21st Century case for brand
WARC is on a quest to make the 21st-century case for brand. That case requires connecting dots from the past.
Brand was invented to drive performance.
Today brand does far more.
We need to understand the many tangents of brand value to account for and ultimately grow. Let me explain.
Originally, trademarks were a way to get distrustful buyers comfortable making a purchase. The more comfortable the prospect, the more likely they are to buy when they need you. Brand was all about capturing an unfair share of in-market buyers, if you will.
For the owner, that value equation is extremely simple - strong brands increase the likelihood of purchase. Easy to model: increase brand strength = increase probability of sales; therefore, brand value is just the present value of the increased future sales. Simple input/output, 19th-century maths can handle that no sweat.
But things had to get complicated. As Dr. Marcus Collins points out, brand marks shifting from legal & quality marks to trust marks, love marks, and community marks, the value equation evolved. As people get MORE from buying into a brand (often including higher order emotions, like fulfillment, status, belonging), brands started "costing" that value into pricing, brand became a driver of increased profits, converting that emotional resonance, and the exponential power of culture, into a price premium.
Multisided value equation. Complicated, but still the 20th-century case for brand.
What's different about brands, and markets in the 21st century?
There's a new set of players coming into the mix. Supercharging this network is the influx of corporations & stock markets, boundless treasures of private equity, and more exotic organizational structures (see OpenAI, anyone?), the primary purpose & value-generating action of business may not simply be to sell things anymore. Markets are abstracted, businesses now create value along a much more varied spectrum of models - look the NYT Business section for the past decade, you're as likely to see commentary on the extreme (likely brand-inflated) valuation of a startup as serious analysis on supply chain impacts.
Brands, their perception, and how they interact in a complex system can create value on publicly traded markets, drive up revenue multiples in mergers & acquisitions, with licensing and co-marketing arrangements, selling IP rights, attracting talent at lower costs, and more.
Brands, in other words, synthetically inflate the value and impact of organizations on nearly every possible measure.
They are market manipulators.
Through that lens, it will become increasingly likely to see marketing investment decisions weighed and made not through simple formulas reflecting the increased probability of sales, but in more complex models accounting for the derived impact on a wider range of effects.
Maybe a broader appreciation of the power of brands finally invites some professional standards? License to advertise, anyone?
