For many marketers, the term "brand awareness" represents a vague concept generally treated as worthy of investment but rarely defined in a precise manner. If you are one of these marketers, perhaps spending on advertising without click-based conversion makes you uncomfortable. You may accept that greater recognition of your brand can lead to sales growth but not completely understand how or why. You might simply drive by a billboard promoting a SaaS platform and wonder how their marketing team defends that expense. Learning the process and elements by which brand awareness leads to higher sales will demystify the whole concept and improve your advertising performance.
Brand awareness refers to an individual's ability to recognize or recall an individual brand. This definition serves for identification but does not explain why greater brand awareness might benefit you or how you can efficiently drive greater awareness. Below, you can find a closer examination of that definition, an explanation of reasons for investment, and finally, the elements you should consider when promoting brand awareness.
For more information on brand building through brand awareness:
The definition above references two ways awareness might manifest — "recognition" and "recall." Brand recall refers to a consumer's ability to evoke the memory of a specific brand when encountering that brand's product category. For example, if a runner realizes she needs to buy new running shoes, she might immediately think of Nike and Adidas without researching or shopping.
Brand recognition refers to consumer realization that she has seen or heard of a specific brand before. This recognition might carry specific associations of quality, affinity, or context. In the case of the running shoes, when our runner begins shopping, she might see another brand like Saucony. She did not bring that brand to mind on her own, but she may recognize it and remember that she had heard of it in a more running-specific context than the more general sports brands Nike and Adidas. An association like this might affect her purchase decision.
The Importance of Branding to Revenue
When thinking about how brand awareness might influence purchase decision-making, addressing how brand awareness advertising benefits a business naturally follows. Contrasting brand awareness advertising with direct response advertising helps highlight the different goals involved in each. Direct response advertising pushes people already considering a purchase to make that purchase specifically with your business. Brand awareness advertising creates a larger audience of people interested in your product category and familiar with your brand. Your brand enters the small set of brands individuals consider when purchasing in your category. The below chart from a 2013 paper demonstrates the long-term, countercyclical benefits of brand awareness advertising:
Benefits extend beyond recognition and recall. In addition to entering a consumer's consideration set, a 2013 study finds "subjects choosing from a set of brands with marked awareness differentials showed an overwhelming preference for the high awareness brand, despite quality and price differentials. They also made their decisions faster than subjects in the nonawareness condition and sampled fewer brands." An additional study showed that "familiarity with a brand influences a consumer's confidence toward the brand, which in turn affects intention to buy the same brand." Essentially, greater familiarity and stronger brand awareness tend to drive:
Higher likelihood to choose a more familiar brand
Comfort paying a higher price for a more familiar product
Lower sensitivity to negative quality differences
Greater confidence and trust in a familiar brand
Taken as a whole, brand awareness advertising can deliver lower acquisition costs, more customers, and higher lifetime value.
How to Best Approach Brand Building
Individual businesses may treat brand promotion differently depending on the tone of their brand's message and personality. Brand awareness strategy can seem daunting without the immediate feedback of click- and conversion-tracking offered by direct response advertising. Fortunately, familiarity with the detailed structure of brand awareness helps guide strategic efforts. Below you will find a chart from a 2001 study detailing relationships between significant brand performance elements.
Two elements occupy the central focus of this chart — market share, and relative price. Essentially, market share refers to the share of total purchases in your product category that consumers make with your business. You can use this as a measure of growth within the constraints of your total market. Relative price refers to the amount of change in your prices that consumers will tolerate before moving to a different brand.
The arrows show how closely increases in one element relate to an increase of the affected element further down the line. To one side lies differentiation and share of voice. Share of voice may refer to the portion of conversation in your product category that mentions your brand. This sometimes refers to your share of total advertising attention, so clearly, investments in advertising will affect it directly. This metric affects both price sensitivity and market share.
Differentiation refers to how much your brand and product stand out from others in your category. Differentiating your product through brand awareness messages can lead consumers to be willing to pay more for your product than a competitor's.
Closest to the price and market share on the other side of the chart lies two aspects of loyalty. Purchase loyalty refers to consumer willingness to make repeat purchases with your brand. Attitudinal loyalty refers to consumer commitment to your brand based on emotional attachment or brand preference. These influence each other in addition to increasing your bottom line metrics.
Brand trust and brand affect also influence each other on top of their effects on loyalty types. Brand trust indicates that customers expect your company's behavior and product will reflect the promise you make. Brand affect measures the likelihood your product brings enjoyment or positive emotions to a consumer that uses it. A focus here on consistency between your message and behavior plus product quality will contribute positively to your business's success.
Finally, hedonic and utilitarian value occupies the far end of the chart. Hedonic value refers to the enjoyment or pleasure a product or brand provides a consumer. In contrast, utilitarian value means the extent to which a product can perform functions in everyday life of a consumer. Each of them exerts an influence on brand affect. Creative brand advertising will only exert much of an influence over one of hedonic value, so focusing on your brand's attractive or emotional features may serve best to improve brand affect.
Brand Building Is Essential to Your Business
Brand familiarity affects the purchase choices consumers make as well as their willingness to pay. Improving your brand image and familiarity in your market can produce long-term loyalty to your business. This makes the promotion of brand awareness essential to your business growth. With greater clarity of intent and supported by the brand awareness advertising solutions offered by AdRoll, you can confidently start your path to long-term revenue growth.
Originally published on January 4th, 2021, last updated on August 16th, 2022.