What’s in a name? Plenty, when it’s an online name. At least that’s been the conventional wisdom.
But with many of the best-known e-commerce brand names — from Pets.com to eToys and Furniture.com — now resting in peace, and without the piles of money needed to fuel the type of name-building efforts that were common two years ago, enthusiasm has quickly cooled for all-out efforts to build Web brands.
“Too many dot-com managers have assumed that brand awareness is sufficient to create momentum that leads to loyalty,” said Lynn B. Upshaw, an analyst at Interbrand.
In fact, experts such as Upshaw now say that the best brands are those built from the ground up on old-fashioned ideals such as customer service and community.
Any Other Name
In other words, it is not the name that matters, but what it represents. That is why online communities such as Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL) and eBay (Nasdaq: EBAY) are the best examples of online brand success stories so far, Upshaw said.
“And it’s no coincidence those are also some of the few profitable companies on the Internet,” Upshaw added.
Forces of Nature
With many online businesses abandoning their dot-com monikers, many believe that investing heavily in a domain name might have been a fool’s errand.
When eCompanies bought the Business.com domain for $7.5 million, it justified the move by saying that the name itself would constitute most of the necessary brand-building efforts.
Instead, it is clear that brand-building, however important, cannot be achieved all at once, whether from a domain name purchase, or from all-out media blitzes like the expensive one-shot Super Bowl ad campaigns companies such as Computer.com ran in the heyday of the rise of e-commerce.
“You can’t force a brand into existence overnight,” said Upshaw.
Goodwill to All
Still, virtually everyone agrees that brand-building is an essential goal. In fact, the brand name, and goodwill it represents, may be the most valuable asset held by some e-businesses.
A study by the Center for Research in Brand Marketing at the University of Birmingham (England) found that tangible assets make up only one-quarter of the full value of the average business. The other three-fourths is largely attributed to the value of that company’s brand identity, the study said.
The smartest e-commerce firms may be those that find a way to latch onto existing brand names in the brick-and-mortar world, Gartner analyst Barb Gomolski said.
“By co-branding with traditional merchants, virtual retailers without brand names can gain a stake in the market, gain credibility and trust and drive traffic,” Gomolski said. “And they can do it fairly quickly and inexpensively.”
For brand awareness experts, the good news is that the day when a company would spend millions of dollars on a domain name, such as Business.com, or tens of millions on a brand-building advertising campaign right out of the gate, appears to be over.
If anything, some dot-coms are going to the opposite extreme. Companies such as Internet.com and the now-closed Kozmo (nee Kozmo.com) decided to jettison the “dot-com” part of their names in an apparent attempt to distance themselves from the stigma of the dot-com shakeout.
Having the phrase “dot-com” attached to a brand name might make a transition to a brick-and-mortar presence more tricky, observers say. Names like Yahoo! and Amazon, Upshaw said, can go anywhere, while Drugstore.com and Furniture.com do not travel quite as well.
“The more open-ended the name, the greater the opportunity to expand into new markets,” said Upshaw.
In the end, however, one overriding rule has emerged. When it comes to online branding, the name does not make the company — the company makes the name.