BrandLoop #11, January 2001

Internet Branding

Through the Loop covered the Third Age of Internet in a previous MarketLoop. When the Internet entered its Second Age, many claimed that it was not a viable brand-building medium. However, the benefit of experience has shown that branding is absolutely crucial to Internet success, arguably more so than in the off-line world. Through the Loop has identified and analysed success factors for Internet branding based on a long-term view of development.

What is really happening?

A quick glance through the press may give the indication that the Internet is a failing medium. The stories about how much shares soared of the first day of trading have been replaced by coverage about high profile dotcom failures. Letsbuyit.com has been rescued from bankruptcy, e-commerce sales may not have reached expectations and boo.com was all over the press. Suddenly, venture capitalists do not appear to be rushing to invest in the latest dotcom business plan. So forget the hype and understand what this really means.

It has become clear that Internet businesses do not have way of working that make them immune to standard rules of business. Like any organisation, the business model has to be not only viable but also sustainable.

There is a shake-out and this has helped us to identify best practices for succeeding in Internet branding. Distinct marketing methods are vital. While these lessons have been distilled from long-running analysis of Internet branding, they are not so different from straightforward rules of branding. This indicates that while “unlearning and starting with an open-mind are vital,” basic marketing conventions also apply to a large extent.

• Brand identity must be clear.
• Innovation has to be continually demonstrated.
• Differentiation is absolutely vital.
• The consumer is in control.

Brand identity must be clear

Branding helps the Internet business to stand out from the crowd. Those companies that are most successful have a clear and concise brand identity. They may provide what appears to be a commodity service but the strength of their branding means that they have become the defining operator in the sector. Examples here include amazon.com which is setting standards in book retailing although it may not have been the pioneer and sells essentially the same items as other internet-based retailers.

Yahoo! is the defining search engine although it may not have been the first and may not be the most effective. It does, however, have possibly the strongest brand and, like amazon.com, this has enabled it to extend into new areas both geographically but also in terms of products and services. It is also interesting to note that while boo.com was a high profile failure, it has been relaunched by its new owners with the same name. This highlights the high level of brand awareness that had already been generated.

Other brands have been developed much quicker on-line than they may have evolved in the off-line world. Companies that have focused on a clear branding strategy have defined the category in which they operate and they may even “own” that category. It becomes very difficult for a competitor to attain the same level of awareness. Examples here are Motley Fool for investment advice, Expedia for travel and lastminute.com for late ticket offers.

Branding plays a slightly different role on-line to that in the off-line world. There is less of physical presence such as stores or packaging design and so the brand has to provide “guides” to help differentiate the offering. The brand name may or may not be the same as the domain name and, in any case, they have to be able to differentiate the site from other domain names and branding used on-line without having the help of physical differentiators.

Branding can also include the provision of content to help add value to the offering. One of amazon.com’s strengths is the depth of its reader reviews while Yahoo! categorises the sites listed thus providing a helpful filter. Content richness and relevance will be key in the future.

Generic or category names are difficult to develop as brands in the same way that they would be off-line. It is also important to consider whether the same brand should be used for on-line and off-line presence. There are arguments both ways.

Innovation has to be continually demonstrated

The previous BrandLoop argued that innovation is a continuous process and that products and services should be constantly updated to survive in the hyper-competitive market-place. On-line this is all the more apparent as the nature of the medium can make it very easy to copy a good idea. Therefore, a major opportunity can become diluted very quickly. Consider the plethora of “new intermediaries” such as reverse auctions or price comparison sites.

The amazon.com and Yahoo! examples show how they have built-in rapid evolution to keep them ahead of the competition. This includes the development of local country versions proving that the Internet is an equally local as global medium as well as improved personalisation and service offerings.

In addition, the medium and its associated delivery channels are evolving rapidly and so on-line communications needs to be dynamic not just to keep up-to-date but also to take advantage of any opportunities offered.

Differentiation is absolutely vital

It is important to offer something different. This may be obvious but differentiation has to be dynamic and sustained in an environment when an innovation can be quickly copied and on a global scale. Retailers may be selling from the same catalogue so incentives must be given to encourage the consumer to visit. This could include adding value through additional content but it is clear that price and product range are not differentiating elements of a company’s overall offer. Customer service and delivery are going to become areas where e-commerce will thrive or struggle. On-line communications are essentially individual messages quite different from the broadcast media of the past. Thus the extent to which communication are personalised and made relevant to the individual are crucial. Personalisation helps a marketer to offer unrivalled customer service and, moreover, it makes the service easier to use.

The consumer is in control

A successful on-line campaign will recognise the fact that different channels are used in different ways and that different types of messages can be sent to different types of access devices. In addition, there are two key elements of on-line marketing that are almost unknown in the off-line world:

• Two-way communications are normal.

• The consumer is in control.

The consumer communicates with the marketer in a form of dialogue rather than listening to or viewing a marketer’s monologue. This could be in the form of interacting with databases that capture details of purchases and other behaviour.

There has been much discussion about on-line marketing issues such as the click-through rate. However, this fails to recognise the fact that on-line communications are consumer-driven and are not led by the marketer. The consumer tends to be looking for something in particular and so mass marketing techniques are not appropriate. Consequently, they may only click when they have finished their task or on a later occasion. Consumers will choose if and when they wish to visit a marketer’s Web site.

Intrusive Internet communications such as pop-up advertising and windows may be viewed as attempting to push messages to consumers in a non-push environment. This does not mean that they have no role but they should not be used and evaluated in the same way. On-line marketing has to address the opportunities that the medium offers and build communications around this rather than simply transferring off-line communications.

Implications

The Internet has been marked by excessive hype as well as scare stories. This is not the sign of a medium in trouble, rather more it is evidence of the fast pace of development and the fact that Internet marketing is radically different from traditional marketing. Quite simply, it is more difficult to achieve results in a hyper-competitive and rapidly evolving sector. However, basic branding conventions still apply.

The Internet business model must be sustainable. There will be much more shake-out in the sector but simply setting up a Web site, however good it is, is no guarantee of success. The business model will have to adhere to general business and marketing rules as well as take into account issues that are specific to the Internet.

Action points

• Is brand identity clear? How do on-line and off-line branding relate to each other?
• Is innovation built-in and demonstrated? It is absolutely essential to stay one-step ahead of potential competitors.
• How is the site differentiated from similar operations? Is it possible to be closer to the consumer through a high level of personalisation?
• Is the consumer in control? The site and its related marketing communications should not alienate consumers through over-intrusion. However, it is necessary to encourage them to visit the site when they wish to.