The Power of Marketing
Our nephew spent the past week with the family as his parents and sister were off in Texas, which meant we were running all over the place; Lego Land, the aquarium, Chuck-E-Cheese. One afternoon, I was sitting at the dining room table over at my parents’ house, working on a MacBook. I needed to finish something prior to an important deadline on the East Coast. I promised him that if he could entertain himself for two hours, I’d go ride bikes for as long as he wanted – my brother and his wife had surprised him with a Teenage Mutant Ninja Turtle bicycle, complete with matching helmet, arm pads, and knee pads and he’d been practicing with his training wheels.
After confirming the clock had to say 7:00 p.m. for me to be done, he took the Lego firehouse set my mom let him pick out at the Lego Land store, scrambling off to the adjacent living room to play as I wrapped up my task. I hear him building, bricks moving, pieces coming together, shuffling, talking to himself. Then, after awhile, I can tell he’s done. He’s put the building together. He sets it down and it sounds as if he steps back to admire it.
Sudden quiet. A moment of silence.
Then, in the sweetest, softest, little four-year-old voice you can imagine, I hear him sing as he takes in his handiwork:
“Nationwide is on your side.”
The power of marketing is incredible. It moves billions upon billions of dollars every single day by driving mental models such as mere association, absorbed in ways we don’t even fully comprehend. A quarter-century from now, he may be shopping for home insurance and not even understand the reasons he picked Nationwide over competitors. It’s one source of competitive moats; a force that can make it difficult, if not impossible, to displace the dominant brand, such as Wrigley, Hershey, Coca-Cola, Clorox, or Colgate. It’s not an accident that firms with extremely high returns on capital tend to redeploy a lot of that cash flow to advertising, even if it doesn’t seem like it’s doing anything. Sometimes, you can’t track the metrics perfectly. You can’t say for certain that a specific advertisement generated a specific sale. It’s important nonetheless. An inability to measure something with precision doesn’t mean it isn’t important or having an outsized influence. Build the brand. Protect the brand equity.
