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The Myth of Branding


Today’s exaltation of the word "brand" is based upon a widely held premise that brands create sales. This is bogus. Brands do not create sales; great products do.

The false premise that brand equity drives sales gives marketers permission to engage in an expensive and elaborate ritual that is totally quarantined from the objective of the organizations writing the checks: to make money now and in the future. For example, a marketer runs a promotional campaign with the intent of building a brand. He detects a resulting increase in brand equity (typically by measuring the change in market awareness of the brand) and concludes that this campaign was a success, and goes to work planning the next. He wonders occasionally why he needs such complex formulas to attempt to model the correlation between brand equity and sales revenues.

If this marketer realized that branding is a by-product of sales (and not an antecedent), he would apply himself to those activities that drive sales—and ignore brand equity altogether. His objective would be a derivative of his company’s objective: to make sales now and in the future. He would measure his success by observing the correlation between the money he invests in promotional campaigns and the resulting change in sales revenues.

The problem with using brand equity as a proxy for future revenue is that it’s almost impossible to measure. Accordingly, you will need to find a metric that reflects the correlation between promotional expenditure and future revenues. In our experience, the best indicator of the long-term effectiveness of a promotional campaign is its short-term results.

Justin Roff Marsh

President

Ballistix

Chicago


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