The role of the Internet in brand discovery

Getting to know all about you

Editor’s note: Jean Durall is director, research services; Cate Riegner is research director; and Josh Crandall is managing director at Media-Screen LLC, a San Francisco research firm.

With its vast and interwoven world of information and entertainment, the Internet has given consumers unprecedented choice and control, transforming the purchase process and the rules of advertising in its wake. Less than a decade ago, marketers clung to the timeworn goals of making consumers 1) aware of their products, 2) consider their products and 3) purchase their products. Today, with consumers in the driver’s seat and armed with limitless brand and product information, a more accurate description of the purchase process would be 1) research, 2) compare and 3) decide. The consumer is now involved in the purchase process to a greater degree than ever before, with the information and autonomy to make highly informed decisions.

Does this diminish the role of advertising? Hardly. Heightened consumer involvement means that advertising has the opportunity to be more effective than ever before in directing attention to relevant products and brands. Nowhere is this more true than online where, given the inherent qualities of the Web, advertising is exceedingly more targeted and accountable.

Marketers are realizing that online is the place to be and advertising is following in that direction. According to The Wall Street Journal, few marketers have spent more than five to 10 percent of their marketing budgets online up to now. But the portion of online spending will increase 18 percent in 2008 according to some projections¹. In addition to moving advertising dollars online, marketers are developing creative, diversified approaches to brand placement on the Web - virtual worlds, YouTube videos, online panels that provide product feedback - all aimed at harnessing the ability of the Web to create shared experiences for viral marketing.

Challenging task

Exciting? Yes. But what influence does the Internet bear on what is still, perhaps, a marketer’s most challenging task: making consumers aware of new products and brands?

To answer this question, we examined how two groups of online consumers - recent shoppers and those involved in entertainment content - learn about new products or brands. These groups are part of our larger study of the online habits of broadband-enabled consumers in the United States², whose number now stands at approximately 127 million3. Data presented here is drawn primarily from the leisure/entertainment and shopping sections of our Netpop survey, which is a tracking study of broadband users in countries around the world.

People who have recently made a purchase, or who are actively shopping, should be open to information about new products or brands, particularly new brands in the categories of interest. Among a subgroup of 1,450 broadband users who either bought a product from among 10 general categories in the previous three months or plan to buy such a product in the next three months, 15 percent say they recently learned about a new company, product or brand. There is no difference in recall of new brands between recent purchasers and those who are actively considering making a purchase in the near future.

Was the Internet instrumental in creating new brand awareness among this group of broadband users? Undeniably. Over half (53 percent) of those who recently became aware of a new company, brand or product say they first learned about it from an online source - most commonly through a search engine (23 percent). In addition to search engines, online ads (10 percent) and e-mail newsletters (10 percent) are also instrumental in creating awareness of new brands among those saying they learned about a new brand online.

Traditional media and interpersonal sources have equal importance in generating awareness of new companies, products or brands but, taken together, they are not as effective as online sources in creating new brand awareness. Television is mentioned by half of those naming traditional media as the source where they first learned about a new brand and 21 percent mention magazines.

New brand awareness is highest among those in our broadband sample who were shopping for business services, office supplies or professional services such as accounting, IT support or legal services. Almost one-quarter (23 percent) of these shoppers recently learned about a new brand. In contrast, shoppers in a category where new products and brands proliferate - health and beauty products - show the lowest awareness of new brands, just 8 percent⁴. Across the 10 categories, the highest level of new product or brand awareness occurs in those areas that involve the highest costs and most risk: automotive and consumer electronic purchases in addition to business services.

Only the first step

Of course, creating awareness of your brand is only the first step. Did these recent shoppers make any effort to learn more about the products and brands they learned about? Again, the answer is yes and their choices of where to seek more information are dominated by online sources.

Three-quarters (77 percent) of the recent shoppers tried to get more information about a new product or brand. Keeping in mind that over half first learned about that new brand online, it is not surprising that online sources are among the most common choices for more information, with search engines again used most often (23 percent). Still, when we look at the sources used by over 10 percent of those looking for more information about a newly discovered brand, there are three patterns that stand out:

1. Source diversity: Those seeking information about new brands turn to a range of online and traditional sources - 19 different sources attract more than 10 percent.

2. Source specificity: Other than search engines, the most popular sources are retail-oriented Web sites - sites for brands, manufacturers, stores or shopping areas on general Internet sites (Yahoo! Shopping or MSN for example).

3. Support for viral marketing: Social networking sites, blogs and chat rooms are a small but consistent block of resources for learning more about new brands, along with online video clips.

Widest array

It is clear that our group of recent shoppers support the shift in marketing emphasis away from traditional media and toward greater use of the widest possible array of relevant online sites. Does this reliance on online sources for information about new brands and products extend to areas of interest other than shopping?

To answer this question, we switch perspective to the entertainment subgroup, 1,284 respondents who spend some portion of their online time on leisure/entertainment activities. People interested in movies, TV shows, music, games, books and other media are always on the lookout for new content so the entertainment subgroup was not asked specifically if they learned about a new company, product or brand recently. Instead, they were asked about the traditional and online sources they use to lean about new content in the entertainment category they use in a typical week.

Unlike the shoppers, those looking for information on new entertainment content turn to the traditional sources of TV and friends and family more than the Internet. Magazines, newspapers and radio each attract one-quarter of those focused on entertainment. Search engines again emerge as the online source used most to learn about new content. And, as we saw with the shoppers, a wide range of online sources attract between 10 and 20 percent of those interested in knowing what’s new in entertainment.

Specialized sites - identified as “my favorite site” in Table 2 - are particularly popular for learning about new entertainment brands. Open-ended responses about why they like these sites include insights on how these sites contribute to new product awareness.

“Like checking out new sites for products.” (kerclink.com)

“(I) might find something I’m interested in buying.” (youtube.com)

“I look and see if I want to buy anything.” (pogo.com)

“New games come out all the time.” (pogo.com)

“They have good previews of games.” (gamespot.com)

“It’s one of my main ways of finding out about new music.” (iTunes)

While traditional sources - television, magazines, newspapers and radio - are used by more than 24 percent of those interested in new entertainment brands, online sources, particularly those involving user-generated content, are very important to those who do use them. These people also expect to use such sources more in the future.

Advice through word-of-mouth sources, including friends or family and instant messaging/chat, are most important when deciding whether to purchase new entertainment content. Over 55 percent rate these personal sources with a six or a seven on a seven-point scale of importance (top two box). The next group of important sources - those with top two box ratings between 40 percent and 52 percent - is almost entirely online.

Most striking is the fact that ratings of importance are almost in reverse order of popularity based on the number of people who use each source; just 10 percent use instant messaging/chat rooms to learn about new entertainment content but over half of those say those sources are very important for deciding what content to buy, for example. Still, the 39 percent of TV users who say that source is very important in deciding on new entertainment content, while a much lower percentage than for many of the online sources, is a much larger number of consumers overall.

The influence of online sources on entertainment content purchases is most likely to increase in the future. Coupons are the only traditional source of influence that more than 25 percent of current users expect to use more in the future to help them decide what new entertainment content to purchase. Roughly one-third of those currently using video-sharing, instant messaging or chat, social networking, or forum and discussion board sites expect to rely on those sources more for entertainment direction in the future (30 percent to 36 percent).

Influence will grow

The segment of the Internet population with a broadband connection uses a wide array of both online and traditional sources to learn about new brands. Further, our data clearly support a diversified marketing and advertising strategy that includes a wide range of online sites as well as traditional media - particularly television. It is also clear that, while social networking and other user-generated Web sites, such as YouTube, Facebook, MySpace or Flikr, have received extensive media attention in the last year, very few consumers are currently using such sites to learn about new brands. But such sites clearly cannot be ignored because they are so important to those who do use them and their usage and influence will grow. 

References

1 Ad Houses Will Need to Be More Nimble, Suzanne Vranica, The Wall Street Journal Online, January 2, 2008.

2 Findings from Netpop | U.S. are derived from an online survey of 4,068 broadband users in the United States conducted in August 2007. Respondents who started the survey were asked one question to identify those who access the Internet via a high-speed or broadband connection (any connection greater than 56 kilobits per second). Respondents who indicated they “usually” use a high-speed or broadband connection completed the survey. Start rates were representative of the U.S. Internet population based on age and gender. Respondents were offered a cash incentive to complete the study. Based on randomly chosen samples of this size (n=4,068), there is 95 percent confidence that the results are statistically accurate to within approximately 1.55 percent of the entire U.S. broadband population if the entire population had been polled

3 Sources: Pew Research Center, U.S. Census, Media-Screen LLC.

4 Difference between new brand awareness among business services shoppers and health and beauty shoppers is statistically significant at the 95 percent level.