Brand Value and eBranding

Brand value is the financial value a brand can get when it is sold or replaced. Companies make significant investments on their brands over long periods of time. Investing on a brand does not only mean creating an immediate sales impact for the immediate quarter.

eBrandValue Marketing Operations
eBrandValue Marketing Operations
Jul 29, 2019
Brand Value and eBranding

What is Brand Value?

Brand value is the financial value a brand can get when it is sold or replaced. Companies make significant investments on their brands over long periods of time. Investing on a brand does not only mean creating an immediate sales impact for the immediate quarter. Thus, simply perceiving these investments as expenses and deducting them from the immediate term’s profit would be inappropriate. Generated loyalty and increased purchase intention amongst the customers that comes with the brand investments also create a long-term preference that carries over into the future periods. Hence, these brand investments should also act as creating an asset whose value is captured by the brand.

Traditionally, brand value has been used mainly by financial analysts for valuation. Especially during mergers and acquisitions, buyers pay a significant premium for that goodwill that comes with a brand’s name. Typically, a brand’s value was calculated once a year at most with potentially great costs. Consequently, for marketers and brand managers, brand value has been a meaningless abstract construct with no use for marketing strategy building. Instead, marketers preferred to use brand equity instead of brand value to emphasize the intrapersonal concepts (e.g., loyalty, top of mind awareness, brand salience and quality associations, that are hard to quantify. For more details on brand equity and eBrandValue’s approach on such concepts, see our whitepaper titled The Difference Between Brand Equity and Brand Affinity.

The recent developments in technology and markets, real-time nature of competition, customer expectations and need to strategize on the fly, created a significant pain area for marketers to capture immediate Return on Marketing Investments (ROMI).  Marketers find themselves in a bind since many of the available tools and methodologies to marketers are either based on discrete data, use surveys or interviews where either representation or real behavioral intentions are questioned.

What is eBranding?

eBranding provides an opportunity to use and adopt digital technologies to not only build a brand but also manage the brands with the state-of-the-art real time technologies that can also provide real time ROMI correlated KPIs. But, these opportunities only remain as promises unless a strong foundation can be built that starts with metric definition all the way to the organization structuring and human resource management. In specific, the main challenges in capturing ROMI with digital can be summarized as following:

  • Many of the current tools and technologies cannot answer how to capture the real-world customer behaviors with the digital-world behaviors. Although there are likes, mentions, stories, snaps etc., do they really create sales? If so, can we predict the future market shares based on the observed customer behavior with such data?
  • Creating content is still a major source of pain. Creative people and agencies require significant costs, yet they can be fickle and are mostly dependent on the talent available at the time.
  • Relying solely on creative agencies for branding purposes provide many of the incentive compatibility issues. That is, one cannot delegate measuring success of a creative campaign to the same agency that created the campaign.
  • New technologies create also many of the problems such as fake source/ data that come with the use of robots or manipulated, seemingly innocent social media IDs.
  • Both marketers and agencies fall victim to the technology companies that peddle their own, mostly specious metrics that have no role on actual brand sales but mainly focus on generating advertising revenue for their proprietary platform.

What is the eBrandValue metric and how is it used?

eBrandValue metric that is calculated by the eBrandValue’s platform real-time provides a solution for marketers to link the state-of-the art opportunities offered by the digital technologies and eBranding with the real-world customer behavior and brand-value impacts. Essentially, eBrandValue provides real-time dollar value of the sum of individual customers’ lifetime values.

In specific, using eBrandValue metrics, marketers and brand managers can come up with solutions to the above outlined problems as follows:

  • Brand owners can link the digital world customer behavior with the actual customer behavior. The eBrandValue metrics provide up to 4-month sales prediction with 90% correlation with past (unit or vol) sales. In addition, the immediate monthly forecasts are accurate within a 5% range.
  • The automatically calculated and carefully trained and monitored artificial-intelligence based curation identifies brand affinity changing trends. These trends create many opportunities that can guide not only new copy and creative campaign generations but also product strategies.
  • Create an accountable metric to measure a campaign’s success and ROMI not only for the owned brand but also for the competitions’ brands. Given statistically significant market share predictive abilities of the metrics, such ROMI calculations provide a credible and tru basis for decision making.
  • The brand affinity calculation methodology enables the platform to sift through the big data and separate the real consumers from the fake ones such as robots or manipulated IDs (e.g., paid individuals).
  • Instead of relying on single platform-specific data, eBrandValue accumulates and aggregates data across all the available platforms. As such, companies can focus on sales creating strategies and define their own priorities without falling victim to the platform-specific advertising sales tactics.

To learn more about eBrandValue Platform, and how such metrics influence brand value, contact us using the form below.

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