the Uncola; Jeep: there’s only one; AT&T: the right choice, etc.).

Branding, as you can readily tell, is not a single element, but the collection of all the devices used to create the intricate mosaic of a company’s reputation. It is more than the sum total of these efforts. It is the value that the customer perceives has demonstrated time and time again.

Savvy professionals in the brand arena know this. They know that the customer intuitively or cognitively registers values, and connects them with values that prevail in society at that moment. The values are discounted if the brand value of yesterday is presented to today’s consumer! Hence, the reason for staying current with not only the prevailing opinions in society, but also the underlying media that support them.

Enter the new media, and, in particular, the Internet and its sibling electronic commerce.

Now, we say that The Internet (Web, etc.) Delivers Your Brand. Like no other moment in the history of commerce, this one means of reaching the customer is both part of the branding process and the brand itself. The Internet, especially in online commerce, exposes each and every part of the enterprise to the customer and others who are influenced by our actions. If we excel at marketing, yet fall short in site navigation, handling the transaction or carrying out every nuance of back-end fulfillment and logistics (including customer service), the branding process has failed. In offline commerce, there are as many failure points, but because of the longevity enjoyed by many companies and the slow pace at which brick-and-mortar operations move, branding faux pas can be covered up and the moment made good for the customer.

Not so in the real time world of e-commerce!

A discourse on this aspect of branding is a paper in and of itself. For the moment, let’s concentrate on establishing the premise for the brand—the marketing side of things.

The starting point for brands and the branding processes is in finding attributes that resonate well with consumers. Developing a brand takes many forms, but an ad agency or other creative service usually inspires it and is given credit for being the initiator of a branding effort. Branding, however, is a process that must begin long before the agency is called in, and it never ends. It is ongoing. And just about everyone in the organization participates in supporting and enhancing the image that the brand represents. The acronym for our mantra above, The Internet Delivers Your Brand, is TIDYB for those who dote on these things.

Why Is Branding Important?

There are demonstrable benefits associated with a strong brand:

• Consistently larger volume/revenue year after year

• More leverage with the channels or intermediaries because customers will request the strong brand, or go to competitors for it

• Resists price competition—which equals margin protection/enhancement

• Can support assertions around high-ground market positions

• Longer life with greater levels of loyalty

• Can support the launch of new offerings

• More forgiveness when quality slips or position is temporarily lost.

A powerful brand not only distances you from the competition, it cuts you some slack if there is the inevitable mistake at any step along the online continuum from first attempt at communication through reverse logistics (returns).

In addition to borrowing techniques from older analog media, the Internet is beginning to add new techniques (and with them a layer of new media forms). Successful use of the Internet can both open a new world for the use of branding techniques and be a lucrative territory for this discipline. Many nimble and adept professionals, schooled in branding techniques and digital communications, are already grasping the potential leverage to be achieved by branding from the inside out!

Nothing is more important for understanding the power of the new media and the use they play in supporting electronic commerce by building a strong brand presence than realizing that not only is time-to-market severely compressed but also the time horizon for market cycles is collapsed. The Internet does more to collapse the process leading to success or failure in branding than any other medium has or will have because of its immediacy and the power with which it increases collaboration between enterprise and customer...or expands the gulf between them.

E-commerce can be the beginning, middle, or end of a positive customer relationship!

As electronic commerce gains a stronger and stronger toehold in the marketplace, it is going from a sliver of the marketing mix to a much more viable and stronger presence. Branding electronic commerce offerings holds the promise of altering patterns that marketers use in other media.

The primary goal, as always, is to establish a strong brand presence. The measurable result of the branding process is customer evangelism—when the customer not only cannot get enough of your offering, but becomes actively involved in promoting it, as well.

Most branding attempts in the online world are, unfortunately, modeled after their offline counterpart efforts. They follow disciplines established by either billboard advertising or television. Banner ads tend to reflect billboards, whereas larger presences are akin to television. Few, if any, tap the true interactive nature of the online world because of technical deficiencies—there is not enough bandwidth yet to support any but the crudest attempts at interactivity.

Brands and branding occur online in patterns that follow the offline world. Each well-established brand has its own cachet, consisting of high levels of customer trust, preference, and utility. The electronic commerce process must be designed to support these qualities, which means that content and context must be in synchronization with the brand image.

For those who are working at branding on the Internet, the attempts somewhat mirror their offline strategies: Heavy advertisers are using Web advertising to complement their efforts offline; those with low profiles offline are using content as a way to convey their online brand stances. The soft underbelly of online branding is in its ability to focus message and medium almost one-to-one. From a branding effort on the Internet, the organization can do what is not available in any other medium: demonstrate service, support, and usability, and do so in the context of content that supports the message!

Strong examples of firms that recognize the power of interactivity to provide more than another means of blasting their image to customers abound all over the Web. Ernst & Young used its Ernie site to provide more than revenue. Ernie was an online consulting service that demonstrated the depth of intellectual capital in the three operating arms of Ernst & Young: consulting, tax, and general accounting practices. That service has apparently died as a result of the merger of EY Consulting into Cap Gemini in 2000.

Online brokerages demonstrate their brands every moment of the trading day, which accounts for the slow rate of adoption by the traditional brokerages tied to their registered reps and others that interact with customers with room to dodge, duck, feint, and recommend.

If the online marketer tries to use the Web to entice customers into hitting the site and lingering long enough to absorb a few carefully crafted messages, branding cannot occur. If, however, the marketer openly tries to deliver information value, branding naturally follows in the online world.

The bottom line in online branding is relationship-building in a way no other medium, other than personal contact, can. E-commerce is the beginning, middle...OK, we already said that!