Monday, July 1, 2013
THE DE-VALUATION OF BRAND EQUITY ADVERTISING
(Or, How Equity Advertising Got a Bad Name)
equity, noun. The money value of a property or of an interest in a property….
Quick. Think of a proposal that a marketer could make in the Boardroom that would be a bigger show-stopper than, “We’re proposing today to pursue a very attractive niche segment in the market.” What general manager, in his or her right mind, would even humor someone by listening to that one? After all, with the name of the game today being volume, Volume, VOLUME, there aren’t many terms in business opportunity discussions that are avoided as much as “niche.” Come to think of it, anyone risking a niche proposal nowadays need not only fear stopping the show; he is just as likely stopping his career!
Well, coincidentally, over the last few weeks, we have run across another equally unpopular proposal: “We think it’s time to charge the ad agency with developing an equity campaign.” We haven’t actually heard marketers say that they have proposed such a thing; rather, in our workshop assessments of many brand ad campaigns, they have merely raised the idea. But it seems that just as readily as they raise the idea, a certain pre-defeatist attitude arises—with a good many, familiar reasons why such an idea would be met with instant rejection. In all honesty, we have at times admonished our clients who genuinely believe that a compelling brand equity campaign is needed, not to refer to it in those words…call it a “brand umbrella campaign,” or a “portfolio mega-idea campaign,” but please don’t position it as a “brand equity idea or campaign.”
Makes you wonder, doesn’t it, how the notion of a brand equity campaign got such a bad name. Isn’t “equity” of any kind something to be sought after? Don’t we yearn for a return to those heady days when the equity in our homes grew geometrically, every year? And aren’t we proud—even at times smug—about something that we can matter-of-factly call “an equity that only our brand owns?” How has the equity in brand equity advertising lost so much of its value? The answers are probably best analyzed in a Harvard Business School Case. But since we don’t have time for that here, we’ll share some general observations and hypotheses that have occurred to us.
“Equity” Ad Campaigns have a bad name because…
1. They are generally incorrectly defined and, naturally, misunderstood. Somehow or other (it’s hard to pinpoint exactly how or when), the conventional wisdom about equity advertising became something like this: “A brand equity campaign is a softer sell. It is much more emotional in its promise than it is functional. It therefore requires more time to take hold; it’s a “slow burn” to get to actual business results.” To this misguided thinking we would say, “Have you looked lately at these longer-running brand equity ad campaigns: MasterCard “Priceless”; Duracell “Trusted Everywhere”; MacBook “I’m a PC & I’m a Mac”; HSBC “The World’s Local Bank”; or even some of the more recent ones, such as the Allstate “Mayhem” one? Even more to the point, have you looked hard enough to discover the consumer/ customer behaviors and the ensuing business growth resulting from these campaigns? The truth is that just like any advertising that a company invests in, brand equity campaigns must specify a desired behavior prior to development, must be based upon a legitimate and productive insight, and must be executed with a compelling idea. They often take more work to do all of these things…but the value they deliver is also most often worth it.
2. Senior Management (including Senior Marketing Management) fails to demand “metric accountability.” As we have discussed many times in these Dispatches, it has become all too common for advertising development to begin without first pre-determining what specific behaviors are expected from that advertising and how and when those behaviors will be measured. Of course, everyone in the chain of command agrees (who wouldn’t?) that the advertising is expected to help grow the business—like, help to grow market share. But, if we’re honest with ourselves, we’ll admit that it’s rare for an approving senior manager to demand the specifics of exactly how that market share growth is supposed to happen; rarely are brand teams asked to “show the math” of how a certain campaign idea is expected to change a certain behavior, which in turn translates to X number of incremental cases of product sold. In such a “loose” environment, it’s so easy to refuse consideration of a brand equity-building campaign—or any campaign, for that matter, that someone higher up doesn’t particularly like!
3. Advertising that spotlights innovation (for example, for a new line extension) is much more readily linked to short-term volume growth. Let’s face it, when a brand launches a new flavor or pack-format combining new distribution, heavy promotion activity, in-store merchandising, and some advertising (to announce news of the launch), it’s often the case that initial volume comes fast. Even if the advertising effect alone cannot be isolated, the assumption is that it must have been a key factor in the volume hit. So prevalent is such an assumption that we have actually had senior management clients who have set down this mandate: “We will only advertise behind product news.”
4. Related to the above, some test methods that companies use to qualify advertising for market use, also tend to favor product news. Though suppliers of these methodologies will assert that no such “bias” exists, most marketers have learned in qualitative research time and again that interesting, meaningful news is always more popular than no news in particular. So, for example, knowing through product placement research that a new flavor is very popular and in-demand, it isn’t surprising that advertising which merely serves up the news of its availability (and perhaps romances its flavorful ingredients) would likely perform well on something like persuasion or purchase intent. This isn’t to say, however, that brand equity advertising which does not stipulate any brand news might not also perform well—assuming the insight and the idea it is based upon are relevant and compelling. But, as already implied, the easier path is to go with advertising that is perceived to deliver short-term volume gains.
These are only hypotheses about why brand equity advertising seems to have lost much of its perceived value. But the point isn’t to incite a sudden resurgence of equity advertising campaigns; no, the point is simply not to reject such advertising out-of-hand…or, more precisely, for the wrong reasons. There are enough big brands out there—comprising a good many line extensions and sub-lines—that have really connected with their consumers and customers in a winning way…through brand equity advertising.
Richard Czerniawski & Mike Maloney
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