Ad Spending Doesn’t Equal Brand Awareness

There is no consistent correlation between ad spending and “top of mind” brand awareness for Internet companies, according to a survey conducted by Greenfield Online for HMS Partners.

Survey participants were asked to list up to five names that come to mind when thinking about specific dot-com brands. Surprisingly, some dot-com brands managed to achieve similar or greater levels of “top of mind” brand awareness despite significantly smaller advertising budgets than several of their big-spending brethren.

“It’s not how much you spend, but how you spend it,” said HMS Partners’ CEO Rick Milenthal. “Dot-coms know branding is crucial for success — and most seem both willing and able to put considerable resources into supporting brands. The winners are going to be the ones that find the most effective ways and places to allocate those resources.”

Since name recognition is considered only half the branding battle, the survey also named several sites and asked respondents who recognized a given name to then describe their site’s function.

“Names like Amazon, Monster, and Oxygen don’t really tell you anything about the site, so their high recall scores (78 percent, 76 percent, and 74 percent, respectively) show that branding messages are getting through,” said Robert Abbott, president of studiomotiv, HMS Partners’ interactive unit.

As might be expected, brands with well-established offline identities also scored well. Of those who recognized and, almost all (97 percent and 93 percent, respectively) could also identify the functions of those sites. Although surfing the Web is how most respondents (83 percent) say they became aware of a specific Internet site, traditional media advertising has a great influence: television advertising was cited by 53 percent of respondents, while other advertising, including print and radio was cited by 52 percent.

“Smart advertisers know that print and radio are cost-effective alternatives to television advertising,” Milenthal said. “According to these numbers, that may be especially true for the kinds of consumers dot-coms want to reach.”

With e-commerce sites, a physical “bricks and mortar” presence is still important to many consumers — 50 percent of all respondents rated having a physical offline presence as very/somewhat important, with only 15 percent saying it wasn’t important at all. But that influence on the purchase decision appears to be declining; although 35 percent reported they would be more likely to make a purchase from a Web site if the brand had a physical offline presence, 34 percent said it would not affect their purchase decision.

“Surprisingly, it was the youngest group (under 25) that placed the most importance on a physical presence, with 61 percent rating it very/somewhat important,” Abbott said. “It’s also worth noting that, despite assumptions to the contrary, men and women reported virtually identical attitudes toward online shopping and purchases.”

Dot-Com Brand Awareness
Brand 1999 Ad Spending
Top of Mind
Brand Awareness2
Branding Bang
for Ad Buck3
eBay $5.5 22% 4.000
Excite $3.2 8% 2.500
CDNow $10.5 22% 2.100
Yahoo $29.2 38% 1.301
Amazon $35.2 45% 1.278 $17.0 6% 0.353 $18.4 6% 0.326
AOL $83.2 22% 0.264
Priceline $49.6 5% 0.101
Monster $29.0 2% 0.069
E*Trade $124.2 5% 0.040
Ameritrade $103.7 1% 0.010
1 Source: Competitive Media Reports
2 Source: Greenfield Online Brand DNA
3 Percentage point of Q1 2000 top of mind awareness per million spent on ’99 advertising

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