Brand consultants have long contended that a compelling and coherent brand identity is the foundation of effective advertising, and that investment in the latter without the former is inefficient. For the first time, however, we now have the hard stats to prove the point.
Our research with Millward Brown BrandZ, taking 10 years of valuation data from the world’s top 100 brands, shows that brands perceived by consumers to have strong advertising, but weaker branding, grew in value by just 27 per cent over the decade. In stark contrast, brands that are perceived to have strong advertising and strong branding, grew by a staggering 168 per cent. That is a remarkable difference and an even more remarkable finding on the power and value that great branding brings.
Beyond a shadow of doubt, this new research confirms that the effectiveness, in brand value growth terms, of great advertising is massively enhanced when it builds on the foundations of strong branding. Conversely, effectiveness of great advertising is severely curtailed when it does not have that platform of strong branding to build upon.
These findings should change how marketers carve up their increasingly pressurised budgets. Investment in branding is vital for a brand’s overall marketing success; it ought to be the first, non-negotiable item in the budget each year, not a discretionary item that often gets put to one side as budget pressures mount.
Driving favourable perceptions among consumers through advertising, however strong it is, requires a significant investment in media, usually many millions of dollars. Strong branding, on the other hand, can be achieved at a fraction of that cost – in branding, something less than one million still buys a lot.
Yet, this data demonstrates that this lower cost item – branding – drives vastly superior returns on investment for those higher media investments. So, in an environment where budgets are limited, the best way forward to get the most value out of marketing is to consider the investment in branding as a part of the media plan from the outset.
My suggestion is this: Rather than spending 100 per cent of a multi-million budget on media with the potential to drive value growth of 27 per cent, divert 5-10 per cent into branding, leaving the 90 per cent to 95 per cent remaining spend to drive 168 per cent growth. This relatively minor adjustment to budget allocation makes a radical positive difference to the return on investment, as our research shows.
However, the unfortunate truth is that there are a great number of brands spending tens of millions of pounds on media every year that invest absolutely nothing in branding, thus losing this obvious advantage it brings. I’ve lost count of the number of marketers who have told me: “I’m sorry, we don’t have a budget for branding.” This research is a wake-up call to those people: if you don’t have a line for branding on your budget, then make one. You simply cannot afford to leave it out.
No longer can branding be lumped into the ‘discretionary pot’, seen as an optional, occasional need and, when budgets are under pressure, an investment that is easily passed over for consideration again next year. Marketers must rebalance their plans or miss the huge power and potential that a combination of strong branding and advertising gives.
Branding is my business and I have long argued passionately for more consideration to be given to it within the marketing mix. But this is no longer just an emotional hunch – it is now about making a straightforward, logical decision from hard data. The inevitable conclusion is that branding should not be seen as an optional extra, but as an essential prerequisite to any media spend.
Branding is essential; something with which marketers can’t live without.