A well-managed brand is one of the strongest assets an organization can have to increase sales and financial valuation. As an agency that is often brought in to enhance an existing brand, tell a brand’s story better through marketing, or launch a new brand, we spend a notable amount of time supporting marketing teams and working with their organization to support the importance of brand.
Getting the brand story and brand purpose just right is hard. Here are some financial numbers about why it’s worth the effort.
Looking historically at the market capitalization of S&P 500 companies in 1975, only 17% of that value was intangible assets, like the brand. Today, intangible assets make up 84%. That is an incredible shift which has many ramifications when you think about it (from US education to global relations)
“Wall Street assigns the most value today for non-physical things.”
Source: Ocean Tomo
Within those intangible assets, an average of 20% of a business’s market cap is brand value; this varies by industry. Retail, consumer durable goods, and consumer services are 28%, 35%, and 43% brand value, respectively.
Source: Type 2 Consulting, Millward Brown
Because of figures like this, shareholder growth among well-managed brands has grown 125% over the last 10 years, vs. a total S&P 500 growth of only 82%.
Source: Kantar, Millward Brown/BrandZ
Down at the customer level well-managed brands get a 13% price premium over weak bands. (This is the same percentage that we find in our primary research among Pacific Northwest consumers too.)
It’s all doable. Clients can get there by focusing on Distinctiveness so that every touchpoint is ownable and easily attributed back to the brand. Consistency so that every impression is linked together and builds the largest brand presence possible. And Dedication: deliberate management of brand delivery.
Thanks to Tom Roach of BBH London who did the hard work putting these numbers together.