Measure what you should - not what you can
Spark, our new publication designed to ignite and inspire fresh thinking, explores measurement across communications disciplines. Does better measurement inevitably lead to better communications? Or are metrics a distraction from building inspiring, enlightening and engaging messages? In this article we’ll explore how brands measure - and add - value.
This article initially appeared in Spark, issue #1. Download the full report here
The value of brand
Brand equity - the commercial value of brands - is estimated to account for a third of the value of US companies in the S&P 500 index. We see this intuitively in the consumer space - the likes of Apple and Red Bull command substantial premiums over the competition. However, it’s no less relevant in B2B. MerchantCantos casts a caffeinated eye over some of the components of brand value creation.
Few businesses work their brand as hard as Red Bull. As much sports-marketeer as soft drinks firm, Red Bull knows its market and makes absolutely sure its market knows Red Bull. Dominated by cliff-divers, race drivers, BMXers and DJs (and not a can in sight, unless being glugged pre-cliff-drop by a Red Bull emblazoned skiing prodigy), Red Bull’s website is a masterclass in content marketing and a striking illustration of the investment Red Bull makes to support and enhance the value inherent in its brand.
While Red Bull is a conspicuous example, there are countless other brands whose brand value is a key driver of profitability. Apple, Coca-Cola, Google and IBM (‘nobody ever got fired for choosing IBM’) have all sold products and services far more profitably and successfully in otherwise commoditised categories than businesses with weaker brands. How can this value be measured?
Money for nothing and the clicks ain't free
In the pre-internet, pre-web analytics, pre-social media era, brands could carefully control and police their image. Brand building was heightened to the level of creative sorcery. This sorcery produced some big budget and beautiful creative brand campaigns, but the measurements of success focused more on audience recall and sentiment than value.
Today, brand equity measurement is far more sophisticated. The impact of social media on brand is electrifyingly, or terrifyingly, transparent (though the increasing necessity of paid-for tends to work against this). There are highly respected industry rankings published by the likes of Forbes and Interbrand which put a dollar value on the brand. And there’s even an ISO standard for brand valuation – ISO 10668: ‘Requirements for monetary brand valuation’.
On Interbrand’s 2015 ranking, as in previous years, Apple romped away as the world’s most valuable brand, followed by Google, Coca-Cola, Microsoft and IBM. These brands were the strongest on three key levers of value creation: the brand’s financial performance; its influence on customer choice; and the strength of the brand relative to competition.
Day-to-day brand metrics aren't doing the trick
These highly sophisticated metrics clearly show the impact of a brand on business valuation. Nevertheless, what about the metrics marketers use to inform day-to-day decision making? According to surveys jointly conducted by Google and Sterling Brands in October 2013, “Only half of marketers consider(ed) their current brand metrics effective”. While Google and a host of other tech companies are working hard to better measure the efficacy of corporate communications and brand work, there’s a clear need to do better.
A KISS with a fist
Keep It Simple (Stupid) is a maxim MerchantCantos likes to apply when we can. We’re not averse to sophistication (there are few things our consultants enjoy more than interpreting a complex process during a hostile takeover defence or wrestling with a thorny piece of legislation). But communications are about delivering messages that connect with audiences; when decisions need to be made quickly, efficiently and effectively there’s no substitute for (accurate) simplicity.
With this in mind, see opposite a scorecard we sometimes use to review key components of brand value. There’s no shortage of metrics we can introduce but our first question is always: what does this data actually reveal for us? If a simple measure will get you the information you need, that’s the one we’ll recommend.
Equally we’ll go into as much depth as is needed to get the job done. The more sophisticated parameters we assess include sentiment, reputation, influencers, owned and earned media, and a customer’s view of a brand’s competitors. We love metrics, but we want them to be useful – our imperative is to ensure that a client knows what they’re tracking and how and why. Something’s gone wrong if your brand valuation isn’t valuable to you.
Familiarity, trust and preference:
- Trust and respect
Services and capabilities:
Quality of communications:
- Clarity and consistency
- Touch points
Character and approach: