Research released the week of April 27 at a CMP Symposium presented divergent views about how effective the Internet is for branding.
The conference in Laguna Niguel, Calif.--called "The Future of Branding on the Internet"--brought together high-tech marketers and agency execs to figure out how to use the Net to raise brand awareness.
BUDGETS MOVING TOWARD SITES
But there was disagreement about whether, and how, the Internet can be used effectively as a branding vehicle.
Bill Bass, director of media and technology strategies at Forrester Research, said based on a recent survey of 55 major marketers, for most products "the Internet is not good for building brand awareness."
Because of the Web's strength at building sales and loyalty, and its relative weakness for building awareness, budgets are being driven to site spending rather than online media buying, Forrester found, in its "Digital Marketing" report.
LOW-PRICED GOODS: SPEND ON ADS
While marketers of low-priced goods such as household products and groceries will shift more spending to online advertising, marketers of high-priced goods such as computers and travel services will shift more money to Web site development, Mr. Bass said.
The research findings are consistent with those released by Jupiter Communications in January, which advised indirect sellers to spend 75% of their budget on the media buy, and retailers and direct sellers to split the budget evenly between media and site development.
In other research presented at the CMP conference, Baccus Strategic Services found that based on nine focus groups with consumers, "The Web is an effective vehicle to brand," said President Erica Baccus.
WEB PERCEIVED AS MORE CREDIBLE
The qualitative research found that Web advertising is perceived as more credible than TV or print advertising; there is a blurring of the line between information on Web sites and Web advertising; people feel a close connection to companies advertising on the Web; and users expect successful companies to advertise on the Web.
"Web advertising is appreciated if it is relevant, timely and topical," said Ms. Baccus.
Media buyers at the conference said the effectiveness of the Web as a branding vehicle depends on the client and what they're trying to sell.
"I disagree the Web is not good for branding," said Denise Shmikler, VP-media director at Bozell Worldwide, Mountain View, Calif.
"Whether it's an effective vehicle is up to the campaign. Are you looking for click-throughs that will result in sales, or are you looking for broad awareness to leverage the name?" she said.
Mark Stephens, VP-group media director at Euro RSCG DSW Partners, San Francisco, said, "People are trying to put it into the place of being either a direct response or branding mechanism, when in fact it does both."
HEWLETT-PACKARD TOP TECH BRAND
Also last week, CMP released findings from its second "Simultaneous Branding" research, based on interviews with 6,400 technology managers, which found Hewlett-Packard Co. is the leading brand in the U.S. business technology market.
In other CMP findings, the three technology companies making the strongest gains in brand equity over last year are Bay Networks, Cisco Systems and Dell Computer Corp., while those losing the most ground are Netscape Communications Corp. and Novell.
Copyright May 1998, Crain Communications Inc.