The brand valuation debate
I've always had a funny feeling about the brand valuation schemes from the likes of Interbrand, Millward Brown and Brand Finance. I wondered what the so-what was for my clients. Should they strive to boost their rankings? Do higher rankings mean more promising future revenue streams or lower risk?
Then I met Jonathan Knowles who has been injecting a lot of common sense into the discussion calling into question the usefulness of these valuations from a brand management perspective. He knows whereof he speaks as one of the originators of the Brand Finance methodology and a leader in uniting the perspectives of Marketing and Finance.
Then Markables published a very thorough bit of research that seemed to drive a heart through the whole idea of brand valuation (even though they have a league table of their own) accusing its proponents of using them as marketing and promotional Trojan horses (which I know for a fact, they do).
This is not a debate that will end soon. So for the moment I am on the side of the skeptics. Rather than hitching your wagon to how highly your brand is valued (unless you are selling your company and need to recognize it on your balance sheet) focus instead on actual measures of business performance and the many ways in which a strong brand (i.e. a strong customer franchise) can benefit your business.