The Internet is Transforming Branding

Definition of Brand: “A product, store or service with an identifiable set of benefits, wrapped in a recognizable personality.”

-- Roger Blackwell

A company’s brand is critically important, because it is their public face, it forms the consumers’ impression of the company and their products. Yet it is increasingly beyond any company’s ability to control.

Companies nurture their brand. They spend a ton of money on naming, logos, packaging, celebrity endorsement, event sponsorship, advertising, the list goes on an on. But more and more today, it is what companies cannot control that defines their brand more than anything, namely the information and buzz found on the Internet.

The Internet, combined with increasingly powerful search engines, has put the world’s information at the fingertips of the average consumer. Now instead of relying on a well crafted corporate brand, consumers increasingly get the real skinny on the Internet. Consumers can get all of the facts about the product, consumer reports, various online reviews, shopping comparison engines even put items side by side with the competition; in fact there is a flood of information about almost any item.

Brands are comprised of two main elements:

1. Function: the quality, price, performance, etc.
2. Emotion: how it makes us feel

In lieu of hard facts, consumers would traditionally rely more on feelings, or they would rely on the perception of function. For example, you might say Sony makes good quality products. Why do you say this? Because Sony has crafted their brand to reflect an image of quality. But now you can get MTBF (mean time between failure) information about various products on the Internet. So, instead of relying on advertising to tell you who has good quality, you can see it for yourself. That is the power of the Internet.

There is also the issue of the buzz on the Internet. Opinion sites, user ratings and comments, blogs and social networks can make or break just about any brand on the Internet. If Sony releases a buggy product with inferior performance, all of the money they’ve spent on building their brand takes a backseat to the buzz.

Let me provide an example:
You are looking to buy a mountain bike in the $800 price range. Which source of information carries the most weight with you?

(a) Celebrity endorsement
(b) An ad in a mountain biking magazine
(c) Branded websites
(d) Recommendations from other consumers
(e) Recommendations from trusted friend

A recent study by Forrester/Intelliseek Research found that the options above are rated in the order of importance, with (a) being the least trusted and (e) being the most trusted. Answers (a) and (b) above represent the old-school method of corporate branding (building, nurturing and controlling). Option (c) is the middle ground because it is still corporate controlled, but it focuses more on product information. Options (d) and (e), the most powerful mechanisms for forming consumer opinion, are out of the control of the corporate branding geniuses.

In short, the Internet provides consumers with immediate access to an increasing body of factual data and user feedback. This is causing a shift in power from the corporate branding gurus toward consumers. Branding is falling a distant second to functional elements. This means that inbound marketing (figuring out what people want) is becoming increasingly important relative to outbound marketing (figuring out how to sell what you have) as we become more informed consumers. The Internet is fostering a consumption meritocracy where to old adage “build a better mousetrap and the world will beat a path to your door,” is finally becoming a reality.