Current Issue Summary
Sept 2021 (Vol. 61, Issue 3)

When Brands Go Dark: Examining Sales Trends when Brands Stop Broad-Reach Advertising for Long Periods
Research since the 1960s has explored what happens to brands when they stop advertising, whether due to recession, financial reasons or a change in strategic focus. Much of that work was conducted by industry researchers, typically covering “dark” periods of less than one year. But what happens to sales if brands go dark for a year or longer? That question is addressed in new research by Nicole Hartnett, Virginia Beal, Rachel Kennedy and Byron Sharp (Ehrenberg-Bass Institute for Marketing Science, University of South Australia), and Adam Gelzinis (Endeavour Group). Their work compares the long-term effects of a broad-reach advertising blackout of 12 months or longer, across light, medium and heavy category buyers.

Specifically, they considered a brand’s size and sales trajectory. The dataset included 20 years of advertising media spend and brand sales volume information, spanning 41 alcoholic and “mixer” brands in the Australian market, from 1996 to 2015. Expenditure was reported across 10 media platforms: metro and regional television, metro and regional press, magazines, radio, online, cinema, out-of-home and direct mail.

Over the 20-year period, the average change in brand sales was –16 percent after one year without advertising, dropping to –25 percent after two years and reaching –36 percent after three. Advertising cessation was identified as any year when a brand’s total spend was less than one percent of its average annual spend over the 20 years. “When brands stop broad-reach advertising for a year or longer, most likely sales will decline and continue to decline year over year without advertising,” the researchers write. “Larger, growing brands often were observed to continue to grow after advertising stopped, but almost all smaller, growing brands immediately began to decline.”

Among the takeaways:

• The findings best fit with the “mental availability” theory of how advertising largely works: that “broad-reach advertising helps to build and reinforce memories at scale.”
• This study also reinforces the notion that “forcing brands to take turns going dark for long periods could have a net negative effect on the total portfolio.”

As earlier research has shown, “rather than adopt a pulsing strategy, which would see brands turning equity advertising on and off periodically, a continuity strategy that reduces or excludes dark periods over the long term better supports brand performance (Gijsenberg and Nijs, 2019).”

Read the full article here.