In one case, a consumer goods manufacturer cut back on promotion during a recession, reducing its budget by approximately half.  It chose to keep its promotion of the product reduced for several years afterward.  There was a small downturn in sales, but a significant downturn in the value of the brand.  At the beginning of the cutback, the brand enjoyed a 24% increase in consumer preference over blind taste tests.  Four years later, this preference had shrunk to just 10%.  More than half the brand’s value had been lost.

Once brand value has been lost, it can be very expensive to regain it—when it’s possible to regain it at all.   Max Sutherland and Alice Sylvester write in their book, Advertising and The Mind of the Consumer,” that before “Got Milk” became a mainstay of National Dairy Board advertising, a study was done on milk promotion in the U.S.  In test markets conducted around the country, stopping advertising on milk had no effect.  For the first 12 months.  

Then sales of milk dropped dramatically, and continued to drop.  Even when promotion was re-started, it took 18 months to reverse the trend—at much greater expense than it would have taken to maintain the market in the first place. 

It’s important to understand also that because the marketplace is not static, decisions made by other players can accelerate the effects of complacency on the part of a marketer.  In our article,  Good Marketing for Bad Times, we name several studies, done by organizations ranging from McGraw-Hill to The Harvard Business Review, that show how aggressive marketers can gain share in downturns as other companies cut back.  If you’re in an industry where everybody is into belt tightening, you’re in much better shape than if one or two companies keep pushing communications.  Because the studies show they’re likely to take market share away—and keep it even after everyone else begins promoting heavily again.

It's not always about money.  

And it’s not just cutting back on expenditures that can hurt.  We’re in a world with new communications options, where brands can be built with little or no traditional advertising.  There are ways to make connections with audiences (and ways for audiences to help you expand these connections all by themselves) that allow extremely valuable brands to rise at unprecedented speed.

Take a look at social networks like MySpace and Facebook.  Rupert Murdock shelled out big bucks for MySpace, which has claimed to have more than 100 million accounts, and the value of Facebook has been calculated at $15 billion after a big investment by Microsoft.  These are amazing brands that have been created not just by their originators, but by millions of participants who are active proponents (or better yet, zealots) of the sites.

But how long does this value last?  As Facebook has risen in popularity, MySpace has taken a hit, with people making events out of closing down their MySpace sites and switching over to the new game in town.  (One study suggests that the social networks are beginning to fragment along class lines, with college-bound students opting for Facebook, while working-class kids find it cooler to stay with MySpace.)  For many, MySpace didn’t keep up with the benefits they wanted as they went through a major life change.

But that doesn’t mean Facebook is immune to revolt.  The site took a tremendous hit when it was revealed that that its Beacon “social ads” shared information with a user’s friends about everything they buy, which users saw as a privacy violation.   The network quickly tried to reverse the issue by making Beacon opt-in rather than opt-out, but damage had already been done. 

It wasn’t just that users were annoyed over the junk information on their pages (they were, but that was minor.) The big issue is that the trust between the brand and users had been violated.

How critical is that?  Think “New Coke.”

And suddenly, the impassioned evangelists for Facebook have their doubts.  And the communications tools at their fingertips that helped build the brand can also start dismanteling it.  At this past week’s South by Southwest Conference in Austin, Mark Zuckerberg, the founder of Facebook was a keynote speaker.  While Zuckerberg was being interviewed by journalist Sarah Lacy in a relaxed, informal chat, the audience was engaged in a behind-the-scenes discussion on Twitter that hammered both Zuckerberg and Lacy for their lackluster dialogue and failure to talk about audience concerns.  

This eventually spilled over to outright heckling, with Lacy inviting the audience to ask their own questions.  They did—about privacy, data portability, and lack of Facebook tools to manage information.

A great PR opportunity had turned into a PR disaster.  One that continues to linger on YouTube and other online destinations.

Which brings us back to the original idea for this posting—that the job of building a brand is never done, and any miscalculation, whether by design in cutting back on communications, or by accident in introducing a product or idea that your audience rejects, can mean your having to rebuild value lost.

So you can’t afford to stop communicating your brand’s key messages.  Reinforcement not only builds value, but it can prevent value from being taken away.  And there are all sorts of forces out their that would like to take it away from you.

Satchel Paige still said it best:  “Don’t look back.   They might be gaining on you.”

To find out how BrainPosse can help you build and sustain the value of your brand, click here or call BrainPosse at (865) 330-0033.

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