Isn’t Brand Advertising Just A Waste of Money?

A lack of immediate and easily measureable results, poorly informed buyers and an advertising industry that is just too creative have given brand advertising a bad name.

Apparently, in these financially challenging times, companies are cutting back on big-brand advertising and investing in “quick-win” sales promotions. According to The Institute of Practitioners in Advertising’s quarterly Bellwether report, produced by Markit Economics, some 4.5% of advertising managers increased their spending on sales promotion; at the same time 1% cut marketing budgets and brand advertising went down by nearly 2%.

The chap from Markit Economics, quoted in the FT, said “competing on price is an appealing method of winning sales” and that companies tend to increase brand advertising when times were good. I also saw Chris Whitelaw quoted, he’s the president of digital marketing agency I-Spy and he said that advertisers were looking to results-driven advertising and that “ a reweighting of spend into directly-measurable acquisition-rich channels, such as search and internet advertising, continues and will be a theme throughout 2012.”

My guess is that this reweighting of spend is driven by the weaker market players who do not own dominant brands in their categories. Dominant brands do not compromise on their brand advertising, because reminding their customers why they buy their products, or services, rather than others and communicating the same message to new customers is why they have a dominant brand in the first place. The very best brands – all consumer brands by the way – have great market positions that have been in place for many years and they invest in up-to-date and captivating messaging to remind us what it is. I know as soon as I see a new Persil advert that I buy it because it “looks after my family” not because it is any better at washing my clothes and even though I now live on my own I still like the idea.

More immediate promotional activity is used by the dominant brands to get you to trial or trade-up and these more tactical promotions are in part a response to what is going on in the market. They need to be playing the value game too, as well as their less dominate competitors: if one is doing it they all tend to do it. The subtle difference though is that they are not trying to be cheapest, just relatively cheaper and that is a big difference that is often missed.

Whilst there should be no doubt in your mind that brand advertising for Persil, Guinness, or British Gas, is successful for them, many smaller business managers are not so confident and that is why they under-invest in brand advertising as part of their promotional mix. Of course it is relatively expensive and it is very hard to measure any immediate returns, no matter what advertising companies tell you. It is more a question of sentiment and clearly at the moment sentiment is low across the board and the more ambiguous investments are just easier to cut: if you can’t measure the positive impact of spending money the opposite may be true too.

The other problem with brand advertising is that many companies delegate the strategic thinking to the adverting companies. It is not their job to decide on your strategy and marketing strategy is the most fundamental part of your strategy. For this reason the advertising universe is full of completely hopeless advertising that has far more style than substance. Style is yet another problem when buying advertising, as the advertising industry love being creative, to a fault, irrespective of if it is actually the best way to sell your product. “Go Compare!” sung by the now familiar moustached opera singer is bloody good brand promotion, but many advertising companies look down their noses at this sort of direct communication as it is less likely to win them creative awards.

So, my point is this. You do not want to be competing on price, ever: discounting your own higher price is another thing all together and the two things should not be confused.  You should always compete primarily on value that derives from something about how your brand is positioned in the market: you can only do this with brand advertising. To get it right you need to: be very clear about what your marketing strategy is and don’t rely on advertising companies to do this for you: you need to make sure that the treatment is not too fanciful; and then you need to have the confidence to keep at it as part of your regular market communications: do all that and you’ll see why the dominate brands put so much effort into brand advertising.

So, isn’t brand advertising just a waste of money? Only if you fail to do the above: if you get it right it has the potential to make you a fortune.



One Response to Isn’t Brand Advertising Just A Waste of Money?

  1. Shobha Ponnappa October 21, 2012 at 3:03 pm #

    As a brand strategist, I must confess I have never looked at brand advertising and brand promotions as an “either/or” proposition. Brand advertising is ideal for the trigger stage of the buying cycle, while promotions help further down the line when converting prospects towards “try and buy” stages of the cycle. That said, I agree with you that brand advertising has to be done “just right” for it to be effective.

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