Why Brands Spend Pour Millions On Marketing

Updated: January 5, 2023

Do you know the reasons why brands spend millions of dollars on marketing? In this write-up, we look at four logical reasons to answer this question.

Why do Marketers Spend Millions of Dollars on Marketing?

Whether a brand fight between Coca-Cola and Pepsi or McDonald's and KFC, brands spend millions of dollars on marketing to win the battle. Though there is no winning in the brand game, the fight is about marketing your brand correctly. By means of strategic marketing, brands can hold a prominent position in the eyes of their targeted audience. They are also able to win over a few customers of their competitors.

However, the question is, is it necessary to create hype for a product already available in the market? Regarding SMEs, nominal marketing conducted on social media platforms can create outstanding results. So why do big brands pour millions of dollars just to stay visible in the eyes of the customers?

In this article, we will figure out why big brands spend millions of dollars on marketing even though their brands are already the talk of the town!

In 2013, Mcdonald's spent a staggering $998 million on brand advertising. The question is, what was their marketing philosophy? In an age where digital marketing has made it easy for SMEs to promote their business for free or by investing a minimum amount of money, do you think it is logical to pour millions of dollars into marketing the big brands?

Well, apparently, the answer is no, but if we do a little research, we might shake our heads yes to investing in million-dollar marketing. The marketing budget for any brand depends on the nature of the industry. For example, according to the CMO survey and Deloitte Digital, Consumer Packaged Goods allocate the most marketing budget, which is 24%. The Energy Industry allocates the minimum budget on marketing which is 4% only (I don’t think they need it anyway).

It is estimated that several companies have decreased their marketing budget since February 2012, from average spending of 8.5 to 7.5 percent of the total revenue. However, some FMCG and technological giants continuously spend around 10% of their total revenue. The question still persists! Why?

In the period of the 90s, Steve Jobs changed the fate of Apple Inc. From being an extinct company, he made it the world’s leading technological brand with his hard work and determination. As a visionary leader, Steve Jobs played his cards right in marketing for the brand's success, and with his strong marketing strategies, he evolved the brand entirely.

Hence to make a brand successful, the requirement of marketing is inexorable. Marketers are accustomed to the fact that marketing is required at every phase of the product, whether its introduction, growth, maturity or decline. Companies spend a considerable amount percentage of their annual revenue and regard it as an investment in different types of marketing. Here are four logical reasons big brands readily spend on marketing, despite being in demand already.

1. Conveying the Message of Continuous Improvement

The brand image is already formed after a few years in the market. However, ongoing marketing helps in building the reputation that you are taking measures to improve your product’s quality continuously. Timely marketing helps convey that additional features are added for customer satisfaction and awareness about promotional offers. By advertising in strategic ways, marketers can change their audience's perception.

2. Increasing Customers Base

The major aim of marketing the product is increasing the customer base. During a period of time, the product evolves and to target the right audience and keep them “hooked” to your brand, it is vital to utilize marketing tools. The more visually appealing your message is, the more you will be able to capture your audience, which requires a hefty investment. For example, companies can use annual report design to explain their work better to potential clients.

3. Getting Multiple Options

There are sub-classes in the targeted audience, and by continuous marketing, you can focus on different categories because there are no such things as having just enough business! Via marketing, big brands can create a massive demand for what they have to offer and enjoy the situation.

4. Securing the Future of the Company

The Leading brand of today can become extinct tomorrow. To avoid losing the brand appeal, big brands engage in active marketing throughout the year or harvest in seasonal marketing that helps them get profitable returns.

Generally, big companies advertise their brands on TV, radio, and billboards because they can capture a large number of audiences in a customized manner. The main objective of pouring a massive number of dollars is to generate leads, and they can achieve their targets tremendously!

Hence, this is why Mcdonald's paid a staggering amount for marketing, i.e., to increase the relationship with their customers, ultimately increasing their turnover rate. The saying “out of sight, out of mind” is commonly repeated among marketers, so they keep making strategies to promote their brands to retain their customers and attract new ones.

It is often said that a brain demands what a person sees, feels or hears regularly. This is the reason why we tend to purchase the products that are advertised frequently and forget the ones that are not displayed recurrently. Big brands have a yearly turnover rate of billions of dollars, and to keep the profit coming, they strategize their marketing very effectively.

Among the big spenders in advertising, Pampers (the fourth leading brand) scored first in marketing. By means of their strategic marketing, marketers can engage their customers and gain a leading position for their brands. However, it should be noted that marketing does not guarantee a specific lead generation, but it does serve massively as a reminder for a large number of audiences.

Big brands continue to increase their outdoor advertising spending because it helps them achieve their objectives, which include communicating with their customers. This is one of the reasons that sets them apart from their competitors; thus, spending a hefty amount of money justifies their goals. Surely, these big brands utilize the social platform for their marketing purpose in their own creative manner. However, they keenly use traditional media to gain impressive monetary returns to connect with their audience.

The Conclusion

The reason why big brands are successful is not just because of the quality of their products; it’s because of the way they convey their brands in the market. The whole idea is to convey the product in such a manner that the targeted audience is compelled to buy even if there are numerous options available in the market that are of lower prices or better quality. There are several reasons why top brands invest in marketing, including retaining their customers by constantly advertising their products in a very vigilant manner. Marketing tactics that portray customization for the customers’ needs get the best scores. So pouring in a hefty amount of money for marketing is a necessity.

Author Bio:

Caitlyn R. Seymore is a digital content producer and developer at Researchomatic. She specializes in writing marketing blogs. Caitlyn Seymore has created great variations in the ASA citation generator. She owns a cat and loves spending time with her family.