How advertising creates brand equity

By Lolu Akinwunmi

One of the most common questions in boardrooms is this: “How do we know our advertising is working?” The answers are often predictable:

Sales increased.
Website traffic improved.
Social media engagement grew.
Brand awareness rose.

While these are all useful indicators, they do not tell the whole story.

The true value of advertising is not measured only by what happens immediately after a campaign. Its greatest contribution often lies in something less visible but far more valuable: its Brand Equity – the additional value consumers attach to a brand simply because of its name, reputation, and the experiences associated with it. It explains why consumers willingly pay more for one product than another, even when the functional differences between them are relatively small.

Strong brand equity is not created overnight. It is accumulated gradually. Advertising is one of the principal instruments through which that value is built. How?

Advertising Builds Brand Salience
The first responsibility of advertising is to ensure that a brand comes easily to mind when consumers are ready to buy. Marketing scholars describe this as brand salience. Truth is:

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Consumers cannot choose brands they do not remember.
Every consistent advertisement strengthens memory.
Every repeated visual identity reinforces recognition.
Every distinctive slogan, colour, logo, sound, or symbol increases the likelihood that the brand will be recalled when a purchase decision is made.

The objective is not merely to be seen. It is to be remembered.

Advertising Creates Emotional Associations and loyalty
The strongest brands rarely compete on functional benefits alone. They compete on emotion. People remember how brands make them feel. Advertising connects products with aspirations, achievements, relationships, happiness, security, confidence, hope, and belonging. Over time these emotional associations become part of the brand itself. This explains why consumers often remain loyal to brands even when competitors offer similar quality or lower prices. Emotion creates attachment. Attachment creates loyalty.

Advertising Reinforces Perceived Quality
Consumers frequently use advertising as a signal of organisational quality. A professionally managed brand that communicates consistently is often perceived as more reliable than one that appears occasionally or inconsistently. This does not mean that advertising automatically guarantees quality. Rather, it reinforces consumers’ confidence when their actual experience matches the promises being communicated. The strongest brands align communication with performance. Advertising raises expectations. The organisation must fulfil them.

Advertising Reduces Price Sensitivity
One of the greatest advantages of strong branding is that consumers become less focused on price alone. When people trust a brand, they often evaluate value rather than cost. (A random test conducted years ago in the UK showed that consumers preferred more expensive branded medications to stores’ cheaper unbranded competing products, even when all contained the same active ingredients). This explains why some brands consistently command premium prices while competing products with similar features struggle to justify even lower prices. Advertising contributes to this by reinforcing reputation, differentiation, and emotional value. Brands that become commodities compete largely on price. Brands with strong equity compete on preference. There is an enormous difference.

Advertising Strengthens Competitive Resilience
Markets are becoming increasingly crowded. Competitors launch new products. Prices fluctuate. Promotions intensify. Consumer preferences evolve rapidly. In such environments, strong brand equity provides protection. Customers who trust a brand are less likely to switch simply because another brand is launched using an aggressive promotion or temporary discount. Advertising reinforces that resilience by continually reminding consumers why the brand deserves their confidence. It keeps the relationship alive.

And perhaps this explains why some organisations continue investing in advertising even during difficult economic periods. They understand that advertising is not merely today’s expense. It is an investment into tomorrow’s competitive advantage. Reducing advertising indiscriminately during challenging times may improve short-term financial reports, but it can quietly weaken the brand’s long-term position in consumers’ minds.

The case of Ovaltine is often cited in Nigeria. Many years ago when the economy was tough, the brand reportedly stopped advertising, ostensibly to preserve expenses; Milo and Bournvita, its major competitors did not. When the economy improved, it became difficult for Ovaltine to reclaim lost ground.

The organisations that consistently outperform competitors usually take a strong view. They recognise that advertising is not simply about generating immediate sales. It is about strengthening one of the organisation’s most valuable intangible assets; its brand. Ultimately, advertising creates value not because it makes people buy once. It creates value because it helps people remember, trust, prefer, and remain loyal to a brand over time. That is the true nature of Brand Equity. And the truth is Brand Equity:

Cannot be built by discounts alone.
Cannot be sustained by promotions alone.
Is built patiently through consistent communication, meaningful experiences, and promises that are repeatedly fulfilled.

For business leaders, marketers, agencies, and entrepreneurs, the lesson is straightforward: The most successful advertising campaigns do more than increase sales. They increase the long-term value of the brand itself.

This is advertising’s greatest strategic contribution.
Next in MSS-06.7: “The Greatest Branding Mistake Organisations Make.”
I am sure brands people and agencies want to know them! Keep a date with us!
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‘Lolu Akinwunmi
Publisher, The MarCom Strategic Series (MSS)
lakinwunmi@primagarnetafrica.com;

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