Why brand strength matters more than ad strength

In 10 years of BrandZ rankings, data shows that good advertising can be an important factor in increasing brand value, but the effects are relatively small unless the company is perceived to have got the brand proposition right first.

For the 10th anniversary of its annual BrandZ ranking, Millward Brown has quantified the theory that a strong brand proposition teamed with solid advertising will create “massive brand value growth”, according to Walshe. The hypothesis has been tested using data and valuations for 87 brands that have appeared in the top 100 over the past 10 years.

The study finds that businesses perceived as having strong brands with weak advertising still grew their brand value by 76% over the period on average. Conversely, weaker brands with strong advertising increased in value by just 27%.

Where both brand and advertising are considered robust by consumers, the value shoots up 168%, demonstrating that good advertising makes a positive difference – but only to strong brands.

“If you haven’t got your brand proposition right the odds are stacked against you,” warns Walshe. “This isn’t anti-advertising – the amplification is enormous with good advertising – but brands have got to get their proposition right first.”

He highlights Pampers, Dove and Audi as brands that have a clear purpose beyond just driving sales, and can “demand additional premium because consumers think it’s worth it”.

Nick Ratcliffe, head of marketing at Audi, believes it is hugely important, particularly for premium brands, to have a distinctive identity. He says Audi’s mantra of ‘Vorsprung durch Technik’, which roughly translates as ‘progress through technology’, encapsulates this mind-set for the business.

“We don’t dwell on our heritage, it’s about thinking that things can always be improved. We know that resonates very well with our target audience who are successful people always looking at how to move forward,” he says.

Over the past two years the car marque has shifted its focus to four key themes: its four-wheel drive system Quattro, to encourage confidence in performance; Audi Sport, which encompasses the sporty RS and R8 models and its motorsport activity, which Ratcliffe says “injects passion and excitement into the brand”; its sustainability platform Ultra, which is designed to increase efficiency while reducing fuel consumption; and innovation through its E-tron plug-in hybrid technology.

“We have a very wide product range which is a challenge so we’ve picked a few major stories rather than spreading ourselves too thin,” he explains. “We have everything from the £15,000 A1 to the £130,000 R8 so it’s important for us to focus on what’s common across the brand. It’s very much about brand first, model second. Somebody buying an A1 needs to know that the car they are buying is just as much an Audi as any other car in the range. There is no dilution of the Audi values or quality in a smaller car.”

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  • Peter Cunningham 28 May 2015 at 10:21 am

    Is it just me or is this blindingly obvious? If your product or service is not good, your USP not clear and your after sales support and customer service not first class then how is advertising expected to change that. I read a report from some recent research by NewVoiceMedia that the main reason customers switch from one brand to another is….now wait for it……..’bad customer service’.

    Well know you have 2 blindingly obvious statements backed up with some kind of research. But what kind of marketer doesn’t know that you need to fix these things before pressing down the pedal on the advertising gas! Otherwise its like running a hotel and spending all your money on the rose bushes along the driveway but neglecting the fact that there is a big hole in the roof and your customers get soaked every night!!

    Advertising on its own doesn’t convince anyone. It just creates awareness. What convinces is the contact with the product or service and the word of mouth it creates. In the past we would see an ad, and ask work colleagues or friends in the pub ‘have you tried that new phone thingy that is advertised on the telly’. A couple of friends would tell you they bought it, the product is shoddy and the customer service painful. No amount of ads or celeb endorsement will change your view after that.

    Today, we look for reviews online and we post questions on Twitter or Facebook. The difference is simply that we don’t have to know the people sharing feedback with us, or don’t need to know them that well.

    While advertising still works for awareness, if we aren’t too busy Facebooking when the TV ads runs to notice, what really gets people buying is word of mouth and Social Customer get Customer. What we do at Buyapowa is provide a means to transform that social word of mouth into sales.

    • Michael Gough 1 Jun 2015 at 12:31 pm

      It might seem glaringly obvious, but you’d be surprised how many clients (large and small) still think they can skip over the brand development and go straight for an all out above the line advertising campaign and still get great results.

      I don’t normally pay much heed to brand valuation type research, but I think this is a good piece. I would take it one step further and say that we should focus on selling our argument, our vision for what the world should be like, as opposed to our brand. People are far more likely to get on board with your brand if they like what what you stand for.

    • Jack Briggs 3 Jun 2015 at 5:43 pm

      Agree but nevertheless dependant on what you’re offering of how effective brand strength/advertising spend will be.

      “A couple of friends would tell you they bought it, the product is shoddy and the customer service painful. No amount of ads or celeb endorsement will change your view after that.”

      Skoda showed that this is not necessarily the case.

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