In a recent blog post Jamie raised some interesting questions for debate around the value of branding on the internet. Since his comments were suitably open in an attempt to promote discussion, there was too much to respond to in a single comment, so I have posted a reply in a new blog, but you can see Jamie's original post here.
How valuable is a brand on the internet:
I see no reason why a brand wouldn't be just as valuable, if not more so, on the internet than in the 'real world', and there are a number of reasons I see for this:
Consumers can search much more quickly and widely for products and services on the internet, so it is vital for an organisation to build up a respected brand to keep consumers coming back. Retention and return visits I would expect to be especially important for sites that generate revenue through advertisements based on site traffic.
As Jamie mentions in his post, trust is an important aspect of choosing online services and this is reflected in different ways, from "I use Google because I trust it to return the search results I am interested in" to "I buy Cds from Amazon.com because I've heard of them and know I can send them back if there's a problem. I've never heard of cheapestcdsonthenet.com (just an example), how do I know I can trust them to deliver me genuine Cds?". On the high street, a store is visible and a relatively stable entity that you can go back to to make a complaint. An online store could be set up in hours, scam lots of people out of money without delivering any products over a few weeks, then disappear. Established sites (brands) leverage their proven track record to overcome this fear in people's minds.
Convenience is just as relevant on the internet as on the high street. If consumers go to a store they know to buy something because they know they can get it there, they will do the same online. Part of the reason I use the same online services is because I don't want to spend time finding alternative providers of that service and comparing which I like best. As long as the one I'm currently using does what I need, I'm happy. As easy as it is to find and compare alternatives online, people get lazy and with so much more information and distraction available online, people will seek to minimise effort expended unnecessarily to save time.
Having said that, if someone recommends a site or service to me, and I trust there opinion, then I will likely check it out and possibly switch (normally I rely on Jamie for this) and this is exactly how brands grow.
Why is Microsoft lagging in the online brand tables?
There are many ways to measure brands, but in my opinion, the only one of real relevance is within an industry or sector. The fact that Coca Cola for example is among the world's most valuable brands has no relevance to me if I'm looking to buy a car. Ford however would have a massive bearing on my decision. As one of the leading brands in the automotive industry, I have heard of it, and as a result I will look at Fords when choosing. This can be taken a step further however, because the automotive industry is very diverse, such that if I were looking for a specific type of car, such as a family hatchback, Ford is still top of the list. If however I am looking for a 4wd, then perhaps Ford doesn't feature highly at all for me, and instead I am looking at Range Rovers (probably not on my salary)
Taking this into account, we may see why Microsoft, which is unquestionably a leading brand in the IT industry, is not necessarily as strong online. The IT industry is again diverse enough such that it can be broken up into sectors that will have different leaders. What's more, when a product or service moves from one technology to another, the market leader does not necessarily move with it if they don't successfully adopt the new technology. Take encyclopedias as an example. When they were in book form, there was an industry leader, say in the form of Encyclopedia Britannica. When this product moved into digital format, Encarta did very well to lead the market. Now that it is online (and with the advent of wikis) we are seeing wikipedia dominate the market. I'll admit encyclopedias are a slightly dubious example because Encarta and Britannica have both successfully made the transition online, but hopefully my point is clear enough and it leads me to another question:
Why don't offline brands automatically convert online?
I don't have an answer to this because I'm by no means an expert in this area, but it seems to me an important question. Why for example is Amazon a leading brand for selling books online when there were established brands on the high street such as Borders or Waterstones already? There may be many reasons, such as a slow adoption of the new technology by high street retailers; an assumption that their offline brand would guarantee them success online; resultant first mover advantage to the new player online (this explains the rise of youtube, Flickr, etc, who were not necessarily the first, but significantly early to benefit); online brand value may be based on different criteria than offline brand value; etc, etc
Finding answers to these questions is going to be key for determining the success of organisations online in the future, especially for any moving from one arena to another. This doesn't have to be high street retailers moving online, instead it could be traditional software providers seeking to offer their products via the internet, such as Microsoft in response to (or advance of) Google, or even an already established online provider. How for example will YouTube respond to a competitor that may come along utilising Silverlight?
I feel I'm beginning to ramble a bit, and if you've held out this long, you're doing well, but I'd be interested to see some further discussion on this topic, so please, feel free to comment.
James