Colored by the Company You Keep

Many advertising media present a series of ads featuring brands in unrelated categories. For instance, while browsing through a magazine or watching TV, consumers can be exposed to an ad for a Gucci perfume that is immediately followed by an ad for a new Saturn car. Is the evaluation of the Saturn car affected by the preceding exposure to the Gucci perfume ad? Would the evaluation of the Saturn car be more or less favorable had the previous ad been for Old Navy clothing rather than for a luxury perfume?

Brands are invariably presented in contexts that can influence how they are perceived. Often marketers actively seek contexts that can enhance a brand’s image and evaluation. Accordingly, brands are often associated with particular popular events and sport teams or featured in certain television programs and movies. To illustrate, Aston Martin has been repeatedly featured in James Bond movies, Viagra has served as a NASCAR sponsor, and AT&T has associated its brand with the San Francisco Giants’ baseball stadium. Such actions are predicated on the belief that positive associations with a context transfer to the target brand. In many circumstances, however, marketers have less control over the contexts in which their brands are presented. Sometimes, for example, supermarkets shelve health and beauty products next to pet foods, magazines place ads for luxurious clothing brands right after ads for arthritis drugs, and shopping malls position high-end beauty salons next to discount stores. Thus, marketers need to understand whether the environment in which their brand appears has a favorable or adverse effect on their brand’s evaluation.

Brian Sternthal (Professor of Marketing at the Kellogg School of Management) and Myungwoo Nam (Assistant Professor of Marketing at INSEAD) set out to investigate this issue. In a series of four experiments, they examined how consumers’ evaluations of an ambiguous brand—that is, a brand for which consumers have no particular associations or strong feelings—can be influenced by other brands presented in the same context, even when they belong to unrelated categories. Participants were asked to evaluate a fictitious brand featured in an ad that was presented in the context of one or more other ads featuring brands in unrelated categories.

Assimilation vs. Contrast Effects
Sternthal and Nam suggest that the context in which an ambiguous brand is presented can influence its evaluation in two opposite directions.

An assimilation effect occurs when a more positive context induces a more favorable evaluation of the target brand or when a less positive context induces a less favorable evaluation. For example, the evaluation of the new Saturn improves after exposure to an ad for the highly valued Gucci brand and worsens after exposure to an ad for the less favored Old Navy brand. A contrast effect occurs when a more positive context induces a less favorable evaluation of the target brand or when a less positive context induces a more favorable evaluation of the target brand. For example, the evaluation of the new Saturn improves after exposure to the Old Navy ad and worsens after exposure to the Gucci ad.

Consumers’ Expertise with the Target Category
The researchers suggest that consumers’ expertise with the target category affects how the context influences the evaluation of the target brand. This happens because consumers’ expertise with the target category determines how they use the context in which the brand is presented. In particular, while expert consumers use the context to evaluate the ambiguous target brand and show assimilation effects, novices use the context as a comparison standard against which to evaluate the ambiguous target brand and show contrast effects.

To illustrate, imagine you are browsing through a magazine. You first encounter an ad for a BMW car, which triggers associations with benefits such as luxury and power. On the next page you see an ad for a JBL stereo system. You are not familiar with this brand so are not sure how to judge its quality. You could use the associations activated by the exposure to the BMW ad in two ways—each would influence your judgment of the JBL stereo system in opposite directions.

On the one hand, you might apply the benefits of luxury and power to the ambiguous stereo system, endowing it with high quality and high power (assimilation effect). In order for this process to occur, however, you would need to be knowledgeable about stereo systems. Otherwise you would be unlikely to realize that these benefits could be applied to the evaluation of a stereo. The implication is that expertise with the target category helps produce assimilation effects.

On the other hand, if your knowledge about stereo systems is so limited that you are unable to map the activated benefits onto the target brand category and also lack an already formed internal standard of reference to judge the target brand, you will tend to see the stereo system as low in quality (contrast effect). Lack of expertise will likely prompt you to think that JBL is not as good in its category as BMW is in its category. The implication is that little expertise with the target category is likely to produce contrast effects.

Managing a Brand’s Environment
Sternthal and Nam’s research suggests that marketers should pay close attention to managing not only their brands but also their brands’ environment. When the evaluation of a target brand is ambiguous, it can easily be affected by other brands presented in the same context, even if they belong to unrelated categories. The specific effect of context depends on consumers’ expertise with the target category. Marketers can derive useful insights from understanding how consumers’ expertise with the category to which the target brand belongs determines how the context influences the evaluation of the target brand.

Expertise with a product category correlates with consumers’ level of category use, which often serves as a basis for customer segmentation and target selection. Moreover, consumers’ knowledge of the category to which the target brand belongs should influence how marketers manage the brand environment. If the quality of a target brand is ambiguous and consumers are highly knowledgeable about the category, the context should be composed of positively evaluated brands to take advantage of the anticipated assimilation effect.

At the same time, marketers should try to ensure that the context in which the brand is presented is not blatantly related to the brand so as to prompt a contrast effect. When consumers are less knowledgeable about the category, as might be the case when targeting point of entry, the preferred context is one in which the target brand’s quality is likely to stand out as superior so as to take advantage of the anticipated contrast effect.