Know-How Exchange : Advertising/PR

My advice to all my clients who ask is unless you expect to become the object of a merger or takeover, forget Brand Equity, its complex and time consuming to investigate properly.

Brand Equity is made up of a number of factors:

Brand Loyalty
Awareness of Brand
Perceived Quality of Brand
Brand Associations - celebrities, sports teams etc
Goodwill - patents, technology etc

And the above can ONLY be neasured by research, but not only research and help of your accountants.

Good Luck

Hi Aklewand,

I’m not sure there is any such thing as a break even point for brand equity anymore than there is a break even point for real estate equity or any other major asset equity. Perhaps you are looking for numbers that show the relationship of brand equity to sales revenue.

In any event, I agree with Andrew, for most companies this is an onerous task without a good ROI on the resources to accomplish the mission.

Hope this helps,

Steve

Brand Equity involves a whole lot more than advertising. Let's say you have a great advertising campaign and you implement it well and thoroughly. The message in the advertising is communicated to your target audience, and they are motivated to try your product.

When they try it, they are disappointed. Maybe the packaging was hard to open. Maybe the usage directions are unclear. Maybe there was a funny odor when they first opened the product. Maybe a friend said something negative about the product and made them think there might be a problem.

What's the brand equity at that point? Not too great.

Now the key question: What was the break-even point for the advertising?

Obviously, it's a meaningless question, because the advertising is just one link in the complex chain that determines a brand's value.