Brand. Making the Intangible Tangible

The Undervaluation of Brand

Brand has been bastardised into the child of comms. How can anyone argue the value of something that has fallen so far down the list of corporate priorities? Marketing directors and CMOs will wax lyrical about their latest campaign, shouting from the trade press parapet that their latest effort is truly a brand-building campaign like no other that came before it.

Cue the likes of Burger King, with their ‘art as advertising’ approach to selling. Plastering rotten food across billboards to demonstrate just how fresh their ingredients are. Something you’d expect in the Tate Modern perhaps, certainly not something that sells a whopper to Dave who’s walking down Euston Road at 11pm and wants something quick after a couple of pints and no dinner. That’s not to say Dave doesn’t appreciate art, he just doesn’t want to eat it.

Yet, the cycle continues, the marketing and advertising world claps and awards are won, but from the outside looking in, it’s a farce. Is brand simply the prestige of the individual who drove such a campaign to happen? Is brand simply a byword for ‘being artsy’.

The cynic might say that brand management is really just a way for CMOs to hop into their next better-paid role. Brand as personal PR. The realist might say that marketing’s reduced executive function has forced this hand.

Brand is an Asset, Not a Measure

Brand is not something that belongs to the marketing department. It doesn’t matter how good they are, brands need to be managed, and that management must come from the C-suite.

But the value of brand is an intangible nothing that goes beyond the logical reasoning of business management. It’s a thing that doesn’t make sense, yet affects everything from hiring, to how much you can charge, from how cheaply you can buy, to how easily you can weather storms beyond your immediate control.

And there is no such thing as a commodity brand; even they have a degree of brand strength. There’s a reason that ‘own brand’ medicine is significantly cheaper than branded medicine. And even then, Tesco’s own brand will have a slight price premium in comparison to that of ALDI. 

Brands matter, even if the difference is pennies. That’s still tangible. And that‘s something worth understanding. Because brand is an asset, not a measure. A business tool that conveys a competitive advantage.

Tim Ambler, former accountant turned marketer and legendary business figure, summarised it as ‘brand = product, packaging and added values’. The key emphasis here is on added values, which isn’t as simple as perceived value by customers.

Let’s not forget suppliers, and staff and all the external influences that can play havoc with value. Try selling a business in a recession, for example. There are always factors outside the influence of even the largest companies, and therefore any attempt to measure and control brand with a simple set of metrics is redundant.

Brand is not something that can be reduced to a line on a spreadsheet, and attempts to do it by even the smartest minds have fallen flat.

Making Sense of Brand Value

Brand is an invisible entity worth millions to billions of pounds that not even accountants can agree on the measurement of. The International Accounting Standards Committee have had endless trouble in building a shared view of intangible asset accounting standards.

Many brands rely on DCF (Discounted Cash Flow) to value brands and their future position in the marketplace, but even that is fraught with challenges as it’s critically dependent on inflation and interest rates, two factors that have spiralled in the last few years. Their impact can decimate value, through no fault of its guardians, no matter how diligent.

And obviously poor brand management can also cost you significantly. Elon Musk bought Twitter and destroyed its value in months. The product itself hadn’t really changed, apart from the stewardship and internal machinations, but the brand certainly had.

And yet the value of brand is not artificial. It is not nonsense. It exists. And it is not additive; it is underneath the skin of everything.

Perhaps the first challenge, then, is not to try and build a brand at all, but instead to understand what the brand is. After all, you can’t navigate in any deliberate direction without a map.

According to research, 64% of businesses say brands don’t influence the decisions made in their company. These figures are self-reported, but is it possible that these 64% of people are simply unable to describe what their brand is, let alone be able to explain what success looks like regards it?

It’s akin to asking someone if they think the limbic system influences their decisions. If the respondents don’t know that they even have a limbic system, it shouldn’t come as any surprise if 30% turn around and say it doesn’t.

Brand is almost a trick question in and of itself. 

Understanding Brand is Understanding Decision-Making

Understanding what a brand is allows a business to set its own constraints. This is a key component of effective business strategy. No business can be everything, it’s not possible - even the largest businesses fail when they try to be something they’re not.

The graveyard of big brand-ideas-turned-bad is extensive, from Walmart’s entry into Germany to Starbucks disastrous attempt to enter the Australian market. But these weren’t strategies, these were planning actions. Strategy is enabled by constraints, it’s about choosing to play a different game - your own game - and the key to that is to understand what your game is and what it isn’t.

All brands need boundaries to operate. Informed assumptions are required to make successful investments in the future. A strong brand, well understood internally, allows a business to make better decisions. Knowing one’s limits is the key to future performance, and to push beyond those limits is a fast-track to disaster.

How to Manage the Unmanageable

This isn’t about running ads, this isn’t even about marketing. This is about running a business effectively so it’s worth more than the function it fulfils.

For a business to succeed in brand management, it must accept that there are things simply too murky for it to fully understand or manage. There will always be gaps in information.

It must embrace its known unknowns. Being aware of its limitations - and asking hard questions anyway - is required. This is how a brand begins to understand itself, through continuous exploration and discovery.

But it must also work on its known knowns, the obvious things that a business can control and manage in the day to day. These are the proxies and measures that a brand can use to get an idea of its brand strength, be that market share, customer satisfaction, loyalty metrics, or something else entirely.

Perhaps it’s easier to think of brand like dark matter. It exists and holds the whole universe together, and governs its structure and dynamics, precisely because it fills all the spaces in between. But, like dark matter, it’s unknowability means we must use surrogates and stand-ins to determine what we might can amidst the uncertainty.

The point is that brand management is a complex, strategic endeavour. It requires senior leadership to understand and navigate both its measurable and immeasurable aspects to maximise its impact.

It’s Marketing's Fault, But It’s the Board’s Problem

While marketers must become more commercially astute, it is also incumbent on the Board and the C-suite themselves to understand the brand they are collectively leading.

Effective brand management isn’t about a list of key objectives and a twelve-month comms plan. It is beyond the immediately controllable fantasy of spreadsheets and financial management.

Brand doesn’t set ‘goals’ – it sets organisational direction. It creates the pitch to play on, and determines what success looks like in the short term and the long term.

The brand is the business. 

All too often, what gets measured gets managed. But the sooner but what’s unmeasurable also needs managing. And that is the tricky, sticky and difficult reality of brand management.

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