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

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