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Report: Brand Not Driving Drive Young Online Consumers

Certain companies marketing to young consumers don't need mass-appeal sites at all and should redirect their online efforts to banner advertising and sponsorships, says a new e-commerce study.

The new Technographics Report from Forrester Research says that young consumers' preferences for leading brands don't correlate with traffic to these companies' Web sites.

Brands dependent upon high-traffic numbers should focus on providing young consumers with functionality and utility.

"In comparing 16- to 22-year-olds' brand preferences with their actual online behavior, we discovered a paradox," said Ekaterina O. Walsh, analyst for Technographics.

"Although Coke, Nike, and Pizza Hut are still among the favored brands of today's young adults, these companies do not generate high traffic to their sites. Since brand leadership doesn't necessarily yield the most clicks, companies must determine whether they need a Web site at all -- or if they will gain brand equity by establishing a persistent online presence using other means."

To help companies assess whether a branded product needs its own mass-appeal, high-traffic site, Forrester said it has developed the Site Need Index (SNI).

SNI measures product characteristics like price, purchase frequency, online configurability, and intensity of research required.

Applying the SNI to different product categories reveals that consumer packaged goods are among the least in need of proprietary sites due to low price and because the purchases occur frequently and impulsively.

Conversely, the SNI demonstrates that technology companies are most in need of high-traffic sites to build their brands and sell their products, followed by online retailers, travel, financial services, and automobiles.

Forrester said its analysis of the most visited sites shows that companies requiring mass-appeal Web sites should focus on functionality and utility, including strong customer service and technical support -- not on games, chat, or sweepstakes.

Both companies that depend on high-traffic sites and those that don't should build their brands online with contextual banners, Forrester said. Eighty-six percent of surveyed young consumers have clicked on banner ads -- 47 percent more than adults.

For the Report "Branding For A Net Generation," Forrester surveyed nearly 8,500 16- to 22-year-olds in the United States from Greenfield Online's young consumer panel.