Most marketers think of advertising only in terms of awareness or short-term sales. But one of the most overlooked and most powerful outcomes of advertising is pricing power.
A fascinating study called Advertising’s Long-Term Impact on Brand Price Elasticity Across Brands and Categories by Berk Ataman, Prof. Koen Pauwels, Shuba Srinivasan, and Marc Vanhuele looked at 350 brands across seven years. The finding was clear: advertising significantly reduces price sensitivity.
This effect was strongest for premium and niche brands in complex categories. In other words, when the stakes are high and the choices are overwhelming, great advertising doesn’t just sell, it helps consumers navigate. By clarifying value and meaning, advertising makes people more willing to pay for a brand they trust.
Kantar and Oxford research reinforces this: brands that cultivate emotional perceptions see far greater resilience and pricing strength. When multiple brand effects are built, willingness to pay grows dramatically, up to 11% firmer pricing for brands with four or more strong brand associations.
Here’s my favorite finding from the Ataman study: competitive ads can help your brand, too. When competitors advertise, they often shine a spotlight on the entire category. That lifts awareness for everyone, making consumers less price-sensitive across the board.
The lesson for leaders?
Strong brands can hold their ground on price. The more your advertising connects emotionally by telling stories, clarifying your purpose, and creating meaning, the less you have to rely on discounting to win business.
That’s the hidden magic of advertising: not just selling more, but giving you the confidence and resilience to charge what you’re truly worth.