Why online media are overrated as a brand building channel

It looks like the attention given to online media as a brand building advertising channel is at least overrated. While online media – including social – might work well for activation, they fail with brand building because of their inner nature. Here are a few studies to keep in mind.

Online media has contributed to the rise of “short-termism”

The latest seminal research of Les Binet and Peter Field, Effectiveness in Context, inspects thousand campaigns of the IPA Databank, with a focus on marketing effectiveness, discussing the effects of brand building and sales activation.

It turns out that the digital revolution has had a significant impact on this optimum balance between the two disciplines, but not in the way we think. New digital channels have generally made activation easier, especially for online brands. 

With activation made easy, the predictable response in many companies has been to put ever more resource behind it, but Binet and Field’s research suggests that this is a mistake. In one of the most important sections of their research, they demonstrate that over the longer term this short-termism will rapidly deteriorate the overall impact of marketing. Brands should use TV, and in general offline channels, as their primary brand-building channel because of its proven potency for them.

Online media follow the double jeopardy principle

Online media follows the double jeopardy principle. Large media/social platforms (eg. Facebook) attract bigger audiences, who use them more (first jeopardy) and more often (second jeopardy). Small media/social platforms tend to attract heavy users who probably have been already reached by your campaign on large media.

That’s why we should aim to target unduplicated audiences when we plan a multi-media/multi-channel campaign. This means, in practice, that planning the same campaign on a large and small media that share, even partially, the same audience might not bring the expected results. The suggestion is to focus on the large media only.

Social media poorly represent brand’s category buyer distribution.

Andrew Ehrenberg first introduced the NBD-Dirichlet model in 1984. Based on the negative binomial distribution (NBD), it demonstrates that the ratio of non-buyers to light to medium to heavy buyers is always perfectly predictable. If a brand gains in sales, the ratios move in a predictable way, and one of the key implications is the importance of light category buyers to growth. Because of the shape, the bulk of the distribution stands among the brand’s light buyers. In practice, focus on light buyers – not on heavy buyers – is critical if a brand wants to grow.

The main consequence is that the most effective online or offline media for advertisers are the ones that give the best chance to reach light category buyers.

Now, while customer distribution follow a NBD pattern, Facebook and social media follow an opposite distribution (“What’s not to like? Can a Facebook Fan Base Give a Brand the Advertising Reach It Needs?“, Nielson-Field, Riebe, Sharp). Which means: Facebook and supposedly other social media platforms don’t offer a similar distribution of category buyers and as a main implication, they don’t represent an effective media for reaching light category buyers and for brand building. Yet, they represent a great channel for conversations with the customer base.

This looks a good law for B2C, but what about B2B brands? Based on the evidence B2B and B2C follow the same buyer distribution pattern (NBD) and for this reason both should use social media for activation, not for brand building.

Note: I still haven’t found similar studies about distribution for other social platforms.

Online media only increase purchase intent if your brand has good reputation

Based on a recent research of Dr. Koen Pauwels, online media, and in particular owned media, is most effective when consumers perceive little risk in their decision.

The practical implication is that online media only increase purchase intent if the brand has already a good reputation. Also, brand managers should ensure their websites provide quality information in order to decrease the consumers’ perceived risk for the products they sell. In addition:

  • Brand managers of unfamiliar/small brands should use both offline and online marketing to build strong brand associations in consumers’ minds. Cross-channel synergy is key.
  • Brand managers of familiar/large brands can generate more synergy by investing in different online media. They leverage the existing brand equity to get better results on online media.

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