At Last! Brand Measurement Equals Brand Performance

At Last! Brand Measurement Equals Brand Performance

The evolution of present day brand measurement can be traced back to the theories set out in the popular 1991 text by David Aaker, Managing Brand Equity. He went on to contend that metrics such as sales that were competing with his proposed measure ‘tend to be short term and to provide little incentive for investment in brand building’ (Aaker, 1996).

And with that, many from the marketing research fraternity embarked on an 18 year misadventure as they attempted to develop predictors of the theoretical construct – brand equity.

There has been little convergence on how to measure brand equity. Originally it was proposed that brand equity could be measured by the ‘Brand Equity Ten’ (Aaker, 1991) which recommended the use of ten measures. In a more recent academic journal article on the topic (Vogel et al, 2008) four measures were proposed. However, none of these four measures were the same as those originally proposed by Aaker in 1991. Meanwhile, marketing research firms have developed their own methods: Research International has developed the Equity Engine, IPSOS the Equity Builder, AC Nielsen the Winning Brands and Millward Brown the BrandDynamics, all of which stake their claim at measuring brand equity in some way or another.

Yet, throughout the ages, the business finance community has continued to value brands based on the economic use method involving discounted cash flow of future sales.

Future sales, stored value and goodwill are all expressions that marketers’ brand definition should be based upon. The definition is crucial, because if how we define brand is wrong, then what we are measuring is unlikely to be right, and therefore the actions we undertake based on this measure are more likely to be misdirected.

PDF linkAt Last! Brand Measurement Equals Brand Performance