Assessing Ad-spend patterns to predict brand health: A model for advertisers to determine future advertising-budgeting strategies

Can a brand’s “health” be associated with a company’s advertising-spending patterns? The authors of the current study applied their own definition of a “healthy brand”-a brand that “experiences sustained year-on-year growth in brand sales over the long term” (Mirzaei, Gray, and Baumann, 2015)-to a model that builds on earlier brand-performance and ad-budgeting theories. The researchers assessed the advertising-spending patterns of what they viewed as “healthy” and “unhealthy” brands across three service industries-airlines, banking, and department stores-from 2000 to 2012. They identified four advertising-spending patterns linked to brand performance, potentially enabling marketers to project the impact of various levels of advertising investment before formalizing advertising strategies and budgets.