How much is my health or fitness brand worth? Are the investments I am making in my brand generating a return to the business? Will creative execution drive more value than an alternative choice? What is the ROI?
Today’s marketing professional is constantly being asked to demonstrate the tangible business value of the investments he or she is making on behalf of the online exercise industry.
The concept that fitness brands are valuable assets, which can be tracked and are expected to perform like any other financial asset, is a well-established notion. But Brand Analytics is not just about how valuable your brand is; it’s also about how your brand can be made more valuable to the end client. The objective is not just to produce a number. The objective is to identify opportunities to leverage the brand so it can more effectively drive business results.
The philosophy is sound, but practice and practical application have been less clear for far too long. There are as many perspectives and approaches to measuring the value of a brand as there are brands to be measured.
Brand value = prices of similar assets? Book value + retained earnings? The profits generated by the asset? The value of the components of the asset? Free cash flows? The price at which I sell the asset in the market? The present value of all future profit streams from the asset? EPS? A percentage of Goodwill? Greater Fool Theory? Price/book? All of the above… ?
Unfortunately, most of these approaches only serve the purpose of assessing the value created in the fitness program developed up to today. That does little to help the health industry marketer diagnose how to create value through more efficient and effective investments in the brand.
For any Brand Analytics program to take on a more predictive approach to the business value (the revenue and profit impact) brand investments will create, the analytics program must be designed to link the marketing management process to the strategic planning process within the marketer’s broader organization.
Integrating Social Networks into Branding Efforts
The emergence of new technologies alongside the change in consumer behavior (specifically their use of online social networks and newfound creative ability) has led to advances in how consumers interact with brands. These advances will require a new strategy on how existing and future brands will be managed, advertised and designed. Future identity designers, marketers, advertisers, brand strategists and business leaders will need to understand these changes and why countless brands have a lack of malleability.
Brands that lack such malleability will struggle to create or maintain brand awareness in a new consumer market driven by revolutionary technology. Without realizing the potential of online social networks and user generated content, existing brands will fail to move into the ‘conceptual age’, where malleability will be vital in their success.
In essence, what we’ve uncovered is how to determine the brand’s “Decision Value.”
Decision Value = the relative efficiency and effectiveness of a brand’s ability to impact a positive outcome when the target audience is presented with a range of competitive alternatives, and includes the business’s ability to monetize that decision.
The equation’s components help the marketer isolate both the issues and opportunities related to their current brand’s performance, as well as the role that the marketing mix (and creative executions as part of the marketing mix) plays in successfully improving current brand performance. The Hierarchical
Decision Model component diagnoses how the brand is currently leading the target audience through the decision process (awareness, consideration, usage, loyalty, and so on). The Creative Contribution Index quantifies how changes to the current marketing mix and/or creative articulation of the brand will impact the Hierarchical Decision Model Performance.
When combined with a traditional scenario-planning approach, using Brand Analytics to isolate Decision Value becomes a predictive tool for marketers to quantify the contribution of planned programs for their colleagues in finance and strategic planning.