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Tactical Blunders in Internet Advertising

(originally published by Booz & Company)

Online brands with high hopes for building real revenues spent nearly $2 billion on media advertising in 1999, with over half spent during the holiday season. Since the quality of communication is considered by some experts to be four times more important than the level of expenditures, a $20 million ad budget can deliver revenues ranging from $5 million to $80 million. So which end of the range will online brands be able to realize? Unfortunately for the majority of Internet brands, most of this money either has been wasted entirely, or is failing to achieve minimum objectives.

The all-too-common scenario goes something like this. A team receives funding of, say, $30 million to start an Internet business. Of this investment, $20 million is allocated to brand-building through an agency hired to create media ads. With an unclear understanding of what the brand stands for, and a business model in flux, the company ends up with ads that either focus on brand attributes without an emotional connection, or seek attention by shocking the audience. In the first case, the ads usually fail to break out of the clutter. In the second case, they don't have the desired effect on the customer relationship, or they create memorable snippets unconnected to the brands.

One fundamental problem is that most Internet companies don't take the time and effort to develop a brand identity or vision that specifies the brand's aspirational associations. This mistake stems from the fact that these businesses are preoccupied — and so their brands are, too —with the technical reasons that their business model or technology is worthy. But most strong brands have a combination of meaningful intangibles, brand personalities, emotional connections, vivid symbols, differentiated branded features, and self-expressive benefits. The Internet firm misses much of this by fixating on high-tech product attributes.

A second problem is the assumption that old media advertising is the only viable route to brand-building, because it is fast and can be delegated. In fact, it is increasingly hard to create advertising that stands out in the media world. Further, old media advertising is almost never engaging and personal. (It's ironic that so many companies built around the most interactive medium pick the least interactive for their communications.)

Successful Web-based brand-builders are out there —witness such programs as Yahoo's event sponsorship, Ask Jeeves's participation in the Macy's Thanksgiving Day parade, or Big Words' yellow jumpsuited presence on college campuses. But these are exceptions.

So why do really smart people make such tactical blunders? Two reasons. First, they believe that being first to market and first to market dominance is critical to success. Thus, they believe there just isn't time to get their advertising right. Second, either they lack marketing talent or the talent arrives too late. Regrettably, the old adage "haste makes waste" applies.

David A. Aaker ( is vice chairman of Prophet Brand Strategy (, a brand marketing consulting group, and professor emeritus of marketing strategy at the Haas School of Business, University of California, Berkeley. He is the author of 12 books, most recently Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity (Free Press, 2004).
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