How Brands Create Value

Macro and micro levels of value creation

Brand value is a cumulative result of sales volume, equity, audience size, and the brandʼs market potential.

But unlike other assets like stocks, bonds, commodities and real estate, there is no active market in brands that would provide comparable values. The main issue with brand valuations is their arbitrary measurement and few agreed-upon systems and processes for evaluating brand assets.

“Brands are a company’s most valued asset, yet there is not universally accepted method of measuring that value. The only time you can be sure of the value of your brand is just after you have sold it,” noted WPP’s advisory board member Jeremy Bullmore.

At the same time, well-managed brands have extraordinary economic value. “Founders die. Factories burn down. Technology becomes obsolete. The brand is the only sound foundation on which business leaders can build enduring, profitable growth,” per ad exec Jim Mullen. Brands are “the most effective and efficient creators of sustainable wealth,” according to Interbrand Chair.

Brand create value on macro and micro levels. On a macro level, brands create value by participating in the economy. On the micro level, brands create value by linking culture with business.