Brand recently released its newest brief with the ANA (Association of National Advertisers) titled Brand Revenue: Measuring the Brand’s Ability to Impact Revenue. This latest ANA Insight Brief looks at how successful branding strategies can impact a company’s overall market share and revenue. Specific topics include how branding drives marketing success, the importance of accountability in assessing brand value, and key data variables that need to be taken into account when looking at brand value.
“To measure the brand’s influence on market share and revenue, the first step is to fully understand the strategic and operational role the brand plays within the organization and how it is intended to affect the business,” said Brad Puckey, the author of the study and Director, Brand Intelligence, at CoreBrand. “The specifics of how communications are leveraged to promote the brand and how the brand is leveraged to increase market share, revenue, and cash flow must be clearly understood. Only with this understanding can a coherent and comprehensive measurement system be put into place.”
According to the brief, when developing a measurement and evaluation model to measure the brand’s influence on market share and revenue, companies must consider four critical elements:
– The brand’s role in purchase decisions
– Unique marketplace dynamics
– Key economic drivers
– Brand strength and performance on overarching brand attributes
Companies must also consider their “brand drivers,” or factors that can be manipulated by communications initiatives to increase market share. Brand driver examples include brand awareness, brand consideration, purchase intent, purchase behavior and brand affinity.
These unique product and brand attributes, in conjunction with understanding brand drivers, can be proactively addressed and adjusted to ensure the most effective communications and should be collected not only for the brand that is being evaluated, but also for key market competitors. Companies must look beyond themselves to determine share-of-voice, share-of-brand, market share, and external economic factors to determine how changes in communications strategy can promote the brand and how changes in the brand can increase revenue and ROI.
“Measurement is a critical component of any brand-building initiative,” added Puckey. “Without it, an evaluation of brand-building success is open to subjective interpretations in the absence of conclusive evidence as to the actual success or failure of the initiative. Without this type of program, there can be no true accountability.”
In the 2010 ANA Insight Brief Brand Equity and Accountability, CoreBrand presented an approach to valuing the brand based on its ability to affect market cap. These two approaches are complimentary and can be used to develop a broader understanding of how a brand is contributing to overall company performance. Together, these two pieces of the brand intelligence picture provide clear insight into different aspects of the brand and its impact.
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