Editor's note: Jeri Smith is president/CEO of Communicus, a Tucson, Ariz., research firm.

More than half of all new products introduced each year are line extensions. With an overall success rate of well under 25 percent for new products, it’s not surprising that so many advertisers rely on a familiar base brand name and equity to launch a new concept. Line-extension launches certainly have significant hurdles to over-come, many of which involve how the line extension is positioned vis-à-vis the base brand. The creative approaches utilized in launch-period advertising play a critical role in the ultimate success of the new product. Perhaps of even greater importance, the advertising for the line extension has the potential to produce significant confusion about the base brand and can contribute to dilution of core brand values. Conversely, when well-executed, line-extension advertising can propel the new product to success and also provide valuable halo benefits on the base brand.

The brand insights team is often integrally involved in the development of the line extension and in providing research along the way to optimize the product and the positioning concept. Research can also play a critical role in ensuring that the advertising campaign that is used to launch the line extension positions the new product optimally for success. Based on the unique communication issues of line extensions, simply applying a typical copy-testing protocol is not enough.

For line-extension advertising, success criteria are broader than the usual set of considerations. Not only is the outcome of the new product launch at play but the extent to which the new entry helps or hurts the parent brand is also of vital importance. By establishing a research construct that takes into consideration the special challenges and opportunities of the line-extension launch, the insights team can play an even more central and pivotal role in its success.

Establish a research construct

The first step is to establish a research construct that is based on the objectives, strategies and unique characteristics of the product. For most line-extension advertising, the desired outcome involves a) engaging the broadest possible group within the overall target, subject to media budget constraints, and b) building awareness of, and communicating the messages/benefits associated with, the line extension.

To accomplish this, a common tactic is to use the base brand name to convey credibility and to transfer those base brand benefits and values that will enhance the appeal of the line extension. From a sales perspective, the intention is usually to build overall brand sales while minimizing cannibalization. However, the extent to which the advertising campaign for the line extension draws on base brand equities will have a significant effect on the ability of the line extension launch campaign to succeed.

 

When the base brand is used as a point of reference, the actual, in-market communications outcome for any given consumer is likely to be one of the following (Figure 1):

  • Some consumers will perceive the advertising to be for the base brand and will attach the message/benefits to the base brand. This may help the base brand but will not optimize the line extension.
  • Some consumers will understand that the campaign is advertising a new product and will attach the message/benefits to the line extension. This will directly impact the line extension itself and assumes that the base brand has a separate ad budget to drive sales independent from the line-extension campaign.
  • Some consumers will understand that the execution is advertising a new product but one that is connected with the base brand; these consumers will attach the message/benefits to the line extension but will also think more of the base brand as a result of the communication. This is an ideal scenario in some cases, particularly when base brand advertising support has been reduced to fund the line-extension launch. However, this out-come is often difficult to achieve.
  • Some consumers who engage with the ad will fail to link the message/benefits to either the line extension or the base brand. Since the average new ad campaign achieves less than 50 percent correct brand linkage during its launch period, this scenario has a high likelihood of occurring among a significant group of consumers. It is, of course, unfavorable and something that solid research can help the advertising team to minimize.

The line extension campaign itself typically employs one of the following three creative approaches.

Strategy 1: Utilize the base brand campaign
Incorporating the line extension into the existing brand campaign enables an advertiser to capitalize on preexisting campaign equities such as spokespeople, brand colors, creative devices and taglines. This approach can build awareness of the line extension without the expense of funding an entirely new campaign. In general, this strategy tends to be effective at generating strong engagement and base brand linkage on the basis of preexisting campaign familiarity.

However, integrating the line extension into an existing campaign also comes with a serious risk of failing to communicate either the identity of the line extension or its unique benefits vs. the base brand. For this strategy to be effective, the advertising should create a strong focus on the line extension and the benefits that differentiate the new product from the parent brand. Across a range of line-extension campaigns that we have studied, this strategy, while often generating strong engagement and building base brand equities, has the lowest chance of generating trial of the line extension.

The primary reason for failure is the tendency of the consumer to link a campaign with which they are already familiar to the base brand rather than to the line extension.

Strategy 2: Execute a completely new campaign

Another option is to create an entirely new campaign for the line extension. This strategy generally requires a substantially greater financial investment, given the developmental, production and media costs associated with a new campaign launch. Creating a completely new campaign for the line extension is typically the strongest way to communicate and differentiate the new product’s benefits.

However, this strategy carries more risk than does utilizing a campaign with some familiar elements. New campaigns take time to build and have neither a base of campaign familiarity nor product familiarity, so they typically cannot be expected to achieve strong results until consumers have engaged with multiple campaign elements. Completely new campaigns on average take longer to wear in and tend to have less success at generating engagement than launches that use some existing campaign equities. Therefore, they are far less likely to result in halo benefits accruing back to the base brand.

Since base-brand equities are not being exploited, new campaigns for line extensions are also at a clear dis-advantage in generating brand linkage (as is true with advertising for new campaigns and new brands in general). For this reason, campaigns of this type are far more likely to succeed if they include multiple campaign elements, ideally across multiple platforms, to help accelerate the build for the new campaign.

Strategy 3: A new creative approach leveraging key equities from the base campaign

The third option is a blended approach that involves employing specific brand-linked equities while creating a new campaign that focuses on the unique benefits of the line extension. This approach typically uses spokespeople, musical signatures, story types or other brand campaign elements that have been proven over time to successfully link with the base brand. However, the specific focus of the ad executions is on the line-extension benefits. Specific stories, creative approaches and/or other elements are adapted or re-created.

When well-executed, this strategy can capitalize on both the base brand equities and the unique benefits of the line extension. On average, this blended approach has the highest chance of gaining correct brand associations for the line extension and is also the most likely to produce trial of the new product. Striking the right balance is critical, as there is a significant risk of misassociations with the base brand (Figure 2).

Success stories and cautionary tales
Different strategies for different media. To launch a line extension for a major personal care brand, one advertiser chose to utilize different creative strategies for TV and digital campaigns. The TV executions mirrored the base brand campaign but added new visuals built around the efficacy claim associated with the line extension, while a new digital campaign was created that focused strictly on the line extension’s enhanced efficacy benefits.

Early in-market results indicated that both the TV and digital campaigns were engaging and strong line-extension brand ID effectively built awareness of the new product. However, the TV was not effective in conveying the efficacy message and was consequently less successful than the digital campaign in generating trial of the line extension.

In this case, the “story” in the TV spot did not clearly revolve around the efficacy claim and rather was more in keeping with the base brand’s more sensory-focused messaging. Based on this learning, the advertiser modified the TV creative and shifted some of the marketing funds to support the digital campaign until the revised creative was ready to go live. This rapid response proved successful in optimizing first-year results for the launch.

Base campaign with altered brand benefits. A marketer of branded fresh food products launched a prepared frozen-dinner line within the format of the base brand campaign. The key difference for the line-extension ad executions was a shift of storylines from a focus on quality/all-natural benefits to quality/convenience benefits.

In-market, the strong engagement and base brand identity carried over from the original campaign to the line-extension executions but many consumers associated the campaign with the base brand instead of the new product. Because the focus was on convenience and not the quality/all-natural story, the new executions generated negative impact on the all-natural associations for the base brand.

This example highlights the risk of damaging the flagship brand with a line extension that has conflicting or contradictory benefits. The failure to differentiate distinctive products being sold under the master brand can be detrimental to both; the use of a single campaign only heightens the risk of a blurring of benefits that can produce a weakening of the brand franchise.

A completely new campaign. A well-known CPG brand developed a new campaign for the launch of a flavor-based line extension. Across all media, the storylines and visuals all revolved around the rich, authentic new flavors; no brand cues from the existing base brand campaign were utilized.

Early in-market research found very low engagement in relation to the media spend and brand linkage was also weak. While the small percentage of those within the target who were engaged by the advertising understood that the product involved tantalizing flavors, the numbers were too small for the campaign to produce sales in line with objectives. With the benefit of a long-running successful base brand campaign, this advertiser might have been well-served to use some existing campaign equities, while building a strong flavor message into each execution.

Another completely new campaign. A new low-sugar variety of a popular brand was launched with a campaign unrelated to the well-established base brand advertising. The line-extension campaign featured creative and entertaining storylines that revolved around the “half the sugar” benefits of the new product.

The new campaign proved to be highly engaging, produced strong brand identification for the line extension and effectively conveyed the low-sugar message. Moreover, the campaign had a positive impact on new product trial and did not produce any measurable negative effects on the perceived taste of the base brand.

This case provides evidence that a well-crafted campaign for a new line extension can succeed, even without borrowing equities from the base brand campaign.

No one right approach

As illustrated in the preceding examples, there is no one right approach to advertising a line extension and no guarantee of success with any strategy. Considerations for advertisers who are contemplating which road to take:

How different is my new product from the base business? If the new product is very different from the base business, a new campaign may work best as it more easily conveys “new” news and may limit consumer confusion if the brand is competing in a new space. However, unless base brand assets are not relevant to the new product, the advertiser would be well-advised to incorporate, at least to some degree, these base brand-linked equities to help ensure successful brand linkage.

How strong are the existing brand-linked campaign equities? If the base brand has successfully created strong brand-linked equities, it will be advantageous to give a brief nod to these and then move into the new product story. Of course, the equities must be relevant to the line extension, otherwise they will cause confusion as to what the benefits of the new product are.

However, if the base brand equities aren’t solid, the line-extension campaign should not be tasked with incorporating them into its own story. After all, communicating the line-extension benefits will be challenging enough without the campaign being required to contort itself to serve the base brand.

What is the advertising budget? Advertisers with more modest line-extension launch advertising budgets are often best served by not producing an entirely new campaign. If there is a way to launch via adapting an existing campaign, this will undoubtedly be the most cost-effective solution.

Range of research tools

There are a range of both quantitative and qualitative research tools that can be brought to bear to provide pre-launch and early in-market feedback on the performance of line-extension advertising while there is still time to modify the campaign. This consumer feedback can help to dramatically improve the odds for success on the basis of providing clear answers to the following questions.

  • Is the campaign, and the individual executions within it, engaging? Is its engagement performance based on familiarity or on news value or some combination?
  • When consumers engage with the new campaign, what brand do they think it’s advertising – the base brand or the line extension? What is it about the campaign that leads to this conclusion?
  • What are the key messages that consumers who engage with the campaign come away with? Do these messages pertain to the line extension, the base brand or both?
  • Is there any confusion associated with the line extension versus the base brand? Are the known benefits of the base brand maintained (or strengthened), while the line extension benefits are clearly understood?
  • Does the campaign build brand perceptions and purchase intentions for the line extension? Is the brand profile that is emerging consistent with the advertising objectives?
  • How differently do consumers who have engaged with the campaign perceive the base brand? Has the campaign impacted, positively or negatively, their intentions to purchase the base brand?

Stakes are high

Clearly, the stakes are high for line-extension advertising, not only for the new product but for the base brand as well. There are many complex and interrelated issues facing the researcher who is tasked with helping to optimize and provide early feedback on the advertising campaign. A clearly defined set of research objectives that address the unique challenges of line-extension advertising can go a long way toward moving toward a successful in-market outcome.

Ultimately, marketing-mix and sales analyses will identify the extent to which the advertising is successful in generating sales without cannibalizing the base brand. However, research that isolates and diagnoses advertising’s longer-term impact on how the brand is perceived by consumers is also critical to advertisers who need to maintain the integrity of both the base brand and the line extension in the mind of the consumer.