FOCUS - READER'S DIGEST SUPERBRANDS SEMINAR: Brand equity dependent on advertising and innovation

Companies must continually advertise and innovate their products and services even through a recession in order to survive and be successful in the long-term. Speaking at the SuperBrands seminar in Singapore, regional director of worldwide client service at Ogilvy & Mather Worldwide Tim Isaac said this was key to maintaining top-of-mind awareness among consumers. In good times, when revenue is more sizeable, this is a given. However, he said that when the economy falters or business prospects take a turn for the worse, the first thing that typically goes out the corporate window is advertising and innovation as executives shift their focus to cutting costs. He cited the example of British car maker Rover, which slashed costs and research and development and "focused instead on how cheaply to get the product out to market" in a bid to beat a recession that was cutting into its profit margins. The result, he said, was that Rover went from being a leader in the UK to a follower. Mr Isaac added that in recessionary Japan, companies which increased adspend during the downturn actually gained market share, while the opposite was true for organisations which reduced advertising budgets. "It's like supporting a pension plan. If you miss a payment, you lose out on future benefits," he said. However, he did say that companies could slash adspend but only if they compensate in other areas, including making innovations to their products and services. Singapore Airlines was a case in point. At the height of the regional recession in the late 1990s, it cut adspend but at the same time undertook a multi-million dollar relaunch of all three of its main brands - First, Raffles and Economy classes. "They looked to the future and added value and innovation and the end result was that the airline emerged from the recession stronger than they had entered it," said Mr Isaac. He added: "Looking to the future and adding value is what it is all about because no matter how good your brand is now, there is nothing to guarantee the viability of the brand in five or 10 years' time. "And, there is no such thing as recession-proofing a brand." Cutting back on budgets without compensating in other areas puts a brand in a position of "grave risk" of losing market share and ultimately revenues. "Change must occur in a continuous rate. Even in a recession," Mr Isaac said. Brand leaders, he noted, must lead and cannot rest on their laurels. This is true in both good and bad times. Economies might falter, but human progress and market demands continue their advance, he said. It is tempting, Mr Isaac said, to hold back on innovation during rough times, but that is exactly the time to push home brand leadership credentials.

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