To Brand or Not to Brand
By Michel Fortin
Posted Tuesday, August 24, 2004
The shift that marketers are making from institutional marketing to what I call "directional" marketing is a rather interesting one. While the most notable reason is the fact that the Internet expands one's target market and increases the sales potential, more often than not it is also the fact that it is arguably more cost-efficient than any other medium.
The web is an extraordinary tool that can help most ebusinesses to accomplish various things. One in particular is the reduction of costs that one would have normally incurred when doing business offline. In other words, what better way would there be to advertise, sell and serve the customer as efficiently, errorlessly, timely and economically than through the web?
People assuming that Internet marketers are not making money online (at least not yet, anyway) should think again. Profits are being realized right now in explosive amounts and in multiple ways, and online companies are laughing all the way to the bank as a result. For example, analysts are purporting that the upcoming holiday season will potentially become one of the busiest, most lucrative times in the history of the worldwide network.
But more important, the savings resulting from more efficient marketing intelligence gathering, quicker product roll-outs, expanded market reach, more expedient order fulfillment and greater public relations potential have made ecommerce the most profitable business activity ever. Due to the fact that the Internet is completely user-driven, direct marketing has become not just a tool for brand-builders but also a necessity to their online survival.
A recent article in CyberAtlas (see (http://cyberatlas.internet.com/)), entitled "Internet Advertising Focused on E-Commerce, Not Brands," revealed online advertising statistics amassed through a Strategis Group study. Surprisingly, the study claims that the top 50, most visited web sites on the 'Net as a result of online advertising is not the larger, more branding-oriented companies but the direct marketers -- such as Amazon.com and eToy.com, as opposed to, for example, Procter and Gamble, Ford Motor Company and Coca-Cola.
However, while some of the larger companies are spending huge amounts of advertising dollars to brand their online presence (with institutional marketing), which will devour a significant portion of their profit margins, the cost-savings factor of the web balances it all out in the end -- thus making ecommerce exceptionally attractive, particularly to direct marketers.
Institutional marketing is not a bad concept -- building one's unique identity if crucial. But alone it's very risky and requires a large investment of capital -- something most small to medium-sized businesses can not afford. Therefore, should branding be left out completely of one's marketing strategy? Not really. In fact, it can (and should) become a natural byproduct.
Brand loyalty can come as a result of implementing directional marketing, which is not only a more cost-effective approach but also a natural extension of the web due to its more intimate environment. Click-happy netizens have very short attention spans. Therefore, direct marketing is necessary to take users by the hand and lead them to favorable outcomes.
But the proper use of various elements of online marketing, such as a more professional looking site, benefit-based product and domain names, positive client testimonials and strong guarantees can help to leverage a direct marketer's efforts while creating strong brand preference. For instance, how many sites have lost customers -- sites with great sales copy, reputable products and outstanding offers -- due to sloppy looking design?
Such elements may seem a part of the branding process but in fact they also support the direct marketing process. Take Hotmail for instance, which is now a well-recognized brand on the Internet. Did it arrive at its position through pure branding efforts? Not at all. Through viral marketing, they managed to plaster their brand name at the end of each email they helped to deliver -- which are now numbering in the millions daily -- while gently directing users to their web site and getting them to take action by signing up for their free service.
Nevertheless, cost-efficiency is certainly an important aspect of online marketing, and the goal here is not to negate branding entirely. However, directional marketing can include an array of practices, from response-oriented promotional activities to upselling offers -- all at the same time building brand equity. Branding should be a byproduct, not a goal in itself.
Take Yahoo!, for instance. In the beginning, this little, unknown Internet directory was not a strong brand but had the capability of attracting hoards of netizens to its site. Today, Yahoo! is almost synonymous with the web. It maintains the recognition as being the leading search engine on the web -- even though it is not an engine at all, which underscores the whole point.
Beyond creating recognition and loyalty, branding also communicates a certain degree of credibility. Often, direct marketers are placed in the same category as sleazy, pushy snake oil peddlers. A century ago, peddlers would travel from town to town selling their wares with the sole goal of selling as much and as fast as possible in order to leave town quickly, thus avoiding the inevitable wrath of their dissatisfied customers. That stigma still exists today.
However, that fear is easily justified. There is no doubt that scamsters exist online. Markets are more accessible, which makes easy prey easier to find. People are still leery of buying on the Internet to a certain degree (and rightfully so) as a result. But a good dose of credibility-building can make a direct marketer shine. This is where branding comes in.
Directional marketing should include various branding elements that are often used in the offline world. (Conversely, institutional marketers are also slowly recognizing the need to implement directional marketing online.) Direct marketers with poorly designed, inconsistent looking sites will have a tough time in building repeat and referral sales. Consequently, they may need to spend more dollars and energy upfront on creating new customer relationships.
When visiting Hotmail's web site (at (http://www.Hotmail.com)), one can instantly recognize their unique brand: Their logo, their corporate colors and their professional appearance. But at the same time, one is offered a variety of options and links: From reading Hotmail's privacy policy, reasons for signing up, frequently asked questions, to new product offers.
In fact, the latter includes their recently launched product, MSN's instant messaging tool, in order to compete with the Internet's current leader: AOL's ICQ (at (http://www.icq.com)). Users are gently directed to sign up for this additional free service. Of course, all of which are aimed at building MSN's (and Microsoft's) brand. But it's direct marketing nonetheless.
In the end, while direct marketing has a firm place on the worldwide web, it does not replace the branding process completely. In fact, strong brands communicate greater perceived value, can defend their offers against price competition, make the direct marketer's job much easier (with repeat and referral sales) and help to curb costs overall.
Therefore, a direct marketer must be aware of branding, such as a consistent, professionally designed site (i.e., graphics, message, color scheme, etc) as well as benefit-based product and domain names. These are just a few of the elements that, while building strong online brands, can surely help to increase sales -- and save a lot of money down the road.
About the Author
Michel Fortin is an author, speaker and Internet marketing consultant dedicated to turning businesses into powerful magnets. Visit (http://SuccessDoctor.com). He is also the editor of the "Internet Marketing Chronicles" ezine delivered weekly to 100,000 subscribers -- subscribe free at (http://SuccessDoctor.com/IMC/).
