Cyberposium 2000 - Building an Online Brand

(Image © 2000 PhotoDisc, Inc.)

It might seen reasonable that brand-building at online companies would employ all the latest, most dazzling high-tech wizardry.

Not so, according to four panelists representing aggressive new firms at Cyberposium 2000, who shared the tricks of their trade at a discussion entitled "Building an Online Brand." As it happened, the panelists related, sometimes old-fashioned marketing techniques work just fine, so long as they are jazzed up to suit the cyber age.

Take the company name: "Very important," all agreed. According to Kaleil I. Tuzman, the CEO of govWorks.com, a site that links local governments with their constituents, his company's name was the subject of fervid debate among his partners, and it ended as a toss-up between govWorks and NextTown. There seemed to be a liability inherent in a name like govWorks, he told the audience with a smile, because it begged the question whether the company could deliver on the promise to make government actually "work."

Robert Levitan, the CEO of the online gift-giving service Flooz.com (and a co-founder of iVillage.com), conceded as well that picking such a quirky name as Flooz was a huge risk. "But we decided to go for it," he told the group, explaining that the company's name also had to conjure up the personality of its spokeswoman, actress Whoopi Goldberg. Both the name and Goldberg were important brand issues, Levitan said.

"First we thought about money names," he said, "like ‘E-currency,' ‘Greenbacks.' These were awful! Cold! Bad! Then we considered the concept that Flooz is a gift: ‘Gift This,' ‘Gift That,' — but that was too limiting.

"So we needed a third word. And we needed a memorable name that's short, fun, international, where we could own the URL and the trademark. That also limited us."

One day, in the midst of this quandary, he said, one of his partners happened to be walking down the street and overheard one person say to another, "How much flooz you got?" Levitan and his colleagues learned that the word flooz is slang for ‘cash' around the Mediterranean. They also felt fortified in choosing it as their company's name because, they agreed, not too long ago the word ‘yahoo' was only used as an insult; now, however, it has re-entered the lexicon with a vengeance, signifying a respected brand, along with Amazon and eBay.

"The name Flooz has become a huge asset," Levitan told the group. "Right next to Visa, Mastercard and American Express, it kind of sticks out."

Along with name selection in building a brand, panelists agreed, another essential was to "get out there first" in the market, not only to garner attention but also to take advantage of the flexibility of the first months as a chance to hone the brand.

Tuzman explained that govWorks began at first as a beta site aimed at government clients before it switched tacks several months later to gauge the needs of its consumer users. Levitan added that his own work at iVillage and Flooz had taught him the value of brand-building early on, since both companies had absolutely no brand equity when they started.

"In the old world you would say that would be a liability," Levitan told the audience. "In the new world, that's a wonderful asset.

"I have a little mantra: launch, listen and learn," he said. "When we [at iVillage] launched Parent Soup in 1996, we talked a lot about ‘communities,' but we didn't know jack about communities. So when we launched Parent Soup, we realized that we had it all wrong: We had thought our customers would want to read the content and then talk to each other. But what we found out is that they wanted to talk to each other, and then maybe read the content.

"That enabled us to understand what our brand was about," he said.

"So there's a fine line in brand building online today — you have to get out there first, you have to launch, listen and learn, and you have to adapt to the customer needs, and you have to deliver enough value to keep forward momentum. When you are launching new brands, use it to your advantage against your competitors," he said.

Another asset to use against competitors, according to Matt Andresen of the electronic stock market Island.com, is superior customer service. Andresen told the group about a recent incident in which an Island customer became enraged after having to wait a full five seconds to see his online trade take effect. While conceding with a grin that such a customer was unlikely to "go into a rage at Merrill Lynch" by being forced to wait five seconds, Andresen said he has to contend with customers' vastly increased expectations of what technology can do for them. In addition, these new expectations are yoked with a myriad of problems that are beyond Island's control, such as Internet service providers.

To such finicky customers, Andresen told the group, "You have to say, ‘Sorry, it'll never happen again.' It's good for your business, and you just have to pacify people to whatever extent you can."

Added Tuzman, "This is the value of public relations. If you react well, then that person becomes your best evangelist — because they had a bad experience and you listened to them."

Another method in brand-building, said Joseph Park, the CEO of the online delivery service Kozmo, is to align with a bricks-and-mortar business, as Kozmo did in establishing an alliance with Starbucks.

The Starbucks collaboration is a great deal, he said, because it helps Kozmo cut through all the clutter of ubiquitous dot-coms. "Every billboard and every bus-side in New York City has a dot-com," he complained. "I call it ‘Whatever.com.'

"With Starbucks, we're the first company to be allowed into their holy temple," he joked. "We're not just reaching consumers: we're reaching the perfect kind of consumers. 90 percent of them are internet users. We look at that as the best portal to us. It happens to be a bricks-and-mortar portal."

Similar low-tech marketing methods were championed by the other panelists. Andresen said Island "decided to buy out the entire World Trade Center" in New York City by plastering the PATH commuter trains with Island ads. His audience is held completely captive, he said, because the trains are just too crowded to read a newspaper or indeed much of anything else. Levitan said Flooz got a boost when Flooz representatives dressed up in orange suits and stood in commuter train stations in New York City handing out free subway maps. Each map, he said, had a scratch-off portion so people had a chance to find free services at Flooz.

Park of Kozmo agreed: "The vast majority of our marketing has been off-line guerilla marketing: parties and billboards. And we have had a guy in New York walking through the subway preaching for Kozmo."

Ironically for online companies, all panelists told the audience that they have generally eschewed online advertising.

Online advertising tends not to pay for itself, observed Levitan. Companies that buy online advertising really have to make it count, he said. As for Flooz, he said, "We're going to stay with TV advertising, but also be more creative elsewhere."

Kozmo's low-tech efforts have also reaped the best rewards, added Park. "Our business is very localized," he told the group. "We're in six cities now. In terms of TV, we've never bought national advertising. A local city portal is much more effective than AOL all over the place."