Even Offline, ‘Dot-Coms’ Are on Internet Time, Hurrying to Make Themselves Known
How to build, promote and extend brands has been the holy grail of the 1990s. And in the days before e-commerce, conventional wisdom held that the elusive process of creating a successful brand took years.
Shoppers chose big brand names because of trust built up over decades, the reasoning went. What separated a pair of Levi’s from no-name overalls, for example, was “a relationship with customers . . . of promises fulfilled,” says Eric McClellan, a creative director at San Francisco-based Goldberg Moser O’Neill. “And that takes a long time.”
In the impatient world of e-commerce, though, no one has time to wait. And as a slew of start-ups scramble for consumers’ attention and loyalty, old notions about brand building are being turned on their heads.
E-companies are pouring tons of money into advertising, not only to get their names out but to burn their corporate images into consumers’ brains. According to Salomon Smith Barney, Internet companies in the last 12 months have spent $3 billion on advertising. And the pace of spending, which doubled in the second quarter of 1999, shows little sign of slowing.
“The ‘dot-coms’ have a need to build their brands quickly,” said McClellan, a speaker at an American Advertising Federation conference in Rancho Mirage last weekend. And competition among e-companies is so heated, he added, that advertising agencies are creating commercials for Internet services before they even exist.
To traditionalists, the pace short-circuits the notion that brands, by definition, have a special relationship with the people who buy them--that’s how General Motors’ Saturn was able to draw 44,000 customers to its fifth anniversary jamboree in 1994.
And, they say, advertising for many new Internet companies also undermines efforts to develop a brand. Ads seem to focus more on grabbing consumers’ attention than on building a relationship with them--witness the uproar earlier this year over ads for Outpost.com that showed gerbils being fired from a cannon.
“We’re not branding, we’re advertising,” said McClellan.
Even dot-com executives say the brands they most admire are the ones that have withstood the test of time. Lance Podell, marketing vice president of DealTime.com, respects American Express and Wal-Mart because “they have been consistent in their relationship with the customer, not just in advertising, but at every point where the consumer touches the brand.”
Yet Podell doesn’t plan on waiting years before DealTime.com, a 5-month-old online comparison-shopping service, is accepted by consumers.
“You can become a brand very quickly, if your message is relevant,” he said in a telephone interview. Amazon.com, for instance, has become one of the biggest names in e-commerce because it provides low prices and fast service, as promised. And its name is powerful enough to support its evolution into an online shopping mall, though it has yet to translate its name-recognition into profit.
Advertising executives who see opportunity in the dot-com explosion say relevance is key. After all, such time-honored brands as Levi’s have stumbled precisely because they lost meaning with a new generation of consumers.
“A brand is a brand,” said Keith L. Reinhard, chairman and chief executive of DDB Needham Worldwide, also a speaker at the AAF conference. “It is a combination of point of view, promise and personality. If you get it right, you can do it very quickly.”
David A. Park, president of DDB’s Los Angeles office (which creates ads for The Times), said the motion picture industry offers a model for promoting dot-coms. “Motion pictures are launched in three weeks to six months,” said Park, whose clients include Go Network. “But they live on forever if the film has merit.”
Reinhard cited the drawing of a young girl used to promote “Les Miserables” as an example of instant branding. What started out as a promotional drawing has evolved into an icon, he said, as theatergoers embraced the Broadway play.
With so many unfamiliar Internet companies on the branding bandwagon, the immediate challenge is standing out in the crowd. And ad executives say the flood of dot-com advertisers is helping to drive the cost of media through the roof, thus raising the price of getting noticed. Hefty rates for drive-time ad slots is keeping DealTime.com off radio in Los Angeles, said Podell, making its bid for attention here tougher. And in San Francisco, he said, the cost per listener on drive-time radio is roughly equivalent to the cost per viewer on TV. So in that market, DealTime.com is opting for television.
Media costs are likely to go higher next year when political advertising crowds out other commercials, making it harder for brands--Internet and otherwise--to be heard. Already, marketers priced out of traditional media are shifting ad dollars into direct mail and street-level tactics; DealTime.com is planning such alternatives in Los Angeles.
The environment “is not good for clients,” Leland T. Lynch, chairman and CEO of Minneapolis advertising agency Carmichael Lynch, said at the AAF conference. “It will be difficult to be effective.”
