PROOF THAT BRANDING LEADS ADVERTISING AS A DRIVER OF BRAND VALUE

There are two big questions that brand owners and marketers should be asking about their business. The first question, what is the value of my brand?, is very accurately answered by the BrandZ data as it has been for some years now. But the answer to the second question, how do I grow the value of my brand?, has been more difficult to discern in precise terms. Until now.

Now, WPP brand consultancies The Partners and Lambie-Nairn have collaborated with Millward Brown and BrandZ on the world’s first financially quantified analysis of how brand-building activities drive growth in brand value. Taking ten years of BrandZ valuation data and uniquely combining this with Millward Brown consumer opinions of these brands, the findings prove that investing in brand positioning and identity produces markedly greater returns in brand value when compared to, or used in conjunction with strong advertising. This data will enable brand owners to prioritise, plan and manage their brand-building efforts more effectively, drive superior value into their brands and significantly enhance their marketing ROI.

AUTHORS

The Partners

Lambie-Nairn

Millward Brown

The most remarkable finding from this study is the extent of the brand value growth that comes from establishing a strong core proposition and identity (grouped here under the collective term, branding) at the heart of a brand.

THE DATA CLEARLY DEMONSTRATES THAT GREAT ADVERTISING IS, BY ITSELF, INSUFFICIENT AND INEFFICIENT – IT NEEDS TO BE UNDERPINNED BY BROADER, DEEPER STRATEGIC AND CREATIVE DEFINITIONS.

While brand consultancies have long argued this point in principle, this data now clearly shows the substantial added financial value this brings: 168% growth in value where branding is strong, versus 27% growth where it is not, even where advertising is strong; substantially greater growth in value (76%) where branding is strong and advertising is not, than when advertising is strong but branding is not (27%).
There is certainly no argument against great advertising here – it is abundantly clear from this data that great advertising contributes substantial value to brands. However, the data shows that advertising drives brand value especially so when it is deployed in conjunction with a strong brand proposition and identity. Analysis shows that a strong brand proposition and identity acts as a multiplier on the brand value contribution of advertising: when underpinned by strong branding, strong advertising delivers a 168% increase in value versus a 76% increase when advertising is weaker; however, when branding is weaker, strong advertising only drives value growth of six percentage points more than weaker advertising, 27% versus 21%.

With brand values running into billions of dollars, these percentage differences equate to highly significant financial amounts and leave no doubt that high calibre brand consultancy is the most essential component of brand value and strength. Given that the financial investment required to define a strong proposition and identity is, generally speaking, considerably less than the investment required to drive a strong presence in advertising media, any brand owners not currently investing in brand proposition or identity should be encouraged to make an urgent redistribution of budgets to address this. The case for a holistic, multi-agency approach to brand building – horizontality, as we name it in WPP – is made very clear here.

In summary, we have for the first time established quantified proof that superior brand value and greatest brand value growth is led by a strong core brand proposition and identity, supported by great advertising. Brand owners not currently making efforts across this full spectrum should take note.

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