Wednesday, February 20, 2008

Building Brand Awareness

Powerful companies with large promotional budgets are reinforcing their competitive advantage through strong advertising offline as well as online. In 1998, the rage cost of building a national online brand was about $5-10 million. In 000, it cost $50-100 million, a tenfold increase. In 1999, 40 per cent of web-development budget was going on towards marketing, with more than 80 per of all television commercials in the USA featuring a Web address and 30 cent promoting an individual Web site (Lindstrom, 1999). Excessive spending brand-building without compensating revenues can be blamed for the down- of many dotcoms. Many of those that survive have incurred significant cost. According to Haigh 00), AOL has so far spent $2 billion on building its brand identity and Yahoo! 00 million.

Web site promotion is becoming more sophisticated, but there is always the danger of targeting the wrong audience, which was estimated to be the case in many as 70 per cent of 1999 campaigns. This has led to a quest for a more effective way. Some companies have been quite creative. For example, Orange Technologies, during the launch of a special youth product, offered to repaint its customers' cars free of charge. The only condition was that Orange would choose the colour. (Guess which one!) After just one day, 24 cars had been painted, at the cost to Orange of $4,200. Even giants like Yahoo! have resorted to creative, inexpensive offline promotions. Chauffeurs holding signs at airports to pick up 'Mr Yahoo!' have actually been corporate promotions (Lindstrom 1999). Gimmicks like this resulted in extensive free publicity for such companies in the media in the early days of the Internet. Small companies have found it hard to compete with these levels of expenditure, and hence need to be particularly creative in order to maximize the value of small promotional budgets. Many advertisers have adopted the now widespread use of banner advertisements as branding tools rather than transactional tools. 'There is absolutely a branding opportunity for advertisers on the Web,' says Jim Nail, senior analyst at Forrester Research, in Cambridge, Massachusetts (Heim, 2001). A good example is the Visa credit card company (ww, which in the past has blanketed the Web with banner advertisements. The consistency of the Visa brand has been likened to a reader consistently seeing the same advertisement on the back of a magazine. This in effect is helping Visa to solidify its brand image. Nevertheless, research undertaken by Dahlen (2001) on banner effectiveness has found that there are major differences between the performances of banner advertisements for familiar and unfamiliar brands. Unfamiliar brands initially perform badly, with very low click-through rates, but with repeated exposures the response rate increases. Familiar brands initially attract interest but customers quickly get bored with their campaigns, and response rates fall. Moreover, major differences were found between novice and expert Internet users with regard to their relative susceptibility to Web advertising. Dahlen therefore recommends that unfamiliar brand banner advertisements should have long-term goals, allowing multiple advertising exposures. For familiar brands, on the other hand, there should not be a long-term goal, as the advertisements quickly 'wear out'.

Internet 2010


Creating a strong brand both online and offline involves far more than the 'look and feel' of the Web home page, the logo or the new brochure. The very essence of a strong brand philosophy is the way in which the staff serves customers - a key part of creating brand convergence. Whether the customers are surfing the Web site or using the service offline, the organization must ensure consistency of all 'customer touch points' to create a single, comprehensive and memorable brand. This involves significant management and staff training, motivation and constant follow-up. Striking the right balance between online and offline delivery systems to satisfy and deepen customers' relationships and maintain the uniqueness of the brand has to be the key to success. A convergent brand strategy has to address some or all of the following issues:

  • Which are the channels that the customers find best suited for delivery of each service: a branch, telephone or online?
  • Are the marketing strategic plans adequate to support integrated delivery through all the channels?
  • Are the staff motivated and appropriately trained? Remember, a `convergent brand' will have an impact on all areas of the organization.

Ensuring integration of high-touch/high-tech delivery channels, creating consistent, differentiated brand and maintaining acceptable operating costs customer will be essential for survival. Offering customers relevant services building a strong brand image in this way are seen as vital for the future of industries such as banking (Weber and Seibert 2001).

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