Archive for September, 2008
Fellow blogger Chris Kenton–former CMO of the CMO Council–pointed me to a great article by Jonathan Knowles that tackles the subject of brand equity and what marketers need to understand in order to increase our credibility with finance, a particularly prescient subejct given the current economic conditions. Knowles’s background includes more that 10 year in finance and management consulting and another 10 in brand consulting, so his is a rich take on a topic that is “frustratingly elusive” to define. The article begins by providing an historical perspective on brand equity and then gets into how the various camps–marketing, finance, and accounting–understand the concept, and ends with some suggestions as to how marketers can close the gap.
As marketers, our perspective is informed by the belief that a strong brand enriches and deepens a product or service. Consumers will tend to prefer a product or service associated with a strong brand. However, as Knowles quotes a finance friend, “preference, in and of itself, doesn’t put money in the bank.”
From a finance perspective, in order to clear the hurdle of accountability
brand equity has to be defined in terms of behavior that will create current and future cash flow.
Accounting tends not to like the concept of “brand” because they see the world in terms of assets, tangible (physical property) or intangible (intellectual property), that can be sold.
In fact, they do not recognize the term “brand” at all. What they do recognize is the intellectual property on which the brand is based (the trademark), because this represents a legally enforceable right to do business under a certain name. To the extent that it can be proven that the trademark could be licensed to a third party in exchange for a royalty payment, accountants will have no difficulty with the concept of brand equity (although they would use the term “trademark and associated goodwill”).
So, who’s right?
Actually, Knowles suggests that all three POVs are valid, and it’s ultimately more useful to define the context in which each is appropriate and to look for the commonalities between them. Of course, the burden of integrating these perspective falls on marketing because, given the other two definitions, ours is the broadest.
The rest of the article looks at four (4) arguments that we should use in order establish our concept of brand equity:
- The three definitions of brand equity lie on a single continuum that describes how marketing creates, captures, and reports value.
- Brand valuation is not the “silver bullet” of marketing accountability.
- Marketing accountability requires an explicit model for how marketing adds value to the business.
- Once the model is agreed upon, marketers should focus on customer metrics rather than financial metrics.
There are a lot more useful ideas in this article, so check out Chris’ commentary here, where you’ll find a link to Jonathan’s article.
Why does it seem like liberals and conservatives never seem to agree? Is it simplistic to say that they just see the world differently? Maybe not. Check out this fascinating talk given at the 2008 TED conference by University of Virginia psychologist Jonathan Haidt, who studies the cultural context for morality and emotion. In this talk, he discusses the five moral values that are valued most by people who fall into either the conservative or liberal camp. This reinforces the fact that understanding a consumer’s worldview can go a long way towards figuring out the best way to communicate with him or her.
Marketers still think of search as a tool to drive traffic to promotions. However, by changing the point at which search is brought into the marketing process, it can be leveraged as a tool for building equity. Matt Wilburn offers his take on this.
According to Augme Mobile’s Anthony Iacovone, the adoption of mobile short codes by brands is on a trajectory similar to the adoption and incorporation of URLs on other media buys followed. As you might imagine, he’s a big advocate of brands driving consumers to engage them through their mobile phones. Here, he talks about why.
Bad Boy’s head of new media draws on his experience from the front lines of the Bad Boy Entertainment empire (Sean John, Ciroc Vodka, Unforgiveable, etc.) to talk not just about extending the reach of creative via social media, but also about the changing media consumption habits of twentysomethings.
More marketers are going to have to get comfortable with the idea that consumers will co-own brand experiences. In this video Kim Lloyd, co-chair of our recent Digital Marketing Summit and Senior Director of Global Marketing for McDonald’s, talks about how authenticity and sharing of a community’s values helped the McDonald’s Olympic alternate reality game, The Lost Ring, successfully engage the global youth audience, and the lessons that brands with smaller budgets can apply from that experience.
AT&T Mobility’s Jordan Berman from PMA IntegratedMarketing on Vimeo.
Leveraging mobile platforms can be daunting. In this video, AT&T Mobility’s Jordan Berman takes a deeper dive into an approach to mobile that he suggested during his session at the Digital Marketing Summit.
Later, he talks about how the iPhone has made many marketers give mobile serious consideration.
In this interview, conference co-chair and Davis Wright Tremaine partner Nancy Felsten, Esq. (above) outlines some of the many marketing law issues that will be covered at our 30th Annual Marketing Law Conference, which is set for November 20 & 21st in Chicago. You’ll hear a lot of excitement in her voice, and for good reason: Our Legal and Government Affairs Center of Excellence has put together another impressive list of presenters, including top global brands and keynotes from:
- William Kovacic, Chairman of the Federal Trade Commission
- Mark Kroese, General Manager, Microsoft Advertising Business Group
- Deborah Tate, Commissioner, Federal Communications Commission
Total running time is just under 9 minutes, and well worth it!
Rob Master runs media in North America for Unilever and he opened our Digital Marketing Summit last week. In this quick clip, he talks about how Unilever became an organization in which everyone thinks about digital, not just the “digital group”, which they don’t have.
I really wish I’d asked another follow-up. I would’ve liked him to talk specifically about at least one thing Unilever did to get everyone thinking about digital. Obviously, it’s not enough to show people the data on how and where people are focusing their attention. It’s a matter of being fluent enough to suggest and evaluate approaches that enable engagement with them in those channels. And at some point, many organizations were–and some still are–full of classically-trained marketers who need to add digital fluency to their repertoire. It would’ve been great to get an example of something that was done.
But it opens up an opportunity for further discussion:
- What would you suggest to a company that wants to put digital at the heart of its marketing?
- Do you have any examples of how a company transitioned to digital fluency?
PMA’s Bonnie Carlson on the Digital Marketing Summit from PMA IntegratedMarketing on Vimeo.
Here’s PMA president Bonnie Carlson sharing her takeaways from our first Digital Marketing Summit, which took place on Monday.