For every company, the brand name is the most important. If Wikipedia sold a service they would make a fortune from doing PPC on their brand term - being one of the top five search terms for the best part of 2 years now. Even SMEs will find that their brand name is creating searches in Google and the other top search engines. The more exposure that you have across the internet (and also offline) will help drive brand related searches. Not only this but the more brand awareness advertising you do will drive more direct traffic to your site through typing in your URL.

Why is this important? A strong brand leads to an increase in sales through reputation. Especially when online is concerned, there is growing fears of being ripped off by rogue traders – established brands are trusted and have a reputation for delivering quality of service and quality products.

Here is an example of why branding is so important. Take XL who currently sponsors West Ham FC. They get a massive amount of brand exposure because of the high profile league they are in, however isn’t it a dubious name….? When I first saw their brand name on the football shirts I thought Microsoft had updated the name of MS Excel to something more up-to-date. I was completely wrong. This is actually XL holidays.

Has anyone else noticed recently the update in name on the West Ham branding from XL to XL holidays? This may just be that I have only just noticed it but I am sure this is a recent change. I think this is because people are confusing the brand name with the already well established name of MS Excel, why else would they do it? Just shows the importance of a strong brand name, and also the symbiotic nature it must form between the products or services sold. The same again can be said for B&Q – what a good idea to do their web address as diy.com, thus creating the symbiotic link between brand and industry/service.

How is your brand?

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Ad-spending usually plummets when economic growth slows. Indeed, as stockmarkets tumble and economies falter, some ad-men expect the knife to cut deeply in 2008 and even more so in 2009. However, advertising budgets may prove more resilient than many analysts think. This is because the internet has brought greater accountability to advertising. With Pay-Per-Click (PPC) advertising, for instance, you can now prove that a click on a sponsored link ad produces a sale. Firms are trying to impose the same discipline on other media spending. I came across a company recently who told me about a separate phone number that they only use for their TV ads and nothing else. By measuring the volume of calls via this phone number, they get a sense of their ROI from television advertising.

“Now when companies raise their budgets they do so more responsibly,” says Jonathan Barnard, head forecaster at ZenithOptimedia, a unit of Publicis Groupe, a French advertising firm. “They’re less likely to see marketing as a frivolous expense ripe for cutting”. Other forecasters disagree about advertising spending in 2008. UBS, a bank, predicts that expenditure on ads will increase by 5%, whereas Goldman Sachs, a rival, forecasts that it will decline by as much as 5%. However, most forecasters concur on one thing: underlying growth in ad spending will come mainly from advertising on the internet.

The internet is claiming a growing share of advertising—at the expense of traditional media, such as TV and print. There is still a gap between the time people spend online as a fraction of their media consumption (about 20%) and the fraction of marketing budgets spent on the internet (about 7.5%). Many companies are trying to narrow the gap, which will sustain internet advertising during a downturn. Search advertising, the most effective kind of all, should be safest.

Indeed, some people say an economic slowdown is likely to accelerate the shift to the internet. Trevor Kaufman, chief executive of Schematic, an interactive agency, says that one of his clients, an American “big-box” national retailer, intends to devote more of its marketing resources to the internet as the economy slows. The internet’s interactivity and wealth of product information make it the best means of generating short-term sales—whereas television is best for long-term brand-building. During a downturn clients see internet ads as easier to measure and hence easier to justify to shareholders, says Mr Kaufman.

But online advertising cannot hope to escape an ad recession altogether. Deloitte, a consultancy, argues that online ads face new obstacles. It points to a recent survey of American consumers which found that more than three-quarters of respondents said online ads were more annoying than those in print. Concerned about their privacy, people have also started to lobby against online tracking of sales, which is a vital element of the internet’s much-vaunted effectiveness.

Some industries will cut ad-spending more deeply than others, says James Walker of Accenture Marketing Sciences. Many banks, hit hard by credit crunch losses, have already cut back on their spending. Makers of cars and luxury goods and other dispensable items will be more exposed to a recession than companies that sell necessities.

The Economist (24/01/2008).

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