Hello, Mr Editor?
Article about branding.
The most valuable brand in the known universe is Google, according to a survey produced by a Strategy Boutique that makes its living convincing companies that a specific financial value can be attached to something as amorphous as a brand. The supremely confident brandmeisters at Millward Brown Optimor published their fourth …
They made some numbers up.
Divided by some other numbers they made up.
And then added a fudge factor.
FFS! And these people get paid?
And, c'mon! ""women in primitive villages [who] would buy their cooking oil from unmarked steel barrels."
Steel barrels? *STEEL* barrels? I hope no one tells the Romans, Greeks et al. There were those heathens dragging their oil around in ceramic containers (amphora - is that the right word?) when, in fact, they should have waited a thousand or so years until someone invented steel. What fools!
God save me from these brain-dead marketing arsewipes. There is only one good thing about marketeers, and that's the fact they are not a lawyers.
It's just a tax wheeze, putting values on brand name. Several large companies register seperate companies in tax havens and give them ownership of the name, so they can pay them to use if and write it off against tax......... or something like that, I can't remember the exact details, I just remember that 2 of the companies mentioned were Coca-Cola and Walkers.
'..that makes its living convincing companies that a specific financial value can be attached to something as amorphous as a brand.'
is it me or can i actively hear oxygen being wasted???!!!? what a complete f**king waste of time and money, no wonder we are in a financial crisis
Paris, because she is more use than that company
I may be too good at maths to have an acceptable opinion on brand values, however.....
The value of the brand is surely the difference between the (now+future) value of the products and the (now+future) value of the company.
So rubbish product which sells for lots, is might be assisted by the value of the brand label (some clothes, sports shoes, modern art, etc). Thus the brand name is worth something.
Do people buy Microsoft products because they are made specifically by Microsoft? Or rather because of abuse of monopoly power and having exhausted any possible alternative? Given two apparently equal products at equal price, would you buy the one made by Microsoft? Seems to me, the number for that brand ought to be a negative figure.
Oh, and I get all my toy plastic cars from China Mobile.
Attaching a value to your brand name is pretty common practice. Most major corporations will have a "Good Will" factor in their accounts which is designed to represent the added value their name and reputation adds to the company. A common example is the extra sales generated by having Coca Cola on the cans rather than virgin cola for example. These two products are virtually the same but the huge difference in sales can, in part, be put down to the Coca Cola brand. Therefore the team of accountants will have had a go at working out how much extra money Google will generate by virtue of it's name. Given that Google has become a byword for searching the internet I'd expect a very big number.
It's amazing what you can learn when you walk down the corridor from the IT dept and talk to someone in a different dept for a bit. I'd recommend it.
And a damn strong one. Although you may scoff at the methology of the report, there are some good nuggets in there. At the very least, read the ten key takeouts on page 34.
"The Paris Hilton Brand did seven million dollars last year." ...actual quote from Paris.
This one line, several years ago, was the reason i began seriously treating myself as a brand and promoting the Disco Legend name.
> According to Millward Brown Optimor, "The dollar value of each brand in the ranking is the sum of all future earnings that brand is forecast to generate, discounted to a present day value."
In fairness, that *is* the theory of how companies are valued, only applied to brands. Forecasts, net present value and all. Read up on it in the excellent "Principles of Corporate Finance" by Brealey/Myers if you like.
Is it applicable to brands? Does it make sense to say that Google is 4/5th brand and 1/5th all the rest (seeing their market cap is $125B)? Probably no; a whole load of tosh. But for now I enjoy seeing any ranking in which Microsoft is surpassed where they would rather not be.
The top 10 (listed) come to a total value of just over $660Bn. With 6Bn people on the planet, that means the value of these brands is worth $110 for each person. So here's my offer: I will sell you my interest in these brands (using them, reading their adverts, talking about them, visiting their websites etc.) at a 10% discount.
Not interested? OK, how about $10 ...... $5 .......... $1 ......... $0.000001
Yup, thought so. The brands themselves aren't worth a penny between them. All we have here are party tricks for accountants.
>Attaching a value to your brand name is pretty common practice.
Has absolutely no bearing on whether its an idiotic practice or not.
>It's amazing what you can learn when you walk down the corridor from the IT dept and talk to someone in a different dept for a bit. I'd recommend it.
Yea, sounds like you went down and talked to the accounting department or the CFO (Chief Fraud Officer) and bought the lies hook, line and sinker.
As someone else said this practice is all about creating false value on a balance sheet and defrauding investors. Google's name is worth just about nothing. If a new competitor beat them at their game tomorrow they would get no loyalty based on name, there would just be some inertia until browser updates changed default search settings.
There is a big difference between brand value and product value. Brand value is what allows companies to charge more for their product or keep a loyal customer base. For example Coket is just the same as some No Name colas in a taste test yet Cocacola can charge 3x as much for it. Therefore Coke's brand is worth the difference.
Microsoft's Brand Value is what allows them to sell a generic mouse for $5 more than a competitor.
It is very difficult to evaluate branding when a company has an exclusive product. ie who is buying Vista just because Microsoft make it?
Does branding work well in interwebs? I'd venture that Google has built huge brand value, but their major value is in the fact that they a great suite of services.
The modern punter is easily distracted. Provide better services than Google and people will just switch to the new provider.
New names are built quickly and die quickly too Ya who? Look at twitter. Huge uptake but very low retention (most twitards give up within a month) because it is fundamentally a crap idea. In a year it will be nothing unless it is cross pollinated with a wider set of services (mail, groups, video/photo sharing etc) to keep the tards entertained a bit longer.
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