It's often assumed a brand is stable and can withstand a hiatus of marketing, especially when there is a strong base of repeat customers. However, the numbers present a different reality.
Recently, the Ehrenberg-Bass Institute for Marketing Science (my fave reputable evidence-based marketing think tank) conducted a study on 70 Australian brands over 20 years and found that sales declined by up to 16% after one year and up to 25% after two years without brand advertising spend. Interestingly, bigger brands are more likely to withstand a one-year hiatus in advertising, while smaller and medium-sized growing brands experience an immediate decline in sales when brand advertising stops. This is pretty relevant intel now as brands are grappling with the fallout from the pandemic and current economic uncertainty.
Smaller and medium-sized growing brands experience an immediate decline in sales when brand advertising stops.
There are no unicorns here
It's worth noting how rare it is to see brands outlive their marketing spend because those that don't advertise tend to die out. Additionally, struggling brands need advertising spend even more. Exposure is necessary for brands to be remembered, which may require a larger advertising spend when times are tough.
Stopping advertising can have serious consequences, as it's challenging to make up for lost ground with competitors filling the gap. The size of a business also determines how it fares. The 16-25% decline figures mentioned earlier are based on an average, taking into account larger brands that are better equipped to weather a year or so without overwhelming damage. In contrast, small to mid-sized businesses may struggle to meet this challenge because they're not as easy to recall based on a lack of market penetration. Consistent exposure is critical for these businesses to stay top of mind.
The long and the short
This is particularly relevant to Kiwi businesses as they navigate unique market pressures. There is a lot of noise in the advertising industry, with various media and digital channels claiming to have all the answers. However, this study confirms that consistent, creative, and impactful brand advertising ('the long'), combined with targeted sales promotions ('the short'), can help brands stick in customers' minds. This is where science meets creativity and is the sweet spot for successful branding.
The takeaway, be consistent with your brand messaging and promotion, get creative with your advertising, look for impact, and keep going during difficult times to grow your market share.
I love to chat all things brand, culture, and sustainability. If this strikes a chord with you, get in touch. Coffee's on me.