In light of today’s highly competitive business environment, we have put together a branding report that aims to help you create a successful marketing strategy. A strong brand not only helps companies to differentiate themselves from their competitors, but also enhances their reputation and credibility among consumers. As a result, the demand for branding services has seen a significant increase in recent years.
This report will examine the trends in branding budgets and the factors driving the demand for branding services, aiming to provide insights into the branding industry’s growth potential and the opportunities and challenges it presents for businesses operating in this space.
Demand: Branding & Positioning is the 5th most popular marketing service
#5
Most popular agency service on Sortlist.com
France
Most active country requesting this expertise
15%
# of projects from food industry, the most interested in branding
Between January 2019 and February 2023, Sortlist has received over 37,600 Branding & Positioning projects, to one of thousands of branding agencies. That makes the expertise the fifth most popular on the platform.
Of these projects, France leads the way, accounting for a full 9.5% of projects posted, followed by India, Spain and Belgium, each representing between 7 and 8%.
But, in times of recession, how are companies valuing branding services, compared to overall trends? For this branding report, we've found out.
Branding in times of recession: Resilient despite uncertainty
While the graph above may indicate solid demand, with perhaps a slight, steady increase throughout 2022, analysing the average budget offered tells a different story:
As average budgets skyrocketed over the tail end of Q3 2021 and through Q4 of the same year we've seen a tailing off throughout 2022 as economic conditions meant tighter belts for businesses and individuals alike.
Demand for branding services, however, has remained slightly more resilient in comparison, as our branding report reveals.
Why branding stays strong(er) in a recession
There's a clear correlation between investment conditions and agency budget offered, indicating a parallel challenge for agencies and brands across the board.
2022 saw the death of growth-at-all-costs mentality, and in 2023, profitability is king.
And for many, companies, marketing budget is the first to be cut: after all, with less money sloshing around the economy, clients often have less money to spend. Many can't spend the same to acquire clients, only to get less from each one.
Yet it's been seen time and again that spending through a recession has a multiplier effect on revenue and market share on the other side. Research from BCG states that for every $1.00 saved from near-term reductions, $1.85 has to be spent to recover that lost market share.
And while it's undeniable that purchase patterns change in times of recession, reducing ROI on much of your ad spend, the ROI of brand building remains the same. Money might be tight, but brand recognition... there's an infinite supply.
That's a focus we see from brands in the relative resilience of budget vs. the economic conditions:
When making this branding report, we decided to look at Vrbo, which used the opportunity of the 2020 coronavirus crisis to outspend major competitor Airbnb 10-1.
What's noticeable is that over 90% of their 91 million spend was on brand-building online video. They cut search ads to match consumer spending, but moved that budget to build their brand and focus on the high-spending family segment.
The result: Vrbo made a quicker, and more successful return to post-pandemic success, despite its initially limited brand recognition following a renaming process just as the pandemic hit. It ended a difficult period by taking a significant amount of market share from Airbnb, and became a household name in the process.
Source: Skift
Branding in a crisis: "Companies are investing more in clarifying their message"
We reached out to Belgian branding agency Nemesis for their perspective on the impact of a brand in a recession and how it can be a powerful way for brands to re-allign and re-invent themselves.
But they don't talk about logos, ads or visuals. Rather, they focus on the impact of a brand on the inner workings of a company: making it more efficient, more united and even more motivated.
They define branding as the expression of the identity and vision of a company, outside, but (most importantly) to the company and its employees. For them, branding can help businesses survive and thrive in a competitive market by aligning their teams, communicating effectively, adapting their offerings, and motivating the company in pursuit of a common goal.
In a recession, you want your entire team to pull together, in the same direction. And the brands that outperform others during a recession. Everyone needs absolute clarity on where they're going.
That is why I think branding is not affected as much, because companies are investing more in clarifying their message, understanding where they're going and federating their teams.
Johan Wouters - Nemesis
And that's perhaps different to the perception of what a branding agency typically is, and the impact it has. Branding is linked in the public imagination to the visual, and the external, but it's so much more than that.
It can veer even towards the operational, the commercial. And it can have a clear business impact. Take the example of marketing spend:
A strong brand amplifies anything you might do in marketing.
If I'm a new marketing manager with a budget to raise awareness, reduce cost per click and get me more leads. and I don't have clear guidance about who we are and where we're going I'll take a shotgun approach. Pay some subscriptions on PR websites, do some ads, change my logo...
but I have no clue why I'm doing it. I'll just do stuff. If the vision is super clear, I know what to do, who to talk to, what the messaging is... decisions suddenly become easy.
Johan Wouters - Nemesis
Which countries are investing in branding?
800%
Germans are 800% more likely to think a brand isn't doing enough to combat climate change
Germany
The country that searches most for branding - 7.5% of companies
20%
The decline in trust in German brands from 2014 to 2019
Looking at local search volume, and the number of companies within a given country, can give an idea of the importance of branding on a regional level. Or, at least, the importance each nation gives to their brand.
Search volume only tells us so much as, of course, each country has different populations and market sizes.
So to get a true picture of regional demand for branding services, the size of each market, in this case the number of brands in a country, should be taken into account for this branding report.
Plotting the variations of Sortlist's major markets over the last five years looks something like this: giving a perhaps surprisingly wide variety by market - with Germany and the Netherlands far away at the head of the table when it comes to interest in branding services.
Trust and branding in Germany: 8x likely to think businesses aren't addressing climate change properly
Germany is a notable frontrunner - we see search dipping consistently over the past five years only to shoot back up in 2022.
There's an important point to be made there about regional sensibilities and demands: 53% of German domestic consumers buy or advocate for brands based on beliefs and values.
German consumers are 8X more likely to think businesses aren't addressing climate change sufficiently, and 6x more likely to be concerned regarding the trustworthiness of information.
Yet the Edelman Trust report in 2019 highlighted declining trust in German brands, dropping a full 20% in the period 2014 to 2019.
This may have something to do with the a knock on impact of scandsals from Volkswagen's emissions to Deutsche Bank - but it's clear that what was once a nation of highly trustworthy brands has had work to do.
The most recent report shows a 7% increase to 50% - Perhaps in part due to the clear drive for branding and positioning services.
How much does branding cost in 2023?
€14,250
Most common price of a branding project
€1m
Biggest branding project on Sortlist: 70x bigger than most common value
€79m
Overall value of branding and positioning projects since 2019
Within the Sortlist platform, we've got tens of thousands of data points, which can help us get a grasp on a question as complicated as "how much does branding cost."
Because, as ever, "it depends."
Nonetheless, we've analysed the average budgets of projects posted (over 37,000) and agency projects uploaded to their portfolios (3,000) to get an idea:
The reality is, that sometimes business owners come to the platform with a budget on the low side, and agencies are understandably proud of their larger projects, which might push the initial budget offered.
So the mid-point, as shown in the above chart, is probably a good place to start.
Why the median might mean more
Nonetheless, there remain some works that skew the average still more.
Take the case of German agency R211 - who in 2020 took on the challenge of reimagining the identity of heritage furniture brand Hülsta:
Beautiful work, but beyond the realm of purely branding and positioning.
The work itself encompassed advertising, branding & positioning, copywriting, graphic design, photography and perhaps most significantly, website creation in a 360 degree project costing €500,000: 25 times more than the mid-point shown in the above graph.
It's common for a branding agency to also offer other services (and for more on that, read on in the next section).
Sometimes these services are extensive, running far beyond what you might consider "normal" branding services. That's because branding is a broad church, and that can sometimes cloud the picture when we want to benchmark the price of specific services.
Looking at the data, we see that the majority of projects (the 40th to the 60th percentile) fall between €8,500 and €20,000.
But that belies some of the strong variations that can be seen from country to country:
That median value might be most representative in terms of the weight of projects posted (more works have been uploaded to agency portfolios within that range than in any other).
And whilst there are clearly more companies that can afford to invest in a $10,000 branding project: that doesn't necessarily mean that's where most money's being invested.
Looking at the budgets offered on the platform:
We can see that $18 million worth of branding projects were posted in the $20-$30k range, and $12 million of projects were posted worth $90k or more.
The smaller $10k projects are common, of course, but that's not necessarily where the investment is.
What kind of agency specialises in branding?
36
Avg. branding agency size: 12% smaller than the overall average
Spain
Country with highest proportion of branding agencies (46% of total)
64%
% of branding agencies that have between 1 and 10 employees
The majority of agencies who work on branding and positioning are on the small side: 64% globally have between 1 and 10 employees. Though this figure may seem high, it is in fact in line, broadly, with overall averages: small agencies are more common.
There are, however, strong regional differences in some major markets when it comes to branding agency size - as you can see in the below graphic:
Most common expertise combinations
If a tree falls in the wood, and nobody's there to hear it, does it make a sound? If a rebranding takes place, and nobody visits the website, does it matter?
An agency rarely works in isolation, and a brand doesn't go to work without a foundation to build upon. That might be a new website, new content, or a new client acquisition strategy: but it's common to see a branding agency also offer other services, to provide integrated campaigns that make to the a new positioning shine.
Therefore it's often useful to look at the most common intersections of expertises, to understand the most common marketing mix.
While graphic design (in third position here) may come as no surprise (given the closeness of a brand and its visual identity) what stands out is how often banding and positioning goes hand in hand with lead generation and promotional activity.
Who better to design a digital strategy for a brand, than the agency that was hands-on, dedicated to its creation? And an agency creating both brand and managing social media can be trusted to strike the right tone, and nail any copy to strike at the heart of the company's position in the market.
It's clear that brand doesn't stand alone, and in 2023 it forms just one part of a coherent digital mix.
What companies are investing in branding?
3x
Branding budgets in healthcare were 3x larger in 2022 than 2021
Food
Industry that invests most in branding and positioning (15%)
35%
Increase in branding projects in healthcare since the pandemic
Food for thought: 13% of branding agencies specialise in food branding
Why do you buy one banana, rather than another? Brand (and bruising, perhaps).
The first bite is taken with the eye: and the food industry is crowded, competitive and undifferentiated. That's what makes brand a major pillar of any food go-to-market strategy, and one that's often just as important as the product itself.
And fruit offers a good test case, as a largely undifferentiated product that's often carefully branded to create market differentiation. Take Cotton Candy® grapes, Sweet Sensation® pears and Staccato® cherries.
For our branding report, we looked at one study by Cornell University, in which consumers were asked how much they would be willing to pay per pound for a variety of apples. Empire, Fuji, Honey and Piñata all fell between US$1 and US$1.20 per pound.
Yet a new variety, yet to be named, was pegged at US$1.15 under the name Williams, and at US$1.18 per pound with the name Burgundy Beauty, but a full 23% more (US$1.41) when they called it Flavor Haven.
A clear impact of brand on the bottom line (although the final name given was SnapDragon).
More than a name
And it's not just name, but narrative.
As part of a prevailing trend in favour of local produce and locally produced foodstuffs, one study analysed the authenticity of the brand narrative surrounding various products, both local and global.
In the case of a product with a "low authentic" brand narrative, the local product was chosen 53% of the time, with the global brand the remaining 47%.
When the brand narrative was considered highly authentic, however, this preference reversed; 77% of consumers preferred the global brand with highly authentic brand narratives.
Source: Local versus global food consumption: the role of brand authenticity by Petra Riefler
A powerful statement as to the importance of brand story in consumer choice of food products, and as the data behind this branding report goes to show, more branding agencies on the platform specialise in food branding than any other expertise (13%).
Building healthcare brands: 25% increase in branding projects in the industry
2022 saw a 25% increase in branding projects in the healthcare sector, and project volume is up a full 35% compared to pre-pandemic levels.
But perhaps more striking is the volume of investment: not only are more healthcare branding projects being posted than ever, but more budget is being dedicated to the healthcare sector:
But why healthcare?
Around the world the private healthcare industry displays rapid growth: with the private insurance market crossing the trillion euro mark in 2015, it's due to more than double in the following decade.
The pandemic has made clear the need for strong healthcare matching the needs of every member of a society only as strong as its weakest link.
But with COVID-related expenditures one of public health’s many challenges — including climate change, health inequities and a worsening infrastructure — new partnerships across public and private health care are set to form the new paradigm.
To this backdrop, the rapid digital transformation of the healthcare industry, with services such as virtual care and an increasing adoption of cloud services offer new opportunities for private sector players.
And the sensitive nature of data, and the paramount need for trust inherrent in healthcare services means that a strong brand, which communicates these values, is fundamental to success.
2023: The year e-commerce overtakes retail
E-commerce is growing, and retail is shrinking. That's not headline news.
But the concurrent increase in demand for one, and decrease in the other, is indeed striking.
When we look at the variation from the mean for retail branding, we see weak demand throughout 2022, despite pandemic related restrictions coming to an end.
And over the same period, demand for e-commerce has been as strong as retail has proven to be weak.
And the fact that the full maturity of the industry has come to bear can be seen in the trend of average budget offered.
Selling online is no longer the preserve of the big players, but rather a necessity to compete in the modern landscape.
About the Sortlist Data Hub
The Sortlist Data Hub is the place to be for journalists and industry leaders who seek data-driven reports from the marketing world, gathered from our surveys, partner collaborations, and internal data of more than 50,000 industries.
It is designed to be a space where the numbers on marketing are turned into easy-to-read reports and studies.
