The role of advertising in today's confused marketplace environment cannot be overlooked, particularly as it pertains to transferring the terms of competition from substantive to cognitive, and giving a new competitive edge to the largest and most established companies.

Consider the following example from the brewing industry:

Years ago, Coors beer was a regional niche player with such a powerful mystique that people would drive or fly literally thousands of miles to obtain a case.  Then Coors decided to take on Anheuser-Busch and Miller on a national scale.

Coors budgeted about $80 million a year for an advertising war chest. This may seem to be a great deal of money, but in the beer industry, it proved to be not nearly enough.   Miller spent about $200 million per year on advertising at the time, and Budweiser, more than $300 million. Coors was soon forced to retreat from its ambitious plans.

A later analysis showed that Coors had been beaten almost from the moment it began its challenge.  Huge as the Miller and Anheuser-Busch advertising budgets were, they actually represented a proportionately lighter burden for their companies, when considered as a share of total product revenues. Thus, Coors was straining to pay for enough advertising merely to flail ineffectually at me two giants; while for the giants, paying for a knockout blow of advertising barely amounted to noticeable exertion.

The pattern tends to be replicated wherever consumers are unable to make meaningful evaluations of product differences, and where a few established behemoths preside over the existing market. And in today's marketplace, these conditions are found quite frequently.

It is, therefore, by an odd sort of logic, only natural that an executive of a prestigious consulting firm used this example to lecture his corporate constituency in the pages of the Harvard Business Review about the recklessness of underspending on advertising, cautioning them never to "raid" their advertising budgets merely to trick up earnings for a few quarters or so.  

The consultant’s choice of the term "raid" conveyed the distinct impression that in today's world, underspending on advertising may be an imprudent (and perhaps even disreputable) management gimmick, on a level with eroding the capital base or having a fling at junk bonds.

But then, perhaps it is.