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Jun 12, 2008

NEWS: In Pricing, Brand Really Does Make a Difference

Ed: Classic advertising issue - does a company spend for short term leads or long term brand? The latter strategy returns premium prices and higher gross margins when compared to pushing products at the lowest price - that more than offsets the higher marketing costs. For example, Apple balances brand and optimum pricing with their Mac, iPod, and iPhone.

Branding impacts the entire supply chain, from clients to agencies to media partners. The survey below shows that top marketing firms believe in the branding strategy. By branding their own service, they earn higher rates and better profitability.

Paper helps publishers gain brand; just as brick-and-mortal helps retailers gain brand and mindshare. Despite huge numbers of unique users, online publishers, like TechCrunch and Silicon Alley Insider, have only a virtual brand and lack the credibility of real brands. This is a problem for online publishing. 

TechCrunch is responding with live events with their readers. It's an expensive solution.
NEWS: Facebook Fails An Online Rorschach Test
What solution do you have for blogs and online publishing?

In Pricing, Brand Really Does Make a Difference

Brand leaders among marketing, advertising and PR firms are more likely to price their services at a higher level than their competitors (41% of brand leaders were premium-priced vs. 24% of lesser-known firms) - and more likely to actually get higher fees, according to a RainToday.com survey.

Brand and value are paramount in pricing and discounting is hurting firms’ bottom lines, finds the 2008 “Fees and Pricing Benchmark Report: Marketing, Advertising, and PR Industry” report, which provides insight from 343 marketing, advertising and PR executives.

It also finds that prices are on the increase despite the economic downturn, and communicating value is still the biggest pricing challenge facing firms. Below, findings from the study.

Brand Names Drive Profits

Firms that are well-known in their target markets receive premium fees, and are more likely to grow their business and realize higher profits, than lesser-known counterparts:


  • Professionals at leading branded firms command up to 33% higher actual/realized fees.
  • 79% of brand leaders experienced revenue growth in the last two years vs. 65% of lesser-known firms.
  • 69% of brand leaders are profitable vs. 56% of lesser-known firms.

Discounting Hurts Bottom Line...

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