consultants & creatives - may 2013

23
CONSULTANTS & CREATIVES Two sides of the same coin Mazen Khater CMO, JWT MENA

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Consultants and Creatives are stereotypically considered worlds apart, but in this presentation, Mazen Khater, JWT MEA's CMO argues they are in fact two sides of the same coin - as both tap into intangible assets to create stakeholder value. Slides capture important business data from reputable sources. Author : Mazen Khater, Chief Marketing Officer JWT MEA Presented : Euromena Consulting 2013 Workshop, 31 May 2013

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Page 1: Consultants & Creatives - May 2013

CONSULTANTS & CREATIVES Two sides of the same coin

Mazen Khater CMO, JWT MENA

Page 2: Consultants & Creatives - May 2013

STEREOTYPICALLY,

THE TWO ARE

WORLDS APART

Page 3: Consultants & Creatives - May 2013

MATHMEN

MADMEN

Source: Google, GQ

Page 4: Consultants & Creatives - May 2013

METHOD

MADNESS

Page 5: Consultants & Creatives - May 2013

ADD

OCD

Page 6: Consultants & Creatives - May 2013

POWERPOINT

POWER NAPS

Page 7: Consultants & Creatives - May 2013

COLD COLORFUL

Page 8: Consultants & Creatives - May 2013

IN REALITY,

THEY’RE IN IT TOGETHER

Page 9: Consultants & Creatives - May 2013

BOTH TAP ON INTANGIBLE ASSETS TO

CREATE STAKEHOLDER VALUE…

Strategy Leadership Organization

& Culture

Brand / Reputation

Human Capital

Intellectual Capital

Innovation

Partnerships IT Networks Supply Chain Processes Technology Loyalty

Page 10: Consultants & Creatives - May 2013

S&P 500 – Market to Book Ratio (1982 to 2004)

Source: CMO Council, MPM Forum, “Brand Equity and Shareholder Value” by Jonathan Knowles and Wolff Olins

Dec

02

Dec

03

Dec

04

Dec

97

Dec

98

Dec

99

Dec

00

Dec

01

Dec

92

Dec

93

Dec

94

Dec

95

Dec

96

Dec

87

Dec

88

Dec

89

Dec

90

Dec

91

Dec

86

Dec

85

Dec

84

Dec

83

Dec

82

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

A “Market to Book” ratio of 4.6 means that in 2003

the net tangible assets on the balance sheets of

the companies comprising the S&P 500 accounted

for only 22% of their market value

The remaining 78% represents value that is

coming from intangible assets

THE CHOICE OF

ASSETS IS DUE TO

THE EVER

GROWING

IMPORTANCE OF

INTANGIBLES ON

BALANCE SHEETS

Page 11: Consultants & Creatives - May 2013

"All our factories and facilities could burn down tomorrow but you'd hardly touch the value of the company; all that actually lies in the goodwill of our brand franchise and the collective knowledge in the company"

Roberto Goizueta, the late CEO of Coca-Cola

"If this company were to split up I would give you the property, plant and equipment and I would take the brands and the trademarks and I would fare far better than you"

John Stuart, the ex-Chairman of Quaker

“It’s about brands and brand building and consumer relationships … Decapitalized, brand owning companies can earn huge returns on their capital and grow faster, unencumbered by factories and masses of manual workers. Those are the things that the stock market rewards with high price/earnings ratios”

John B. Akasie, Financial Editor, Forbes

AMONG

INTANGIBLE

ASSETS,

BRANDS WERE

DEEMED THE

MOST

VALUABLE FOR

MANY

COMPANIES

Page 12: Consultants & Creatives - May 2013

SEVERAL STUDIES

HAVE CONFIRMED

THE HIGH

CONTRIBUTION

THAT BRANDS

MAKE TO

SHAREHOLDER

VALUE

Coca-Cola 69.6 51

Microsoft 64.1 21

IBM 51.2 39

GE 41.3 14

Intel 30.9 22

Nokia 30.0 51

Disney 29.3 68

McDonald’s 26.4 71

Marlboro 24.2 20

Mercedes-Benz 21.0 47

Emirates Airlines 3.21 29%

STC 2.51 8%

Q-Tel 2.13 14%

Zain 2.08 11%

Etisalat 1.99 14%

Saudi Electricity 1.02 5%

DP World 1.00 12%

Savola 0.87 23%

Kuwait Finance House 0.79 6%

Aldar 0.73 17%

Inte

rnati

on

al B

ran

ds -

2002

Brand Value

(USD Bn)

Company/

Brand

Brand Contribution

to Market Cap (%)

GC

C B

ran

ds -

2009

Source: BusinessWeek, Interbrand/JP Morgan league table 2002, GMR March 2009 Edition

Page 13: Consultants & Creatives - May 2013

STUDIES HAVE

ALSO SHOWN

THAT STRONGER

BRANDS RESULT

IN BETTER

INVESTMENT

PERFORMANCE

1) The three indices were normalized to 100 for the first time period to set a baseline for the value growth

2) Based on Business Week world’s most valuable brands study, e.g. Coca-Cola, Ford, and Microsoft

2000 2001 2002 1995 1996 1997 1998 1999 1994 1993 1992 1991 1990

500

400

300

200

100

0

Valu

e G

row

th

Index 1: Most valuable

brands in S&P 500

Index 2: Less valuable

brands in S&P 500

Index 3: S&P 500

companies

Brand Contribution to Shareholder Value

USD 100 in 1990 = USD 450 in 2000

Source: UBS, Prophet Consulting, Business Week

Page 14: Consultants & Creatives - May 2013

OTHER STUDIES

HAVE DIRECTLY

LINKED

OVERALL BRAND

HEALTH WITH

BUSINESS

PERFORMANCE

7.58 6.38

6% 14%

75% 41%

7.35 6.77

46% 36%

2.90 2.09

16% 34%

1.93 1.77

7.24 6.03

Attractiveness

Liabilities

Leadership

Satisfaction

Distinctiveness

Bra

nd

Hea

lth

Met

rics

Consider new offers

Likelihood to switch

Adds to bill

Likelihood to refer

Bu

sin

ess

Perf

orm

ance

Healthier Brand = Healthier Business

Source: MIT Sloan Review

Page 15: Consultants & Creatives - May 2013

SOME STUDIES

HAVE EVEN

SIMULATED THE

IMPACT OF

BRAND

REPUTATION ON

STOCK PRICES

2.7%

0.8%

3.3%

0.21%

$936 million

$1.9 billion

$4 billion

$292 million

its stock price would rise by…

…had the reputation of

If… boosting value by…

Source: Buisness Week July 9, 2007 / CCW Communications Consulting Worldwide Inc.

Page 16: Consultants & Creatives - May 2013

EVEN PERSONAL

BRANDS HAVE

PROVEN THEIR

WORTH IN

IMPACTING

SHAREHOLDER

VALUE

Page 17: Consultants & Creatives - May 2013

CHAIRMAN’S

PUBLICITY HAS

CONSISTENTLY

IMPACTED

KINGDOM

HOLDING’S

STOCK PRICE

Impact of Personal Brand on Stock Price

Source: Forbes; Interactive data via factset search systems

Page 18: Consultants & Creatives - May 2013

YET, EACH

DELIVERS BRAND

SOLUTIONS

DIFFERENTLY

Page 19: Consultants & Creatives - May 2013

DRAMA

PRODUCES

DECKS

PRODUCES

DRAMA

Page 20: Consultants & Creatives - May 2013

ANALYZES DREAMS

ANALYZES DATA

Page 21: Consultants & Creatives - May 2013

CRAFTS

STORIES

CRUNCHES

NUMBERS

Page 22: Consultants & Creatives - May 2013

DESPITE THEIR DIFFERENCES,

THEY COMPLIMENT EACH OTHER

Page 23: Consultants & Creatives - May 2013

Albert Einstein: “What I admire most about your art, is its universality. You do not say a word, and yet … the world understands you.”

Charlie Chaplin: “ It’s true… but your fame is even greater: The world admires you, when nobody understands you.”