online marketing psychology

May 1, 2010

Brand advertising doesn’t work

Advertising with the pure focus to build a brand, not sell a product, doesn’t work. That is what I read in an ebook[pdf ] from the Ad Contrarian. And what he writes makes a lot of sense.
Brand advertising, focused on imagery or lifestyle, is least effective against your most desirable customers. It may be effective against light users or nonusers in your category, but it tends to be ineffective against heavy users.
For example I buy quite a lot of books. Say that Amazon tomorrow would set out on a brand building advertising campaign (not that they would but imagine!). In it they focus on how fun it is to read, and how fun and easy it is to buy from their store. This without referring to any of the products they sell. Probably they would manage to convince a lot of people to give it a try and make their first purchase.  The problem is that these people won't spend much. Not as much as the people that have bought books before. An advertisement featuring a certain product could convince them to spend more.

This reminds me a of one of the basics of business: selling to a current customer is a lot more profitable then attracting new ones.

While it is a nice advertisement, it doesn't advertise any product. More of a brand building advertisement. It can be argued that it is part of Volkswagen's sponsorship strategy with this specific team, but it illustrates the point made above.

How can you know if you are building a brand by not selling products?How do you know if your advertising is working? Isn’t the best possible indicator whether people are willing to spend their money on your brand?

The concept of building a brand is a complex one, with many factors (product performance, customer service, R&D,etc.)besides advertising play a role. And because customers in some categories change brands often, this holistic view of a brand is more important.

It also affects on how you can establish your position in the market. It takes more than an advertisement.

The best way to build a brand is with persuasive product advertising. This should be focused at:
  • your heavy users (who have the money and are willing to spend it)
  • convincing people to try your product/service, the love might come later
What do you think? Does brand advertising affect you in an area you are a heavy user in? Or just in places where you are less familiar?


  1. This is a great read.

    If companies are prepared to spend obscene amounts of money on mass marketing tactics that use creativity as the foundations of brand building, then who can blame advertising agencies for helping those firms waste the funds?

    I disagree with you when you say that the best way to build a brand is with persuasive product advertising. According to Ernt & Young, 90% of products fail to become brands, despite US$1.5 trillion spent on marketing annually.

    But you are right, retention is key. After all, you have a 15% chance of selling to a new customer but you have a 50% chance of selling to an existing customer.

    Yet how many of us have bought something and then never heard from the company again? I own a house and 3 cars, all different makes. Neither the property developer or the car dealers have ever tried to sell me another house or car or asked me for referrals. Actually, that's not true, one of the dealers did send me the odd text message or email with info on promotions but that isn't branding, it's lazy.

    Forgive the blatant self promotion, but here's how to build a brand.

  2. Thanks for taking the time to comment marcus!

    You made some good points and I agree with you.

    If the advertising departments of big companies want to support the agencies, not a problem for me! (As long as they create nice stuff of course!)

    The point I was trying to make here is that advertising for brand purposes only doesn't have the impact the product advertising has. If you are using advertising, make sure you pick the right way.

    I agree with your definition of brand building, it takes more than a heartwarming commercial for a brand to be loved (and followed). The focus has to be more on a long term relationship and operational excellence that will make the customer come back.

    Buying a car or house is a long-term commitment so missing these chances to get close to your customer is definitely a missed opportunity!