ResearchTalk

The Millward Brown Approach
Don’t say we didn’t try.

In the ceaseless search for simplicity, we ask Eileen Campbell, CEO of Millward Brown for a single measure to encapsulate brand health: “We aren’t really advocates of single number measures – the same way you wouldn’t monitor your personal health with a single number.” Sounds reasonable.

Instead, the philosophy behind BrandZ, their brand health tool/framework, is to measure the strength of the consumer bond, says global brand director Peter Walshe: “Consumers have relationships with brands, and the intent is to strengthen those relationships.”

Strength is derived from a couple of (exotic-sounding) metrics: ‘bonding’ and ‘voltage’.

Bonding refers to one of five levels that indicate the strength of the consumer bond. It is based on factors such as: spontaneous awareness, knowledge, relevance, performance, and perceived competitive advantage. For example, the lowest level (weakest bond) typifies a consumer who is simply familiar with a brand and nothing else. The highest level (strongest bond) reflects a consumer who regards the brand as relevant to them and way ahead of the competition.

And voltage? That, says Walshe, reflects how effectively consumers move up the bonding levels. Strong brands tend to have high conversation ratios between the levels.

Interbrand and Landor
Global brand consultancies Interbrand and Landor also run brand health monitors. But they do so for brand valuation purposes as well as for brand/RoI optimisation.

Interbrand launched the first ever brand valuation tool in the 1980s as a way for companies to recognise the intangible value of their brands as tangible assets on balance sheets (a controversial practice at the time but now an accepted financial practice). Our focus here is on the brand strength bits of the valuation tool.

Interbrand’s Rishi Dhir, senior consultant within the brand valuation team, says that seven factors contribute to their strength score. Only three of these are consumer-driven (the rest are judged by Interbrand folks and cover areas such as IP/protection, diversification, etc.). The consumer metrics include: leadership (based on awareness, familiarity and whether the brand ‘acts as a leader’); relevance (how the brand is performing vs. marketplace trends, and the distinctiveness and differentiation vs. the competition); and, stability (loyalty, repeat purchase, level of satisfaction, recommendation, etc.).

“It’s not a particular number that counts, it’s what lies behind that number,” emphasises Interbrand’s UK CEO Rune Gustafson, “It helps clients prioritise touch points and investments.”

WPP’s Landor uses sister company Y&R’s long-standing Brand Asset Valuator (BAV) tool. Landor’s president of Asia-Pacific, Michael Ip, says it uses two ‘pillars’ for strength (differentiation & relevance), and two pillars for stature (esteem & knowledge/understanding).

Efficacy
There are a couple of primary uses for brand health tools, notably identifying a brand’s impact on future sales (i.e. prediction) and measuring/improving RoI (i.e. diagnostics).

Millward Brown’s Campbell says the BrandZ model is “pretty predictable.” Walshe adds that over countless studies, the correlation between the strength ‘score’ and measured sales is at least 65% (r-squared = .65+). In other words, strong brands correlate with significantly higher levels of purchase.

And in terms of diagnostics, Interbrand’s Gustafson says that a study for hotel chain Intercontinental uncovered an unmet need that the chain could potentially ‘own’. They discovered that knowledge was a key loyalty driver: “The [guest’s] disappointment was that they weren’t learning more about the places they were visiting because they were darting between meetings.” This insight led to concierges being brought forward in the decision-making process, and rooms were equipped with ‘5 things you can do’ lists. “Staying relevant and coherent to customers is one of the mainstays of a brand,” says Gustafson.

Issues
All very well, then.

Well, not so quick, says Ian Gee, regional brand planning director, Asia Pacific, at global media agency Initiative. For one thing, he believes that the link between what people say and what they do is ‘vulnerable’, particularly nowadays: “Research is very bad at predicting the future, particularly during an uncertain [economic] period.”

While this is not a direct retort to Millward Brown’s correlation between brand strength and sales (because those sales are not self reported by consumers but based on actual data), it does raise the issue of a lag between attitudes/perceptions and behaviour.

A lag that concerns Gee: “People store attitudes that they may sometime want to use to inform brand/product choice. But when confronted with making a choice, suddenly external circumstances have changed so much that the actual decision they make, there’s no relation to the attitudes they may have stored up until yesterday.”

Another issue is differentiation. John Gerzema. chief insights officer, Young and Rubicam, and author of new book The Brand Bubble, reckons that plain vanilla differentiation has had its day: “Consumers don’t just want a brand to be different; it has to keep being different. We call this energized differentiation, the consumer perception of meaning, motion and direction.“ He sees brands as a direction rather than destination, where velocity rather than distance is the key strength metric.

However radical that sounds, Campbell has similar thoughts: “An important measure is a sense of momentum…if the public has a sense that your brand has a positive trajectory, that’s quite a good indication of share growth.”

Emotions
Robert Passikoff, founder & President of Brand Keys, believes that brand health monitors fail by focusing on the rational: “The decision process in brand adoption, engagement and loyalty is primarily emotional (70%).”

This is made worse by his belief that “the rational bits [of brands] are generally undifferentiated, the emotional bits provide the differentiation.”
And using image attribute statements does not help, he says, because the statements do not represent “the emotional elements that resonate within brands…plus, emotions are difficult to articulate with traditional image statements.”

His solution, developed over the past 24 years, involves the use of psychological questions/scales that measure what people believe. The result is a map of engagement (any marketing or communications activity that results in an increase in brand ‘equity’) vs. attitudinal loyalty.
Passikoff claims that “because it is psychologically-based, we are able to see changes to the configuration of categories…and of levels of expectation, usually 12-18 months ahead of traditional research techniques.”

Growth of online
Gee points to the growth in word-of-mouth/online buzz as a development that brand health monitors need to incorporate: “I can see these growing in the future as more of our lives get committed online…that will become probably a stronger measure of overall brand health than the more formalized questionnaire-based tracking.”

Campbell says they are starting to include this activity: “The other thing we are starting to measure are what conversations they are having about brands…are they talking to other people about brands…how much consumer propagation is happening.”

Music, no doubt, to the ears of Mark Earls, author of Herd: How to Change Mass Behaviour by Harnessing Our True Nature, and winner of best paper at ESOMAR’s 2007 Congress. He contends that we tend to copy others rather than make truly individual choices, and so when faced with reporting why we make certain decisions/our attitudes, we tend to post-rationalise. For him, understanding how we interact is key.

In general though, Earls is not a particular fan of brand trackers: “Monitoring brand health is a distraction. The real game is not with the brand but with people and their interactions – this is what shapes consumer behaviour, not brand perceptions or relationships.”

Winners and losers
Having opined about the tool itself, a few emergent themes then.

Given the economic climate and pressures, Campbell is starting to scrutinise attributes such as ‘brand willing to pay more for’ and ‘brand that is good value for the price’ on some of her clients’ trackers because “Marketers need to protect the sense that they are providing something special.
“We think it’s particularly important for marketers to try and prevent consumers from switching to lower priced or store brands…we found that the perceived gap in quality between a major brand and store brand is greater than the actual gap…then you’ve set an extraordinarily high hurdle for the brand marketer to get over once the recession is over to get them back.”

In other words, price promotions could be a false economy and ultimately damaging.

“These are great times,” says Gee, “for challenger brands when old loyalties come into serious question. Like Lexus in the 1980s, an S-class car for an E-class price.”

Interbrand’s Gustafson talks of the chaos in the financial sector, particularly in the US and UK. Here, trust in financial brands has been damaged with the resultant loss of significant brand value among financial services brands, some (Merrill Lynch) more than others (HSBC) (as of June ’08).
Landor’s Ip, based in China, believes that despite the reduction in domestic growth rates, there is still an opportunity for Chinese and Indian companies to build share globally. And while Chinese companies currently lack a depth in global management, he believes that companies such as Lenovo are learning fast: “…they were very clever in appointing a CEO from outside the company, and in moving their chairman to New York.”

Future
Reflecting on the future, Campbell suggests that the research industry may well be on the cusp of a new challenge: “I think we went from ten years ago being very good at explaining why something happened…today we’re pretty good at predicting what will happen…what I think clients are increasingly looking for is to imagine a future and tell them how to get there…beyond a single brand and towards portfolio management.”