The big brand feedback loop

The following excerpt is taken from the article “Differentiation or Salience” by Andrew Ehrenberg (pictured), Neil Barnard and John Scriven as published in the Journal of Advertising Research in November/December 1997:

“There are also remarkable feedback loops and marketing-mix synergies in these relationships. The bigger brands are so much bigger because the promise of more advertising had slowly, and up to a limit, led to more shelf-space and display, to higher and more profitable sales, hence to bigger advertising budgets (and possibly less price-cutting) and to more shelf-space, etc, again. The benign spiral includes that the more marketing activity and display there is for Brand A, the more noticing the brand can again gain. Just seeing the brand around can reinforce its memorability and thus again its salience.”

It’s a virtuous cycle.

Big ad spend leads to more shelf space leads to more sales.

And repeat.

The bigger the brand becomes the more cash is required to compete.


This is how big brands are built.

Until now.

In Dollar Shave Club and the Disruption of everything, the strategist and analyst Ben Thompson argues that the internet is enabling smaller brands by reducing the amount of investment required to compete.

For example YouTube and Facebook are dramatically reducing the cost of advertising media placement. And Amazon is reducing the monopoly big brands have over the limited shelf space of physical stores.

Perhaps, at them moment, this argument is over egged.

But if, over time, dollars continue to shift from traditional to digital media. And sales continue to shift from in store to online. Then the way to build a big brand may shift as well.