Study suggests that branding is more important than advertising

A recent study has found that branding could be more important than advertising when it comes to growth in brand value.

The research was carried out by Millward Brown, The Partners and Lambie-Nairn – all WPP PLC companies – with the aim of assessing the relative importance and effectiveness of advertising campaigns compared to having a strong brand image.

Researchers used WPP’s Brand Z data to produce the ‘Brand Value Growth Matrix’ global report, which showed that a strong brand identity leads the way when it comes to growth in brand value. Companies with a strong brand proposition were shown to have increased their value by a huge 168% over just 10 years.

A chicken and egg situation

The findings of the study were not so clear cut as to suggest, of course, that branding alone is the key driver of growth in brand value. When supported by good branding, great advertising was shown to have been a significant boost to value growth, suggesting what most advertising and digital marketing specialists have known all along – that impactful advertising and a strong brand image go hand in hand and are always mutually supportive and beneficial.

However, when branding is weak but advertising is strong, both become far less efficient than when the situation is the other way around. For example, the study found that:

  • Brands with strong advertising but weak branding experienced a growth in value of just 27% over ten years
  • Brands with weak advertising but strong branding managed a growth in value of 76%

As you can see, there is a huge gulf between the two – suggesting that branding very well may be ‘more important’ than advertising. The study’s final findings do contradict this view slightly though, as researchers found that brands with weak branding and weak advertising still managed to grow their brand values by 21%.

How brand owners can use the data

To help business owners to strengthen both their advertising and branding, from web design to marketing material, The Partners and Lambie-Nairn CEO Jim Prior has this to say:

“The data from the study enables brand owners to prioritise, plan and manage their brand building efforts more effectively, drive superior value into their brands and significantly enhance ROI.

“The most remarkable finding from this study is the extent of the brand value growth that comes from establishing a strong proposition and identity at the heart of a brand. The data clearly demonstrates that great advertising is, by itself, insufficient and inefficient – it needs to be underpinned by broader, deeper strategic and creative definitions. While brand consultancies have long argued this point in principle, this data clearly shows it.”

Which do you think is strongest in your business – branding or advertising? Do you feel that they are co-dependent, supporting each other, or have you had success by focusing your efforts on just one area? Please feel free to share your thoughts and experiences.

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