New research showing how a brand can quickly collapse even as ad spending, sales and market share increase will be addressed by Coalition for Brand Equity Chairman Larry Light, a moving force behind a study conducted by A.C. Nielsen Co.
"We've seen something we've never seen before," Mr. Light said. "It is possible to increase sales at expense of brand loyalty. For the first time, we have solid, quantitative evidence."
For one unidentified food product, Mr. Light said, brand loyalty fell 22% in 1991 compared with 1990, despite a 12.5% growth in market share and a 27% increase in ad spending.
In 1992, he said, share for the brand tumbled to 21.4%, corresponding to the decline in loyalty the previous year.
Mr. Light-also president of Arcature Corp., a Stamford, Conn.-based marketing consultancy-blamed the dive in loyalty largely on a 78% increase in couponing.
"The marketer increased ad spending, and we say that is good," Mr. Light said. "But it's not what you spend, it's how you allocate what you spend."
"We have to get the balance back in line between advertising spending and promotional spending," said Roy Bostock, outgoing chairman of the Four A's and chairman-CEO of D'Arcy Masius Benton & Bowles, New York. Two years ago, clients wanted to know what was the minimum they should spend on advertising. Now, there is more of an "active dialogue" about the appropriate amount to spend, he said.
Agency survival is another top-of-mind issue among the estimated 435 executives who will convene this week in bucolic White Sulphur Springs, W.Va. Underscoring that concern is the unusual attendance of Saatchi & Saatchi Co. Chairman Maurice Saatchi, who has vowed to become more involved in the attempt to resuscitate U.S. operations.
The buzz last week among agency executives planning to attend the conference underscored a growing pet peeve: the demand by leading consultant Morgan, Anderson & Co. that agencies submit detailed financials to participate in a review.
Agency executives worry the confidential data are then logged onto a database that Morgan Anderson uses to negotiate agency compensation and determine shops' fitness to handle perspective clients.
At the conference, Mr. Bostock will be succeeded as Four A's chairman by Ed Wax, chairman-CEO of Saatchi & Saatchi Advertising Worldwide. This will be the first conference presided over by O. Burtch Drake, named to succeed John O'Toole as president earlier this year.