Internet Branding Expert Laura Ries Say goodbye to generic domain names, ad-based revenues and secondary category leaders. Branding expert Laura Ries introduces the new rules of the Internet.

It's difficult to say, with a straight face, that the rulesof the Internet have changed: After all, e-commerce, B-to-B, ASPsand all the other buzzword business opportunities on the Web areabout as new a business concept as you can get. How can therealready be rules involved? But once you start thinking about allthose Internet bandwagons filling up with this company and that,you realize that rules are in the making-whether it's the useof generic names like Buy.com and Furniture.com, or the faith thatbanner ad-revenues are a cure-all.

And then Al and Laura Ries decide to chuck the new rules out thewindow in favor of the new, new rules.

		"The most successful companies on the Internetare the small entrepreneurs who don't do research. They just gowith their gut instincts and fix it along the way. And they'rethe ones who are now multimillionaires."

The father-and-daughter team are no strangers to developing therules of branding. They previously co-wrote The 22 RulesImmutable Laws of Branding, a Business Week bestseller;Al also co-wrote The 22 Immutable Laws of Marketing. Intheir newest book, The 11 Immutable Laws of InternetBranding (HarperBusiness, $21), the Ries explore the concept ofbuilding a strong brand name on the Internet and how businesses aregetting it right-and getting it wrong-in areas from company namesto interactivity to vanity, the hubris of successful netcompanies.

We've asked Laura Ries, who's also a partner with herfather in the marketing strategy firm Ries & Ries (http://www.ries.com), to talk with usabout how these rules are changing the face of business.

Entrepreneur.com: You say the Internet can be a businessor a medium. Why is this distinction important to branding?

Laura Ries: Whether the Internet is going to simply serveas a medium for your existing business or whether it's going tobe a completely new business is the key decision you need to makewhen you're developing an Internet business.

In many cases, the big thrust of attention has been on creatinga new business, and in that case, the first thing you need is a newname. You need to identify [your new business] as an Internet brandbecause it's a separate business. It's a different type ofbusiness. Things run differently on the Internet. The Internet isbased on interactivity, for example. So many companies that haveexisting businesses, like The Gap or Barnes & Noble, theyreally need to throw out their old book and start over with a wholefresh new way of seeing things on the Internet. And the best andeasiest way to communicate that [change] with consumers is with anew brand name.

Entrepreneur.com: Why does the"foot-in-both-camps" strategy-not choosing whether theInternet will be a medium or a new business-undermine consumertrust?

Ries: I think it's confusion, not only from thecompany standpoint of "Which direction are we going in? Is itthe Internet or is it a traditional business?" but forconsumers as well. It confuses them in terms of what you standfor.

In the long term, the Internet is going to be focused on lowprice and selection. We believe the future of traditional[business] is going to be the opposite. It will be focused onservice and availability-not on the lowest price. In fact, theymight have to raise their prices and offer more to consumers interms of the shopping experience. The biggest problem with retailthese days is that their emphasis on low prices [means they're]out of stock many times because they don't want to buy toomuch. They're going to have to change this, and they'regoing to have to be customer-centered focused andservice-oriented.

Entrepreneur.com: A large part of your book is devoted tothe discussion of brand names. How has the Internet affected theimportance of a brand name?

Ries: The most important thing for a brand on theInternet is its brand name. The Internet has a lack of visibilityas opposed to the "outernet," the real world. In the realworld, you drive by and see signs. You see buildings. You see abank. You see a bookstore. But on the Internet, it's completelydifferent. You actually have to type in and correctly spell thebrand name or the company name in order to get [to the site.] Yourbrand name is the sole connection and the way that anyone is goingto find you. So that means it's going to be extremely importantlong-term in establishing what that brand is and what it standsfor.

Entrepreneur.com: What are other laws regarding Internetbrand names?

Ries: One is "The Law of the Common Name,"which says that the kiss of death for an Internet brand is acommon, generic name. We feel a generic name is so damaging becauseit's very hard to place [a generic name] in the mind because ithas very little meaning for consumers. Many companies, while havinggood business strategies and great execution perhaps, are going tobe doomed by the fact that they have lousy names. One problem isthere's so much confusion with so many generic names in eachcategory. Are you Car or Cars or eCars or iCars or CarNet? It'sgoing to be impossible to differentiate yourself from thecompetition.

You can imagine a conversation: "Where'd you buy yournew car?" "I got it at Cars." "You got itwhere?" It doesn't lend itself well to conversation and,as a result, doesn't build a brand in the consumer's mind.The mind doesn't really know what to do with a genericname.

On the other hand, we have "The Law of the ProperName." Because your name stands alone on the Internet,you'd better have a good one. The proper name has a muchbetter, long-term, strategic effect because you can build thatspace in the mind of the consumer where your brand can stand forsomething. And it doesn't have to be a made-up word; it can bea real word used out of context. For example, Amazon.com, we feel,is a very strong brand name, linking the idea of the world'sbiggest river and the world's largest bookstore.

Entrepreneur.com: Another interesting law you introducein your book is "The Law of Singularity," where you saythere's really no room on the Internet for secondary categoryleaders. What does this mean for smaller companies that can'toffer the breadth of what a leader offers?

Ries: The idea of singularity is that there's goingto be a leader in every category. And there is a tremendousopportunity for smaller companies to narrow their focus and competevery effectively against the leader. You know, in terms ofAmazon.com, they are many specialty book e-tailers. For example,VarsityBooks.com sells books to university students and has donevery well and has a promising future. And they did so by narrowingtheir focus.

You can't go against the leader by offering the same thingsthat they do. It's going to be very difficult to beat them onprice. The only way you're going to have success is bynarrowing the focus and becoming a specialist in something andtaking, perhaps, a smaller piece of the pie. Or going to a newcategory, one that's not so heavily dominated by a leader, andsetting up another business. The dust hasn't settled on theInternet. There are actually very few categories that have adominant leader. There are lots of opportunities in those areaswhere the dominant leader hasn't shown itself yet.

Entrepreneur.com: You reject the notion that the Internetwill be dominated by advertising. Why?

Ries: The original theory was that the Internet would bemuch like television: You would give away the content and makemoney by selling advertising. The thing is, the Internet is acompletely new type of medium. Television is a passive medium; yousit there and watch it. The Internet is the opposite-it'scompletely interactive. And studies have shown that when you givepeople the opportunity, they will turn off advertising immediately.The Internet allows people to choose what they want to watch andwhere they want to go, and they've chosen to turn off thatadvertising.

So we feel the advertising model is not one that's going tobe effective on the Internet. And we're seeing thathappen-click rates have declined. Initially, people had somesuccess with the idea of advertising and banner ads because themedium was so new. People were interested and excited abouteverything and tended to click on everything. But now that it'sa part of our everyday lives, you have to face reality that peoplearen't interested in actively seeking advertising and will, infact, go out of their way to avoid it.

On the other hand, there has been a tremendous amount ofadvertising off the Net. All the dotcom companies, because of theirlack of real-world visibility, are forced to use advertising inother mediums to get attention and to remind people about theirbrands and to visit their sites.

Entrepreneur.com: In your "The Law Of Time"chapter, there's a very interesting quote: "Getting itright makes no sense from a branding point of view. Anything worthdoing is worthwhile doing in a half-assed way. Anything not worthdoing is not worth doing in a perfect way." This really seemsto buck conventional business rules.

Ries: Specifically for the Internet, this is veryimportant because time is of the essence and it's so importantto be first in the mind. Many of the initial Internetcompanies-Yahoo! in particular-essentially launched without havinga product. Yahoo! outsourced [the construction of their searchengine], but they were able to build that all-important brand inconsumers' minds. Later on, they fixed the product and now itworks quite well.

But time is so important and many companies have been boggeddown by trying to get their product perfect before launching it.There's such a limited opportunity to build that brand. Youneed to be at the right place at the right time. You need to befirst. You need to generate the publicity surrounding you and yourbrand-that's really the key ingredient. That doesn't meancrappy brands will make it on the Internet. But you shouldn'twait too long.

I think the reason the big companies haven't had muchsuccess on the Internet is their internal thinking says, "Wehave to wait until it's perfect, and we have to doresearch." But the most successful businesses on the Internetare the small entrepreneurs who don't do research. They just gowith their gut instinct and fix it along the way. And they'rethe ones who are now multimillionaires.