Brand assessment is a highly fragmented business, with a number of different consultancies, advertising agencies, and even in-house departments offering a growing number of research stethoscopes to listen to the pulse of a brand.
It took years for Ipsos-ASI Inc., an international research firm, to tweak and modify Equity*Builder, the company's new method of measuring the health of a brand. In 1997 and 1998 company executives thought they finally had it, remembers John Hallward, president of the Montreal-based office of the British firm.
Hallward and his team believed they had come up with an innovative model that would measure factors beyond the standard brand loyalty surveys broken out by demographics. The new Ipsos metrics went beyond measuring the degree to which a consumer professed to like a product and frequency of purchase, taking into account market share and other figures to determine brand equity.
Ipsos took the results of the new model to St. Louis-based Energizer Holdings Inc., because the manufacturer's well-known battery was one of the brands that scored strongest on the company's new equity scale. But the marketing team was less than enthusiastic about its high marks and furrowed its collective brow. â€œThey said, â€˜If we have such great brand equity, then tell us why we're not doing as well in the market as we'd like,â€™â€? Hallward remembers.
While the brand equity measurements were impressive, it turned out that with batteries, brand equity doesn't count for much. Consumers are less brand loyal and more price sensitive when it comes to a product that's inside a device. While Energizer ranked high, so did Duracell, giving both brands a high degree of substitutability. Indeed, as tracked by AC Nielsen, Energizer's total share of the U.S. retail market increased just 0.2 share points in the first quarter of 2001, while total sales for the alkaline battery category rose 8.8 percent in the same period. Numbers similar to those, along with the substitutability issue, sent Ipsos back to the drawing board. The company added a metric for what it calls â€œbrand involvement,â€? measuring how invested a consumer is in the brand, separate from his or her high opinion of it.
The lessons learned in the Energizer example helped Ipsos create what has become Equity*Builder today, one of several new and more comprehensive ways to appraise a brand's health, using more than 200,000 different assessments in 65 categories, ranging from uniqueness to relevance to quality. Ipsos' brand-health clients now include airlines such as Montreal-based Air Canada, state lottery programs, consumer products firms including Cincinnati-based Procter & Gamble Co., and even commodity goods like Arden Hills, Minnesota-based Land O'Lakes Inc.'s butter.
Hallward says the original misinterpretation of the strong equity ranking helped the battery-maker as well. Energizer learned that it should not invest in further advertising that was designed to boost its already high brand equity in a category where such equity mattered little.
The advertising lesson was a financially significant discovery for a brand the size of Energizer, which in May announced a new $100 million U.S. remarketing and positioning effort focusing on the longer life of its batteries. Brand assessment is a highly fragmented business, with different consultancies, advertising agencies, and even in-house departments offering a growing number of research stethoscopes to listen to the pulse of a brand. As a result, there are no statistics available on the dollars spent annually on such brand health checkups. But Scott M. Davis, author of Brand Asset Management: Driving Profitable Growth Through Your Brands (Jossey-Bass, 2000), estimates that most consumer marketers allocate 3 percent to 7 percent of total revenues to brand building, and of that, 5 percent to 10 percent is spent on measuring brands. Using Davis' calculations, a brand like Energizer could see a $7 million annual domestic savings â€” and millions more company-wide, including worldwide markets â€” by accepting Ipsos' trial-and-error process.
The Energizer example is not an anomaly, and, in fact, is a typical result of smart brand health assessment, says Stephen C. Horne, president of Analytici. The New York-based company developed Prophesy ROI Optimizer, to help marketers calculate if what they are spending on advertising is worth the price. Horne says brand managers can often get a 60 percent improvement on their products' return on investment by moving funds from one type of marketing effort to another.
Think of it as managed care for marketing: Budgets for preventive tests and screenings are shrinking just as technology is being developed to deliver more information with greater accuracy during any annual physical. Brand health is akin to human health, as both are capable of improving and have the opportunity for long life, says D. Matthew Knain, director of loyalty and equity management for Maritz Research Inc. in St. Louis.
To make sure that growth is possible, today's brand managers must constantly assess the progress of their brands against others. As market share positions shift more rapidly than they once did, experts say marketers need to measure their brand's health on a more regular, and in some cases on-going, basis than they did even a year ago. They need better, more accurate, and customized ways to measure their products and services against the competition.
In addition to Ipsos-ASI, a number of firms have developed different criteria, using a combination of widely accessible quantitative data from Nielsen and Information Resources Inc. qualitative focus groups, and other proprietary research to provide that kind of personalized health maintenance. While familiarity and loyalty questions have been a part of a marketer's black bag for decades, today's researchers say those tools are the equivalent of simple thermometers. They take an accurate temperature, but the X-ray, CT Scan, and MRI-style abilities of more advanced criteria are what really indicate the health of a brand. However, the environment in which researchers use these tools â€” software, telephone and online surveys, and focus groups â€” has remained constant, much like the doctor's examining room.
These new measurements better assess the health of a product or service while comparing it with those in its competitive set. In November, FCB Worldwide, the New York ad agency, introduced Relationship Monitor, an effort to quantify the emotional relationship consumers have with the brands they use. Like Equity*Builder, Relationship Monitor uses criteria that go beyond self-reported frequency of purchase and the price consumers are willing to pay.
â€œWe had a hypothesis that consumers' relationships with brands were like person-to-person relationships,â€? says David Budner, executive vice president and worldwide director of Relationship Monitor. Working with clinical psychologists, marriage counselors, and clergy, FCB picked up on the use of emotionally loaded words, like â€œgrieve,â€? that consumers would apply when describing how they felt when a favorite brand was taken off the shelf.
With those metrics, Budner says Relationship Monitor can calculate whether or not consumers are ready to make a long-term commitment to a brand of bleach, just as they would to another person. Relationship Monitor was tested with 60 brands, ranging from consumer products such as Levis, Nike, Sony, and Oreo, as well as more complex brands such as the Democratic National Party and the U.S. Postal Service. FCB found that, as in personal relationships, trust was an important element in developing loyalty.
Others who have not developed such touchy-feely metrics are convinced that the emotional side of a person's reaction to a brand â€” both in consumer markets and in the business-to-business sector â€” is essential in accurately assessing a brand's health. â€œWe are seeing a difference in the attachment a consumer has to a brand,â€? says Ian Lightstone, director of brand strategies practices at Maritz. â€œA change has taken place in that there is an emphasis on the relationship.â€?
In October, Chicago-based Accenture conducted a survey of 2,000 consumers to evaluate 17 business-to-consumer brands being marketed online, looking at how healthy the brands were in cyberspace. The researchers found that â€œsofter elementsâ€? were as important to a product's online health as harder categories such as price and Web site speed, says Kelly Dixon, senior manager and director of eBranding at Accenture.
â€œOne of the things we tell people is that you need to go beyond awareness to understand brand health,â€? says Julie Schwartz, director of research at Lexington, Massachusetts-based ITSMA, a technology branding firm. â€œWe ask them to think about, â€˜Do your customers know who you are? What you stand for? What is the emotional experience evoked by the brand?â€™ This goes much farther than, â€˜Have you heard of the brand?â€™ because it is not just familiarity but actual knowledge of how well they know the brand.â€?
While firms such as Ipsos, FCB, and ITSMA have developed metrics that assess the bonds consumers form with the goods they buy, using such information to predict a brand's future health is much like asking a medical doctor for a next generation prognosis. Even the newest and most significant assessments are essentially snapshots of a brand's health at that particular moment in time, influenced by the activity of the competition, the state of the economy, and even short-term mood of focus groups and survey respondents.
â€œAs you begin to talk to your audience, you find glimmers of new opportunities and new trends that may be emerging,â€? explains Diane Manning, vice president of strategic planning for Brandfusion, a San Francisco-based public relations firm that conducts brand health assessments for clients. â€œFor example, the need for a whitening toothpaste starts with consumer habits and trends and seeing that people are drinking a lot of coffee that is staining their teeth.â€?
Following such trends is the reason Maritz's Lightstone recommends that marketers measure brand health at regular intervals over periods of four, five, or six years so that point-in-time measurements will be meaningful. Just like taking your temperature once every decade won't tell you whether or not you have a cold in mid-December, waiting until you are worried that your brand might be ill is not the time for brand assessment. â€œEverything you do in a marketing sense either contributes to or runs afoul of your brand's health,â€? sums up Charlie Ballard, a senior vice president at Ipsos.
THE HIGH PRICE OF ADS
U.S. marketers will spend more than $100 billion to advertise their wares this year. Evaluating the health of a brand has become ever more important as the cost of advertising continues to rise.
Sourcee: Competitive Media Reporting