From: alexhormozi
Advertising plays a crucial role in establishing and strengthening a brand, though it is distinct from branding itself [00:06:40]. While advertising is primarily about informing people about a product or service, branding is the process of creating specific associations and feelings towards that product or company [00:06:40].
Defining Advertising and Branding
- Advertising: The act of “letting people know about your stuff” [00:06:40]. This includes promoting a product or company through various means and distinctive design [00:03:47].
- Branding: The deliberate pairing of a business or product with specific outcomes or associations in the minds of customers [00:05:21]. It’s the connection or association people make between certain things and a company [00:21:28].
Advertising’s Contribution to Branding
Advertising serves as a primary mechanism through which branding occurs. It enables the initial “pairing” of a brand with desired elements [00:13:15].
For instance, Nike pairs its brand with world-class athletes like LeBron James and Tiger Woods [00:13:33]. Through advertising featuring these figures, people who value sports and competition associate Nike with positive outcomes like success and winning [00:13:40]. This deliberate pairing helps the brand grow [00:13:47].
The Impact of Advertising on Branding Success
Advertising’s effectiveness in branding can be seen through specific examples:
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Good Advertising, Bad Branding: The Bud Light collaboration with Dylan Mulvaney was effective advertising because it made many people aware of the product [00:06:21]. However, for a significant portion of its ideal audience, this pairing was disliked, leading to bad branding and sales losses [00:06:49]. Bud Light later attempted to recover by pairing with figures more aligned with its target audience, such as Shane Gillis and the UFC, which helped sales recover [00:07:11]. This demonstrates that while advertising increases reach, the quality of the pairing determines whether it results in good branding or bad branding [00:06:54].
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Good Advertising, Good Branding: When advertising effectively pairs a brand with positive associations desired by its target audience, it leads to increased customer engagement and purchases [00:09:55].
How Good Branding Enhances Advertising Effectiveness
Once a strong brand is established, it significantly enhances the power of subsequent advertising efforts [00:18:10].
- Higher Conversion Rates: A generic white t-shirt might only get a 0.5% click-through rate in advertising [00:18:14]. The same t-shirt with a strong brand like Nike’s Swoosh could achieve six times higher click-through rates, even at a higher price point [00:18:31].
- Cheaper Customers and Higher Returns: Strong brands lead to lower customer acquisition costs and higher returns on advertising investments [00:18:46]. This allows businesses to scale much faster [00:26:26].
While advertising serves to introduce a product and create initial associations, the product’s actual performance after purchase also contributes to brand perception [00:26:06]. A strong brand can influence how people perceive the value of a product [00:26:51], but a premium brand should also deliver a special experience to retain customers beyond the first purchase [00:27:17].