What Is Brand Awareness?
Brand awareness is a marketing term for the degree to which consumers recognize a product by its name. Ideally, consumers' awareness of the brand not only means recognition but also includes positive perceptions of the product versus the competition.
Studies have found that consumers naturally pay more attention to products with higher brand awareness, influencing how well they recognize and remember these brands. Entrepreneurs can build brand awareness by creating thought leadership content, volunteering, and building a strong network.
Key Takeaways
- Brand awareness refers to the familiarity of consumers with a particular product or service.
- A brand awareness campaign seeks to familiarize the public with a new or revised product and differentiate it from the competition.
- Social media has become an important new tool in brand awareness marketing.
How Brand Awareness Works
Products and services with high brand awareness will likely generate more sales. When faced with choices, consumers are simply more likely to buy a name-brand product than an unfamiliar one.
Building brand awareness starts by connecting your product or service to a clear and compelling value proposition. For example, Verizon's "Can you hear me now?" campaign effectively captured the attention of its target audience and highlighted its expanded service coverage, resulting in a 10% increase in net customers to 32.5 million in the first year. Other key strategies include establishing a strong online presence, using visually appealing designs, and actively engaging with your audience through social media, email, and other platforms.
Another example of successful brand awareness is the soft drink industry. Without their packaging, many soft drinks are indistinguishable, and sugary beverages are known to contribute to chronic diseases like diabetes. However, industry giants like Coca-Cola and Pepsi rely on strong brand awareness to ensure consumers choose their products despite these health risks and competition from alternatives. Over the years, their effective advertising and marketing strategies have significantly increased brand recognition, leading to higher sales.
This higher brand awareness rate for dominant brands in a category can serve as an economic moat, preventing competitors from gaining additionalmarket share. For example, Warren Buffett is an investor in Coca-Cola partly because it's one of the most recognizable global brands with intense customer loyalty, providing it with a wide economic moat.
Special Considerations Regarding Brand Awareness
As of 2024, Internet users spend just over 2 hours daily on social media, compared to an hour and a half back in 2012.
Not surprisingly, companies spend a lot of energy promoting brand awareness on platforms like Instagram and Facebook, especially targeting Millennials and Gen Z audiences.This has led to new forms of promotion in which consumers generatediscussions about productsand servicesthey like and use. Facebook continues to be the most used platform, while Instagram and TikTok dominate among younger users. Brands must stay updated with these trends to effectively reach their target audiences and maximize their marketing impact.
Inevitably, consumers also share unfavorable experiences, and marketers are adapting to that reality. It has become crucial for a company to respond to negative reviews and offer a solution to the customer's problem, in real-time.
But as consumers view and interact with social media posts and updates, brand awareness will increase. For brand awareness to be most productive, consumers should be able to connect to the company's website seamlessly from the social media platform. It's also a good idea to use data-driven insights to tailor content for each platform, ensuring it resonates with the specific demographics active there.
Other Ways to Create Brand Awareness
Print media is not the force it once was, but consumers still read newspapers and magazines. Strategically placed advertisem*nts, such as those in targeted sections of newspapers or specialized publications, can capture viewer attention and boost brand awareness.
For example, a newforex (FX)trading company might advertise in a magazine focusing on global trade and currencies to create brand awareness among investors.
Advertising in physical locations, such as inside stores, is also used to create brand awareness. Impulse purchase products are well-suited for in-store distribution and advertising. For example, a company marketing a new candy bar may distribute the product at a point-of-sale (POS) location to create brand awareness.
Event sponsorship may effectively build brand awareness, offering visibility at charitable events, sporting events, and fundraisers. For example, the PGA Tour’s Valspar Championship significantly boosted Valspar's brand recognition by using paint buckets as tee markers, dressing caddies in branded gear, and featuring a chameleon sand sculpture. These creative efforts led to a 10-point increase in brand recognition, prompting Valspar to renew its sponsorship contract early.
Another example is a health insurance company that may distribute complimentary company-branded health packs at a charity marathon. This associates the brand with an act of goodwill and community feeling, increasing awareness of the brand and burnishing its image.
What Is an Example of Good Brand Awareness?
Coca-Cola, McDonald's, and Nike are some of the most recognizable brands globally. They have successfully created positive brand images and increased customer awareness. The red Coca-Cola can, McDonald's golden arches and Nike's checkmark instantly identify their respective brands.
Why Does Brand Awareness Matter?
Brand awareness is essential because it ensures your brand is top of mind when customers make purchasing decisions. It builds trust and credibility, making it easier for consumers to choose your brand over others. Strong brand awareness fosters customer loyalty and can increase sales and market share.
How Can I Increase Brand Awareness?
To increase brand awareness, psychologists at the University of Southern California recommend focusing on the psychological aspects of branding by emphasizing sincerity, excitement, competence, sophistication, and ruggedness. Use creative marketing campaigns to make your brand memorable, engage with customers on a personal level, and consistently reflect your brand’s values in all interactions. Be strategic in using colors, carefully choose your words, and try to foster a sense of belonging, as this can significantly improve your brand's appeal and customer loyalty.
The Bottom Line
For certain businesses, including consumer-focused companies, brand awareness is crucial for influencing consumer purchasing decisions and fostering loyalty. It's a key reason why brands like Coca-Cola and Nike have had such a lasting impact on consumers.
Effective strategies include connecting your brand to a compelling value proposition, using creative marketing campaigns, and engaging with customers across multiple platforms. Staying current with social media trends and using targeted ads can also help maintain a strong market presence.
