The Power of Advertising in Growth

Beyond the Transactional Nature of Business

In 2003, after graduating with an MBA in Barcelona, I joined a design agency, Plush Design, where we were of course working on the early fringes of digital marketing. Our mantra back then was: “TV Advertising is dead”, “TV is dead”.

Of my many failed predictions in my 25 years of career, nothing sounds more silly than that.

Advertising is one of the most powerful tools in modern business. It does more than promote products—it shapes consumer perceptions, builds brand loyalty, fuels market expansion, and determines a company’s long-term success. Some of the world’s biggest brands, including Dove, Procter & Gamble (P&G), Patagonia, Nike, Adidas, and Coca-Cola, have used advertising to sell products and position themselves as market leaders.

By analyzing how these brands have leveraged advertising, we can explore how strategic marketing influences business performance. This article delves into how advertising strengthens brand identity, drives revenue, helps companies expand into new markets, and sustains a competitive edge in an increasingly digital and consumer-driven world.

The Role of Advertising in Strategy

Advertising is fundamental in shaping brands and ensuring they are connected to local cultural elements. A company may offer a high-quality product, but without strong advertising, it may struggle to differentiate itself from competitors and be distinctive enough to be remembered at the point of sale. In industries where consumers have countless choices, advertising is the tool that influences perception and creates lasting associations between brands and emotions. Nike is a prime example of this. Rather than simply highlighting the features of its athletic footwear and apparel, Nike’s advertising strategy has always focused on inspiring its audience. The company’s iconic "Just Do It" campaign, launched in 1988, was not about selling shoes; it was about selling the idea of perseverance, ambition, and achievement. By connecting with consumers emotionally, Nike created a brand identity that transcended sportswear, allowing it to dominate the market for decades.

Similarly, Dove transformed itself from an essential skincare brand into a global advocate for beauty inclusivity. When the brand launched its "Real Beauty" campaign in 2004, it did not focus on soap or body lotion. Instead, the campaign featured real women of all shapes, sizes, and ethnicities, challenging conventional beauty standards. This approach resonated with consumers, significantly boosting sales while establishing Dove as a leader in the personal care industry. By shifting the conversation from product benefits to brand values, Dove built a deeper relationship with its customers—something that advertising alone can achieve when executed strategically.

Coca-Cola, a brand synonymous with refreshment, has perfected the art of maintaining a strong, consistent brand identity through advertising. From its 1971 "I’d Like to Buy the World a Coke" campaign to its annual holiday advertisements featuring Santa Claus, Coca-Cola has created a marketing presence beyond its product. The emotional connections built through advertising have ensured that Coca-Cola remains the most recognized beverage brand in the world.

A well-advertised brand also has the power to justify premium pricing. Adidas, for example, has positioned itself as a premium sportswear brand through high-profile endorsements, cutting-edge product innovation, and consistent storytelling. By associating itself with elite athletes and cultural icons, Adidas has created a perception of quality that allows it to charge higher prices than generic sportswear brands. Advertising influences how consumers view value, enabling businesses to achieve better profit margins.

Advertising as a Driver of Market Expansion

Businesses rely on advertising to maintain their customer base and expand into new markets. Launching a new product requires more than availability, it requires visibility. Companies that effectively advertise their product launches often see much higher adoption rates, directly translating into revenue growth.

Nike has mastered the art of creating anticipation around its new product releases. Whenever the company drops a new pair of Air Jordans or a limited-edition sneaker, the hype is primarily driven by carefully curated advertising campaigns. These campaigns leverage social media influencers, celebrity endorsements, and high-quality storytelling to create a sense of urgency, often resulting in products selling out within hours.

Patagonia has taken a different approach to advertising its products but has been equally successful in expanding its market presence. While most brands use advertising to encourage more consumption, Patagonia famously ran an ad titled "Don't Buy This Jacket" on Black Friday, urging customers to reconsider unnecessary purchases for sustainability. The unconventional approach positioned Patagonia as an environmentally responsible brand, attracting a growing base of eco-conscious consumers. Ironically, the campaign led to a 40% increase in sales, proving that advertising does not always have to follow traditional methods to be effective.

Dove, a brand traditionally associated with female skincare, successfully expanded into the men’s grooming market through advertising. With the launch of Dove Men+Care, the company shifted its messaging to themes of masculinity and self-care, leveraging powerful storytelling that resonated with a male audience. Through well-crafted campaigns, Dove established a presence in a market dominated by legacy brands, proving that effective advertising can reshape consumer behavior and brand perception.

With its massive global reach, Coca-Cola has also used advertising to tailor its messaging to different markets. In China, the brand emphasizes family togetherness, while in Latin America, its advertisements focus on festive celebrations. By adapting its advertising to fit cultural nuances, Coca-Cola dominates in diverse regions worldwide.

Building Repeat Business Through Advertising

The name of the game is penetration. However, one should not forget the other side of demand: repeat business. While not in all categories, we can speak of customer retention, repeat business is just as necessary as customer acquisition, and advertising plays a significant role in building long-term businesses. Brands that create strong emotional connections with their audience enjoy better customer repeat rates and advocacy.

P&G’s "Proud Sponsor of Moms" campaign is an excellent example of using advertising to foster more profound connection with brands. During Olympic seasons, the campaign highlights real stories of mothers supporting their athlete children, evoking deep emotions among viewers. This advertising approach strengthens consumer attachment to P&G’s brands, making them more memorable during each Olympic cycle.

Nike’s marketing strategy is another case study in building brand loyalty. By aligning itself with top athletes such as Michael Jordan and Serena Williams, the company creates an aspirational identity for consumers. Purchasing Nike products becomes more than a transaction: a statement of ambition, perseverance, and achievement. Nike’s advertising campaigns consistently reinforce this message, ensuring customers remain engaged with the brand over the long term.

Dove has also leveraged storytelling to strengthen its connection with consumers. By consistently championing real beauty and self-confidence, the brand has cultivated a loyal following that sees Dove as a skincare brand and a movement. This deep consumer-brand relationship is a direct result of the power of advertising.

Coca-Cola’s holiday advertising campaigns exemplify how consistent messaging creates brand stickiness. The company’s Christmas advertisements featuring Santa Claus and polar bears have become a tradition, reinforcing the brand’s presence in the consumer’s life year after year.

Advertising as a Competitive Advantage?

Maintaining a strong advertising presence provides businesses with a crucial competitive advantage. Even during economic downturns, companies that sustain consistent advertising efforts are likelier to outperform competitors who cut back on marketing.

When Under Armour reduced its advertising budget in 2020, Adidas seized the opportunity to increase its marketing efforts. As a result, Adidas regained lost market share while Under Armour struggled to maintain its position. This example underscores the importance of advertising consistency, particularly in competitive industries.

Advertising also plays a crucial role in crisis management. Nike faced significant backlash when it featured Colin Kaepernick in one of its campaigns. However, instead of backing down, Nike doubled down on its messaging, reinforcing its brand identity. The result was a 6% increase in sales, demonstrating that well-executed advertising can turn controversy into a business opportunity.

Coca-Cola’s misstep with "New Coke" in 1985 is another example. The company’s attempt to change its classic formula led to consumer outrage. However, through strong advertising efforts, Coca-Cola successfully revamped its business by reintroducing "Coke Classic," proving that advertising can help brands recover from setbacks.

The Lasting Impact of Advertising on Business Success

Advertising is not just about selling products: it is about shaping consumer perceptions, creating emotional connections, and driving long-term business success. From Nike’s motivational storytelling to Coca-Cola’s tradition-building campaigns, successful companies use advertising to create powerful brand identities that stand the test of time.

Businesses that invest in strategic advertising, maintain consistency, and leverage evolving digital tools will continue to thrive in the competitive marketplace. As technology advances, advertising will become even more sophisticated, making it an indispensable tool for sustained business growth.

Reference:

Sommerfeld, Stephanie. “The Transformative Power of Advertising: A Comprehensive Analysis of Its Impact on Business Evolution and Societal Progress in the Modern Era.” Advertising and Business Impact, 2024.