Strong Marketing Builds Long-Term Pricing Power, Research Suggests

Economic uncertainty is tough for both businesses and consumers. With global tensions and rising inflation, some companies will choose to cut costs and wait for a better day to grow. But that might not be the best strategy. Even when things look bleak, consumers are willing to pay a lot for products and brands that offer real value.

The ultimate hack in turbulent times? Consider marketing as an investment rather than just a cost, particularly if you’re thinking about long-term success. Recent research from Kantar, in partnership with Google, shows that consistent brand building helps you stay strong during economic downturns and come out even stronger afterwards. It also highlights how marketing can boost your pricing power and profitability.

Want to stay on top of marketing effectiveness? Take a look at our selection of key findings from this important research:

• Strong brands can charge more. What exactly is pricing power? According to Mary Kyriakidi, Global Thought Leader at Kantar, it’s a willingness to pay significantly more – up to double that of cheaper alternatives. 

There is a clear link between brand strength and pricing power. Now, things get even more intriguing: Kantar’s data shows that with every additional point in pricing power, you can justify a four-point increase in relative price. The research reveals that brands with strong pricing power are more immune to price increases. According to Amund L. Brathen from Kantar, price strength analysis allows us to understand how to charge a higher price. The core lies in providing value for the customer. It is about investing in and building associations with the brand that make consumers perceive (not necessarily objectively) that they get something extra from buying the brand. It’s important to be meaningfully different if you want to be able to charge a higher price. 

To charge a premium price in the future, you need to understand how your brand or product can solve consumers’ problems or meet their needs better than your competitors. Brands need to invest in it and tell consumers about it. According to Mary Kyriakidi, Kantar studied brands for over four years and found that those which improved their pricing power added 67% to their brand value compared with 33% for others. The pricing power effect is so strong that even when brands lose penetration over this period, a gain in pricing power more than offsets this – making it the best way to maintain profitability and sustain business value.

• Don’t just focus on counting sales volume – consider CLV (Customer Lifetime Value) instead. These days, marketing’s contribution is primarily measured through its impact on sales volume. This overlooks its crucial role on the other side of the equation: price. New research from Google and Kantar highlights the powerful connection between marketing, brand equity, and pricing power. It reveals how strong brands influence strong prices — and demonstrates marketing’s undeniable impact on business growth. 

The research reveals that customer lifetime value (CLTV) is a powerful metric for capturing the value of both performance and brand activity. A promotional offer might secure the initial sale, but brand building influences whether that customer keeps buying, the price they’re willing to pay, and how likely they are to recommend the product to others. When seen through this lens, the apparent tension between short-term results and long-term brand building begins to dissolve. As the famous Mark Ritson puts it: „Here’s the reality: in most categories, only a small percentage of your customers are ready to buy at any given moment. People hold onto cars for years, and they stick with their banks for even longer. If you wait until someone is actively looking to become a customer, it’s often too late.“

• Brand and performance marketing work best when combined. The research from Google and Kantar reveals that for e-commerce brands media effectiveness peaks when 40-60% of the investment goes to brand building, with brand marketing contributing to both short-term and long-term sales. Strong brands make emotional connections that influence future purchase decisions. As a result, they can command price premiums, resist competitive pressure and recover more quickly from market disruptions. Yet despite these clear benefits, many organisations struggle to maintain consistent brand investment. The challenge often comes down to measurement: while tactical campaigns deliver clear, immediate results that are easily tracked, brand effects accumulate gradually through carryover effects that are harder to isolate and quantify.

Google and Kantar’s analysis of hundreds of effectiveness studies reveals a striking pattern: the long-term sales impact of media investment during months 5-24 typically equals that of the first four months. This finding has profound implications for marketing strategy and measurement. By focusing exclusively on short-term impact, marketers could be ignoring half of the value they create. The analysis suggests that moving away from promotion-heavy communication toward balanced brand building can reduce price elasticity by up to 20% in the long run.

• Channel selection is crucial. Channel selection has a vital role to play in achieving a balance. Video advertising has emerged as particularly successful at delivering a full range of marketing objectives — building brand metrics while simultaneously driving short-term sales. According to Mary Kyriakidi, it’s not just how brands communicate this, but where. Kantar’s media effectiveness research reveals that although the average brand’s media budget prioritises offline ad spend over online, it’s online that over-indexes when it comes to affecting difference and digital advertising is the driving force behind brand difference and a brand’s pricing power.

But simply maintaining investment levels isn’t enough—how that investment is deployed matters too. Google and Kantar’s research shows that brands attempting to offset reduced budgets by shifting spend toward short-term performance marketing often end up making their long-term position worse. In one example, a brand with a strong marketing history pivoted sharply toward performance channels during a recent period of economic pressure and saw their marketing ROI drop by 44% within two quarters. The cause? By reducing brand-building activity, they had weakened the foundation that made their performance marketing effective in the first place.

• “Brand building is our armour in economic turbulence”. As Mary Kyriakidi concludes on the basis of the research, consistent investment in brand building not only drives long-term growth but also enhances short-term performance. Оut of all functions in the business, marketing can make the greatest impact and fortifies against price fluctuations. Effective marketing reduces price elasticity, making customers less sensitive to price changes. In her words: „It’s not enough to up prices and hope for the best. There’s groundwork to be laid. The savvy marketer will align their brand’s interests with those of the consumer and will never stop investing in the brand as a value-producing asset.“ 

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