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Traditional versus on line Brand management What is necessary for a brand to excel in the on line environment? What adjustments are necessary to the traditional brand management strategy?

Introduction Internet Marketing offers a whole new dimension to attract, engage, retain and transact with the consumer. A bright future looms for the savvy and more technical brand manager because the number of potential customers seems boundless. However many companies do not have a result-driven path towards developing a brand on the internet. The majority of the companies nevertheless are convinced they need to be present or do something with Internet. For a marketer it is natural to translate his/her off line brand experience to on-line branding. Nevertheless this approach is at least insufficient and often inadequate. This article emphasizes the differences to approach off line versus on line branding from different angles. It will offer you food for thought and practical suggestions how to follow a successful on line Branding strategy. Without claiming to be complete or exhaustive it states Do’s and Don’ts and emphasizes what has to be taken into account. Branding and big opportunities also for small companies! Brands from a small company and with a small budget have a good chance to steal market shares from the gigantic global brands. In general the most important thing for a small brand is to be strong in its own defined market. The internet offers the opportunity to travel faster and easier than ever before in history. So stop inferiority complexes and start making your brand more present, interactive, clear and focused online. Build your brand in a new and exciting way.

Copywrite Š Innovianto

March 30, 2010

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When a customer is about to make a choice he sums up in what he experiences to be his best choice. Here the keyword is experience. At this point we can and should tap in. Branding always is known to be expensive since it can only be done by advertising and huge media investments. The big brands invest in TV commercials bringing their brands into our homes. You cannot get much closer than that, can you? We know Goliath so much better than David. Which makes David the underdog that eventually wins and Goliath the giant. We know what Goliath stands for, what he believes in and what he wants to accomplish. Forget it! Smaller brands have the opportunity to create an experience with customers, assuring them that your brand, though small, is a far better choice. For a big brand it is difficult to be flexible and creative. You cannot easily change the direction of a tanker that has gained speed and is steered by marketers that know how to steer big tankers. In a small organization it is much easier to create a unique and exciting experience and perform a consistent branding strategy. Act with a clear differentiation strategy and make yourself heard and liked. How? Brand Management: traditional versus online, the differences On line Brand management is a specialism that demands a thorough understanding of traditional Brand management as well as the dynamic methods of e-branding on the internet. A successful off line or traditional branding strategy will not automatically work online. The ideal strategy is a well balanced blend between off and on line Brand strategy.

Copywrite Š Innovianto

March 30, 2010

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Element

Traditional Brand Management

On line Brand Management

1.

Communication Target Group

2.

Word-of-mouth marketing

The tone-of-voice is aligned with the brand image. Via Internet just address any potential consumer/customer Complete new world and ground for possible Word of mouth marketing to be unlocked by the brand marketers. Internet interest groups, social networks, reviews, blogs, twitter, hyves etc.

3.

Media buying

The communication Target group is a smaller group we would like to have as our ideal brand users. Here the secret is: Who is talking about you. First we turn to people we trust, friends, family and colleagues. Very difficult to steer. Based on experience marketing, events. One-to-many Based on communication target group, hardly measurable. Waste. Brand Manager controls the one direction communication process. The manager decides. Based on segmentation

4.

Control of communication

5.

Targeting

6.

Social networks

7.

Database marketing

Copywrite Š Innovianto

Events, congresses, network groups Mainly direct mail, expensive, limited management information

One-to-one Far more targeted on behavior. Measurement. Customers are far more in control of communication online. On the Web routine collection of information on customer profiles and on line behavior patterns. Flexible real time Directly targeted, one-on-one measurable Cost efficient

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1. Communication Target Group First we need to make a distinction between high involvement and low involvement brands. Between high image and low image brands. High involvement products are products for which the buyer is prepared to spend considerable time and effort because they are of vital concern and have great impact on the consumer’s lifestyle. E.g. house, car, white goods. Low involvement products are products which are bought frequently and with a minimum of thought and effort, because they are of no vital concern nor have any great impact on the consumer's lifestyle. E.g. detergents, mints, biscuits, cola drinks, salt etc. A low image brand will face an uphill task if you try to upscale it into a high image brand. A high image brand relates directly to the buyer’s personality. Tell me what brands you favor and I’ll tell you what you find important in life. High image and high involvement demand a narrow description of the communication target group. You address your communication directly to your brand ambassadors. Striving to let them buy your brand first and then let them tell your brand story. Examples: BMW, Rolex, Blackberry, fashion brands. How to define a communication target group working for on line branding purposes? Do we still utilize the same paradigms as in off line branding and if not, in what way does it differ? For traditional Brand Management it is important to make our Communication Target Group tangible and adjust our media planning accordingly. We do this in defining the desired target group. You aim to reach a specific ”high quality” audience. What audiences do advertisers generally want? 1. Affluent 2. Influential. Male. Early adopters. (girls are more likely to buy boys things; boys are more “influential”; even though girls see more movies and women buy more cars, males are still targeted more often) 3. Young in general • because brand preferences aren’t yet established; • whole lifetime ahead of you; more valuable, “lifetime customer value” • more susceptible to advertising • make brands seem “fresh,” “vital” • aspiration (old people aspire to be young)

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March 30, 2010

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Starting our on line Brand Management campaign we follow the traditional route in online advertising and in social media marketing. So first we address the communication target group we aim for. There is a big difference however! We now have tools to keep in touch on a one-to-one basis with our user group, who probably is way from our aspiration target group. We can track and trace them and stay in contact via e-database marketing. So we can be cool, we can compete, we can look young, great and feel great, we can just do it, be it, live it and still address directly to our user group. However when an aspiration brand becomes a mass market item though, stand back and watch the fireworks fly. Then it is important to innovate and attract your ambassadors again. 2. Word of mouth marketing People love to talk. People talk about brands, cars, computers, shampoo. Off-line this world is limited to a small group of people around you and it may take quite some time to travel across the country or the globe. On-line it might be a real attack. A posting in a blog where millions of people might read about you even before deciding to buy your product. Or it might be an advantage: people start talking how much they love what you do. Now this is of course what you would like to happen and it can be achieved quite easily. Word of mouth marketing is about earning a positive conversation. But the first thing you need for this is to be honest and authentic. Your consumers or customers have almost complete power. As a marketer it is your task to give people a reason to talk about you and make it easy for that conversation to take place. Earn respect and recommendation first. Treat your consumers well and they will help you. How does Word-of-Mouth marketing work? The principles for online and offline • • •

What is the story behind your brand? How are you going to tell this story? How are you going to facilitate this story telling?

Pro-actively encourage people to share their experience and start talking about you and recommending you. It starts with a strong sense of identity translated in a brand image and a good story. Give people a story they like to tell!

Copywrite © Innovianto

March 30, 2010

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Word-of-mouth marketing can be so easy and obvious, that people just miss it. In online you don’t have to a have a large budget, a top website, a cool technology or sexy product. You can even make it work for a single story with no budget at all. Blogs are a big deal because they empower people to share ideas. To be found in Google, to be part of discussion in social networks. The Word of Mouth you find here is very visible, it’s written down publicly for everyone to see. Real Word of Mouth dips in and out of different spaces. You get an email from your mother-in-law who strongly recommends a good restaurant. You mention this unexpected email to a colleague at your office and next he gives a recommendation or a review on www.diningcity.com. Mind you. Word of mouth marketing only works if you have good products or services. A good story helps but is not enough. It will only work if people like you and trust you. Think about it. We have a new social force that rewards with free marketing, sales and profit. And this same force stops companies from treating bad or underperforming. That’s why Word of Mouth marketing is so exciting.

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March 30, 2010

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The Five steps of Word of Mouth marketing Ambassadors need a story to tell and tools to spread this story asap, marketeers join in the conversation in order to learn, track, understand and measure. Step 1. Ambassadors

2. Story

3. Spread

What to do Find people who will talk about you Give people a reason/ story to talk about you Help the message spread fast and far

4. Join in

Join the conversation

5. Track

Measure, learn and understand

Examples Your Plan Fans, customers, influencers, bloggers Humor, viral, great service, special offer, cool product Blog, tell a friend, e-database marketing, white paper, online community, viral email, personalized item Reply to comments, post on blogs, offer personal service, a concept diary Read message boards, search blogs, listen to feedback and learn

YOU CAN DO THIS, it’s easy • • •

Find your fans (they are probably standing right in front of you) Do something funny (keep it simple) Make it easy for the fans to share.

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March 30, 2010

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Story As a sportsman I live and thrive by sports. Being active and enjoying the adrenaline kick. In 1998 on August 5t, I had an accident, racing my bike I smashed into a car door. My hip was severely injured and a generic surgeon in a small hospital in Eupen-Malmedy (Belgium) fixed it with a number of screws. In 2002 my hip got worse as the cartilage started to wear out. From then on I couldn’t play squash or tennis with my friends anymore. Though this was painful, it was certainly not insurmountable. I just couldn’t accept it and tried all kinds of physicians varying from chiropractor, orthopedist, physiotherapist etc. Nothing helped. Finally in 2007 I decided, though with doubts, to have medical surgery and a resurfacing kind of hip replacement with dr. Koen Desmet in Gent (Be), specialized and renowned allover the world. With the promise to tennis, run and squash again. When I found his website I was especially interested in the testimonials and stories from other patients. I just couldn’t find one negative review. The surgery and recovery had quite an impact and afterwards I still suffered more or less the same pain as before.. The sports activities were even more limited than before surgery. I developed knee and ankle problems due to a difference in balance. In January 2010 I got a recommendation from Tom van Leeuwen who couldn’t climb the stairs due to knee problems. He visited Bill Pieplenbosch in Rotterdam, an Indonesian in his fifties living in one of the famous Cube houses, who gave him a painful kind of massage and completely cured his problem. As far as I know Bill has no medical degree. He is a modest man who studied sports massage. I had an appointment with Bill and quite miraculously pain and problems I had been suffering for years, seem to be cured completely. He only changed my balance a little, bringing my forefoot higher in my shoe and gave me a hell of a massage. Bill isn’t making lots of money since his treatments are rather cheap for not officially acknowledged. Now it’s my turn to help Bill and help him find new customers. This story is to illustrate the power of Word of Mouth marketing. How many word of mouth recommendations can Bill get? Do you have any ideas?

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March 30, 2010

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3. Media buying Traditional Advertising really differs from on-line advertising. Some of the metrics that traditional advertising use to quantify advertising exposure are: 1. Reach is defined as the percentage of people within a given universe who are exposed to a particular advertisement at least once within a given period of time. Off-line, the universe is typically based on total people within target group (male/female/age etc.) 2. Gross Ratings Points (GRP) are calculated by dividing the Gross Impressions of a media buy by the population of the audience reached. Targeted Rating Points (TRP) are GRP’s for a specific target segment. 3. Effective Reach is defined as the percentage of the universe reached at a particular frequency. These metrics are also available on-line, but how do on line media work? Internet media buying has become an essential marketing service alongside television and radio media buying. Every year, more and more advertising budget is shifted to the Internet as companies seek better ways to target consumers and achieve a measurable return on investment (ROI). To most traditional marketers, the Internet is a complex advertising medium with numerous channels, vast amounts of content and advertising options, and a huge array of technologies to plan, deliver, track and analyze online campaigns. Most marketers have little idea where to spend their Internet budget, let alone how they will measure the media ratio and return on investment of their campaigns. In my opinion an organic search is probably the cheapest and first important asset for internet media. SEO- tools (=Search Engine Optimation) are available to obtain data. SEO is the practice of guiding the development or redevelopment of a website so it will attract visitors naturally by winning top ranking on the major search engines (Google is the most important) for selected keyword phrases. The second important asset is how you would like to attract your customers. What are you objectives? Do you want them to buy, or participate in the brand or do you want to build awareness or image of your brand?

Copywrite Š Innovianto

March 30, 2010

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You may opt for a Google Adwords Campaign or for banners to direct consumers. You may participate in Social Networks or interest groups. On line Media Planning is the process of developing Internet advertising plans using site demographics, behavioral analysis and other inputs. An on line media plan may contain one or several sub campaigns, depending on whether it is broad reach or targeted in scope. A plan should include the networks/sites to advertise, placements, ad units (sizes), ad copy/creative versions, demographic targets (if applicable), flight start and end dates, number of impressions, % rotation, and any third-party tracking required. Media plans may change during the course of an online campaign and are subject to availability, rates and other factors. Advertisers have always been interested in the number of people viewing their ads. On the Internet every impression is logged and reach numbers are commonly reported. What has been lacking is a way to also predict accurate reach numbers online. Predicting on line reach is very different from predicting reach on television or radio. In these traditional media, reach is simply the total number of viewers of a particular campaign. On-line, the calculation is much more complicated. For example, a campaign of one million impressions on a site with one million unique users may reach only a small percentage of the site’s population. This is because these impressions compose a small fraction of the total monthly impressions on the site. Therefore, when predicting online reach, one must take into consideration the frequency distributions of the sites in question, the run rate (the number of impressions in a given time period) and other subtleties such as site overlap. Effective reach is the percentage of users reached at a target frequency level or higher. This number can give a marketer an impression how many users have multiple interactions with their brand. On a small site, one commonly sees higher average frequencies. This, in turn, can lead to higher effective reach numbers.

Copywrite Š Innovianto

March 30, 2010

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For online advertising there are many possibilities. Depending on the media mix different pricing models/performance measurements may be used to get the most out of every media Euro spent, including: • • • •

Cost per 1,000 impressions (CPM) Cost per lead (CPL) Cost per click (CPC) Cost per action (CPA)

CPA is a pay-for-performance model in that you only pay when a sale or other action is completed. With CPC you only pay when a advertisement banner/Skyscraper/rectangle) has been clicked. Online media buying is a specialized area as you may understand. 4. Control of communication Control of communication for on line branding is a paradox. The traditional brand manager controls the communication almost completely. He or she decides where, when and how to advertise, communicate and be visible. It’s a one-way of communication. Conversely for on line brand management customers are almost in control of communication. A customer might leave comments, blog, and review and state his or her opinion visible to many, many others. The paradox is that the brand manager is able to control the online communication! He or she is able to create an almost one-to-one relationship with the customer. He may moderate an interest group and participate actively in discussions on-line etc. Thus the brand manager has a chance of getting personal data and information. A customer may participate in a marketing activity, subscribe for a newsletter, ask for a white paper etc. This offers you the opportunity to interact in many, many ways. Imagine: You may inform customers about the latest marketing activity, events and so on. You can start building an interest group e.g. friends of Hertog Jan beer. It may be also an easy and fast way to conduct market surveys on-line and get your customers involved in the process of marketing, service, innovation, test etc.

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March 30, 2010

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An example of this is the website www.ibood.com. Each day during the night ibood offers a product, gadget or service at the lowest price. On the ibood website consumers review the product and ibood moderates. Kapferer (1992) states that the brand strength is reflected by the number of customers who are brand sensitive. Brand sensitivity is the relationship a given consumer has with a brand for a given product category. So the brand is marketed to appeal better to consumers, thus resulting in increased affection and ultimately better profitability. On line brand management focuses on building a relationship with the customer through personal profiles, e-mail, social networks, marketing activities, video etc. Introducing online brand management requires commitment and organization. The on line brand manager should meet creatively the needs of a customer personalized, faster, and more efficient. Online brand management requires branding a website as a tool for interaction and service. Amazon.com is another good example of personalized service. Once you have bought a book and you return to the site, suggestions are made regarding similar literature. 5. Targeting customers In traditional brand management targeting customers is based mainly on segmentation. There is a trend toward targeting smaller niches or segments, but here is also a logical limit. You can’t customize your offer too much to the individual because you probably end up squeezing your profitability. This is due to increased manufacturing, design, marketing and distribution costs. On-line the web segmentation can be far more precise. The on line brand manager can collect information on customer profiles, behavior patterns etc. With Twitter you can interfere directly into communication regarding your product or brand. Amazon.com suggests new books and displays them on your personalized webpage. All this can be accomplished with the use of sophisticated internet tools. Behavioral targeting is one of the relatively new tools that are growing rapidly in use. The Internet allows you to make records of customer behavior. Marketers love precisely targeted ads that enable them to reach consumers without waste, cheaper

Copywrite Š Innovianto

March 30, 2010

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and more efficient. The most efficient Behavioral targeting is the Google search engine, people tell what they are looking for and at the same moment they are open to offers or information relevant to their search terms. Behavioral targeting is also attractive for the consumer because the ads respond to their search behavior in the past. This searching behavior tells me what consumers find interesting. A recent study by Marketing Sherpa reports that 22% of marketeers plan to increase their budgets on Behavioral Targeting. 36% of respondents say they have great results with Behavioral Targeting, compared with 52% claiming great results with paid search like Targeted Ads, such as Google Adwords. Paid Search: The moment a consumer is searching the internet for information related to your brand the specific advertisement will be visible. The Top 3 Benefits of Behavioral Targeting (source Forrester Research): 1. More click-throughs (35%) 2. Higher conversion (26%) 3. Better ROI (return on investment) (21%) Marketeers are excited about Behavioral Targeting, but there are also downsides. By nature, Behavioral Targeting is more effective and thus minimizes waste. However Targeted Advertising is based on surfing habits from the past. This is also the weakness because you miss a large number of prospects or prospective customers. Interest in a service or product is not necessarily based on past behavior. Some people will never come into contact with new products, unless you offer it in their face! High interest brands, high image and high involvement brands allow the online brand manager to interact easier. The customer even might decide to become a cocreator by collaborating with the brand to develop the exact product he or she needs or to get rid of small irritations of the product. 6. Social networks Traditional brand management may find it more difficult and expensive to participate in networks. You need to organize it physically, e.g. events, music, parties.

Copywrite Š Innovianto

March 30, 2010

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On-line there are plenty social networks available like LinkedIn, Hyves, Twitter, Facebook, MSM. There people will be discussing you, talking about you, reviewing your performance etc. But how can you make this relevant for your brand? Relevancy depends from your product category and brand affinity. Does your brand represent a lifestyle? Does your brand have impact in the consumers life? Consumers feel more connected to brands closer to their hearts and/or to their skin (physics). So a toilet cleaner is not directly relevant for a social networks approach. Twitter offers a great opportunity to interfere real-time in discussions related to your brand. Nowadays people are more sensitive to direct feedback and suggestions. You do face a problem with ironing your clothes, something is annoying you or you are looking for a specific solution for cleaning dirty spots. A blended approach with both off-line and on-line networking is the strongest strategy. On a regular basis you socialize on-line and from time to time you meet in real life. So invite your important on line social network contact to meet, greet and interact. 7. Database marketing A whole marketing arena is now available. Just imagine what the possibilities are. Via on-line advertising and on-line marking activities you can gather address information allowing you to interact directly with your consumers. A strategic e-database marketing program may consist of the following elements: 1. Get Program (Get) This program is for consumers recruited through on line media. Landing Pages with action buttons. Action mechanism is e.g. discount 2. Retention program (Keep) Building relationships to increase customer loyalty and to augment the retention rate. 3. Referral Program (Member-get-Member)

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In general every customer can participate in the referral program. 4. Ambassador Program This is a limited program: ambassadors only. These ambassadors are active promoters in on line media. They are the activators in our Word of Mouth Campaign. 5. Loyalty program We will reward loyalty in giving refund or benefits for future purchases. 6. Influencer programs Who are influential people for your brand? This might be a specialist, general practitioner, pharmacist, idol and so on.

On line brand versus traditional brand management We see an important shift arise towards on line and internet usage. As on line brand management is becoming a stronger tool you just can’t postpone building your brand any longer. In the core the old paradigms for brand building stay unchanged, however, the instruments and actions are completely different and demand new skills and knowledge. The opportunities to build a brand with limited budget are available especially for small brands and for every marketer willing to explore a new territory.

John Jehae Innovianto www.innovianto.nl john@innovianto.nl Online marketing / e-database marketing

Copywrite Š Innovianto

March 30, 2010

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Traditional versus online brandmanagement