Although I still believe there is a place for advertising as a brand-maintenance or brand-affirmation tool, I am convinced that to build a brand today you need PR.
At one time, advertising did build brands. But that was in a simpler world. That world, sadly, is no more.
I've been rereading The Fall of Advertising & the Rise of PR by Al and Laura Ries. It is their book that has moved me from having a mere suspicion of advertising's demise as a brand builder to total conviction that it is dead.
As the authors say, "Publicity is the nail, advertising is the hammer." What does this mean? It means that your PR effort helps make your message believable so that your advertising will have credibility when it hits.
Typically, companies want to hit the market hard and make a lot of noise. Advertising allows you to launch quickly, control the message, and have your message in as many media as you have the money for. However, that does not mean your message will be believed. The louder advertisers yell, the less likely I am to believe them. How about you?
PR takes time and does not necessarily work on your schedule. Planting new ideas or changing minds is a slow process. When your PR program rolls out over a longer period of time, prospects have time to adjust their attitudes. Brands that take this approach are longer lasting, too.
Chevrolet, for years the number-one auto brand, was still number one in ad spending in 2001. It spent $819 million dollars -- 39% more than Ford spent. Still, Ford outsells Chevrolet by 33%.
Since 1997, Chevrolet has outspent and undersold Ford. Chevrolet spends $314 per vehicle, and Ford spends $170 per vehicle. Is advertising working for Chevrolet?
Kmart, embroiled in financial difficulty for years, had revenues of $37 billion and spent $542 million on US advertising in 2001. Wal-Mart spent $498 million and garnered four times the revenue: $159 billion split between its Wal-Mart and Sam's Club stores.
The average Wal-Mart store does $46 million in sales each year, and each Sam's Club store sells an average of $56 million. Sam's Club does almost no advertising.
Those are old brands, you're saying. What about some newer brands, Harry?
OK, let's look at Pets.com. Remember the dog sock puppet that starred in their commercials? It won awards, but not sales. In six months Pets.com had $22 million in revenues and spent four times that much on advertising. Off-base advertising creativity at work.
The Body Shop was built totally by publicity. No advertising at all. Starbucks, until recently, did virtually no advertising. It has built a brand through good PR efforts. Starbucks annual sales are around $1.3 billion, while advertising expenditures over 10 years have totaled less than $10 million.
Finally, what advertising agency do you know that has built its brand with ads?