Marketers continually wrestle with determining the most effective ways to measure brand value and the influence a brand has over its consumers. A brand positioning, like a friendship, is a relationship. It is built on trust, communication, and respect and is primarily subjective and ever-changing.
While there is no single tool that can quantify or qualify this relationship, the most successful brands define a set of standards or Key Performance Indicators (KPIs) that reflect the attributes of brand valuation. That matters most to marketers and their brand's end users.
By establishing these KPIs up front and consistently measuring against them, a suite of selected KPIs can holistically indicate the strength and influence of a brand.
The following three examples outline some KPIs marketers use to quantify and qualify the value of brands.
Digital Brand Valuation
The Nielsen Company
Nielsen has created a software platform that measures brand equity metrics in real-time in order to see how a campaign has performed against its goals.
The software measures "brand lift" which is the percentage that increases engagement, opinion, and brand awareness as a result of an advertising campaign. Marketers can use the metric to see how their promotional activity has affected consumer perception of their brand.
Perception is broken down into "awareness, attitude, favourability, intent, and preference" and is measured through web polls with a test and control sample.
On top of customer observations of brands, Nielsen looks at these additional factors when determining brand lift:
Frequency of ad exposure
Creative units or messages
Distribution across sites and networks
Campaign duration
While Digital Brand Effect assesses whether a brand name is strengthened in a consumer's mind following exposure, it does not attempt to quantify or explain its value.
Brand Valuation – How Much Are Brands Worth?
B2B International
Taking a step back from the implications of a valuable brand, this B2B International article looks at the intangible factors that can give brands their value.
The very real, albeit seemingly superficial, differences in brand equity perceptions among consumers are best illustrated in brand valuation case studies.
In one particular study, people were given several pictures of cars and were told to list the car's price. However, the exact vehicle was used, and a different logo was superimposed in all the photos to make it seem like each car had a unique brand. Mercedes was routinely valued the highest, while Volkswagen was consistently worth more than Ford.
So what influences the perception of each brand's valuation?
Beyond the material effects companies have, intangible assets have a massive impact on brand equity.
These include:
Customer loyalty (or goodwill) to the brand
Public trust in the product
The "cool" factor
Corporate social responsibility practices
Skilled labor and patents
Effective company procedures and distribution agreements
While these immaterial assets have value, it is extremely difficult to quantify them easily. During a sale of a company, however, these intangibles are typically represented in the difference between the price paid for the business and the value of its fixed assets at that time.
However valuable immaterial assets like customer loyalty and public perception may be to a brand, they are also the most insecure – they can quickly dissipate following a company meltdown or breach of trust with consumers.
Trump Exaggerating His Net Worth (By 100%) In Presidential Bid
Forbes Magazine
And now for something totally different as well as topical -- Forbes Magazine attempted to review Donald Trump's brand equity.
In the publication's initiatives to divide a brand name from the body around it, Forbes utilized a really simple technique for estimating brand valuation: increasing a firm's licensing incomes by 2.
While Donald Trump states his net worth is north of $10 billion1, he declares his name and also brand alone are worth around $3.3 billion. Forbes examined Trump's funds with their very own formula and also figured his name deserved not much more than $253 million.
CNN
According to CNN, Trump has been quoted as saying: "My net worth fluctuates, and also it goes up and down with the markets and also with mindsets and also with sensations, even my sensations." 2
Without one definitive means to determine a brand name's value, Trump has actually selected to disregard metrics and choose based upon sixth sense.
Quite pertinent in this current political climate, this article highlights exactly how subjective a brand's analysis can be.
These are simply a few instances of tools as well as methods utilized to establish brand name equity, but this checklist is not exhaustive. Brand name value is a contested topic amongst marketing professionals rooted in science as well as assumption.
Conclusion
There are numerous approaches for brand valuation by reviewing the worth of a brand name. A definitive solitary device stays elusive as well as, likely, impractical. Brands carry status, history, and also possibility.
They are a stamp of quality, and also their worth depends on a variety of factors: apparent, intangible, and also emotional - not unlike human relationships. Brand name worth appears best figured out via an alternative set of standards that matter most as well as hinges on consistently and also non-stop tracking versus them.