Marketing Accountability Standards Board Releases White Paper Calling for Brands to Be Valued in Financial Terms

Brand-centric enterprises are urged to develop processes to better define the financial value of brands to the executive level

Financial Value of Brands Process

The Marketing Accountability Standards Board (MASB), an organization devoted to establishing and advancing accountable marketing practices, has released a white paper outlining the need for brands to be valued in financial terms and calling upon companies to develop an internal process for doing so.

The Financial Value of Brands Imperative: Why Brands Must Be Valued in Financial Terms, developed by authors from academia and industry, and contributed to by two dozen thought leaders, recommends that brand-centric enterprises develop an internal process to annually measure, explain and report FVB to the executive level, even in the absence of any external regulatory or accounting requirements. For marketers who don't know where to start, summaries of valuation services provided by several leading measurement providers are included.

According to MASB, regular measurement and analysis of the financial value of brands demonstrates the material contribution of brands to the overall value of the enterprise and provides an excellent management decision-making tool to enhance long-term enterprise value. Despite this, FVB is not systemically monitored or analyzed in most organizations.

"If you have a multi-billion-dollar asset, you should be thinking simultaneously about its growth and protection at all times," said MASB President/CEO Tony Pace. "Since growth is measured in financial terms, the strength of brands and the resulting customer franchise must also be expressed and analyzed in financial terms. The FVB process is not merely an accounting or academic exercise. It can and must be used as a management decision-making tool with the end goal of enhancing enterprise value."

As an enterprise moves toward implementing a Financial Value of Brands measurement, analysis and reporting process, four steps form the road map: 1) gain executive buy-in, 2) expert identification of methodology, 3) focus on reasonable and consistent goals for accuracy and analyzing trends, 4) incorporate FVB calculation into marketing return assessment process.

To facilitate the regular measurement of FVB, MASB is offering a pilot program to assist in the identification of a suitable measurement approach and provider for each participating brand owner. Contact info@themasb.org to participate.

The authors are Jim Meier, retired finance executive; Tony Pace, MASB President/CEO and former CMO at Subway; Vithala Rao, Malott Professor of Management Emeritus and Professor of Marketing and Quantitative Methods Emeritus in the Johnson Graduate School of Management at Cornell University; and Frank Findley, MASB Executive Director, former executive at MSW Research, Comscore and ARS Group.

The paper was produced by the MASB Financial Value of Brands Project team and reviewed by a distinguished group of academics, professionals and industry thought leaders. For more information, visit themasb.org

Source: MASB - Marketing Accountability Standards Board

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Categories: Marketing

Tags: brand valuation, C-Suite, CMO, enterprise growth, marketing ROI