Wednesday, November 15, 2006

Brand Valuation: Finance vs. Marketing

Brand Valuation is a close cousin to Marketing ROI or ROMI, as I have mentioned several times. There was an interesting article in the October 15th edition of Marketing News in which Don E. Schulz, Professor Emeritus of IMC at Northwestern recounts a recent five-day conference on brand valuation. Evidently, the conference was attended by mainly financial types, and the lingua franca of the conference was, in his opinion, light years away from what he was used to as a marketer:

"There was no mention of 'peeling back the brand onion' or 'aligning the brand's design elements to fit the emotional state of the desired consumer'... In short, the discussions were about how senior management and the financial and accounting people view brands than how the marketing people do it. And that's the side of brands and branding I don't think we marketing people see often enough, certainly not if we look at the marketing and communications press or the content of the multitude of brand conferences and seminars that seem to go on continuously."

Clearly, Schulz is frustrated by a failure of dialogue between the marketing department and the finance people. Interestingly, however, I think this is one area where B2B marketers may be in the lead. B2B marketing departments tend to have a lot more finance and accounting types floating around to begin with, largely because the pipeline focused nature of B2B marketing demands this kind of skill. Thus, it is much more common to hear B2B marketers talk about ROI than it is about "brand message having a semiotic balance with the five human senses."

What I've seen happen in B2B organizations is that the folks running the channel or the pipeline eventually find the branding people and get frustrated. The direct side of the business can measure (well, at least in general) its performance using hard numbers. Why can't the branding side of the business do the same? More often than not, this serves as a forcing function for the brand folks to at least start to value what they're doing. Of course, this valuation is much more difficult, but this is no excuse to not start the climb.

The takeaway from the Marketing News article seems to be that better dialogue is required between finance and marketing today. I would argue that B2B marketing orgs could serve as a "best practice" for this kind of integration. Maybe this is one area where B2B is actually ahead of B2C in marketing.

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