What does Comparative Advertising do for Brand Equity? BD October 2000

One subject that has split the advertising industry over many years is that of comparative advertising. The lines were drawn in the early seventies when the rules against it were dropped in advertising’s homeland, The United States of America. The Federal Trade Commission (FTC), the government body which oversees commerce and trade in that country, decided that the previous controls on this form of advertising were not in the consumers’ interest. Freedom of speech is at the heart of the American Constitution and so the strictures were withdraw.

But the FTC went further. It did not just abandon the rules; it actively promoted the practice in which one advertiser blatantly compares its product with its competitors. The most visible result was a rash of some of the most creatively brilliant advertising ever seen. Pepsi and Coca Cola epitomised the genre with campaigns that were entertaining and made some creatives and their agencies famous and very successful. Whether advertisers gained any more than awards for their walls has long been a moot point.

Not every country followed the US lead. South Africa was one. Until just a few years ago, comparative advertising was disallowed in terms of various provisions in the regulatory code of the Advertising Standards Association (ASA). These were changed quite recently under extreme pressure from the proponent of comparative advertising. They argued for freedom of commercial speech and the right of the consumer to be given information to inform their buying decisions. The opposing lobby claimed that this argument was fallacious because no advertiser was going to promote the opposition and denigrate, by comparison, his own brand. This view was based on the opinion expressed by an American ad icon who once said: “I have never known an advertiser spend money to promote his competitors product.”

The modifications to the ASA code to allow local advertisers to use comparative advertising was a hollow victory for its supporters because the provisions of the Trade Marks Act, which specifically disallows advertisers from using competitor brand names and logos in their advertising, continued to do what the ASA had now partially abandoned.

Nonetheless, the very vigorous SA advertising community has pushed the regulations and law to the boundaries with some highly entertaining advertising that has won awards and the plaudits of TV viewers and readers of the country’s print media. The BMW and Audi campaigns are recent examples.

As a postgraduate student of brand equity and advertising, Sthuthukile (S’thu) Zungu, has spent the past five years studying, in the department of Business Economics at Wits, for her masters degree. Now working for BMW, she recently submitted her thesis titled: “The effects of comparative advertising on brand equity.” In a rigorous series of tests, albeit limited in scope, she has examined the idea that comparative advertising is not superior to other message carriers in its effect on a brand’s equity.

She conducted her survey among MBA students at the Wits Business School selecting them on the basis that they are, by and large, junior and senior working professionals. As she explains: “the profile (of these part time MBA and Business Postgraduates) meet the profile required for this study …”

The techniques she used was to divided the sample into two and then expose each group to either a comparative or non-comparative advertisement for the same brand. Each respondent completed a detailed questionnaire before and after exposure. The product types were a luxury car (high involvement) and a toothpaste (low involvement).

What she found needs to be absorbed by all marketers who give thought to the implications of the forms of advertising created for them by their advertising agencies.

She explains in her thesis that consumer brand equity is based on the strength, favourability and uniqueness of brand associations. Associations are the attributes that people hold in their memories and which shape the way they feel about the brand, including whether they will buy it to try and whether they will then continue to use it in the future. This is the Brand Knowledge Structure (BKS) that is at the heart of leading models of brand valuation, because BKS drives the brand’s expected life.

Her findings, generally, did not encourage the use of comparative advertising for high ticket items. For example the effect of comparative advertising on the strength of brand association favoured the low involvement toothpaste. After exposure to the comparative advertisement the associations strengthened significantly. The opposite was the case with the high involvement luxury car. The strength of the associations actually decreased. With the favourability variable the comparative advertising seemed to make no difference at the low involvement level, but was detrimental to the motor car: the associations became less favouirable. If a brand has unique attributes comparative advertising will strengthen these perceptions at the low involvement level but weaken them with high involvement brands.

The conclusion is quite concerning. At the very best comparative advertising will have some positive effects with low involvement brands such as toothpaste, soaps, detergents and the like, but could harm the brand equity of high ticket items that fall under the heading of high involvement.

Zungu’s conclusion is that brand management must not only consider the weight of advertising and the content of their marketing communications, they must give serious thought as well to the vehicle used to carry the messages. It seems as though, appealing as it may be to agency creatives, consciously drawing the consumer’s attention to the competition, can be detrimental the brand’s health.

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