the grass is greener on the internet

No value in brand valuation?
February 20, 2009, 11:37 pm
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I get the feeling Wally Olins likes to stir things up.

Yes, THAT Olins…of Wolff Olins fame, though now with Saffron.

Design Week has just published an excerpt of his latest book, ‘The Brand Handbook’, in which he claims that brand valuation is absolutely useless for all purposes except ego boosting.

It’s harsh but he does have a point when he says that it’s incredibly difficult to quantify a brand. A brand is not a financial value. To get anywhere near close to an accurate measurement you’d need an algorithm more complex than Google search.

Brand value is also more volatile than politics in a recession and can be just as irrational.

And yet Interbrand still ranks brand value yearly, with companies like Coca-cola, Nike, Apple and Disney coming out on top.

Is it just for ego?

In short…I’d say no. It’s an attempt by management to recognise that there are intangible assets that affect a company’s performance. Brand value is a significant factor in decision-making – the easiest way to make sure that it would be considered was to incorporate it into existing processes by giving it a numeric value.

Companies demand a minimum return on any investment made. The issue is how to justify the monetary investment needed to create a brand by showing that return.

I don’t have answers on how this can be done.

All I can say is that it’s not ideal, but with the current paradigm of decision-making brand valuation is the only way to ensure that it gets the investment that is required.


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