Our thinking appears in marketing articles and publications around the world

For some time now, marketers have talked about methods to measure the economic effectiveness of their programs and have looked for financial metrics suitable to report their activities to the board. A recent survey by the Columbus Business School indicates their success has been limited. Only 30% of the CMOs interviewed use financial metrics for reporting, and 57% of CMOs use no measure of Return on Marketing Investment to evaluate their achievements.

In many companies marketing and accounting follow totally separate paths. Accounting is the process of managing income, expenses, assets and liabilities. Marketing is the customer-focused function. This separation is artificial because the two functions in reality are indivisible.

Roger Sinclair stresses how measurement of brand performance is becoming a long-term necessity. Marketers use a multitude of measurements to gauge the effectiveness of their activities and the progress they are making toward their goals.

James P. Catty’s latest book, Guide to Fair Value under IFRS, includes a chapter on “Trademarks and Brands” written by Prophet Academic Partner Roger Sinclair, PhD. The guide explains the concept of fair value in implementing IFRS (International Financial Reporting Standards), and its differences with U.S. GAAP. It provides detailed guidance as to how fair value is to be determined, and fills numerous gaps in common understanding of IFRS requirements.

In this article, Roger argues that accountants and marketers are more similar than we think.  

Roger Sinclair outlines that Portfolio management is a key ingredient in enterprise value in and that inefficient portfolio units drag down the rest. The Prophet Brand Valuation Tool offers sensitive and unique facilities for this management function.

If marketers are looking for an easy time in this new decade, they must think again. There are three core trends that are irresistibly affecting the way marketers conduct their business; and they are each substantial.

If the marketing budget — which always ranks very high on the schedule of costs on the income statement — was viewed more like the investment in assets, more marketers would sit on the board and have the ability to explain and report on the crucial assets within their purview.

What is a brand and when does it become an asset? In this article, we discuss the history of brand valuation.

Why are companies using brand valuation? There are many reasons including, in a few cases, sheer curiosity. Using a case study of the Australian wine industry, Roger explains why brand valuation is the thing.

Marketing is often described as a profession. It is not. If it were a profession, no one could be a marketer without having completed the requisite training and having the certificate on the wall. Marketing will never be a profession in the true meaning of that term, but marketers will become more professional in what they do if they augment their competency with these additional skills. 

Brand valuation has emerged from its introductory phase and is now on a steep growth slope.  This whitepaper focuses on the financial heart of brand valuation: isolation of the portion of “super profits” generated by the brand. It is argued that the brand is central to a firm’s ability to earn these profits and that it exerts an influence on the resources and capabilities that are directly responsible for a firm’s success. No other intangible has the same linear link between the market which is the source of a company’s revenues, and the wealth the company creates for its shareholders.

It came as something of a surprise to me to learn that brand valuation is closely linked to a contributory cause of the world financial credit crisis. A big discussion point right now is how intangible assets that have no active market as a reference should be valued. Apparently, this was one of the major “last straws” in the demise of the banks which used level 2 as the method to value their assets and not level 1. If that means little to you, you are not alone.

Marketing is under threat. First it was tobacco, now it is alcohol and food, next it will be motor vehicles, carbonated beverages, and fast food restaurants. It is not the damage that these products are capable of that worries me — it is the attack on marketing as the cause that should concern the industry.

In this article focused on professional services companies, Roger argues that there is a negative correlation between the time a services company completes the job and the level of commitment for clients to buy again. To combat this, professional services companies should adopt a new form of brand equity research.

Since brands are now assets when they are included in a business combination, ways of valuing them must be developed that take account of their special characteristics. In this article, we demonstrate that brands do have characteristics worthy of special consideration and that valuation professionals might have to adopt some unfamiliar approaches to do full justice to this form of intangible asset.