• Adweek , Monday, May 12, 2008 11:45 AM

"The entire economic rationale for brands is gone," said Umair Haque, Havas Media Lab director and a Harvard Business Online contributor. "Interaction is too easy now for brands to have power." Indeed, Haque and others agree that brand equity in the Digital Age is about how brands manage their relationship with consumers.

For example, Google and Craigslist, two of the Internet's brand icons, have maintained such a strong brand image by keeping their bare-bones sites unadorned with advertising to help consumers find what they seek quickly. This develops a modicum of respect between brand and consumer that grows as the brand consistently delivers what the consumer needs over and over again. As a result, both companies have been able to grow virally-that is, without spending much, if anything at all, on advertising.

"It all comes back to whether customers are having a strong interaction with the brand on a regular basis," said Yelp CEO Jeremy Stoppelman, whose company operates a social networking and user review Web site. "When you have a service that people feel enthusiastic about, they spread the word and pass it on," said Rob Kalin, CEO of Etsy, which sells handmade goods online. "If we were to take out big glossy ads in magazines or do television commercials, then that changes how people perceive what your company is."

Read the whole story at Adweek »