Advertising is a vital ingredient in helping premium brands sustain their market leadership, according to a new study commissioned by the Advertising Association (AA).
The report, Advertising and the Long-Term Success of the Premium Brands, analyses sales data for 52 grocery brands in 26 categories, such as baked beans, household cleaning products and washing powders, between 1975 and 1999.
The report is written by Dr Stephan Buck, a non-executive director at Taylor Nelson Sofres
In spite of the growth in supermarket own labels, which now account for 40 per cent of all grocery sales, 19 of the brand leaders in 1975 are still leaders today and half of them have managed to increase their market share.
Between 1975 and 1999, these brand leaders increased their ad spend by 191 per cent compared with a 95 per cent growth in advertising spend in the packaged goods sector as a whole.
In contrast, brands with lower levels of advertising support than their rivals are likely to be struggling for survival or be taken over by own labels.
The AA says Dr Buck’s findings provide further support for its argument that advertising is a vital business tool that cannot be ignored in an increasingly competitive market.
AA director general Andrew Brown says: “I welcome the publication of this study and, in particular, the strong case it puts for long-term advertising investment in brands.
“A good deal of the AA’s work is promoting advertising as a business tool – this is an important addition to our armoury.”