How long is a piece of string - Interbrand

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					     Brand & Reputation Management




     How long is                                                                                                                                  Measuring brand value

     a piece of string?
                                                                                                                                                                             top 20 best defined brands
                                                                                                                                                                             Global study, by brand consultancy Clear, covering
                                                                                                                                                                             22,000 people and based on consumer desirability of brands




     Measuring brand equity is essential to improve return on
     investment, but what should you measure? Communication,                                                                                                                       01          +5%                                                                          02      +9%                                                                                 03        +0%



     marketing and public relations struggle to show meaningful
     measures: awareness, visibility and likeability simply aren’t strong
     enough to show business value, writes Kate Hilpern                                                                                                                             11         +5%                                                                          12      +4%                                                                                 13        +5%




      VALUE


     Ȗ There was a time when branding           Our constantly changing per-            Undoubtedly, the key parameter
                                                                                                                                                Global brands top 20
                                                                                                                                                                                                                                                                                  2012 global brand values in $billions
     was perceived by the consumer as         ception of brands adds a further        to which brand equity is linked is                                                                                                                                                          ranked by BrandZ equity database
     nothing more than a logo on a pack,      challenge to how brand value is         sales performance. “Connecting
     which helped to differentiate one        measured, says James Withey,            brand equity to sales performance
     company from its competitors. Back       head of brand insight at Precise        remains the Holy Grail of market-                                                        01                                        02                                     03                              04                                           05                                          06
     then, of course, the touchpoints         Media. “Consumers increasingly          ing, which is why we continue to
     between a brand and a consumer           expect brands to engage in dia-         search for it,” says Mr Lastra. “But
     used to be finite and measurable.        logue with them, be transparent in      it’s an elusive connection to make                 $183bn                                                $116                                    $108                                   $95                                           $77                                        $74                                         $7
       “Even as brands became cleverer        their communications and honour         because you can reach people with
     about where they broadcast their         their promises. Brands are shifting     your message who love you, but
     message, it was still manage-            away from being ‘assets’ owned by       either can’t find you or, if they do,
     able,” says marketing strategist         a corporation,” he explains.            can’t afford you.” The link between                             Apple                                     IBM                                      Google                             McDonald's                                Microsoft                                    Coca-Cola                                       Mar
     Cesar Lastra. “But there is now            The spread of social media also       brand value and customer loyalty
     a formidable catalyst known as           means that consumers no longer          can also be tenuous: “Loyalty,
     advocacy. The measurable part of         consider themselves solely as           ideally, is a function of repeat pur-                                        11                                         12                              13                              14                                 15                                            16                                   17
     the message does not end with the        individuals, but as members of a        chase, not repeat brand declara-
     consumer. It is either amplified in      wider brand community. “Apple’s         tions of love.”                                                $46                                   $43                                   $42                               $40                              $38                                      $37                                     $34
     an exponentially positive form or        customers are likely to be pas-           Others argue that brands connect
     torn apart in a drastically negative     sionate, not only about the brand’s     with people culturally, economi-                             General                           Vodafone                                      ICBC                         Wells Fargo                              Visa                                   UPS                               Walmart
     way, effectively undoing that built-     products, but also about what the       cally and emotionally, and that a                            Electric
     up equity in one fail swoop.             brand stands for and what it says       strong brand will therefore earn
       “The Coca-Cola Company calls           about them,” says Keith Glanfield,      customer loyalty. Loyalty can also
     this ‘impressions’ versus ‘expres-       marketing tutor at Aston Business       help to build a brand’s reputation
                                                                                                                                                 YouGov BrandIndex by-annual league table \
     sions’: impressions being all the        School. As the power of the brand       through word of mouth.                                     scores based on public perception of brands
     messages the consumer receives           increasingly lies in the strength of      Current academic research cer-
     from the brand and expressions           the brand community, he believes        tainly indicates that the more loyal                          58
     being everything that is amplified       measuring brand equity will             the customers, the more loyal the
     by the consumer. The difficulty          become harder still.                    employees, suggesting that these                                             55
                                                                                                                                                                                  54
                                                                                                                                                                                                                                                                                                                                                                         top 20 uK
     in measuring brand equity is,
     therefore, about the shelf life of the
                                                Mr Glanfield adds that many
                                              of the views that have devel-
                                                                                      factors are interconnected, says
                                                                                      Aston Business School’s Mr Glan-
                                                                                                                                                                                                      52                52
                                                                                                                                                                                                                                                                                                                                                                              first
                                                                                                                                                                                                                                   48
     branded message and the distinct         oped around branding have been          field. “Research has found that the                                                                                                                        47
                                                                                                                                                                                                                                                                  45
     clarity of when ‘branding’, as we        based on the fast-moving con-           performance of the brand in the                                                                                                                                                            43        42
     know it, is happening.”                  sumer goods (FMCG) sector. “But         eyes of employees – and their sense                                                                                                                                                                                 41
                                                                                                                                                                                                                                                                                                                             39
                                                                                                                                                                                                                                                                                                                                              38                   38
       The speed at which brand equity        branding doesn’t only apply to          of belonging to a brand community                                                                                                                                                                                                                                                           38                38             37
     can change dramatically shouldn’t        FMCG products and categories – it       – influences their attachment to
     be underestimated, says Brian Mil-       equally applies to service brands,      the organisation and the effort they
     lar, director of strategy at Sense       corporate brands, B2B [business-        put into supporting the brand.”
     Worldwide. “Brands, such as Peb-         to-business] brands and govern-           Mr Lastra believes that it is
     ble and Double Fine Adventure,           ment organisations, charities and       “employer-brand” and the evolution
     became overnight sensations on           social enterprises, all of which        of “social business” which signify the
     funding platform Kickstarter way         have their own particular special       latest expressions of brand equity.
     before they’d even launched a            and defining characteristics when       “Years ago, there was a book called
     product,” he says.                       it comes to brand measurement,”         The Cluetrain Manifesto. It said that,
       It doesn’t take much for angry or      he says. “Charities don’t have          if you really wanted to know what
     disgruntled customers to prompt          traditional ‘sales’ transactions, for   was happening with your brand,
     a movement on Facebook or for            example; corporate brands have          you had to go up and down the ranks
                                                                                                                               source: CityAM




     companies to lose control of the         shareholders to please; services are    of your employees. Today, they
     conversation with poorly timed           intangible and difficult for custom-    are chatting internally and using
     brand campaigns on Twitter, says         ers to imagine.”                        Twitter and Facebook to amplify
     Thomas Brown, head of insights             The upshot of this is that the        these messages,” he says, pointing
     at The Chartered Institute of            equity of a brand is no longer con-     to companies such as Nokia that
                                                                                                                                                                                                                                 Heinz I 06
                                                                                                                                                                                               Marks & Spencer I 04




                                                                                                                                                                                                                                                                Sony I 08
                                                                                                                                                                                                                                                                             Boots I 09
                                                                                                                                                                             BBCiPlayer I 03
                                                                                                                                                               Google I 02




                                                                                                                                                                                                                      BBC I 05




     Marketing. “Two examples are             fined to the measures historically      have brand-evangelist programmes
                                                                                                                                                                                                                                              John Lewis I 07
                                                                                                                                                Amazon I 01




                                                                                                                                                                                                                                                                                          Cadbury I 10


                                                                                                                                                                                                                                                                                                                            Channel 4 I 12


                                                                                                                                                                                                                                                                                                                                                                   Samsung I 14


                                                                                                                                                                                                                                                                                                                                                                                                    Colgate I 16
                                                                                                                                                                                                                                                                                                                                             Cathedral City I 13


                                                                                                                                                                                                                                                                                                                                                                                  Maltessers I 15
                                                                                                                                                                                                                                                                                                         Sainsbury's I 11




     HSBC overturning its student             used – market share, profit mar-        whereby employees volunteer to
     overdraft fee decision because           gins, consumer recognition of logo,     bring the brand to life in the work
     of a campaign led by NUS on              to name a few. With the goal posts      environment and beyond.
     Facebook and the Qantas luxury           having changed so dramatically, it’s      Graham Hales, chief executive
     hashtag campaign on Twitter              no wonder measurement of brand          of Interbrand London, says all
     being hijacked by unhappy pas-           equity is at such an interesting        these elements impact a brand’s
     sengers complaining about delays         inflection point, concludes Precise     value and that businesses are, in
     and service.”                            Media’s Mr Withey.                      fact, welcoming a tighter and more


10                                                                                                raconteuronthetimes.co.uk                                   theraconteur.co.uk                                                                                                 twitter.com/raconteurmedia
                                                                                                                                                                                                                                                                                       Brand & Reputation Management




                                           Achieving a measure of brand equity is a contentious issue with varying methods, incorporating different
                                           elements, producing differing results. Here are four ways of ranking or putting a value on top global brands




                                                04        +4%                           05       +2%                                       06   +4%                              07   +4%                                08    +5%                                     09     +5%                                        10    +6%




                                                14        +0%                           15       +5%                                       16   +7%                              17   -1%                                18    +8%                                     19     +7%                                        20    +7%




                                                                                                                                                                                                                                                                                                                       source: Brand Desire, 2012




                                                                                                                                                                                                              08                      09
                                                                                                                                                                                            07                                                             10

                                                                                                                                                                                                5               $ 33                 $29                   $28
                                                                                                                                                                                                                                                                              11

                                                                                                                                                                                             $3
                                                                                                                                                                       06
                07                                      08             09               10
                                                                                                                                                                                 6                                                                                       $28                      12

                                                                                                                                                      05                    $3                                                                                                               $27
      74                                  $69                     $49              $47                                                                                                                                                                                                                            13
                                                                                                                                                            3
                                                                                                                                                        $4




                                                                                                                                                                                                                                                                                                            $25
                                                                                                                                      04                                                                                                                                                                                       14
                                                                                                                                                                                                                                                                                                                        $2
                                                                                                                                           5




      rlboro                                    AT&T              Verizon       China Mobile
                                                                                                                                                                                                                                                                                                                              5
                                                                                                                                         $5




                                                                                                                                                                                                                                                                                                                                           15
                                                                                                                                                                                                                                                                                                                                  $2
                     18                                  19            20                                             03                                                                                                                                                                                                               5
                                                                                                                               $ 59




        $34                                     $33               $27                                                                                                                                                                                                                                                                            16




                                                                                                                                                                                                                                                                                                                                       $2
        Amazon                          Facebook                Deutsche




                                                                                                                                                                                                                                                                                                                                           4
                                                                Telecom                                                                                                                                                                                            6   6                                                                                17
                                                                                                                                                                                                                                                           1                       9
                                                                                                                                                                                                                                                 58                                      9




                                                                                                                                                                                                                                                                                                                                           $2
                                                                                                   02                                                                                                                                                                                        -15
                                                                                                                                                                                                                                           10
                                                                                                               $ 70




                                                                                                                                                                                                                                                                                                       10




                                                                                                                                                                                                                                                                                                                                           3 $2 3 $19
                                                                                                                                                                                                                                      6                        9   1 0 11 1 2
                                                                                                                                                                                                                                                                              14
                                                                                                                                                                                                                                                      17                                 8                                                              18
                                                                                                                                                                                                                                                  7




                                                                                                                                                                                                                                                                                                            3
                                                                                                                                                                                                                           0




                                                                                                                                                                                                                                                                                             15
                                                                                                                                                                                                                                            6




                                                                                                                                                                                                                                                                                                                 20
                                                                                                                                                                                                                         27




                                                                                                                                                                                                                                                                                                  13
                                                                                                                                                                                                                                      5




    K brands                                                                                                                                                                                                                                                                                           19
                                                                                                                                                                                                                                                                                                                                                        19




                                                                                                                                                                                                                                                                                                                       6
                                                                                                                                                                                                                  -3


                                                                                                                                                                                                                                  4
                                                                                              $72b n




                                                                                                                                                                                                                                                                                                            16
    t half 2012
                                                                                                                                                                                                                              3




                                                                                     01



                                                                                                                                                                                                                                                                                                                         5
                                                                                                                                                                                                               8




                                                                                                                                                                                                                                                                                                             20
                                                                                                                                                                                                                              2




                                                                                                                                                                                                                                                                                                                                       $17
                                                                                                                                                                                                                                                                                                                                                   20

                                                                                                                                                                                                                                                                                                                           16
                                                                                                                                                                                                                                                                                                                 22
                                                                                                                                                                                                              2

                                                                                                                                                                                                                           1
                                                                                       Rank

                                                                                              Brand value
                                                                                                ($ billions)




                                                                                                                                                                                                              Previous
                                                                                                                                                                                                                  rank


                                                                                                                                                                                                                          Change
                                                                                                                                                                                                                             (% )




                                                                                                                                                                                                                                                Assessment of brand value based on
                37                 37           37                                                                2011 ranking of the top 20 brands                                                                                             financial performance, the role of brand in the
                                                                                                                                                                                                                                                purchased decision process and brand strength
                                                                                                                                                                                                                                                                                                                         source: interbrand



                                                                                                                  01       I    Coca-Cola                    05   I   General Electric              09    I    Disney                                  13      I   Cisco                                    17    I    Samsung
                                                                                                                  02       I    IBM                          06   I   McDonald's                    10    I    Hewlett Packard                         14      I   Nokia                                    18    I    Louis Vuitton
                                                                                                                  03       I    Microsoft                    07   I   Intel                         11    I    Toyota                                  15      I   BMW                                      19    I    Honda
                                                                                                                  04       I    Google                       08   I   Apple                         12    I    Mercedes                                16      I   Gillette                                 20    I    Oracle




                                                                     measured agenda. The internet, he                                the impact a brand has in driving cus-          has truly embraced brand valu-
                                                                     insists, actually makes accessing                                tomer choice, based on an in-depth              ation. “Samsung now seeks out
                                                                     market information and research                                  analysis of demand drivers in the cat-          markets where purchase deci-
                                                                     easier. “Brand valuation and equity                              egory. The second is “brand strength”           sions are directly attributable to
                                                                     studies can help to measure peaks                                analysis. Interbrand has identified             consumer sentiment towards the
                                                                                                                                                                                                                                                 Connecting brand equity to sales
                                                 Bosch I 20




                                                                     and troughs in popularity,” he                                   the ten factors that it believes cre-           brand. And the company creates
                Waterstones I 18
                                   Dyson I 19
Freeview I 17




                                                                     says. “They show how brands are                                  ate a strong brand; it uses these to            business unit objectives based
                                                                     currently creating value and they
                                                                     highlight opportunities for future
                                                                                                                                      benchmark a company against its
                                                                                                                                      competitors. Finally, it combines
                                                                                                                                                                                      around brand strength,” he says.
                                                                                                                                                                                      Samsung has managed to differ-                             performance remains the Holy
                                                                     value creation.”                                                 this customer analysis with a finan-            entiate itself from a plethora of
                                                                       Interbrand's approach to brand                                 cial model of the business to place a           cheap imitators seeking to exploit                         Grail of marketing, which is why
                                                                     valuation has three key components,                              financial value on the brand.                   its success and it has overtaken
                                                                     he says. The first is a “role of brand”
                                                                     analysis. This seeks to understand
                                                                                                                                        Mr Hales points to Samsung as
                                                                                                                                      a great example of a business that
                                                                                                                                                                                      Sony as the world’s number-one
                                                                                                                                                                                      brand in televisions.
                                                                                                                                                                                                                                                 we continue to search for it

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