What is the purpose of a strong brand: to attract customers, to build loyalty, to motivate staff? All true, but for a commercial brand at least, the first answer must always be ‘to make money’. Huge investments are made in the design, launch, and ongoing promotion of brands. Given their potential financial value, this makes sense. Unfortunately, most organizations fail to go beyond that, missing huge opportunities to effectively make use of what are often their most important assets. Monitoring of brand performance should be the next step, but is often sporadic. Where it does take place, it frequently lacks financial rigor and is heavily reliant on qualitative measures, poorly understood by non-marketers.
As a result, marketing teams struggle to communicate the value of their work and boards then underestimate the significance of their brands to the business. Skeptical finance teams, unconvinced by what they perceive as marketing mumbo jumbo, may fail to agree necessary investments. What marketing spend there is, can end up poorly directed as marketers are left to operate with insufficient financial guidance or accountability. The end result can be a slow but steady downward spiral of poor communication, wasted resources, and a negative impact on the bottom line.
Brand Finance bridges the gap between marketing and finance. Our teams have experience across a wide range of disciplines from market research and visual identity, to tax and accounting. We understand the importance of design, advertising, and marketing, but we also believe that the ultimate and overriding purpose of brands is to make money. That is why we connect brands to the bottom line.
By valuing brands, we provide a mutually intelligible language for marketing and finance teams. Marketers then have the ability to communicate the significance of what they do, and boards can use the information to chart a course that maximizes profits. Without knowing the precise, financial value of an asset, how can you know if you are maximizing your returns? If you are intending to license a brand, how can you know you are getting a fair price? If you are intending to sell, how do you know what the right time is? How do you decide which brands to discontinue, whether to rebrand and how to arrange your brand architecture? Brand Finance has conducted thousands of brand and branded business valuations to help answer these questions.
Brand Finance’s research revealed the compelling link between strong brands and stock market performance. It was found that investing in highly-branded companies would lead to a return almost double that of the average for the S&P 500 as a whole.
Acknowledging and managing a company’s intangible assets taps into the hidden value that lies within it. The following report is a first step to understanding more about brands, how to value them and how to use that information to benefit the business.
-David Haigh, CEO, Brand Finance
View the Why Brands Matter 2020 Report
"It is an undeniable fact that the COVID-19 pandemic has fundamentally altered our world and how we as humans, interact with our environment.
Its impact has been massive and governments across the world have been encumbered with a multi-faceted problem. Not only have they had to bear the responsibility of finding innovative ways to protect their people but they are also having to find ways to either build resilience to withstand the impact of the COVID-19 pandemic on their economies or finding ways to kick-start economies that have been severely hit by the impact of the pandemic.
Fact is, brands will play a leading role in re-starting the pulse of economies across the world.
Brands convey the source, quality and authenticity of products. Brands represent creativity, innovation and optimism. Strong brands restore consumer confidence and brand competition can rebuild economic strength. In fact, research shows that the importance of brands actually increases during times of crisis.
This is why the IAA is launching a global campaign to promote the role brands can play in driving economic revival.
Our campaign visuals show the benefits brands bring to consumers - choice, trust, identity, pride and passion amongst many others. At the same time, they highlight what will be lost to all of us if we lived in a world without brands. It would be a poorer world with less choice, less clarity and less trust.
These are reasons why brands matter ... and why at the IAA, we love brands!
These indeed are tough times for Countries, People and Brands. But one thing’s for certain: “This too, shall pass!”
As is becoming my custom, let me end this with an African proverb that puts our roles in perspective: It says, “where you will sit when you are old, shows where you stood in your youth”.
In other words, the actions all of us – Governments, Citizens, Brands and Marketeers - take now, will determine where we will be in the future. It is the brands that show up during times of crises that will be remembered when the dust of this pandemic and every other crisis settle. I encourage all of us to commit ourselves to ensuring the success of this campaign. Let me also use this opportunity, on behalf of the International Advertising Association, to call on governments and all brands around the world to work together to create an environment that gives consumers the confidence to invest in brands that matter to them; an environment where brands are protected and nurtured and allowed to fulfill their full potential"
-Joel E Nettey,
World President & Chairman, International Advertising Association
Nations, regions, cities: they are all brands. They provide us with a source of pride and belonging.
While many countries have not covered themselves in glory through the pandemic, either via their slow and inept responses to the COVID outbreak or their handling of its resulting negative economic impacts causing international reputational damage as a result. How lasting is this damage to the nation as a brand? Will it have long-term economic consequences once global trade recovers? Or is this merely all reputational? What type of nation-branding can help recover lost prestige, capitalise on new-found brand equity?
Brands excite our emotions. The world is a richer and more diverse place with brands
Identities bring emotions. We may know things, but without emotions carried by signs and colours, the world will be just much less. Less engaging, less proud and less loveable
Brands equal choice and freedom. Without brands our freedom to choose is constrained
Without branding, consumers struggle to identify those core values or differentiate between products and services, reducing their understanding, lessening their choice.
