Brand equity boosts businesses' bottom lines

A report recently released by the Association of National Advertisers in conjunction with Guideline shows that brand equity is now a major component of companies’ overall valuations. The report, initiated to provide insights into best practices related to building brand equity, found that brands need to be tended and protected, as well as flexible, in order to respond to the marketplace.

“Brand equity is a key component of a company’s value and its future success. In today’s marketplace, brand marketers need to be aware of the potential challenges their respective brands face,” said Bob Liodice, ANA president and CEO, in a news release. “They must also keep an eye out for the warning signs that a brand is beginning to deteriorate.”

Earlier this year, ANA and Guideline polled ANA’s Brand Marketer Leadership Community, an exclusive peer community of marketing and brand marketing professionals, to understand how companies view the warning signs of brand deterioration.

To better understand the issue, the survey also examined brand health and brand development in its broader sense.

On average, 75 percent of all respondents viewed brand equity as very important to their company’s success. Most of the respondents agreed that brand equity is the intangible ingredient that differentiates them and sets them apart in a highly competitive marketplace.

Additionally, the survey found that brand marketers are using a number of media channels to help build equity in their respective company’s brand.

Most of the respondents felt that traditional media channels were the most effective in brand building, with television chosen by 76 percent of respondents. Internet banner advertising, ranked No. 3 overall, was chosen by 56 percent of respondents as particularly effective for young and emerging or strong brands.

Among the signs of brand deterioration, the survey pointed to slipping customer conversion or repeat customer rates and increased sales via promotions, special deals or price reductions.

The report also outlined the Top 5 strategies for combating brand deterioration:

1. Product innovation (87 percent)

2. Exploring new targets (68 percent)

3. Conducting a root cause analysis (67 percent)

4. Deeper qualitative research such as focus groups on brand issues (66 percent)

5. Refocusing of marketing efforts (64 percent)

Survey respondents comprised nearly 300 brand-marketing professionals who represent brands that are household names.