WITH BUSINESS headlines still charting casualties in the great dot-com meltdown, it should come as little surprise that creating a successful brand on the Internet is more complicated than simply beaming your latest ad campaign onto a customer’s desktop. Some companies trying to stake out territory on the Web shouldn’t even be there in the first place, experts say, and others may need to develop a different strategy to create a meaningful presence.
Certainly, despite Wall Street’s waning appetite for Internet stocks, the allure of doing business on the Web is still white-hot. In- deed, traditional companies are taking to the Web in even greater numbers than those untested dotcoms. According to a recent Jupiter Media Metrix Ad Relevance survey, the number of new online advertisers increased by 157 percent from January through October 2000, growing at an average rate of 14 percent a month. While traditional advertisers accounted for roughly 41 percent of the top 100 new online advertisers in January, they made up close to 50 percent in October, with dot-coms rounding out the other half.
Before taking the great digital leap, however, top executives should first figure out the answers to some basic questions. For starters, why go on the Internet at all? Contrary to what some believe, the Web does not have to offer a virtual replication of a real-world customer experience. “The burden has shifted from delivering a functional offering to making an emotional connection that creates preference,” says John Grace, executive director of Interbrand, a global branding consultancy whose clients include Lucent Technologies, BMW, British Airways, and PricewaterhouseCoopers.
Grace urges CEOs to take the time to study what role the Web would play in their business’ daily operations. Is it a tool for building commerce, disseminating information, or simple brand-building without a commercial attachment?
Next, companies must determine whether the Web can help them build a relationship with consumers. Brands, after all, are shortcuts to helping people make purchase decisions. When a customer relationship is strong, brands can be successfully leveraged with new communication, or in a new context. Volvo, for one, recently launched its S60 sedan online, targeting upper-income prospects with strategic teaser messages, but no offline media. Its reasoning: Customers would seek out the car for themselves, laying the groundwork for Volvo to do more “permission-based” communications.
Finally, once the relationship cues are in place, a company must ask itself if its Web experience is really unique. Retail brands, such as Gap.com and Schwab.com, have learned that strong attention to customer service is a crucial way to differentiate themselves in a marketplace of numerous options. The Tiffany.com home page, for example, does not bombard visitors with baubles and silver that can be delivered in its trademark turquoise boxes, but rather, “10 top table manners,” a social lesson befitting a premium brand that stands for “doing things right.” The key, then, is making a site distinct without interfering with its usability.
Amazon.com, adds Grace, is another classic example of a business that has successfully built strong customer relationships using a rather old-world technique of direct response. Aside from carrying various best-seller lists, Amazon alerts customers to other books purchased by readers who’ve chosen a particular title, and sends personalized e-mails from CEO Jeff Bezos with information on new releases and special discount offers. In effect, Amazon treats customers like assets, not transactions.
Getting the Right Idea
IF ANYTHING can be learned from the legions of failed dot-com brands, it’s that building brand awareness is no longer the only criteria for doing business today. Brands must also prove they are relevant. Online retailer Boo.com advertised heavily and built huge expectations for delivering low prices on fashions and sportswear, but it then failed to deliver on those promises. With a new set of investors, it’s now trying to make a comeback. The site no longer carries any merchandise, but will link visitors to individual store sites.
How did so many dot-corns go wrong? Working with cheap venture capital they frittered away millions of dollars on offline media-namely costly TV advertising campaigns-to grab attention. Many of these newcomers had untested business models, or did not generate enough consumer interest, and thus had little profit potential. When the VCs checked out, the party stopped-leaving investors and bankruptcy attorneys to assess the damage.
Pets.com logged huge accolades for TV ads with its famous sock puppet. Its inaugural campaign scored at the top of USA Today’s Super Bowl Ad Meter contest last year. But the clever mascot -who grew so popular that he “wrote” his own advice book, entitled Me by Me (PocketBooks, November 2000)-was not enough to keep the purveyor of pet supplies from the scrap heap.
“In this climate, you really have to test and learn and demonstrate you have a viable business that can generate money and encourage visitors to return to your site,” said Gregg Fisher, director of strategic services at Icon Nicholson, a unit of New York-based Icon Medialab that offers integrated e-business services to the likes of Fujitsu, L’Oreal, Motorola, and Nestle. “Then you have to take what you learn from your customers and build a business around that, rather than blanketing the world with advertising and marketing messages and forgetting about the more fundamental operational issues that really matter.”
So great is the temptation to experiment that General Mills, for instance, is testing a program that will allow consumers to customize their cereal via the Web at www.mycereal.com, with the chance of offering more than a million possible combinations. Big G’s motivation: Giving people greater “power” in decision-making based upon their own needs and tastes to rev interest in an otherwise lackluster cereal market. Under the plan, cereal orders will be shipped in two to four days and delivered to a customer’s home for about $1 per serving. Whether the option will be more than a novelty is an open question, say observers, who remain dubious of its success.
“I’d suggest that it will have a lot more power as a marketing ploy-and a short-term one at that,” says Will Novosedlik, global practice leader for branding at Organic, a San Francisco-based Web services firm. “Clearly, the biggest challenge going forward for traditional mass-market companies is how do you set up to accommodate personalization without going out of business.”
Novosedlik thinks rival Kellogg may have a better trick up its sleeve with its “Eet and Em” online loyalty program, which uses a hungry horse (“Eet”) and a thrifty pig (“Em”) to get kids to accumulate points to win prizes. “It gets kids to interact with the brand online. It’s taking the classic communication from the back of a cereal box onto the screen-and it has more of a chance of success than customizing a bowl of cereal,” he says.
Still another issue that CEOs must grapple with are brand names themselves. “At the highest level, the question must be asked, do we use the same brand we have now, or do we adopt a new one?” says Fisher.
He relates the story of an unnamed insurance carrier known for dealing with personal products for affluent customers that was looking to move online with a property and casualty business geared to small business owners. Since its name didn’t have much relevance in the new market, it decided to go with a totally different brand. “Managing a brand online is about managing a 24-hour, seven-day-a-week completely transparent experience with customers they may never come in contact with,” adds Fisher. “But with brands more participatory than ever, companies have the opportunity to collect incredible amounts of data from customers and tailor who they are as a business to individual needs. It throws the whole idea of branding on its edge and lets users take ownership of the brand.”
EVEN MIGHTY Procter & Gamble I chose a different name, Reflect.com, for its cosmetics Web site that allows users to input details about their skin type and hair color to develop a customized line of makeup, sans pressure from snooty department-store sales-types. It’s a smart move, reasons Sergio Zyman, the former chief marketing officer at Coca-Cola, who is now a Web consultant in
One of the many myths of the Web is that brands have to spend millions of ad dollars to gain recognition. eBay has won high marks for creating the online auction model, without significant spending on media. Instead its first-tomarket service generates word-of-mouth referrals. “They essentially came in and replaced something that people liked to do-going to garage sales on Saturdays and Sundays,” says Zyman, author of Building Brandwidth: Closing the Sale Online (HarperBusiness, Nov. 2000). “Now little old ladies in
Similarly, Chrysler built awareness for its retro-styled PT Cruiser last year when it took the vehicle to auto shows and college campuses, where it collected e-mail addresses from interested prospects, and then invited fans to online chats with designers. The campaign created demand for the PT before a single car rolled off the assembly line.
For most businesses, an online strategy should complement the offline message, but even then there are exceptions. “There are many categories where the brand opportunity is to mine the experience, rather than the end result,” says Interbrand’s Grace. He recalls working with a maker of tulip bulbs some years back, whose blooms were cherished by gardeners. But research had taught the company that people got more satisfaction getting their fingernails dirty, planting the tulips, and waiting out the winter before finally getting the flower, “which was almost secondary to the whole process.” Similarly, Grace is advising a client developing a travel portal to hit upon the trip-planning process and exploit more of the discovery experience, rather than just make it easy for consumers to purchase airline tickets.
Inside vs. Outside
If a CEO feels fairly confident of what he or she is looking to do on the Web, there’s a strong chance that the strategic planning can be done in-house before going outside to hire a firm for design and systems integration. But if a company has little understanding of where its Web opportunities may lie-and doesn’t really have the time to learn-it might make sense to go outside from the start and carefully review the prospects.
Unfortunately, many traditional companies are not playing it smart. Look at who the average company puts in charge of its Web practice, notes Zyman. “It’s either someone right out of school or near retirement.” Some 40 percent of his consultancy’s contacts are initiated by CEOs, Zyman estimates. But it should be higher. “A CEO would not fly in a plane without a well-trained pilot,” he says. “You need business people who understand the role of the Web in an overall strategy.”
Banner Ads-As Good As It Gets?
IN THE EARLY stages, a new medium takes on attributes of the one that preceded it. Early radio, for example, was simply a live performance broadcast over radio waves. Banner ads, the most prevalent form of online advertising, are a way of us looking at the Web and seeing it as a medium that attracts traffic, but little else. And for the most part, they do a ghastly job of brand building.
Fortunately, with the dot-com shakeout, advertisers are finding cheaper deals and a general willingness by portals to work on more media-rich innovations. Still, online agencies note that in a “contextually relevant” environment, where consumers are driven by a particular need-i.e., looking to book a vacation-there is a strong likelihood that they’ll click on an ad banner, enabling targeted messages to score higher than the average 1 percent click-through rates seen with banners in general. “Until broadband arrives and the bandwidth clears up, the Web is much more suited to a pull strategy than a push strategy,” says Fisher. “It’s about putting your message where people who have a specific need are likely to go and look for it, and bringing some functionality to it.”
Thus, Yahoo! travel allows advertisers to sponsor the portion of its site where consumers go to book their tickets. And that’s where a good online brand experience can enhance a company’s profile even faster than usual. Gomez Advisors, an Internet quality measurement firm, recently gave delta.com the top ranking in the Customer Confidence category and first place in its Internet Fare Shopper user profile. Delta.com also moved up to third place from fourth in the overall rankings and turned in the best performance in both e-mail and telephone customer service inquiries-far beyond its recent ranking in industry surveys. “The difference online is that a brand isn’t just a communications issue,” says Novosedlik. “It’s an organizational one.”
Karen Benezra is the editor of New York City-based Brandweek magazine.