Brand Academy y20132013
Building valuable brands
Gil C L i Silki
INTRODUCTIONGiles Crown, Lewis Silkin
GOING UP?
$700,000 M
Apple Market Cap Apple Brand Value
Interbrand dataYcharts - Morningstar NASDAQ data
$500 000 M
$600,000 M
$400,000 M
$500,000 M
$300,000 M
$100,000 M
$200,000 M
$ M
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Enduring brand value?
$250,000 M
Samsung Market Cap Samsung Brand Value
Interbrand dataYcharts - Morningstar OTC Markets data
$200,000 M
$150,000 M
$100,000 M
$50,000 M
$ M
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Profit before brand?
MUST IT COME DOWN?
$40,000 M
Dell Market Cap Dell Brand Value
Interbrand dataYcharts - Morningstar NASDAQ data
$30,000 M
$35,000 M
$25,000 M
$15,000 M
$20,000 M
$10,000 M
$ M
$5,000 M
131313131313131313131312121212121212121212121111111111111111111110101010101010101010100909090909090909090908
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A lost brand?
$70,000 M
Nokia Market Cap Nokia Brand Value
Interbrand dataYcharts - Morningstar NYSE data
$50 000 M
$60,000 M
$40,000 M
$50,000 M
$30,000 M
$10 000 M
$20,000 M
$ M
$10,000 M
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A brand left behind?
Intellectual Propertyp y
ProductInnovation
&Heritage
Valuable Trust &
Transparency
Heritage
brandProfitConsumer
engagement
AllureReputation
Mik R h I t b d
BEST GLOBAL BRANDS 2013Mike Rocha, Interbrand
@mikerocha73@mikerocha73
www mobro co/www.mobro.co/mikerocha
Agenda
1. Best Global Brands 2013 overview1. Best Global Brands 2013 overview
2. Methodology and applications
3. How can you be a brand leader?
Best Global Brands 2013 i2013 overview
11
A few statistics
Top 10 Brands
IBM+4% 78 808 $m
McDonald’s+5% 41,992 $m
+4% 78,808 $m
Google+34% 93,291 $m
Samsung+20% 39,610 $m
Microsoft+3% 59,546 $m
Apple
Coca-Cola+2% 79 213 $m
Apple+28% 98,316 $m
Intel–5% 37,257 $m
GE+7% 46,947 $m
+2% 79,213 $m
Toyotay+17% 35,346 $m
Methodology and li iapplications
22
Interbrand brand valuation methodology
AuthenticityBrand Strength
RelevanceClarity Relevance
Diff ti ti
Clarity
C it t DifferentiationCommitment
EXTERNALINTERNAL
ConsistencyProtection FACTORSFACTORS
PresenceResponsiveness
Understanding
Brand valuation applications
Brand Management
Strategy/ Business
Case
Financial
How can we grow the
value of our
Which strategy will deliver the
What is our brand worth
today?brand? best return?
y
How can you be a b d l d ?brand leader?
33
HAVE CONVICTION NURTURE YOUR CULTURE
SURRENDER DELIVER AN SURRENDER CONTROL
DELIVER AN EXPERIENCE
HAVE
Trust Speed Working Purpose
HAVE CONVICTION
| Best Global Brands 2013 | Amsterdam | #BGB201322
Thought leadership platforms
Trust Speed Working Purpose
Currently, Smarter Planet acts as a unifying belief and innovations platform for the businessbelief and innovations platform for the business
• Positions IBM as ‘chief problem solver’Positions IBM as chief problem solver
• Bigger than the company
• A unifying idea
IBM has reinvented itself many times. But through it all, its DNA, its soul
i d i t t IBM' t remained intact... IBM's most important innovation wasn't a technology or management system. Its revolutionary idea was to define and revolutionary idea was to define and run a company by a set of strongly held beliefs.
Sam Palmisano, Former Chairman & CEO
.
Trust Speed Working Bigger Purpose
HAVE HAVE CONVICTION
| Best Global Brands 2013 | Amsterdam | #BGB201325
NURTURE NURTURE YOUR CULTURE
| Best Global Brands 2013 | Amsterdam | #BGB201326
Google culture Nurturing the people in your organization doesn’t require expensive perks or touchy-feely gimmicks. It’s about motivating, engaging and listening – and it can work for anybodywork for anybody
You don't need a lot of money to do what Google has done. If you give people freedom, they will amaze you.
Laszlo Bock, Google’s SVP of People Operations
2 5m2.5m
NURTURE NURTURE YOUR CULTURE
| Best Global Brands 2013 | Amsterdam | #BGB201328
Are you an IBM’er?
6 yearsIts genius lies in fostering innovation through co-
i i h i l 6 years creation with its employees, suppliers, partners and customers.
Mark Fidelman, Forbes
Surrender control – co-creation
SURRENDER SURRENDER CONTROL
SURRENDER SURRENDER CONTROL
DELIVER AN DELIVER AN EXPERIENCE
| Best Global Brands 2013 | Amsterdam | #BGB201333
Apple’s obsessive attention to detail is a unique hallmark of their brand’s experiencehallmark of their brand s experience
• Product – setting the tone for the brand experienceProduct setting the tone for the brand experience
• Details matter
I love the process of unpacking something. You design a ritual of unpacking to make the product feel
i l P k i b h i special. Packaging can be theatre, it can create a story.
Sir Jony Ive, Senior VP of Design, Apple
Attention to detail has been applied to all touch points, particularly retailpoints, particularly retail
• Early reliance on big box Early reliance on big box computer and electronics stores
• Poorly trained staff and ill-• Poorly trained staff and illmaintained Mac sections
• Needed to get closer to • Needed to get closer to customers
A l ’ di ti i ti i • Apple’s disruptive innovation in retail programme was to focus on the brand-led experience
Ambassadors needed clear guidelines on how to deliver a brand-led servicedeliver a brand led service
Appears seamless but Apple’s behaviour requires:• Internally codified behaviours
• Rigorous training
• Not externally communicated• Not externally communicated
Genius Principles
Approach ProbePresentPresent ListenEndEnd
HAVE CONVICTION NURTURE YOUR CULTURE
SURRENDER DELIVER AN SURRENDER CONTROL
DELIVER AN EXPERIENCE
Thank you!Thank you!
www.mobro.co/mikerochamikerochaMike RochaGlobal Director, Brand Valuation
TRUST & TRANSPARENCY –Anthony Mullen, Forrester Research
TRUST & TRANSPARENCY THE UPCOMING CHALLENGE
Trust & Transparency – the i h llupcoming challenge
A th M ll S i A l tAnthony Mullen, Senior Analyst21st Nov 2013
@ant_mull
Please tweet us your questions:Please tweet us your questions:
Trust takes years to earn but it can beTrust takes years to earn but it can be destroyed in seconds
1991 - "How can you sell this for 2009 Worst Family Brand1991 How can you sell this for such a low price?", I say, "because
it's total crap."
2009 - Worst Family Brand 2011 - Worst UK Airline2012 - Worst European Short-Haul Airline
© 2012 Forrester Research, Inc. Reproduction Prohibited 41
Be Real or Be RejectedBe Real or Be RejectedTHE ERA OF CONSEQUENCES
After 30 years of indulgence, consumers, businesses and governments are rebuilding the marketplace on a firmer foundationfirmer foundation.
Trust has become a cornerstone value.Trust has become a cornerstone value.
The prevalent skepticism that makes trust difficult to achieve and maintain also makes its achievement more powerful.
Brands face a choice – be real or be rejected.
© 2012 Forrester Research, Inc. Reproduction Prohibited 42
The Window of Opportunity
‘Covert’ Advertising
Maturing Legislation Greater
AutomationAdvertising –no real public
awareness
Public Awareness
& Privacy 2.0
Automation &
Transparency
pre 2009
2009 -2011
2013 -2015 2016+2009 2011 2015
3 killer use casesShow me everythingDelete everything Move everything
Risk Profiles – 3 responses to theRisk Profiles 3 responses to the ePrivacy Directive
© 2013 Forrester Research, Inc. Reproduction Prohibited 44
New tools give consumers more power toNew tools give consumers more power to track and control their data
Personal Identity Management • Digital Identity Managers• Digital Identity Managers• Reputation and Data Removal
Management• Personal Data Aggregators
>45 sites !gg g
• Specialized Data Vaults• Privacy & arbitration tools• Scoring / Trust / Value Sco g / us / a ue
Mechanisms• Preference Management• Quantification of self
© 2013 Forrester Research, Inc. Reproduction Prohibited 45
Consumers don’t trust advertisingConsumers don t trust advertising
© 2013 Forrester Research, Inc. Reproduction Prohibited 46
WEBSITESTAFF
ADVERTISERS
WEBSITEAPPLICATION
STAFF
GOVERNMENTPUBLISHER
BRANDPUBLISHER
SERVICEAGENCY
CONSUMERS HARDWARE
Within given context a recipient TRUSTS a provider for performing an action and realizing the result that
corresponds to a recipients goal
© 2012 Forrester Research, Inc. Reproduction Prohibited 47
It’s possible to come back from beingIt s possible to come back from being ‘crap’ but it takes honesty
© 2013 Forrester Research, Inc. Reproduction Prohibited 48
Brands have tools for managingBrands have tools for managing reputation and trust
© 2013 Forrester Research, Inc. Reproduction Prohibited 49
Digital and social activities provide anDigital and social activities provide an audit trail of behavior from both consumers and brandsconsumers and brands
Sharing Economy Social Platforms
© 2012 Forrester Research, Inc. Reproduction Prohibited 50
Allowing for richer models thanAllowing for richer models than reputation
© 2013 Forrester Research, Inc. Reproduction Prohibited 51
© 2013 Forrester Research, Inc. Reproduction Prohibited 52
The Window of Opportunity
Legislation Greater
Automation& Privacy
2.0
Automation &
Transparency
?use technology to really UNDERSTAND and SERVE the
customer and do so in a 2013 -2015 2016+?RESPONSIBLE way that engenders
TRUST and LOYALTY
2015
Thank youThank youAnthony Mullen
ll @f [email protected]+44 (0)207 323 7733@ant mull@ant_mull
BUILDING BRAND VALUE WITH Marcus Taylor, Venture Harbour
BUILDING BRAND VALUE WITH DIGITAL MEDIA
Building Brand ValueBuilding Brand Value With Digital MediaWith Digital Media
Why do we care about building “brand value”?
“Brand Building”Brand Building“Branding”
“Build Brand Equity”= “Improving our reputation”
Build Brand Equity“Brand Enhancement”
Your reputation precedes youou eputat o p ecedes youIf it’s positive, much of your work is done for you.
Why build brand value using digital media?
It’s where the eyeballs areIt s where the eyeballs are
It’s where conversations & buying decisions are taking place.
If we don’t our competitors willIf we don t our competitors will
Long Term
Friends & FamilyColleagues
Professional IntimateProfessional Intimate
One Night StandsBrands
Short TermShort Term
Credit: Mat Clayton
Long TermThose we trust the most...
Friends & Familyare recommending (through likes, tweets, and other social signals)…
ProfessionalI iIntimate
BrandsTh t t th l t
Short Term
…Those we trust the least
Short Term
Credit: Mat Clayton
H d d it ff ti l ?How do we do it effectively?
“If one cannot increase the supply of a resource, one must increase its yield” – Peter Drucker
The Lo er Yo r Marketing B dget theThe Lower Your Marketing Budget, the Smarter Your Digital Strategy Must Be.
Lower budgets can be a blessing in disguise. They force you to think about1:many (viral) marketing opposed to1:many (viral) marketing, opposed to the easier 1:1 marketing options.
Quality x Quantity
Red Bull own a media company with 135 staff producing branded content. Their official video content has been viewed over 700,000,000 times.
Create conversions around the brand, not necessarily about the brand.
Emerging opportunities & innovation
Mobile advertising is Currently ~1/3rd of the costof desktop advertising.p g
Huge opportunity for cost Effective content distribution.
Buzz + Advocacy
Most brands are great at building buzz online, but struggle with advocacy
What are you doing to ensure your brand is gettinginvolved in conversations around yourinvolved in conversations around your products / services – and is it enough?
Thank youThank you
INDEPENDENCE INNOVATION Kelvin King, Valuation Consulting Co
INDEPENDENCE, INNOVATION AND TRANSPARENCY
INDEPENDENCE INNOVATIONINDEPENDENCE, INNOVATIONTRANSPARENCY
KELVIN KING, MANAGING DIRECTOR
STRUCTURE PLANNING & VALUATION
Privileges of ownership
What is being transferred, definition and identification
Transfer part of rights
Lowest defendable scenarios Lowest defendable scenarios
Valuations for exit
Licensing from IP HoldCo
STARTING AT THE TOP AND TRYING TO BUILD DOWN
BRAND VALUATION
THE LAWS OF PHYSICS AND VALUATION SUGGEST THAT THIS IS
NOT POSSIBLE
Awareness, perceptual attributes, attitude, loyalty, strategies and, p p , , y y, g
management; just a few of the due diligence areas of examination
alongside financial and economicg
ACCOUNTING STANDARDS
The US FASB has created a list of what it considers to be a firms intangibles:
Market‐related Trademarks, trade names, service marks, trade dress, newspaper mastheads, internet domain
names.
Customer‐related
Customer lists, customer contracts, customer relationships, customer agreements.
Artistic related
Ballets, books, plays, articles, other literary works, musical words, opera, pictures, photographs,video and audio‐visual material.
Contract‐based
Licensing agreements, advertising or service contracts, lease agreements, construction permits,operating and broadcast rights, employment contracts.
Technology‐based
Patented technology, computer software, unpatented technology, databases, trade secrets,secret formulae
OCCASIONS FOR VALUING BRANDS
Mergers & Acquisitions Mergers & Acquisitions
Portfolio review and risk assessment
Arrange a loan – securitisation
Tax purposes
Licensing
Balance Sheet
Joint Ventures and Technology Transfer
Pension deficits
Selling your IP
Distress
WHY ARE WE VALUING?
Tax Valuation and Open Market Value
Fair Value
F i M k V l Fair Market Value
Commercial Value
Investment Value Investment Value
Owner Value
TOOLS
Howmuch? The determinants for discounted cashflow modelsHow much? The determinants for discounted cashflow models
Gross Profit Differential – Premium Prices/Premium Profits/
Excess Profits
Relief from Royalty
USEFUL LIFE
How long for (time periods)?How long for (time periods)?
Physical Lifey
Functional Life
Technological Life
Economic Life
Legal Life
LICENSING
Many factors affect licensing and royalty rate advice
Deal structure (term, cash, profit etc)
Exclusivity
Relative risks
Investment rates of return
Commercial relationship between parties (fair value is not fair market value and neither is open market value)
Arms length requirements – HMRC and Transfer Pricing
THE LICENSEE/PURCHASER & LICENSOR/VENDOR
Four Calculations or Steps – 'can Kelvin count'
1. Intrinsic value of Vendor or Licensor
2. Intrinsic value of Purchaser or Licensee
PLUS
1. Intrinsic value of Vendor or Licensor
2. Intrinsic value of Purchaser or Licensee
The capital values calculated are an essential step to calculate royalty rate or valuation
K l B L h F h H d d C ti
DO ETHICS ADD TO OR SUBTRACT Karl Bygrave, Lush Fresh Handmade Cosmetics
FROM THE VALUE OF A BRAND?
LUSHLUSHFRESH HANDMADE COSMETICS
Do ethics add to or subtract from the value from the value of a brand?
Karl Bygrave, Director,Lush Fresh Handmade Cosmetics
The original Body Shop team (clockwise): Mark Constantine(clockwise): Mark Constantine, Anita Roddick, Deb McCormick
© 2013 Lush Fresh Handmade Cosmetics
© 2013 Lush Fresh Handmade Cosmetics
The 10 Company Rules:
1 Value people before profit1. Value people before profit
2. Develop & promote talent from within: 'opportunity hangs in the air’
3 Take responsibility for our environment3. Take responsibility for our environment
4. Value and serve our customers
5. Benefit from the use of new technology5. Benefit from the use of new technology
6. Increase creativity and sales opportunities
7. Create a balanced and profitable business7. Create a balanced and profitable business
8. Contain staff and space additions
9. Behave ethically9. Behave ethically
10. Communicate effectively: 'We need to care about each other and help others'
© 2013 Lush Fresh Handmade Cosmetics
LUSHLUSHFRESH HANDMADE FRESH HANDMADE COSMETICS
91
What are ‘ethics’ for Lush?What are ethics for Lush?
© 2013 Lush Fresh Handmade Cosmetics
How do we have an opinion?How do we have an opinion?
© 2013 Lush Fresh Handmade Cosmetics
Charity Pot
• We have donated over £1.3m since 2007I 2012 d d £343 895 37% 2011• In 2012 we donated £343,895, +37% on 2011
• In the last 12 months we have donated to 133 groups
“ M k f l t i id d t k i th t“…Makes me feel great inside and out knowing that I’m helping others while helping myself ” online customer review
Buying/ Slush Fund
Our Ethical Buying team:
© 2013 Lush Fresh Handmade Cosmetics94
Transport Policy
• We aim to air-freight less than 5% in weight of the raw materials we import.p
• From February 2009 we asked our staff not to take any UK mainland domestic flights. We have gone from 122 return flights a year to zero.
• We tax ourselves on flying – for every tonne of CO2 y g yemitted when we fly, we pay £50.
More than just campaigning
• Our first all female shop opened in• Our first all female shop opened in Jeddah in March this year
© 2013 Lush Fresh Handmade Cosmetics95
Does everyone believe in Does everyone believe in everything?
© 2013 Lush Fresh Handmade Cosmetics
Are we doing this to build the Are we doing this to build the business?
© 2013 Lush Fresh Handmade Cosmetics
Why do the public know about our ethics?
© 2013 Lush Fresh Handmade Cosmetics
Do we upset more people than Do we upset more people than we appeal to?
© 2013 Lush Fresh Handmade Cosmetics
Do ethics add to or subtract from Do ethics add to or subtract from the value of a brand?
© 2013 Lush Fresh Handmade Cosmetics
Thank YouThank You
© 2013 Lush Fresh Handmade Cosmetics
Brand Academy y20132013
Building valuable brands
Gil C L i Silki
QUESTIONS?Giles Crown, Lewis Silkin
© 2009 Deloitte Touche Tohmatsu
Brand Academy y20132013
Building valuable brands