When the lights go out

Image: Nicolai Berntsen/Unsplash

When the economy slumps or a company hits hard times, the advertising budget is a frequent target. A recent study by Ehrenberg-Bass in the Journal of Advertising Research set out to determine what happens when brands stop advertising.

The study looked at the performance of 41 brands in the beer/cider/spirits category in Australia over the course of 20 years. It found that, on average, sales dropped 16% after one year of no advertising; however, by itself that number doesn’t mean much.  Context is important.

Large brands tended not to see an immediate collapse. In fact, their sales remained relatively stable or even grew for 1-2 years before dropping off.  Small or growing brands took a more immediate hit – their declines were quicker and more pronounced. 

Recovery is not instantaneous, either. It takes longer than 12 months to recover from a year on the advertising sidelines.

Ehrenberg-Bass talks a lot about “availability,” and this research may validate that point.  (“Availability” meaning not just physical but also mental availability.)  Large brands have already sunk their talons into your brain, so if you don’t see advertising for a while, the brand linkages remain alive.  Plus, you still see in-store activations and displays, you still see other people buying the brand – the brand doesn’t literally disappear from your sight.  However, over time, those linkages will erode unless they are refreshed.

This is a narrow study in a specific category and it would be fascinating to know how these results would look in different categories and/or in different nations. Nonetheless, it is a useful step in answering a key question about the value of advertising.