Most of us would like to assume our brands are stable, especially when we’ve a solid base of repeat clients. But this false sense of security doesn’t exactly reflect the figures. One of our favourite evidenced-based marketing think tanks, the Ehrenberg-Bass Institute for Marketing Science, have just come out with some interesting research about what happens to brand when they stop advertising. In their study of 70 Aussie brands over 20 years, they found that without advertising spend, sales decline as much as 16% after one year of no advertising, climbing to 25% after the second year. What’s interesting is that big growing brands are more likely to withstand a 1-year hiatus in advertising, but small and medium sized growing brands showed an immediate decline in sales as soon as advertising stopped. Off the back of a couple of years of Covid and market uncertainty, that’s pretty important information.
Beyond that it’s rare to see brands that outlive their marketing spend decline – mainly because those that don’t advertise die out.
The same study also shows that struggling brands need this advertising spend even more. The problem isn’t as simple as cutting down on expenditure to keep going. Brands need exposure to be remembered, which may mean a larger advertising spend when the chips are down.
The danger of silence.
Taking a ‘gap year’ in marketing spend, for big businesses, doesn’t necessarily mean you can pick up where you left off. Those brands that stop advertising, find it difficult to make up for lost ground with competitors filling the gap.
How your business fares is also determined by its size. The 16-25% figures listed above are based on an average, considering big brands which are better able to weather a year or so without overwhelming damage. Small to mid-sized businesses are less able to meet this test, because they’re not as easy recalled based on lack of market penetration. Small to mid-sized businesses need consistent exposure, to stay top of mind.
Usefulness for Kiwi brands.
This study is relevant for Kiwi businesses, as we ride through these unique market times. It’s rare to get solid evidence on the effectiveness of advertising in NZ, with so many different media and digital channels shouting that they have all the answers. The study confirms what strategic and learned marketers already know: consistent, creative, and impactful brand advertising, combined with ongoing targeted sales promotions, help your brand to ‘stick’ in the mind of customers, increasing brand loyalty. It’s the sweet spot where science meets creative, and it’s how brands grow.