The budgets that companies allocate for their branding portfolio is increasingly an important part of their business and in alignment with their marketing objectives.
A plethora of options are now available for marketing a brand in the digital world. This hands businesses choices in how they allocate their branding costs to communicate with potential consumers.
Echo Brand Design is a company that has wide experience of creating bespoke campaigns for major corporate names, including Cobra beer and Brylcreem. Jeremy Davies, head of marketing, explains, “As understanding of the brand’s value as an intangible asset has increased, brand building has become higher priority. Consumer products, from global brands like Coca-Cola to local brands such as Dorset Cereals and Nakd, use packaging design as the primary expression of their brand design.”
How much companies spend can vary widely, anywhere between 1% and 30% of sales revenue, he added. He also believed that corporate brands often value their brands just as highly.
Although the brand may be less visible, design is still a crucial factor. A powerful brand identity system that can be flexed across numerous products or services can help to cross-sell, or successfully launch into new business areas.
He says, “Before deciding on a brand budget, the business should analyse its marketing objectives, identify where brand investments should be made, and set clear metrics to track Return On Investment.”
Overall, metrics are crucial, and the ultimate goal of a company’s brand is to drive commercial success.
As of now, there are so many variables and channels of communication that brand-building activities must deliver business performance, prove their efficacy and not just add a few extra followers on social media.
Echo are now using various technologies with their clients due to the rise of digital media, which has significantly changed the way the branding budgets are spent.
TV advertising no longer stands alone and there are many examples how companies are using social media and digital technology.
The famous Phil Collins and the gorilla playing the drums advert was initially released on You Tube by Cadbury’s.
Packaging has become more interactive. Using digital printing technology, cell phone apps have also been used to build brands and improve user experience.
McDonald’s have even designed an app that will speed up ordering and delivery.
Marketing costs, of course, will vary between companies which are global brands and small businesses and startups.
The big companies
Adidas are one such brand that has built a global footprint, employing over 46,000 people across the world. In the first half of this year alone, it can boast a gross profit of €3.9 billion.
Jan Runau, Adidas’ chief corporate communication officer, said, “While expenditure for the point-of-sale investments consists of expenses to support the group’s sell-through development at the point-of-sale. The expenditure for marketing investments consists of items such as expenses for promotion partnerships, advertising, public relations and other communication activities.”
“In absolute terms, expenditure for point-of-sale and marketing investments increased 22% to €2.348 billion in 2015 from €1.923 billion in the prior year, to strengthen brand desirability.”
An example of a typical modern day operation for Adidas can be found at the last football World Cup finals two years ago, held in Brazil.
Adidas made a huge effort to produce exclusive content across social and global retail channels, entirely in sync with how World Cup matches unfolded.
London-based social media agency We Are Social gathered content on over 100 players, who would be wearing Adidas manufactured shirts at the tournament.
They then moulded all of the information into a ‘content bible’, with 1,000 images and 160 videos usage in reaction to game play.
In return for their determination to be the most talked about brand during the tournament, Adidas were just that.
Through the event, they commanded 1.6 million tweets, and their You Tube audience got more than 200,000 new subscribers.
The small companies
Life is different for the London-based the7stars media agency, which began its journey 11 years ago.
While an exciting and growing business, the 140 employees and £228 million worth of billings reveal a business dwarfed by giants such as Adidas.
The process they go through before they decide on a branding budget, involves really getting under the skin of the client’s business.
This usually involves them asking a lot of questions, and challenging them to really think about what they want to achieve with a campaign.
Sam Farrard, the accounts director of the company, explained, “Smaller companies and startups generally have less experience of running brand campaigns and much more to lose than big brands. This lack of experience also makes it more difficult to predict what a campaign will achieve, which makes planning a mix of faith as well as the science.”
He opined that budget setting for new brands usually involves a choice between moving slowly and carefully.
This means setting incremental test budgets and proving success, or recognising that there is a need to act quickly and seize market opportunities by scaling quickly.
For bigger brands with a huge budget, that challenge is more what you are going to sacrifice to focus impact, rather than trying to do everything, because large brand names can.
Whereas Adidas believe that they are unfazed by competitors’ marketing campaigns, the7stars are keeping a watchful eye on their rivals, to achieve the most with their budget.
Farrard believes that gaining an insight into what competitors are up, to can also help communications planning.
“In the majority of sectors, there are a number of competitors behaving in broadly a similar way, for example on certain days or in certain channels,” he added.
Brands should decide whether to conform to historic norms, for example, because that is the most effective way of spending a budget.
Or, it represents an opportunity to do something different and stand out from the rest.