Survey: Companies Struggle with Online Branding

More major companies are turning to the Web for marketing their products, but internal impediments often derail such efforts, according to a new survey conducted by the Conference Board.

The 86-year-old nonprofit, which serves to organize problem-solving conferences across various industries, said its survey of 60 major U.S. companies found that Web marketing efforts often stall because of turf battles.

Instead of moving swiftly to promote and sell brands online, companies often get bogged down in debates over exactly which brands to market, and over which corporate units should oversee such activities.

While many firms are pushing more than one brand on the Web, 75 percent of the surveyed firms are relying on a master or umbrella brand — usually their corporate name — to support other brands.

Eastman Kodak and Dow Chemical, for instance, established uniform global standards for their Web sites at the onset of their online effort. IBM and FedEx, meanwhile, began with multiple approaches but now enforce uniform standards.

Visa, with partners in over 20,000 financial service firms spanning six global regions, has a Global Brand Management Group, which creates strategy for the brand, controls the content on the Visa.com site and provides marketing advice to regional partners, who execute the bulk of the brand’s local online advertising.

None of the firms surveyed relied solely on a new brand created for the Internet, although about 40 percent reported using a combination of new and existing brands.

Even after deciding which brands to market online, there remains the question of who’s responsible. Typically, three departments — information technology, marketing and communications — share responsibility for managing e-businesses. Brand strategy is typically overseen by senior management, working with marketing personnel. Strategy execution is run out of the marketing or branding departments, often in collaboration with companies’ communications group. Creative and technical support is handled out of IT and communications units.

As a result of these issues, few major companies say they’re performing as well online as they had anticipated. Most survey participants say that they are at least “moderately successful” in meeting their current online marketing goals. But insofar as creating a total online “customer experience,” only 15 percent reported feeling “highly successful.”

“Getting organized has been a major hurdle as Web sites proliferated and turf squabbles erupted between executives in information technology, marketing and business units,” said Kathryn Troy, author of the report and director of the Board’s Performance Excellence and Operations unit. “A common lament was that ‘everyone is in charge and no one is in charge.’ Every business unit wanted its own site — some companies found that they had hundreds of sites. Conflicts also arose over whether to focus on master brands or product brands. Our latest research shows that order is slowly emerging, although no single e-branding business model has appeared.”

The report is particularly interesting in light of Internet advertising firms’ efforts to encourage major brands to put a greater share of their marketing budgets online. While much of the thinking has centered around issues of process complexity, unit standardization and accountability, the Conference Board study would seem to indicate that major advertisers’ internal woes account for at least a significant part of their slowness in exploiting the online medium.

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