“There’s never been a better time to be in advertising, and there’s never been a worse time.” Aaron Reitkopf, North American CEO of digital agency Profero
The Internet has revolutionized the world in many ways. Recently, it seems that both people and organizations have gone all digital. This paper shall give an explanation of Reitkopf’s statement on marketing by investigating to what extent the Internet has affected the world of corporate branding and elaborating on advantages and pitfalls of this medium. Arguably, digital branding can be a highly valuable online marketing tool if, and only if, an organization wins the challenge to understand its customers, to successfully establish a positive customer-brand relationship, and to have a comparative advantage over its online competitors.
The structure of this paper his threefold. In the first part, it will derive implications of the Internet and social media on branding in general by elucidating advantages and disadvantages of the digital world. Secondly, the essay will focus on a specific aspect of the so-called I-branding (Simmons,2007), namely co-creation of brands. Lastly, a case study of the sports brand Nike will further clarify the meaning of I-branding and will provide examples for the advantages and disadvantages mentioned in the first part.
The effect of the Internet and Social Media on branding
To start off, the meaning of branding needs clarification. According to Keller (1998), “branding involves attaching a label for identification and meaning for understanding to a product, service, idea, etc. That is, through the manner by which brands and their supporting marketing programs are designed and implemented, brands achieve a certain level of awareness and become linked to a set of associations in consumers’ minds.” The aim of brands, or in general, their organizations, is to create brand equity which can be defined as “[…]the differential effect that brand knowledge has on consumer response to the marketing of the brand” (Keller, 2008). From brand equity, organizations derive consumer loyalty, larger margins, competitive advantages over competitors, greater price elasticity of demand, brand, category and line extension opportunities, and an increased marketing communication effectiveness (Keller, 2008). Successful branding thus contributes to the creation of brand equity.
Regarding I-branding, organizations have different tools of I-branding at their disposal. In the so-called online brandscape, they possess corporate URLs and pages in social networks, where they present and inform about their products and services as well as where they offer additional features. These features can include product-related and unrelated services such as online shops, store-finder, FAQs, the possibility to obtain information about the organization itself or entertainment features. The latter gain an important role in our topic. Organizations can create digital communities possibly centered on a brand or specific product (Medien Kompakt, 2011) through which users can directly connect with each other and with the brand. Other entertainment features incorporate interaction with the user in the manner of for example games, music, or personalization options. Additionally, users have the possibility to share their interactions with the brand with other users by posting them on their own social network pages, forwarding them via email, or including them in blogs.
The trend of sharing leads to the next argument. Arguably, it has never been easier but also never been more difficult to reach people. As information becomes abundant and simply too much in quantity to possibly absorb, people need sources that reduce the mass of information to a smaller amount specifically relevant for them. On the one hand, online tools such as emails, RSS feeds and social networks support the world of mouth. By enabling users to create profiles and interact with other users, information can be shared and spread, a phenomenon called peer-to-peer (p2p) marketing. Managers and their marketers can “[…] exploit […] social networks to produce exponential increase in brand awareness, through process similar to the spread of an epidemic (Simmons, 2007).” Sharing information has become easy taking just one click and the spread of content multiplies within seconds. The advantage for branding is that not only the person who initially starts the epidemic is a high-potential customer. People connected to this person likely have similar interests and needs and thus become as well part of the target market. Once the process of sharing has started, it develops own dynamics and the organization can be sure that the content spreads. The dynamics base on the fact that people are nowadays “[…]willing to include brand content in their social networking profiles, blogs, and websites, which is an aspect of these generations that businesses should […] utilize” (Qualman, 2009).
Furthermore, “[…]individuals trust the opinions of their peers more than they trust the opinions presented by traditional advertisements. […]76 percent of consumers rely on what others say regarding their purchasing decisions, while only 15 percent say they rely on traditional advertising” (Qualman, 2009). This implies, that based on recommendations, people tend to make their consumption decisions instead of searching for content by themselves.
Internet users not only voluntarily help the multiplier effect to come into action but also take over the task of traditional filters such as data agencies and filter the content themselves. On the other hand now, this new kind of filter can arguably be a pitfall for branding. Many users stay within the boundaries of their Internet tools and, beyond those, do not become active and search information on their own. Only information shared by similar interest groups or friends gets through and much content is left behind.
The rationale behind people communicating information is twofold: Information can be interesting, fun or explanatory as well has it can be used for selfish purposes. With the aid of social networks, people do self-marketing and present their identity and personality online. The aim for an individual is to build up a digital self-image that presents oneself in a highly positive way. Marketers exploit this self-image-building by adopting “[…] a more social perspective […]” (Mühlbacher et al., 2006) and by conceiving“[…] brands as meanings shared by a group of people who use them as symbols in social interaction” (ibid). Salomon (1983) argues that brands provide an important role in identity creation, and customers often decide whether to accept or reject brands on the basis of its symbolic value. The aim is to market a brand or product in a way that the product- or brand image and the self-image are congruent (ibid). If this is the case, people are likely to use a certain brand or product for the purpose of self-image building.
Hence, the challenge for organizations is to build unique, entertaining, and valuable digital marketing programs considered worthy to share. Branding via the Internet then becomes a mutually valuable process both for the brand and for the customer (Simmons, 2007). On the one side, the brand profits because relevant content is shared among a mass of people without having to spread it oneself. On the other side, the Internet user profits since one can present oneself in a certain light using the brand image as contributor to the self-image.