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| Branding in the Social Computing Age |
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| Written by Mike Ellsworth | ||||||||||
| Sunday, 25 April 2010 18:45 | ||||||||||
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The Death of the BrandOK, the headline is a bit of hyperbole, but it's not an unthinkable concept. Of course, there will always be brands, but the days of brand owners thinking they can control what we think about a brand may be ending.
Simon Knox said, way back in 1996[i], "In the future, it is not going to be enough simply to consider how
responsive each customer group is to your brand, you will need to know how responsive your company can or should be in meeting the total needs of
customers who buy from across the categories in which you compete."
Knox continues: "In traditional consumer marketing, the advantages enjoyed by a brand with strong customer loyalty include ability to maintain premium pricing, greater bargaining power with channels of distribution, reduced selling costs, a strong barrier to potential new entries into the product/service category, and synergistic advantages of brand extensions to related product/service categories (Reichfeld, 1996)." Five years after Knox, Gommans, Krishnan, and Scheffold[ii] recognized that brand loyalty was undergoing a bit of a sea change, and discussed a replacement concept: e-loyalty, which leads to behavioral loyalty, the tendency to keep buying a brand: As extensively discussed in Schefter and Reichheld (2000), e-loyalty is all about quality customer support, on-time delivery, compelling product presentations, convenient and reasonably priced shipping and handling, and clear and trustworthy privacy policies. [. . .] A satisfied customer tends to be more loyal to a brand/store over time than a customer whose purchase is caused by other reasons such as time restrictions and information deficits. The Internet brings this phenomenon further to the surface since a customer is able to collect a large amount of relevant information about a product/store in an adequate amount of time, which surely influences the buying decision to a great extent. In other words, behavioral loyalty is much more complex and harder to achieve in the espace than in the real world, where the customer often has to decide with limited information. The Internet brings this phenomenon further to the surface since a customer is able to collect a large amount of relevant information about a product/store in an adequate amount of time, which surely influences the buying decision to a great extent. Traditional brands with high brand loyalty have enjoyed a certain degree of immunity from price-based competition and brand switching (Dowling & Uncles, 1997). In e-markets, however, this immunity is substantially diminished due to how easy price comparing among shopping agents is (Turban et al., 2000) and due to the fact that competition is just one click away. Nine years later it is becoming clearer that behavioral brand loyalty is not only difficult to maintain online, but it's getting more difficult to maintain offline as well. The plethora of online information Gommans, et al. referred to now includes a tremendous wealth of customer reviews, opinions, diatribes, blogs, and wikis such that the potential customer of virtually any product or service can spend days absorbing it all. Lest you think marketers are oblivious to this revolution in branding, and brand position, Nick Wreden, managing director of FusionBrand, said in an article[iii] back in 2005, "The number of branding failures, many based on 'positioning,' exceeds 90%, according to the consultancies Ernst & Young and McKinsey & Co." The old stuff may be losing effectiveness. The occasion was McDonald's announcement - five years ago - that it was abandoning brand positioning, which basically is a way that a company seeks to control how their brand is perceived by consumers by pushing messages at them through traditional media. At the time, Larry Light, McDonald's chief global marketing officer, said, "Identifying one brand position, communicating it in a repetitive manner is old-fashioned, out of date, out of touch." Light stated his position even more strongly, heralding "the end of brand positioning as we know it," calling it "marketing suicide." Light was right back then, and even more right today, when brand perception is ever-more deeply affected by social computing. When the millions have found their voices - online - it's hard to compete with pushed branding messages delivered via conventional media. Add in the detrimental effect of commercial skipping digital video recorders like Tivo, and McDonald's move five years ago seems even more prescient.
A recent Nielsen survey[iv] of more than 800,000 Facebook users and 125 individual campaigns from 70 brand advertisers found that based on customer purchase intent, Facebook ads that contained social context were four times as effective as standard Facebook ads. Nielsen makes a distinction between "paid" and "earned" ads - typically meaning those mentions produced by public relations or random mentions in the media, but in this context, adding in the concept of ads bolstered by a friend's recommendation.
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| Last Updated on Sunday, 25 April 2010 19:40 |
Sounds a bit like a perscription for marketing via social computing, doesn't it?
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