STUDY ESTABLISHES LINK OF CORP. ADS, BRANDING: CONSISTENT SPENDING HELPS BOOST EQUITY

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Corporate advertising does help build brands, even those already considered elite names, according to a new survey.

The study, conducted by Corporate Branding, Stamford, Conn., confirmed a relationship between consistent U.S. advertising expenditures and growth in brand equity.

The consultancy studied the "brand power" of 174 companies in diverse categories between 1990 and 1996 by polling senior executives at Fortune 1,000 companies and investment professionals, and tracking their familiarity and favorable impressions of companies as a "Corporate Branding Index."

The research found that top-tier "elite brands" such as AT&T Corp. and General Electric Co. spent an average of $69.1 million annually on total corporate advertising, while bottom-tier brands such as Western Digital and Northeast Utilities spent an average of $600,000 a year on corporate ads.

TWO MIDDLE TIERS

The study also identified two middle tiers. The first, made up of strong, non-icon brands -- examples include Amoco and Raytheon -- spent an average of $15.8 million annually on corporate ads. The second, consisting of established, low-profile brands, such as Data General and Consolidated Edison, spent just $1.2 million on average.

The study also found a relation between the ad spending/sales ratio and brand power scores. Top-tier advertisers showed an average ad/sales ratio of 0.61, while bottom-tier brands had a ratio of 0.04.

Consistency is key to brand building, according to the study, which found a link between a consistent ad/sales ratios and consistent brand power.

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