2clutterThe agency Young & Rubicam has built a database that by now includes around 40,000 brands. Using a specially developed tool, the Brand Asset Valuator (BAV), the company measures the development of brands in more than 40 countries since 1993 - analysing more than 75 metrics.

John Gerzema and Ed Lebar analysed the BAV database and wrote an exceptionally pertinent book, The Brand Bubble, about the declining value of brands and why the world’s largest brand names are in flux. By using the proprietary data, the authors where able to vividly explain how brand clutter has created a marketing bubble.

According to them, shiftless brands are at risk for two reasons: They get lost in the advertising din and become insignificant – or what is perhaps even worse, the business is facing an image loss in important factors such as perceived quality and trust. At the same time this decreases the ability to stand out from other brands and gain loyal customers. But since brands are such an important part of any corporation’s value, I don’t want to deprive you of the interesting analysis of the branding problem and the authors’ recommendations of solutions, as the insights can be quite useful.

Fact is that according to their analysis of the BAV database, the value of brands, as measured by the credibility, respect, perceived quality and brand awareness, dropped sharply over the years. Thus, the credibility, for instance, declined by almost 50% within twelve years, the value estimate by 12% and the perceived brand quality by 24%. Even the brand awareness has decreased remarkably by 24% and this trend has continued since the financial shock of 2008, actually even having accelerated.

If customer surveys show that the number of high-performance, value-creating brands is diminishing across the board, but at the same time, businesses and financial markets keep raising brand valuations, a brand bubble that could erase large portions of intangible value in your company and send another shockwave through the global economy will simply be the consequence, the authors state.

Gerzema and Lebar lay out credible evidence that business thinks brands are worth more than the consumers who buy them, based on their detailed analysis of a decade's worth of brand and financial data from Young and Rubicam's BrandAsset® Valuator, the largest brand database in the world. Given that one third of all shareholder value is brand value, this growing disconnect should be of urgent concern to CEOs, marketers, analysts and investors.

But the authors' research not only uncovered the brand bubble, they discovered how companies can raise the value of their brand with the one factor that today's consumers respond to: “energized” differentiation - a brand's questing spirit for continuous evolution. Brands with this quality have proven to be irresistible to consumers and have higher valuations than other brands.

Such energetic brands could not only contribute to ward off the impending image decay, but also sustainably contribute to the financial success of their company and positively change the attitude toward the brand that drives the share price up.

What characterizes such energetic brands depends on several aspects, such as being:

  • Interesting/exciting: The brand delivers topics of conversation, such as e.g. the Standard Chartered Marathon, FedExCup, or Avon Walk for Breast Cancer.
  • Mobilizing: The brand engages people and is part of their hobby or lifestyle, such as Google, Amazon or Starbucks.
  • Innovative/dynamic: The brand stands for innovative products that the customer simply must have, and that way consistently defines new subcategories as seen with Apple, Samsung or GE.
  • Passionate/meaningful: There is a higher purpose to the brand the customer can identify himself with, such as Nike, Adidas or Apple.

One way to boost a brand is by launching new, innovative offerings on a regular basis: McDonalds, Apple, Subway and many other brands inspire you with always new products that ensure their brand gets attention. Unfortunately successful innovations are hardly possible without great effort, capable people, creative processes and a reasonable budget. Really breakthrough innovations that stand out from the sea of innovations, that solely insure the market position of the company, are even more uncommon.

John Gerzema and Ed Lebar are on the spot here again. With interviews, data, and fascinating case studies of today's most vibrant brands, they demonstrate that marketing is now a responsibility that lies everywhere within the organization and is actually key to ensure a sustainable and profitable brand performance. In their book they guide the reader through a five-stage process for reorganizing a company around the brand and raising its value in the eyes of both consumers and financial markets.

Who sells hotdogs or insurances will have a hard time to develop new offerings that electrify the market, the authors claim, but in this case it is necessary to look beyond the product offering for ways to make the brand interesting, activating, dynamic, passionate, and the topic of conversation.

Here are the author’s suggestions:

Development of an activating promotion: Coke Zero, for example, called on all basketball fans to upload their most passionate fan videos and photos. The winners were then presented in a special show prior to the broadcast of the championship game of the NCAA college league.

Development of a promotion for new customers: The fast-food chain Denny's announced in a commercial during the Super Bowl and on the Internet their free Grand Slam Breakfast that got the company a rush of over two million customers in a day which didn’t want to miss the offer.

Setting up a social network around the brand: With its website www.glutenfreely.com, General Mills provides a social network for all those who are interested in a gluten-free diet; or on the website of Harley-Davidson, motorcycle fans of the brand can upload pictures of their last tour.

Design of attractive branches: The Apple stores make up a large part of the success of the products and brand, because with their presentation they strengthen the company’s product line and brand image. Nike and Sony present their brand and products very convincingly and consistently in representative stores as well.

Presentation of the brand to the customer: The representatives of the golf brand TaylorMade are visiting golf clubs to show off their equipment and sell it on site. This enables customers to experience the brand in a more alive and authentic fashion than in the sports shops.

Organizing high-publicity events: Good examples are the publicity stunts of Virgin boss Richard Branson, like the balloon adventures, or the Red Bull sponsored Stratosphere jump.

Support for a higher purpose: Whole Foods Market for example provides information for anyone interested in organic products.

There is yet another way: Search an energetic brand - a "source of energy" - and bring your brand in connection with it.

By Daniela La Marca