Get a demo Do I subscribe? News sign-up
Print

New research examines brand health

News, 26 August 2016

NEW YORK: Healthy brands are best defined in terms of experiencing "year-on-year growth in brand sales over the long term", according to a new study published in the Journal of Advertising Research (JAR).

That conclusion is grounded in analysis conducted over a period of 12 years with an examination of the adspend patterns of "healthy" and "unhealthy" brands in the airline, banking and department-store categories.

Assessing Ad-Spend Patterns to Predict Brand Health: A Model for Advertisers to Determine Future Advertising-Budgeting Strategies in fact identified four adspend patterns linked to brand performance.

And they were "smart" (high relative advertising spend), "double hump/camel" (gap in consistent relative adspend), "early quitting" (lack of consistency in relative advertising spend) and "poor" (low relative adspend).

"Understanding these patterns potentially [enables] marketers to project the impact of various levels of advertising investment before formalizing advertising strategies and budgets," write Abas Mirzaei, David Gray and Chris Baumann of Macquarie University, as well as Lester Johnson of Swinburne Business School.

"The performance of a brand can be influenced by short-term situational influences, such as price discounting and aggressive marketing actions by competitors. The implementation of these kinds of influences does not necessarily mean that advertising spending is ineffective.

"By focusing on short-term outcomes, advertisers and brand managers actually may damage the potential to build brands over the long term. Although brands often are built over the course of several years, they often are judged and evaluated quarterly."

In terms of marketing practice, the authors advise, "Healthy brands that follow the 'smart' or 'double-hump/camel' pattern need to maintain their brand health by continuing to spend aggressively, more so than competitors.

"Although 'smart' spending doesn't imply simply continuing spending on advertising, it does recommend that brands monitor their competitors' advertising spending and modify their own spending accordingly.

"Smart-spending brands have an ascending spending in relation to competitors. The current findings confirmed the continuity strategy; however, the authors of the current paper suggested that brands must consider continuity in relation to the relative position of competitors' advertising spending."

"Assessing Adspend Patterns to Predict Brand Health", and the full contents of the latest issue of the Journal of Advertising Research, can be found here.

Data sourced from Journal of Advertising Research; additional content by Warc staff