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I thought the following article from Mahesh Murthy via The Wall Street Journal was instructive:

One thing I learned from my days in traditional advertising is that a brand doesn’t exist on shelves—it exists in the hearts and minds of people. Your brand is the sum total of perceptions about your product in the heads of your relevant audience.

If that’s true, then online media are the most important place for your brand image to be established, defended and grown. This is where your offering comes face-to-face with your audience and where its responses can be measured, shaped and—if need be—countered in real time. This is where perceptions can be built, person by person.

This brand building is more effective that the mode we’ve employed until now: TV commercials with 30 seconds of well-produced fiction that try to sell a brand image. It is more credible and much less expensive. In fact, it can cost you nothing, if you have the knack and can do it right. Not too many TV campaigns can match that.

Zero-budget advertising is a phrase no traditional advertising firm wants to hear. The old ad business is predicated on your spending lots of money buying space and time in media vehicles such as this one. But if you look at recent times, it’s a model that is dying.

Look at some of the world’s biggest brands. Gooogle, Amazon, Ferrari, Starbucks, Ikea, eBay, Yahoo, Apple, Harley Davidson, Reuters and Goldman Sachs are a dozen among the 100 top brands in the world per a recent study by brand management firm Interbrand, each with a “brand value” that averages $10 billion. Word of mouth played a major role in building those brands. We await the Apple iPad with no ads released yet, we talk of Google Buzz without having ever seen a Google ad, and we throng to a Zara outlet without seeing its commercials on TV.

Today, the best way to establish your brand among big-hitter rivals is to make it remark-worthy and generate conversations free of charge. See how Red Bull took on big-ad-buying Coke and Pepsi with a product that sold at a higher price for a smaller pack size and built it to a billion-dollar brand with little advertising? The new axiom, call it Mahesh’s Law, is this: your marketing IQ is inversely proportional to your marketing budget.

Start on your brand by answering a simple question: Are you remark-worthy? When someone talks about your offering, is there a 10-second sound bite that is “re-tweetable” on Twitter? If not, go back to basics and craft a simple, clear hook that that sets you apart. Like: Google helps you find stuff better, Harley owners are a cult, Starbucks is a great place to be, Red Bull lets you party harder.

Now apply a single test: Do a Google search on your brand to see whether every element of the resulting page can support this position. Among the results will be your Web site, news items about you, other Web users who mention you, blogs about you, tweets about you, videos starring you and such.

Now work to own the presence in each of these elements.

Start with the Web site. If it’s got corporate gobbledygook and you don’t go back a second time, users won’t either. Make it something worth talking about and worth returning to. Find a Web firm that understands your brand, and not a tech firm. Or do it yourself if you’re starting out.

Then audit every mention of you. Google alerts alone won’t do it, but it’s a start. See who’s saying what.

Then intervene in conversations and respond to complaints, visibly, with your own Twitter account or some other way of interacting. It’s important that on-lookers see your response to a complaint in the open so they know that you can take care of theirs too, if they ever have one. This is where your real brand is built.

Are you seen as the one to talk to in your industry? What will make it so? Issue white papers or surveys, or give out fun statistics. Do the things regularly that give you thought leadership in your niche.

Are there fun or educational videos you’re part of? Put them up, even if they’re shot on your phone. Are there competitors being talked about? Intervene, and respectfully make your presence felt.

Journalists today take more stories from what’s blogged and tweeted about than they take from publicists. Connect with them directly. They’ll respect you for it. Become a “source.”

You’re not burdened with the necessity of paying a big ad firm to do cookie-cutter work. You have the advantage of not having any money. So you’ll probably end up ahead.

— Mahesh Murthy is the Founder of digital brand-management firm Pinstorm and a venture capitalist at Seedfund. He tweets as @maheshmurthy.

Indeed, the web search channel today is where a brand’s vital signs ie. what the market thinks about it – are cataloged and available for all to see.