Can’t Buy Me Love – advertising money doesn’t guarantee consumer perception of quality – Statistical Data Included
New research shows that media spending cannot predict consumer perceptions of quality. So which are the ‘best’ brands?
It doesn’t matter how much you spend on media. You can’t buy a consumer’s love, especially when it comes to his or her perceptions about product quality. Recent studies have found that consumer opinion pertaining to quality bears little correlation to the amount of time and money companies spend advertising their wares on Friends, FM radio or FoxSports.com.
None of the 10 brands that were most heavily advertised in the U.S. last year (to the tune of more than $3.5 billion in combined media) were recognized as being among the top 100 “quality” brands in an exclusive online survey conducted for Brandweek by Total Research Corp., Princeton, N.J. Conversely, the top 10 quality brands received only about $150 million in combined media support.
TRC polled approximately 27,000 consumers, ages 15 or older, during the week of March 7 for its EquiTrend 2001 survey. Participants were asked to rank 1,000 consumer brands in 24 categories based on two criteria: Quality and Salience. Quality scores were placed on a scale of 0-10: Zero is unacceptable quality; five is quite acceptable quality; and 10 is outstanding quality. As core of eight or higher is considered “world class,” as fewer than 1% of brands receive that rating. “Salience” is a type of informed awareness, defined by TRC as the percentage of people who feel well-enough informed to rate a particular brand. Salience scores ranged from 1-100, with 100 being the highest.
A final score, Equity, was awarded by multiplying the quality and salience numbers. “Equity” provides a more complete picture of brand strength. Those brands with high perceived quality and that are very well-known have more equity than either high quality/less well-known brands, or very well-known brands with lower quality. (This year, Brandweek adds Quality, Salience and Equity scores to its charts and category analyses, which begin on page S24.)
Among the products rated as having the utmost or highest quality: Waterford Crystal, Craftsman Tools and the Discovery Channel. Meanwhile, the top three media spenders–McDonald’s, Burger King and Circuit City–didn’t even crack the top 100.
“You can’t buy your way to the top of perceived quality Spending more on ads will help, but there’s more to it than that,” said Doug Berdie, president of Strategic Marketing Research Group, a division of Total Research. SMRG conducts the EquiTrend brand equity tracking research twice yearly.
Preaching to consumers about a product’s quality generally falls on deaf ears, said Laura Ries, branding expert and co-author of The 22 Immutable Laws of Branding, who is based in Atlanta. “Advertising in general lacks credibility with the consumer,” she said. “The most likely thing to influence a person’s perception is publicity along with word-of-mouth. [And for the most part], you can’t buy either of those things.”
Both experts agreed that while advertising has its shortcomings in this realm, it is key to raising awareness and reinforcing a product’s message. “Well designed and well-placed advertising is very effective,” said Berdie. “A company that really knows what segment it wants to target using what approach and in what media, can convey the brand personality they want. The shotgun approach to advertising may help salience, but it won’t help perception of quality.”
The seven world-class brands: Waterford Crystal, Craftsman Tools, Discovery Channel, M&M’s, Crayola Crayons & Markers, Bose Stereo & Speaker Systems and WD-40 Spray Lubricant. Others that came within a 0.1 percentage of a world-class rating: Discovery Science Channel, Reynolds Wrap Aluminum Foil, The Learning Channel, Rolls-Royce and Kodak Photographic Film.
The common denominator among all these brands is that they “have a very straightforward promise of what they will deliver and they have consistently delivered it over a long period of time,” said Berdie.
Of the world-class brands, only M&M’s broke into the list of top 1,000 media spenders, per Competitive Media Reporting. Fourth-rated quality brand M&M’s spent $45.7 million last year. The top three perceived brands combined spent only $30 million: Waterford, $1.7 million; Craftsman Tools, $11.9 million; the Discovery Channel, $16.5 million.
Comparatively McDonald’s led all companies in spending at $662 million. Burger King was a distant second at $384 million.
Marketers should take these comparisons with a grain of salt, said Robert Passikoff, president of consultancy Brand Keys, New York. “From category to category consumer expectations change dramatically,” he said. “People don’t buy hamburgers the same way they buy crystal; the values are different. Quality is less important in hamburgers than crystal.”
What’s more, quality isn’t these companies’ primary concern, said Passikoff. “McDonald’s isn’t spending to maintain a quality image. It’s a fun image, a fast image and sometimes a health image. If there was a fun list, Waterford would be down at the bottom.”
One obvious benefit of the burger giants’ hefty media spend is increased salience. McDonald’s was ranked No.848 in quality, but it had a salience score of 99, while Burger King was No. 728 with a 98 rating. “This proves ads can buy salience and it helps with quality but it can’t assure you a [high] quality rating,” said Berdie.
Rounding out media spending by the top 10 quality brands: Crayola, $13.2 million; Bose, $9.5 million; WD-40, $2.2 million; Discovery Science Channel, so small it wasn’t measured; Reynolds, $10.6 million; and the Learning Channel, $15.2 million.
Surprisingly the much-maligned dot-coms made a decent quality showing with five Web sites making the top 100: Discovery.com was 42; Bluemountainarts.com, 44; Yahoo!, 72; A&E.com, 79; Weather.com, 87.
“The fascinating thing is Bluemountain spends zero in advertising and Yahoo! spends a ton,” said Jim Nail, senior analyst for emerging technology research firm Forrester Research, Cambridge, Mass. “That’s a real comment on the power of what in the old economy we called ‘word of mouth’; now we call it viral marketing. It shows that advertising is a weak tool to establish a brand. When a consumer can have a direct experience with the service, it’s a much more powerful branding moment than a 30-second TV ad.” (For the record, Bluemountain spent $3.1 million on media last year.)
Ultimately none of the big dot-com spenders made the top 100 list. They are: Ameritrade, $161 million; Datek, $109M; Priceline.com, $92.6M; Schwab.com, $82M; E*Trade, $72.4M; Snap.com, $61M; and, Monster.com, $58.8M. Nail said this fact has more to do with these companies’ goals than anything else. “Priceline never tried to position themselves as quality; they were cheap’ said Nail. “Schwab and E*Trade basically talk about the price of their trades. [In that respect,] you have to be careful about saying advertising doesn’t work.”
That any dot-coms made the list is a testament to consumer wants and needs, said Nail. “Basically consumers are just looking to get what they want in a quality way,” he said. They don’t care about Bluemountain’s financial situation. They just know they can go there to send a friend an electronic greeting card. They feel good doing it. Their friend feels good receiving it and that’s it.”
The appearance of A&E.com, Discover.com and Weather.com, meanwhile, comes from “the halo effect they get from their association with the traditional businesses. Clearly consumers perceive programming on those channels to be quality,” said Nail.
Apparently people love their basic cable channels. The Discovery, Discovery Science, Discovery Health, National Geographic, History, A&E, Biography and Weather channels all made the top 100, with a 7.18 rating or higher. Individual shows such as Biography, The Series; Animal Planet, and Disney World also made the cut.
That means more than 10% of the top 100 products are media properties. “I’m not at all surprised,” said Jack Myers, chief economist for The Myers Report. “What product is more ubiquitous than TV? What do people spend more time with than TV? People recognize [when] they are tuning into a high-quality [TV] product. It’s no different from what they expect when they buy a Craftsman tool.”
Last year, TV viewers were subjected to omnipresent political ads, Bush For President spent $74.2 million — Slightly more than Flonase Nasal Rx and slightly less than Red Lobster. Gore spent $55.8 million, on par with Nissan Trucks (Frontier) and Samsung Digital Phones.
Of course, presidential candidates can generate substantial awareness without a big spend. That likely is true of the seven companies in the top 100 with salience scores of 98 or higher. Consumers who didn’t know these products (Reynolds Wrap, Oreo Cookies, Heinz Ketchup, Hallmark Greeting Cards, Kleenex Facial Tissues, Campbell’s Soup arid Coca-Cola) were probably trapped on a desert island with Tom Hanks.
The amount these companies paid to stay in front of the consumer’s eye ranges from $10.7 million (Oreo) to $194 million (Coca-Cola). The moral to these statistics: It doesn’t hurt to be old.” [These brands] have been around a long time. Their heritage has a lot to do with awareness,” said Ries. “They have all been dominant, powerful brands.”
Of the top 100 quality brands with poor consumer awareness (salience below 50): Rolls Royce, Bentley Automobiles, Ritz-Carlton Hotels, Ferrari, Four Seasons Hotels and Discovery Communications. The worst was Kevlar, DuPont’s protective apparel, which scored a 38. The lack of media spending may play a part in the trend: Rolls Royce spent $1.4 million, Bentley $984,000, Ritz-Carlton $7.4 million, Ferrari $48,000, Four Seasons hotels $6.6 million and Discovery pays to brand its channels, not itself. As for Kevlar, it spent $184,000 on media.
There have been some significant changes since the last EquiTrend survey released in November 2000, as Rolls-Royce, Bentley Philadelphia Brand Cream Cheese and Arm & Hammer Baking Soda slipped out of the top 10. The exclusive nature of Rolls Royce may have contributed to its fall, said Berdie. “When the economy becomes dubious, [expensive] brands get hit harder,” he said. “It’s easier for consumers to discount a brand slightly than admit to themselves that they don’t have the money to spend. They say to themselves, ‘Maybe they aren’t that good after all.”
Finally, some more bad news for tobacco companies. The worst brands, in terms of quality were: Kool, Doral, Salem, Newport, Basic, Virginia Slims, GPC, Winston, Camel, the Playboy Channel, Marlboro and Firestone. The National Enquirer also scored poorly.
HOW THE BRANDS WERE EVALUATED
The Brandweek/Total Research Corp. EquiTrend survey is based on the opinions of 27,277 consumers aged 15 and over. All interviews were conducted online and took place from March 7-15, 2001. The respondents rated a total of 1029 brands covering 24 consumer categories.
Each respondent rated 100 brands, including 20 calibration brands rated by the total sample, plus 80 randomly selected brands. Each brand therefore received 2,000 rating. In addition to the brand rating questions, a variety of usage, demographic and psychographic questions were asked.
The brands included in the survey comprised. the top brands measured by sales across 24 consumer categories listed in Brandweek’s Superbrands edition of June 19, 2000 plus approximately 250 additional brands that were among the top media spenders from January to November 2000, according to Competitive Media Reporting.
The goal was to determine consumer perceptions of brand quality and identify how much goodwill a given brand has established.
Each brand was rated on the following criteria:
Quality – 0 to 10 The cornerstone of the EquiTrend system is the measurement of perceived. quality. On the EquiTiend scale of zero to 10, zero means “Unacceptable/Poor,” while 5 means “Quite Acceptable” and 10 means “Outstanding/Extraordinary.” Respondents were asked to use any number within that range to rate the quality of brands, or could indicate they had absolutely no opinion and could not rate it.
Salience – 0 to 100 The percentage of people who feel well-informed enough about a brand to rate it is referred to as that brand’s “salience,” a type of informed awareness. Over the years, salience has been shown to be more predictive of market performance than is either aided awareness or unaided awareness. High salience indicates a brand has benefited from long-term advertising and marketing campaigns.
Equity – 0 to 100 A brand’s equity is determined by multiplying its quality score by its salience, which maximizes the ability to predict market share. Thus brands that have high quality and are very well known have more equity than either high quality less-known brands, or very well known brands with lower quality scores.
Not all people use the scales in the same manner. Some are “easy graders” (giving scores of 8’s, 9’s and 10’s) while others are hard graders” (giving very few scores above 6) and others give a more balanced set of ratings. Total Research Bias Correction calibrates the ratings to reduce rater bias, thereby increasing the accuracy of market predictions by up to 50%.
People’s perceptions of brands are influenced by overall consumer confidence and a number of other non-brand factors that fluctuate over time. Total Research calibrates the data by making wave adjustments to factor out these influences.
COPYRIGHT 2001 BPI Communications, Inc.
COPYRIGHT 2001 Gale Group