Value-based brand measurement and management

Abstract

This paper details a recent breakthrough in how to measure the intrinsic equity in brands and how to relate brand equity to financial value creation. The methodology integrates brand health measures from the BrandAsset 1 Valuator (BAV) database maintained by Young & Rubicam (Y&R) with measures of financial performance from Stern Stewart's Economic Value Added (EVA 1) database to deliver the first wholly objective approach to brand valuation. The result is a robust econometric framework for measuring the relationship between brand health and value creation that is based on observable, repeatable data. By eliminating the need for 'expert opinion', the approach delivers results that enjoy high levels of credibility at boardroom level. Perhaps most importantly, the creation of a framework that explicitly integrates inputs from marketing and financial sources creates the basis for enhanced collaboration between the marketing and finance functions. Input from both functions is vital for the development of value-based brand strategies that harness the full contribution of brand strategy to the overall success and value of a business.