PETALING JAYA: The importance of brand owners upping their advertisements is gaining momentum despite the tough economic conditions brought about by the Covid-19 pandemic.
Companies which are hesitant or deferring their spend on ads to save costs would end up losing their market share. Smaller companies tend to take a bigger hit in this regard.
Research undertaken by Australia-based Ehrenberg-Bass Institute, among others, showed that when brands stop advertising for a year or more, sales often decline year-on-year following the stop.
It added that on average, sales fell 16% after one year, and 25% after two years.
It also noted that the rate of decline is fastest for brands that are already declining before the advertising stops.
Brand size also matters, the research said, adding that small brands typically suffer greater declines than bigger brands.
Bigger, growing brands tend to continue to grow after advertising stops for one to two years, whereas the sales trend quickly reverses for small, growing brands, it pointed out.
Based at the University of South Australia, the Ehrenberg-Bass Institute is the world’s largest centre for research in marketing.
KFC Malaysia chief marketing officer Chan May Ling (pic below) said that during challenging times like these, marketing dollars are often the first variable to be shifted.
This is because marketers are often challenged with the hypothesis of “how much of an advertising dollar will give us the immediate return of sales” for the purposes of optimal profitability.
“With lockdown conditions, media consumption has shifted with a 19% year-on-year growth in digital channels. Brands that have made the pivot towards e-commerce or social commerce will have probably shifted their advertising dollars towards aggressive acquisition for transactional growth.
“With that, an emergence of brands has taken this opportunity to continuously advertise with a focus on digital channels as sales are most measurable on these platforms,” she told StarBiz.
Chan said brands would need to stay relevant with the right social currency in order to deepen their presence in the consumers’ minds.
Marketers today would have to deploy an “always on” strategy to continuously be present in the consumers’ minds to drive brand salience which would lead to a purchase, she noted.
On whether advertising and upping investments in brand building would benefit marketers, she said: “There is no one-size-fits-all solution to this. However, a recommended approach is to test and learn the hypothesis.
“Brands have to be bold to deploy ‘dark weeks’ off media and measure its impact to sales or build control groups to measure before and after campaign impact. With more measurable data points, brands will be able to plan better for future campaigns. “
Supporting the view that brands should continue to advertise irrespective of the economic conditions and the Covid-19, Malaysian Advertisers Association (MAA) council member Javed Jafri (pic below) told StarBiz that fast-moving consumer good brands need to advertise to drive their short-term sales.
He said that in some categories, consumers might have become more value conscious, which makes it imperative for brands to advertise. This is to remind them of the superior value and benefits offered by such brands, he said.
“While the pandemic may have suppressed demand for some categories, it has not knocked out all the demand for the next five years as there continues to be a need for building long-term brand equity.
“Brands continually and constantly need reinforcement to maintain brand equity over the long haul. With massive fragmentation of media, we have much more data points to validate the consumption pattern.
“Hence media consumption has direct and indirect influence on purchase decisions. With double-digit growth of commerce, data and content consumption in the 18 months, 90% of Malaysians based on a survey agree that time spent on video streaming has increased versus before the pandemic and 46% say that it would continue if things normalise,” Javed added.
He said brands that maintain their communication during the pandemic via multiple channels could win a more significant share of voice in the market if competitors communicate less or not at all during the same period.
He said brands could also offer personalised approaches focusing on how they could help consumers in offering more benefits.
Meanwhile, Mondelez International head of marketing (Malaysia and Singapore) Arpan Sur said: “We at Mondelez International believe that being relevant to consumers during these tough times is even more important as it helps retain connection and create long-lasting bonds.
“So, we do less of marketing and talk to consumers as humans – it is the shift from ‘Marketing to Humaning’ that we are practising.
“Investing more in advertising has helped us stay ahead of the curve, create connections with purpose and will hopefully help us drive long-term growth.”
KFC and Mondelez are members of MAA.
In an earlier interview with StarBiz, Oxygen Advertising managing director and 4As senior adviser Datuk Johnny Mun said that regardless of what the situation may be, marketers need to continue investing in brand building albeit there may be tweaks to the focus and content of the messages communicated.
“By this, I mean that brands may shift their focus from sales-centric messages to one of a corporate social responsibility (CSR) nature or even a hybrid of both.
“History has shown us that everything has a lifespan and a pandemic is no different. It’s just a matter of the duration. Successful brands are built over time and like a seedling or a plant, need constant care and nurturing and cannot be simply left to nature to steer its course.
“A brand in neglect will almost end as a forgotten one as consumers would not hesitate to try out alternatives, given that they are spoiled for choice now,” he said.
Branding Association of Malaysia president Datuk Eric Chong said that in view of the current situation, it is also the best time to build brands.
He said a lot of new brands have emerged since the start of the pandemic and most of these players are the “amphibious” species – they operate effectively both offline and online.