Brand equity is a major component of a company’s overall valuation, according to the findings in a new report by the Association of National Advertisers and research firm Guideline. On average, 75% of all respondents (some 300 brand marketing professionals) viewed brand equity as very important to their company’s success.
Most respondents also said traditional media channels were the most effective in brand building – specifically television, cited by 76%. But the survey found that internet advertising is emerging as a channel for brand building and is particularly effective for young and emerging or strong brands: Internet banner advertising ranked third overall (56%).
Warning signs of waning brand equity
Most respondents agreed that when customer conversion or repeat rate versus the competitor slips, it is a clear warning sign that the brand is at risk.
The top five warning signs:
- Customer conversion or repeat versus competitor slips (70%)
- The percent of customers who rate the brand as “excellent” slips (68%)
- Net promoter score slips (67%)
- Growing disparity between what customer’s rate highly about a company’s brand and its brand goals (62%)
- The product in being sold on promotion, deal or at a price reduction (62%)
Strategies for combating brand deterioration
Of the 14 potential strategies for brand revitalization, the ANA/Guideline survey found that a majority of marketers agreed that product innovation could effectively combat brand deterioration.
The top five actions for combating declines in brand health:
- Product innovation (87%)
- Exploring new targets (68%)
- Conducting a root cause analysis (67%)
- Deeper qualitative research such as focus groups on brand issues (66%)
- Refocusing of marketing efforts (64%)
The 2007 ANA/Guideline trend report presents the results from a survey of the ANA’s Brand Marketer Leadership community. The respondents included over 300 brand marketing professionals, who represent household brand names.
