Brand Advertising: Rebounding?

In an interesting article out of Ad Age –“Brand Advertising Poised to Rebound?”– A number of senior marketers at the ANA’s “Brand Building in Tough Times and Beyond” conference opine that brand advertising is about to resume at healthy levels following a long season of budget reductions. Everyone has an opinion on whether this is the precise moment when the uptick will happen, but there are larger issues at play here. What has this period of adjustment and slowdown meant for the industry at large? Here are some of my thoughts on the subject.

• Some marketers currently spending ad dollars on cost-cutting promotions will lose market share to companies who have increased brand advertising during the economic downturn.

Certain well-established brands can take a hiatus from branded advertising and invest instead in promotion, especially where in-store/retail is competing strongly for facings. It really depends on whether the category is price sensitive or not. For price-sensitive categories–like shampoo, for instance– branding is far less important than in coffees where brand loyalty is a key factor. However, very high-end fashion products like Dior and Hermes, etc., will win only if their branding remains strong during challenging times.

• Brand building itself is evolving.

Communication with today’s consumer demands insights what the consumer expects, wants, and needs. Right now, alternative advertising solutions–such as product placement in video games, branded entertainment solutions, and other brand partnerships–are becoming some of the most appropriate consumer engagement media. When brand building resumes, it’s going to have to look different than it did when it slowed down. The times have already changed.

• The recession has encouraged some consumers in some categories to find the lowest priced brands. They may never return to the brands to which they were previously loyal.

There are two reasons for this. One, store brands have increased in popularity recently—and not just because of the recession. It is also because they’ve actually done a good job of branding and have evolved into fully viable brands in their own right, offering quality, predictability, etc. Consumers don’t see themselves a trading down, but trading smart. And second, history has shown that, when brands lose substantial share during recessions, they often have a very difficult time “buying back” that share when the economic environment improves. It simply costs too much. That’s why the prevailing wisdom is to try to hold on to your share of market in tough times.