05 June 2000

According to new research carried out for the London office of multinational agency network Leo Burnett, consumers still trust traditional company brands more than internet start-ups - despite the Niagara of promotional cash flooding into new dotcom brands.

Although awareness of a brand can be high, consumer trust in that brand often trails well behind its name recognition. The finding has implications for the entire ad industry, not least the shops scrabbling to create new ad campaigns both for internet start-ups and the online extensions of established companies.

Says Leo Burnett director Joe Staton, of dotcom advertising in general: "I love it, but most of the ads don't tell you anything about the company." His view underscores widespread criticism of dotcom ads that labor to raise awareness at any cost by creating cryptic, shocking or irritating campaigns. “A lot of this is about leveraging trust from one medium to another,” argues Staton, “moving trust from the offline to the online world".

The research cites examples of three British internet brands, ISP Freeserve, and online banks Egg and Smile, respectively backed by traditional parent companies Dixons Stores Group, Prudential, and The Cooperative Bank. Consumers were far more likely to conduct transactions with their websites once they knew the name of the well-known parent company.

However, shifting an offline brand onto the web is not always a good idea, say the researchers, because the company's traditional image may not be appropriate for its internet identity. Online promotion is therefore a balancing act between creating a hip new identity that targets the desired audience, and harnessing the power of a traditional brand to support perceptions of reliability and trust.

To examine the relationship between online and offline brands, the study polled some 200 British internet users. They were asked about three kinds of company: internet-only traders, traditional companies and internet companies backed by a traditional parent. Predictably, traditional companies like the BBC, Boots the Chemist, Prudential and Dixons ranked high both in brand awareness and brand trust.

The respondents were then asked to rate new online brands such as Freeserve, Egg, and Smile. While awareness ratings came relatively close to those of the traditional companies, brand trust lagged far behind. For example, online reservation service was recognized by 84% of the people studied. When asked if they would trust the brand, only 17% of the respondents replied in the affirmative.

But for online traders backed by traditional parents, levels of trust and likelihood of purchasing from the company both rose when consumers were prompted with the name of the parent company. For example, 53% of consumers over 35 said they would be more likely to patronize internet bank Egg when they knew it was backed by Prudential. With younger respondents, 42% made the same response.

Concludes Burnett’s Staton: "The important thing to remember is that as people face a jungle of choices, they will return to the brands they trust."

News source: Wall Street Journal