Brand advertising: Is it a cost or an investment?

I do not agree with Ishwars comment that brand advertising cannot be viewed as an investment but rather as a cost. And Anurag's comment of ROI to be calculated over a point of time is correct.

My contention which i probably forgot to mention in the earlier post is the moment a brand is viewed as a cost, brand building will stop after some time because companies do have a trend of cutting down costs when things are not going well. So in such a situation things like money spent on brands, manpower etc. face the chopping block and as a result not only will the brand suffer long term damage but it would have wasted the money already spent. Lets not forget that branding is a continuous process and for anything to be continued, you need to support adequately.

 One advantage of viewing it as an investment is that no matter what situation a company is in they will always provide for branding. And once you view it as an investment, periodical reviews and ROI calculations are mandatory and automatic.

Even advanced countries in the world havent found a way to accurately predict the success or failure of advertising simply because to do that it depends upon individual human opinion as one of the factors. And where humnan opinion is involed accuracy is a big factor.

Like i said advertising can never be evaluated in terms of sales because sales of a product is not dependent on advertising alone but a whole bunch of factors and if one factor doesnt do its duty properly then the whole will fail. It is like a motor vehicle, each and every part of a car has to do its duty properly for the car to function. Engine health alone cannot determine the functioning of a car.

To add to Anurags comment it cannot and should not be seen as a cost.

I think anyone who calls it an investment should be in a position to calculate the ROI. I am a marketer myself, but I just think a lot of marketers choose the easy way out and call it an investment. In the process, they can justify almost any spend on the brand without a tangible outcome on the brand itself.

I do not disagree that building a brand is along term process and that investing in it is necessary, but I disagree with brand managers who justify all spends on a brand with the simple statement that it is an investment.

 I think if it is treated as a spend, there is more of a necessity to evaluate what you have done and justify spends. It should work as a control mechanism on brand managers. Obviously everyone loves to be in control, rather than be controlled. The philosophy of trying to justify advertising as investment could well be a result of the desire for control.

Maybe I am saying something absolutely against marketing theory, but I see the need to justify money outflow - Does it actually benefit your brand? Advertising especially online can at least be measured more accurately, but still qualitative aspects on brand imagery are as difficult as ever to gauge.

It is a challenge, but with new media emerging as a key to reaching out to the audience, I think we are discovering more ways of evaluating our advertising and its effects on transactional behavior. Lets not discourage that by saying, after all its an investment

Brand advertising is obviously an investment but unfortunately it is viewed as a cost today. It is an investment for the future especially in a market where the brand will switch over from a monopolistic reign to a competitive one. To advertise on a higher gear once competition is around is going to be pretty expensive and that is why all good brands are built on a steady basis from day one by investing in brand building adequately.

Example: Glaxo SmithKline Beecham changed its logo to GSK and wanted to drop the name Glaxo as it was perceived to be an old brand name but consumer research revelaed otherwise that the Glaxo brand name was still strong and hence GSK started adding it to their new logo.

Another example that readily comes to the mind is of course Intel. It has become so synonymous with computers that today people look at the intel mark first on the computer rather than its specs.