Your advertising budget is like a country’s defense budget. Those massive advertising dollars don’t buy you anything; they just keep you from losing market share to your competition.
All of its tanks, planes, and missiles just keep a country from being overrun by one of its enemies.
Publicity is a powerful tool, but sooner or later a brand outlives its publicity potential. The process normally goes through two distinct phases.
Phase one involves the introduction of the new category—the plain-paper copier, for example, introduced by Xerox in 1959. Hundreds of magazine and newspaper articles were written about the launch of the 914 copier. Xerox executives also appeared on numerous television shows to demonstrate their new baby. Much was written about the potential of the new category.
Phase two concerns the rise of the company that pioneered the new category. Again, hundreds of articles were written about the marketing and financial successes of Xerox, a company that rose from the ashes of Haloid, a manufacturer of photographic paper.
Today, everybody knows that Xerox pioneered xerography and has become a global leader in copiers. There’s no news story left to tell, so advertising takes over.
Almost every successful brand goes through the same process. Brands like Compaq, Dell, SAP, Oracle, Cisco, Microsoft, Starbucks, and Wal-Mart were born in a blaze of publicity. As the publicity dies out, each of these brands has had to shift to massive advertising to defend its position. First publicity, then advertising is the general rule.
(Anybody who thinks advertising built Microsoft into a macrobrand should go back and read Chapter 3 again.)
Sooner or later a leader has to shift its branding strategy from publicity to advertising. By raising the price of admission, advertising makes it difficult for a competitor to carve out a substantial share of the market.
To attack a heavily defended neighboring country requires substantial military expenditures. To attack a heavily defended brand leader like Coca-Cola, Nike, or McDonald’s requires substantial marketing expenditures.
Leaders should not look on their advertising budgets as investments that will pay dividends. Instead leaders should look on their advertising budgets as insurance that will protect them against losses caused by competitive attacks.
What should a brand leader advertise? Brand leadership, of course. Leadership is the single most important motivating factor in consumer behavior.
The list of leaders that advertise their leadership is very short. Most leaders advertise some aspect of their quality.
But what happens when your advertising says, “Our product is better”? What does the reader, the viewer, or the listener to the advertisement really think when you make the claim that you produce a better product?
“That’s what they all say.”
Pick up a copy of any magazine or newspaper and flip through the advertisements. Almost every ad makes some type of better-product claim. That’s what they all say.
But what happens when your advertising says, “Our product is the leader”? What does the prospect think?
“It must be better.”
Who makes the best ketchup in America? Do you really believe Hunt’s is the best? You might, but most people believe that Heinz is the best. Why?
Heinz is the leader and everybody knows that in this freedom-loving, democratic, equal-opportunity country of ours, the better product always wins.
“I pledge allegiance to the flag of the United States of America, the republic for which it stands, and the leading brand in each category.”
As yet, we Americans don’t do the pledge of brand allegiance, but we might as well. That’s how strong our belief in the notion that the better brand will win.
Then why, you may ask, don’t more advertisers advertise leadership? (Such claims are quite rare.)
They do consumer research. They ask customers why they buy the brands they buy. And people are quick to reply that they would never buy a brand just because it’s the leader. As a matter of fact, they go out of their way to deny it.
“I never buy a brand just because it’s the leader.”
Then why did you choose the leading brand? Why do you drink Coca-Cola? Or rent from Hertz? Or drink Budweiser beer?
And now we have completed the circle. Everyone knows the better product will win in the marketplace. Since most people want to buy the better product, most people buy the leading brand. Which in turn keeps that brand the leader and gives that brand the perception that it’s the better product.
Advertising is a powerful tool, not to build leadership of a fledgling brand, but to maintain that leadership once it is obtained. Companies that want to protect their well-established brands should not hesitate to use massive advertising programs to smother the competition.
Indeed, advertising is expensive. Today it takes $2 million or so to buy thirty seconds of advertising time during the Super Bowl. And top-rated prime-time shows are equally ridiculous from a monetary point of view. ER, for example, costs $620,000 for a thirty-second commercial. Then you have to add the cost of production, which has been averaging $343,000 per commercial.
So why spend the money?
Advertising may not pay for itself, but if you’re the leader, advertising will make your competitor pay through the nose for the privilege of competing with you. Many won’t be able to afford it; those who can won’t bother. Instead they’ll be content to nibble on the crumbs around your huge piece of the pie.