"The cost of raw materials is going up, and marketing is the only thing that offsets those increases. You have to build brand value and spend on marketing."
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By
Jonah Bloom
Published in AdAge : May 13, 2009
Could it be that we're about to see an uptick in brand advertising? You might think so based on conversations today with some of the senior marketers attending the ANA's "Brand Building in Tough Times and Beyond" conference.
Some of the results of a survey that the ANA plans to release next week were discussed at the event today, and among the findings was that 74% of senior marketers who responded believe "brand equity" is very important to their company's success. Of course, that hasn't stopped many marketers from paring back their brand-advertising budgets in the past year and focusing most of their efforts on cost-cutting and promotion.
But now, encouraged by the idea that consumer spending might have bottomed out -- or even be starting to trend ever so slightly upward -- some marketers said they would be returning to brand advertising soon.
Marty Ordman, VP-marketing and communications for the Dole Food Co., said that however strongly you believe in your brand, "you have to do your bit to reduce spending at tough times like these," adding that Dole has done some cost-based promotional efforts to reduce the gap between private-label prices and its own prices. However, having witnessed "an increase in the number of customers making multiple-item purchases," Mr. Ordman said that Dole, not historically a big brand advertiser, is eying some digital branding efforts and ramping up in-store ads again.
Need to build brand value
He also said that such
periods remind board-level executives of the value of a brand --
especially true if, as in his case, you're competing with private
label. That was a point echoed by Richard McDonald, senior VP-global
marketing of Fender, the musical instrument brand. "The cost of raw
materials is going up, and marketing is the only thing that offsets
those increases. You have to build brand value and spend on marketing."
Mr. McDonald noted that while he's seen no improvement in sales of higher-priced musical instruments, Fender has noted improved sales at the lower end of the scale. He said the company is now "redirecting resources" to brand building, particularly through video games, other digital media and partnerships with other marketers.
MasterCard's senior VP-U.S. consumer marketing, Chris Jogis, said the company's belief is that it's important to invest in the brand. "Our strategy and our platform around 'Priceless' remains consistent," he said. "Our marketing plan this year is focused on what we're calling 'outsmarting the times,' and ensuring we are providing as much tangible value to cardholders as possible, to balance with the already strong emotional connection we've built with 'Priceless.'" Mr. Jogis said that while MasterCard might not be spending quite as much as it has in other years, it was able to take advantage of reductions in the cost of media to get more bang for its buck.
Optimistic signs
Cynthia Ashworth, VP-consumer
engagement at Dunkin' Donuts, said that the economic climate had worked
well for Dunkin', which she described as having established itself as
an "everyman" brand. She said the company has boosted brand-advertising
spending in some areas, and added that she expects Dunkin' to emerge
from the recession with increased market share.
With other major marketers, such as IBM, General Electric and SAP having recently launched significant initiatives to support their brands, these senior marketers' comments might be considered optimistic signs, particularly for those in ad agencies and media companies.
It's worth noting, however, based on the top-line results of the ANA's upcoming survey, that these days marketers regard product as the key to building brand equity (89% cite it as very important in that regard). Other things they regard as very important to brand: customer service (86%), employees (81%), website (81%), marketing communications/CRM (78%), field sales (74%) and then advertising -- regarded by 73% as very important.
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