Why is branding not cheap in the age of AI?

When businesses first approach branding, the common reaction is surprise. Branding sounds abstract, but the cost is very concrete. The feeling of "expensive" arises when branding is seen as just a set of logos, a few colors, a slogan, or a guideline.

But branding is never just those things.

Branding is how an organization is understood when it enters the market. It's the feeling customers have when they first hear the brand name. It's the reason a brand is chosen, trusted, or ignored – sometimes in just a few short seconds. When viewed at that level, the cost of branding is no longer the cost of the image, but the cost of how an organization is present in people's minds.

Branding isn't something that's "made," it's something that's shaped.

Unlike advertising or content, branding doesn't produce immediate results. Branding isn't created to boost short-term sales. It exists to answer a longer-term question: Who is this business in the broader market landscape?

To answer that question, branding forces businesses to look inward: what is core, what is superficial, what can be changed, and what cannot be compromised. This process isn't quick, easy, or done haphazardly.

The cost of branding, therefore, lies in the time spent thinking, the depth of analysis, and the carefully considered decisions, not in simply "making it look good."

In the age of AI, the question isn't "can it be done?", but "how well can it be done?"

Today, with just a simple command, AI can generate a very complete-looking branding strategy. There's positioning, insights, a framework, and a very smooth language. This leads many to believe that branding has become cheaper.

But there's a crucial line: AI can generate logical answers, but branding needs the right answers.

Right for the specific people behind that business. Right for the history that organization has gone through. Right for the very specific market context, culture, and time.

And that line isn't in the data.

AI knows what usually works, but it doesn't know what will resonate.

Branding doesn't operate using a general formula. A strategy might be perfect on paper, but it won't resonate with customers if it doesn't truly reflect the organization's "real people."

In fast-moving consumer goods (FMCG), branding helps brands become memorable, but in luxury, branding determines whether a brand is desirable. In this segment, customers don't buy for functionality; they buy for emotion, symbolism, and the feeling of belonging to a very special world. And to build that world, luxury brands spend on branding at levels that many other industries can hardly imagine.

LVMH, the group that owns Louis Vuitton, Dior, Fendi, Givenchy, etc., is a prime example.

According to its annual report, LVMH's advertising and promotion costs alone have reached approximately €10–11 billion annually (in recent years), accounting for a very large proportion of its total operating costs. This investment is not only for advertising, but for the entire brand ecosystem: fashion shows, exhibitions, flagship spaces, in-store experiences, artistic collaborations, and the preservation of handcrafted heritage.

Source: LVMH Annual Report; Reuters analysis of the luxury industry.

It's noteworthy that LVMH isn't spending money to "sell more bags in the next quarter." They're spending to ensure Louis Vuitton isn't just seen as a bag, but as a cultural icon.

Chanel: When branding is about protecting heritage and emotion

Chanel is a rare unlisted brand, but its publicly available financial reports show that it spends billions of dollars annually on marketing, communications, and brand experience. According to analyses by Business of Fashion and Reuters, Chanel maintains very high spending levels on fashion shows, cinematic image campaigns, and especially on tightly controlling the global brand experience.

For Chanel, branding isn't about constantly creating novelty. On the contrary, they invest heavily in maintaining Chanel's very distinctive emotion: elegance, mystery, and timelessness. That spending is the price to pay to prevent the brand from being swept away by trends and from becoming "democratized" in public perception.

Hermès: Spending on Branding to Maintain Scarcity

Hermès is another special case. They don't chase growth at all costs, they don't expand aggressively, and they even accept customers… waiting. According to luxury industry analyses, Hermès invests heavily in craftsmanship, in-store experiences, and storytelling about its heritage, rather than mass advertising.

Hermès' branding costs lie largely in things not easily visible in marketing reports: training artisans, preserving traditional techniques, and designing retail spaces like art galleries. These are the expenses that allow the brand to maintain emotional scarcity, which is what luxury truly sells.

Source: Hermès Annual Report; Business of Fashion.

Luxury demonstrates a very clear truth: branding is an asset, not an expense.

In the luxury industry, no one asks: "Does branding generate immediate results?"

The real question is: “Without investing in branding, will this brand still be considered luxury in 10 years?” Luxury corporations understand very well that while product value can be copied, brand value is something that cannot. And to protect that value, they are willing to spend heavily, consistently, and patiently.

When viewed from the perspective of luxury, the question “why branding isn’t cheap” becomes very different. Branding isn’t cheap because it doesn’t just create recognition, it creates desire.

It doesn’t just generate revenue, it creates symbolic value.

It doesn’t just help sell products, it helps the brand stand out from the price war.

And that’s why, in luxury – where every detail can become symbolic – branding is never considered an expense. It’s a condition for the brand’s true existence.

Branding is expensive because it requires real-world experience.

Branding rarely fails due to a lack of ideas. It fails because of wrong decisions in seemingly small areas: choosing the wrong focus, speaking the wrong tone, expanding before being ready, or changing too quickly before maturity. These things don't appear in polished case studies. They only become apparent when businesses operate in real life, face real challenges, and pay real prices. Therefore, branding costs reflect the depth of experience and the ability to foresee risks before they become crises.

Ultimately, branding is still about people.

There's a fundamental reason why branding can't be cheap, no matter how advanced technology becomes: a brand carries the soul of an organization. A brand embodies the founder's beliefs, the team's memories, how the organization faced challenges, and what they weren't willing to compromise on. These things cannot be created by algorithms.

AI lacks collective memory, life experiences, and the ability to feel pride or regret.

Meanwhile, it is these very "human" qualities that create lasting differentiation between brands.

Technology makes branding faster, but it doesn't make it cheaper.

AI helps shorten the time and reduce technical costs. But the hardest part of branding – strategic thinking, practical experience, the ability to read context, and preserving the brand's soul – is not only not cheaper, but has become even more valuable in a world where all the answers are readily available.

Branding isn't cheap because it touches the very core of a business.

Branding isn't cheap because it's not about decoration. Branding is the process of shaping how an organization exists, thrives, and is remembered in the long term. In the age of AI, where every brand can look right, only those brands that are truly authentic are trusted. And that "authenticity," ultimately, still stems from people.

CONTENTA CONSULTING