Learn Strategic Brand Management
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
How do internet brands function, the purely online brands such as Goggle, embay and Amazon? What are the specific mechanisms of their growth, seemingly so rapid while it mistaking place? We now have the benefit of distance to guide our analysis. The first phase of the internet, which led to the speculative bubble, was that of prophets rather than profits, business plans rather than proven use.We know what happened to the thousands of investors who believed in an El Dorado without effort.
Nevertheless, the end of the beginning was not the beginning of the end. While investors turned away from the internet as quickly as they had first picked it up, campus students, researchers and managers continued for their part to make increasing use of it. We now have phenomenon that has restructured our society, and will remake our way of life, redefine our expectations and our impatiences.The process is underway, since the billions of users who have tried it are asking for more. With Web 2.0, the internet is becoming the first interactive and interpersonal mass media: the rise of bogs is the clearest signal, as is the rise of sites such someplace and You Tube.
The pure internet brands, also known as brands dot.coms, have begun the new century in a very different context from that in which they were born. Only the best from that first period remain: Amazon, Goggle, embay, My Space. We must learn from them and from others how the online environment creates very specific conditions, which are themselves transforming traditional brand management.
The customer makes the brand
One of the reasons that so many internet start-ups in the first period never took off, implicating so many investors in their collapse, was that they only thought about their flotation on the stock exchange, offering considerable prospects for increases in value.The paradox, as we know, is that they still had very few loyal customers, very little income, and were far from covering their running costs. The majority of those companies that boasted of their high spontaneous awareness scores were strangely silent about their sales.We experienced a period where valuation preceded value.
Logically, it is the value created by the customers that is the only basis for serious valuation.It is true that the e-brands of this internet era innovated by creating a way of functioning that was aimed more at investors than at consumers and value creation. The dominant logic aimed to bring together a significant pool of several million euros in order to invest quickly in an offline advertising campaign, essentially on prime-time television, in order to create interest in another pool, which would be immediately reinvested in advertising.The spontaneous awareness thus created gave rise to curiosity, causing people to click on the icon and visit the page, but above all it impressed investors, sure that they were getting their hands on one of tomorrow’sinners.
This was neither B2C, nor B2B, but B2I, business to investors. The goal was to achieve the initial public offering (IPO), and flotation on the stock exchange, as quickly as possible.adly, how many start-ups confided in us, off the record, that the initial clicks were from curious surfers who did not buy anything? It is true that the internet has its aficionados, young and ultra-curious, in search of the latest innovations – but consequently also disloyal and fickle.
Since it was born from dozens of internet reviews, not to mention supplement sin the ordinary press and magazines, each new campaign thrilled editors, since it gave them something to talk about. These start-ups were surfing on a rum our effect, not on reality. Rum ours will always run out of steaming the end.
During that same period, for the brands that have survived, the Bays, Amazons, Goggles and Intuits, their delighted customers were continually talking about them, essential lyon the internet, chat rooms, e-mail, forums and the like. One of the surest predictors of company growth is what is known as the NPS (net promotion score)(Reich held, 2006).
This is the difference between the percentage of people who would recommend the brand to others around them(known as promoters) and those who would it to those around them (known as detractors): the score is 40 per cent for embay, one of the strongest. We are indebted to Jefferson for the following quote: ‘Our users would tell us what was wrong during the day, and we would work overnight to improve the system.’ As for the boss of Inuit, he reminds us that on Web 2.0, it is useless to invest in advertising campaigns, since it dissatisfied customers who do the work: it is necessary to invest in ways to satisfy them, day after day.
This is the specificity of the Web 2.0internet brands: ‘brand building’, construction of the affect and attachment to the brand, is much faster, since the company can receive immediate feedback from its clientele, segment by segment, person by person, and immediately make the changes that will increase satisfaction, to the great surprise of the people in question, who notice the improvements for themselves day by day.
The internet brand is both experiential and relational. It is experiential, because each person forms their own idea by visiting personally, by living the experience. One only has to visit Goggle to be impressed by what simple click can obtain, time after time. It is atypical process of loyalty generation through the systematic distribution of gratifying experiences to the user.
It is relational, because the great strength of the internet is its ability to learn from each individual, one to one, and to demonstrate what it has learnt to that same individual. Amazon is the model here: the user only has to go online to see that he or she is recognized, and welcomed with good, personalized news(new books chosen for him or her, based on recent purchases).
To this is added the positive effect of‘network externalities’. embay has benefited from these, as has Kellwood: the more visitors there are to an auction site, the greater the chance that the sellers will find a better buyer able to offer a better price, and likewise the greater the chance that the visitors will find seller with the product they have always wanted, but had despaired of ever finding. It isa giant virtual car boot sale, like the Paris flea market or the Potbelly market in London, except that it is transparent: the user can tell immediately who is offering what.
Visitors toe Bay have all the more reason to revisit the site, since it continues to grow – not to mention the fact that by returning to the same site, users have no need to relearn how to use it. They already have their bearings, even when they are not recognized, spotted and greeted like a dear friend. These are all factors that create, if not a barrier to leaving Porto visiting rival sites, at least a mechanical propensity to revisit. Of course the service is high quality, and is always improving, to adapt to clients that are becoming more sophisticated and whose demands are growing. Like any brand, the internet brand must continually create value for each fragment of its clientele, almost one to one.
The internet is also a mass medium of affinity: users can immediately communicate with their friends and community how satisfied they are with a particular site, and what they have just found or experienced there. Electronic word of mouth, or ‘word of mouse’, finds an accelerator out of all proportion to usual word of mouth, hence the recent notion of the ‘viral rum our’.
Virtual closeness and psychological closeness
What is a brand? Fundamentally it is a name(and its associated symbols) that has a lasting influence on purchasing behavior. What is big brand? A name that is also linked with emotion by a very large number of potential purchasers. A big brand has no effect without an emotive relationship. It is this attachment, or commitment, that generates the desire to pursue the relationship, from the purchaser’point of view, which translates to loyalty to the brand. The value of a brand is measured by its capacity to create a personal tie of loyalty with the consumer, at a particular price level.
Are the pure internet brands brands like any other? Studies show that closeness is still lacking for many brands. This might appear paradoxical at a time when the internet is presented as the alpha and omega of personalization. However, those are the facts. When asked, consumers are hesitant to say of dot.coms, ‘This is a brand I feel close to’, as if the relationship of repeat visits had not yet been translated into a genuine intimacy and complicity.
Do we visit Kellwood, a price search engine, or Price Minister because we prefer Kellwood or Price Minister? Or simply because they are the only names that immediately spring to mind, so that we click on them, and then click on them again, using the economy of effort represented by a favorites list?
For some analysts, this lack of closeness is structural: the pure dot.com brands will always lack the sensory, physical and palpable dimension without which there can be no genuine closeness. What is left of these brands once the screen is switched off? For other analysts, it is a temporary phenomenon. Relational closeness is built over time, through repeated and extended use. Thus Yahoo! began as a search engine, and then extended its services to local weather forecasts and many other services. In doing so, it is penetrating more deeply into the internet life of individuals.
Brands such as embay took four years of silent work to progressively refine their concept and their services: they made little use of advertising, but much more of word of mouth of satisfied pioneers, then early adopters and finally customer-ambassadors. Their reputation was built through interactions with enthusiastic surfers, who had the feeling of being listened to, which in addition to their recommendation also had the effect of lending these brands an emotive dimension and closeness.
The closeness and complicity are those of shared values and emotions – hence the phenomenal success of a site such as Mustache You Tube, both bought by Goggle for baking’s ransom for that reason. Amazon, for example, is a genuine brand in the sense that it carries values that extend beyond the product. It has moved beyond the marketplace by offering on its site a new way of interacting with other people on the subject of books, and now many other products as well.It symbolizes more than the new economy – it prefigures a new society and a new era.
How does the internet brand communicate?
The brand’s first medium is its name, in this case its domain name. Two schools of thought clash on this subject. The first is afraid of general ism, a disease that we have often shown and castigated: wishing to describe the service, all actors end up with names that ar every, if not too, similar. The purpose of ab rand name, as with a domain name, is not to describe but to distinguish. According to this first school of thought, a site for small online advertisements or online auctions should under no circumstances call itself ‘e-auction’, but rather ‘embay’, for example (which is indeed the name of the world leader). There are in fact many competitors seeking to use the generic term ‘auction’, which will quickly create confusion in the market for consumers.
In fact, the leading European online auction site was called Nebraska, which did not describe the service but brought a touch of added value(the word bazaar invokes spontaneous mental associations of profusion, excitement, merchandising, human relationships, amusement, as with the Great Bazaar in Istanbul). The word ‘bazaar’ immediately brings added values and emotive resonance.
The second school of thought states that the appropriation of a service also occurs through the appropriation of its name. We should add that the strategy of appropriations not limited to the name, but involves temporal advance and the exploitation of this advance at the online and offline communication levels. Thus the leading brand in price comparison is named Kellwood. To a French speaking audience, it sounds like ‘squelch?’(What price?), with a touch of modernity and impertinence in the spelling.
Note, however, that for Swedes, Germans, Spaniards and Italians, Kellwood is a purely connotative name, which is evocative but means nothing. By lucky chance, it still retains positive mental associations (in Germany, for example, the sound of the word Kellwood evokes ‘calculation’, and in Italy it evokes something funny).
The example of the first internet portal dedicated to women in France is also revealing: what could be more descriptive than the domain name aufeminin.com? The choice of this name met three objectives: to find an explicit name to make a quick impact, a name with potential to become a brand(therefore with emotional depth), and of course a name available on the internet (it was bought from the owner) and also able to be registered as a trademark.
Add a fourth, implicit criterion that must characterize all internet brands: its potential to be immediately internationalism. In fact, aufeminin.com became enfemenino.com in Spain, alfeminile.com in Italy, andgo.feminine.de in Germany. From the point of view of this fourth criterion – internationalization – a non-descriptive name is easier tousle, but has the disadvantage in the country of origin of not being direct enough, if directness is the objective.
After the name comes the home page, the brand’s lobby. Goggle’s example is revealing.Few places on the Web have been thought through as carefully as this almost virgin, all white page. Paradoxically, the more Goggle in reality an ogre, a hydra that wants to buy and swallow up everything around it, to become the number one mass medium in the world, the more important this page becomes.
It hides the tentacle dimension of the Goggle company via a very pared-back, limpid, serene brand design, an advertisement for a world where everything is simple, beautiful and easy. One only needs to insert a word in the search box and await the miracle. The home page is certainly a key application point for the internet brand:Orange’s home page resembles a bazaar. It dislike being on the Paris metro: far from the desired personalization, it is full of competing advertisements that manifestly have nothing to do with the individual.
Then the brand communicates through its ergonomic qualities, its arbores, its complication or the ease of moving through the site itself – not to mention the background, the ability to move customers to the point that they wish to return to the site, knowing that there will always be something new for them. There can be no brand without regular good news for customers and visitors!
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