5.

3
Brand Equity Metrics

By Greg Nyilasy
 Brand equity
Purpose

• Brand equity is about what the brand is worth to a

customer
It is the value premium that a company realizes from a product
with a recognizable name as compared to its generic equivalent
(Generic soda vs. Coke)
• Measures the intangible value brands represent for firms
• Brand equity is strategically crucial, but famously difficult
to quantify
• Business long-term objective is sustainable competitive
advantage, the marketing function s long-term objective
is strong brands (which secure present and future
consumer demand)
• Brands are marketing assets even if they are not
necessarily accounted for as such in financial accounting

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 Brand equity
Construction

• Many experts have developed tools to analyze this asset, but

there s no universally accepted way to measure it
• Three main approaches:
1. The premium that consumers would pay above the generic
(non)branded version (source: consumer research)
2. Trait-based models using consumer perceptions
(examples: Aaker, Y&R) (source: consumer research)
ALSO REMEMBER SHARE OF HEART METRICS HERE
3. Models that have a financial valuation component
(Interbrand, MB BrandZ) (source: consumer research and
financial data)
• Data sources: Desk research, Expert Panel, Thomson Reuters
and Company annual reports, Consumer goods data, Social
Media signals

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 Brand equity
Construction Aaker model

I was satisfied/dissatisfied
I would buy
I would recommend
Market share, price vs Loyalty
competitors, coverage
The brand is high quality
The brand is growing in
Market Perceived popularity
behaviour quality I hold this brand in high
Brand esteem
equity

The brand is good value for

Awareness Associations money
[BRAND PERSONALITY
ITEMS]
Have you heard of this brand This is a brand I would trust
(aided, unaided)
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 Brand equity
Construction Y&R Brand Asset Valuator (BAV)

Advertising agency Young and Rubicam s (Y&R) proprietary Brand

Management tool and global database of consumer perception of brands
1350 brands tracked over 70 metrics; 48 image attributes; 12 cities

Source: Kotler & Keller 2012

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Brand equity
Example Y&R Brand Asset Valuator (BAV)

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 Brand equity
Example Y&R Brand Asset Valuator (BAV)

Examples: looking at a subset of top brands from the thousands that is

continuously measured in BrandAsset

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 Brand equity
Purpose Interbrand and Brand Z

• To define the value of the brand in financial terms

• On the level of business-unit strategy:
Informs marketing decisions and campaigns, know which
areas to improve on
Aids resource allocation, avoid wasted resources by
allocating more resources to the brand s weak areas
Co-branding analysis
• On the level of corporate strategy:
Mergers or acquisitions help find targets/buyers
Joint ventures allocate profit sharing and shareholding

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 Brand equity
Construction - Interbrand Valuation Model

Interbrand Brand valuation components

1. Financial Performance of branded products/services
2. Role of brand in purchase decisions
Role of Brand Index (RBI)
3. Brands competitive strength

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 Brand equity
Construction - Interbrand Valuation Model

Steps 1-3
Step
5

Step
4

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 Brand equity
Construction - Interbrand Valuation Model

More detail on Step 5

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 Brand equity
Example - Interbrand Valuation Model

Top global brands in 2021 by brand equity in $s, according to Interbrand

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Brand equity
Construction - WPP/MB BrandZ

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 Brand equity
Example

Top global brands in 2021 by brand equity in $s, according to BrandZ

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 Brand Equity Metrics
Considerations & Problems

• Proprietary and black box methodologies make it

difficult to evaluate results each brand consultancy
has their own method
• Syndicated services do disservice to unique brand
characteristics
• How to organize brand strength/brand traits is
infinitely variable
• Some brand evaluation results do not seem to make
intuitive sense

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 Summary

1. What NPD concept tests are and how to make

volume projections for new product introductions
Volume Projection Metrics (observed trial rate,
projection adjustments)

2. How to measure growth and cannibalization

Growth Metrics (year-on-year, CAGR,
cannibalization)

3. How to measure brand equity

Brand Equity Metrics (Aaker, BAV, Interbrand,
BrandZ)
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