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Brand Value – Why it matters

Natural Magnetism

Element 62 - Brand Value

If, like many of us, you are wondering where the money is right now, the short answer is Tech. And the figures are mind-blowing!

Tech companies dominated the Best Global Brands 2020 report from Interbrand with Apple, at an estimated $322.9 billion as the company with the largest brand value. Amazon follows at $200,677 million, demonstrating an impressive 60% increase in brand value, compared to last year.

In the relentless disruption of the covid-19 pandemic, communication brands and social media have flourished. Instagram (#19), YouTube (#30) and Zoom (#100) are all appearing in the rankings for the first time. Although a diverse list, there is no doubt that Silicon Valley technology is on top in every sense of the word.

The Worlds most valuable brands 2020
The worlds most valuable brands 2020

So why does Brand Value Matter?

With numbers like these, it’s clear that brands offer the potential to create incredible commercial value for companies and corporations. The old adage that “People buy brands, not products” – is particularly relevant in the Covid-19 climate. Differentiation is key to long-term profit, growth and staying power. Brands that have achieved differentiation fared better throughout the covid crisis than those who failed to exploit their differentiators. This is because people don’t have relationships with products; they are, however, loyal to brands.

An ever-growing school of thought insists that brand is essentially more important than any product or service. There are several reasons for this, the first and most obvious being that brands are immortal, products date. Brands build communities, inspire ideas and motivate change at a time when one-dimensional products are struggling to satisfy the demands of a technology-driven, global communication society.

Secondly, increased internet access in developing countries and a boom in e-commerce and online business practice have opened new geographical markets. A blossoming middle class across Asia, Africa, and South America is increasing competition for relevant brand names, keywords and descriptors in multiple languages, but mainly English. These are large population countries with enthusiastic audiences and a wealth of opportunity for hungry, new entrepreneurs driven by the need for change. Increased competition drives up the value of existing brands while forcing new brands to be more creative in defining their brand identities, value propositions and other brand assets.

So

In this maelstrom, the challenge of brand performance management continues to be a demanding one that requires highly experienced professional partners and a complex multi-discipline strategy to deliver.

The hard truth is simply that great products, branding and advertising are simply not enough to differentiate businesses in a climate of intense competition for the attention of today’s discerning buyers. They want brands to be more than just product or service providers. They want them to be community builders, problem solvers and allies for change. They want human experiences with technology-driven efficiency, which meet them halfway – after all, attention is currency. If you want them to spend it on your brand, then you must return on that investment with something of value. Because in this world, where time is at a premium, that is essentially what attention is – an investment.

Changing buyer behaviour highlights how brands can potentially be worth more than all the other assets of the company combined – many of which depreciate in a way that brand doesn’t. Brand valuations can be complex to ascertain, but experts report that the share of brand value across industry segments can equate to around 40%, on average, of a company’s value. Not a percentage to ignore.  

Brand is no longer just nice to have. It’s a long-term investment which can pay for itself – if you look after it. If you want to know more about how your brand is performing, please contact us to find out more about how our brand audit service can reveal opportunities for improving your brand position and value.

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