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January 9, 2017

Branding vs. Promotional Advertising. Which Is More Important?

Quick…what’s the first brand that comes to mind?

Whether it was a B-to-B brand or a consumer brand you thought of, it probably wasn’t promotional advertising that made that brand top of mind. No, it was brand advertising that built it up in your head, so much so that it was the first that came to mind.

That’s because promotional advertising, by its very nature, tears a brand down, making it worth less in the mind of the customer. And discounting too much or too often can actually cheapen your brand so much over time that people may never be willing to pay full price again. Brand advertising, on the other hand, builds a brand up in the mind of a customer and can make a brand worth more over time.

Don’t get me wrong, promotional advertising can still play a key role for just about any company. In fact, in many cases, I’d argue it’s a necessity in today’s crowded marketplace. It is, however, important to remember that promotional advertising should almost always run with a mix of brand advertising to keep the value of your brand high.

Some easy examples.

For many B-to-B brands, product rebates and 0% financing are great ways to generate buzz, clicks, and immediate purchases. For consumer brands, BOGOs or free shipping seem to rule the day. Either way, many times these tactics are necessary to generate trial or increase sales—and the more competition you have, the more you may see companies offering discounts.

To use an example we’re all familiar with, it’s easy to look at two very popular consumer brands (though it’s certainly relevant for B-to-B brands, too): Walmart vs. Target. Walmart, of course, is easily perceived as the cheaper brand—they have, after all, built their reputation on promotion and price. Target, on the other hand, certainly offers discounts every single day, but their strong mix of brand advertising over the years has made their brand way more valuable in the minds of consumers—and they carry that to their store level with a brand experience that perfectly matches. Therefore, Target is able to charge more for many of the exact same products offered at Walmart. The reason is simple: the power of the brand.

What’s the right balance?

There’s certainly no exact science. But it’s safe to say, almost every company should have a mix of branding and promotional advertising, and that mix depends on your industry, your competition, and how your product is perceived by your customers. The key is to know your customers and, more importantly, know where your brand stands in the minds of your customers.

About Littlefield
Based in Tulsa, Oklahoma, Littlefield Agency has been helping regional and national companies grow their brands and businesses since 1980.
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