In 1931, P&G executive Neil McElroy wrote an internal memorandum that launched “brand management” as a corporate practice. Because “you manage what you measure,” the practice of brand management inevitably led to brand measurement. This is commonly known as brand tracking. Today, almost a century after McElroy’s memo, hundreds of millions of dollars are spent every year on brand tracking.
However, there’s little consensus on how brand measurement should work. There seems to be as many ways to measure brands as there are brand experts. This has produced a tsunami of different brand metrics. From awareness, consideration, preference, and usage to desire, intent, relevance, salience, reputation, satisfaction, stature, preference, loyalty, confidence, power, affinity, prominence, referral (NPS), mental availability, mental penetration, and many more.
How can business leaders take brand building seriously when the experts can’t agree on how to measure it? Poor McElroy must be turning over in his grave!
The right question to answer
The fundamental problem is that most brand experts start with an incomplete question: “How should brand measurement work?”
The better, more complete question is: “How should brand measurement work to connect brand strategy and investment to financial growth and returns?”
Why? Because in the business world we measure things to help us make decisions that will improve our business, then evaluate those decisions and take corrective action accordingly. We should measure brands for the same reason: to help us make better decisions about how to grow our brands in order to optimize their contribution to corporate growth, profitability, and sustainability.
The litmus test for brand measurement
Connecting brand strategy to financial contribution means you can quantify how changes in your brand’s positioning and activation for a target audience will drive current revenue, long-term value, and financial ROI – with numbers that a hard-nosed CFO can believe. This is the litmus test for every brand measurement system and sadly, most approaches utterly fail it.
The solution to brand measurement
Fortunately, there is a solution. It’s to have a brand measurement system that mirrors and quantifies the chain of cause and effect from brand strategy to brand equity to financial outcomes for a particular audience. It looks like this:
For this to work, it must meet these minimum requirements:
- Brands are measured relative to all brands in a culturally defined landscape of brands.
- Brand equity is measured as a composite of familiarity, regard, meaning, and uniqueness relative to all brands
- Brand positioning and activation are measured, too, and their metrics are linked directly to brand equity.
- Brand measurement operates with a weekly, monthly, and quarterly cadence.
- Brand measurement covers all potential audiences with census-matching resolution, including both customers and non-customers.
- Brand equity metrics are validated by independent third-parties as leading indicators of revenue and value growth.
- Brand equity metrics are linked to the investment required to increase them.
So, what does this tell us?
Brand experts don’t agree on how to measure brands because their preferred approaches don’t meet all seven requirements in the list above, and thus those approaches fail the litmus test. So, the bigger question of how to measure brands devolves into an intractable “I say, you say” argument that never reaches resolution.
Moreover, the chronic lack of connection between brand metrics, brand strategy, and financial outcomes means that brand managers can’t know with any confidence what metrics really do matter. That makes it tempting to either collect as much as you can just in case you miss something important or to measure only whatever management prefers, at least for today. As a result, brand measurement systems become either too complex or simplistic.
All this undermines brand management as a valued business process that deserves the same attention as other processes like new product development, supply chain management, and manufacturing quality control.
Plus, it’s opened the door to performance marketing taking over marketing budgets because of the received wisdom that it’s more measurable than brand-building. That’s bad for brands and ironically, it’s bad for performance marketing because it depends a lot on brand strength to work well.
And what’s in it for you?
The good news is that getting brand measurement right is worth a lot. For example, it’s the key to unlocking these essential capabilities:
- Data-driven brand positioning based on likely financial return, versus expert opinion alone.
- Engaging the entire enterprise in activating the optimal brand positioning (because pretty much everything an organization does impacts brand equity or is affected by it).
- Testing “creative” based on its predicted brand and business impact, not just on likes from the test audience.
- Allocation of time, attention, and money across brands, audiences, and markets based on relative return instead of last-year-plus or the strongest voice in the room.
- Finding and evaluating partnerships and sponsorships based on predicted brand impact and financial return versus who we know and like, or gut alone.
- Integrating brand metrics into marketing mix models.
- Turning brand-building and performance marketing into partners helping one another succeed, rather than rivals fighting each other for budget.
This is how you elevate brand management to the C-suite and boardroom, empower the CMO, forge a true CMO-CFO partnership, and boost the return on performance marketing. And it starts with getting brand measurement right.
Ready to learn more? Request BERA’s free brand assessment to better understand how your brand performs, areas where it can grow, and how you can upgrade your brand measurement system.