Millward Brown
WPP
Y&R
Omnicom
TBWA
Interbrand Brand Metrics
“When given a monetary value, a
brand increases its power as a business driver and planning tool”
Joanna Seddon
CEO Millward Brown Optimor
Collecting the data
Data for the evaluation is first drawn from the researched opinion of thousands of brands in
17 categories by knowledgeable consumers and B2B customers across 31 countries
Bonding The brand’s advantages are unique:
“it’s my brand”
Advantage The brand is better than most brands in the category
Performance The brand is acceptable quality and does what it is supposed to
Relevance The brand meets their needs
Presence They are aware of the brand
No Presence Have not heard of the brand
Data for the evaluation is also is sourced from Bloomberg, analyst reports,
Datamonitor industry reports, and
company filings with regulatory bodies.
corporate
branded intangible earnings X brand contribution
Portion of intangible earnings attributable to the brand, this percentage originates from the consumer and B2B customer research
“The Brand Contribution is rooted in real-life
customer perceptions and behavior, not spurious
‘expert opinion’: in some categories, brand is important — luxury, cars, or beer, for instance. In
categories like motor fuel, on the other hand, price and location play a very strong role.
Furthermore, as markets develop, consumer priorities and the role of brand may change.”
Millward Brown
BrandZ 2009 report
branded intangible earnings X brand contribution X brand multiple
Growth potential of the branded earnings is taken into account. The multiple, that ranges between one and ten, is derived from financial projections,
market valuation and Voltage
BrandAsset Valuator (BAV) is Young &
Rubicam's comprehensive global database of consumer perceptions of brands:
350,000 consumers,19,500 brands, 44 countries, 173 studies since 1993
The BAV research is based on four key pillars: differentiation, relevance,
esteem and knowledge
Differentiation
Measures the strength of the brand’s meaning and distinctiveness.
Successful brands are strongly
differentiated. The more differentiated, the more likely it will be used and less likely it is to be substituted.
Relevance
If a brand is not relevant, or personally appropriate to consumers, it will not
attract or retain them. Relevance powers penetration.
Relevance + Differentiation = Brand Strength
Differentiation Relevance
D>R
The most healthy brands have greater differentiation
than relevance. “Room to grow, brand has power to
build relevance”.
Differentiation Relevance
D<R
More relevance than
differentiation equals potential commoditization. “Uniqueness
has faded, price becomes the dominant reason to buy”.
Esteem
Esteem reflects popularity and quality.
Esteem relates to how well a brand fulfills its implied or stated consumer promise. It requires differentiation and relevance to have preceded it, but it
can outlive both of them
Knowledge
Knowledge captures intimacy and
understanding, it is the end result of all the marketing and communications
efforts and experiences consumers have had with a brand. Consumers understand and remember those brands that demonstrate high
knowledge.
Esteem + Knowledge = Brand Stature
Esteem Knowledge
E>K
More esteem than
knowledge means “I’d like to get to know you better”.
The brand is better liked than known.
Esteem Knowledge
E<K
Too much knowledge can be dangerous. “I know you and
you’re nothing special”. The brand is better known than liked.
Brand Stature
(Esteem & Knowledge)
Brand Strength (Differentiation & Relevance)
low high
high
BAV Power Grid
Brand Stature
(Esteem & Knowledge)
Brand Strength (Differentiation & Relevance)
low high
high
Brand Stature
(Esteem & Knowledge)
Brand Strength (Differentiation & Relevance)
low high
Brand Stature
(Esteem & Knowledge)
Brand Strength (Differentiation & Relevance)
low high
high
03 06
http://www.thebrandbubble.com/explore/
give it a try at
Best known of the brand valuation methodologies. Created to find an
approach that incorporated marketing, financial and legal aspects
photo by Darren Hester
Interbrand starts by assigning sales to individual brands &
projecting five years ahead
intangibles intangibles
Identifies earnings attributable to intangible assets and identifies
brand’s contribution, this multiple is known as the role of branding index
Future earnings are discounted to arrive at net present value
Discounts calculated with current
interest rates and the brand’s overall risk profile
Criteria Weighting Notes
market 10% brands in growing or established markets where
consumer preferences are more enduring would score higher
stability 15% long-established brands in any market would normally score higher, because of the depth of loyalty they
command
leadership 25% a market leader is more valuable: being a dominant force and having strong market share matters
profit trend 10% long-term profit trend is an important measure of
brand’s ability to remain contemporary and relevant to consumers
support 10% brands receiving consistent investment and focused support usually much stronger, but quality of support is important
geographic spread 25% brands that have international acceptance and appeal are inherently stronger than regional or national brands
protection 5% securing full protection for the brand under international trademark and copyright law
“The final result values the brand as a
financial asset. BusinessWeek and Interbrand believe this figure comes closest to
representing a brand's true economic worth.”
BusinessWeek
Developed by south african academics,
adopted by TBWA’s Disruption consultancy, now with Prophet
featured in kevin lane keller’s strategic brand management
Applies an accounting definition of an asset - resources under the control of an
enterprise that will generate future
economic benefits for the enterprise - to brands
economic profit
starts by calculating(economic profit is the amount of after-tax profit a company earns that exceeds the cost of capital the company has used in operating the business)