The Raison d'être
The early 1990’s saw an introduction of generic products into the market, with the result of branded products losing market share. Marketing articles screamed that Brands were in trouble, and magazine headlines questioned “Are brands dead?” According to one accounting metric, the IBM brand was worthless.
Young & Rubicam believed otherwise. After a thorough research review, it was apparent existing studies were largely anecdotal, or case histories. Within our own organization, Landor had conducted the most global scientific effort called the Brand Power Study, but it contained only two metrics: measurements of Esteem and Knowledge. Many questions remained unanswered, especially the key issue: How do brands grow and decline?
Y&R wanted to answer this question scientifically. A study was envisioned to definitively and scientifically understand how brands grow and decline, and a Corporate Research Group was formed to handle the design and fielding of this study. The methodology was unique: consumers would be presented with a series of brands which they would rate on 72 measures. Brands were presented outside of a category context, so the reaction to the brand was “pure.” In 1991 pretesting was conducted in the United States and London, and by 1993 the first wave of fieldwork had been completed in 12 countries.
The analytic process was daunting. The size of the database exceeded the capacity of business computing at the time, and at the end of every day all department computers – including the secretarial staff’s – were left to run analyses overnight. Through an exploratory process, several findings began to emerge. We noticed that growing brands usually had strong ratings on Different, Distinctive, or Unique – from this observation emerged the Differentiation construct. Analytical work revealed relationships between several BAV measures and a brand’s market place performance. Eventually, we developed a set of constructs that related to a brand’s market performance that we now know as the BAV® Pillars – Differentiation, Relevance, Esteem and Knowledge. When it became evident that these measures were related to a brand’s financial metrics, including price elasticity, current operating value, and future earnings, it was clear the study had broken beyond a standard tracking, or attitude and usage study.
In 2001 BrandAsset Valuator acquired a panel in the U.S., allowing the collection of many additional measures, including psychographic and attitude measurements. Data was collected on a quarterly basis. The study has now been conducted in over 40 countries, among nearly a million people.
The study represents the world’s largest brand database, and it continues to evolve. In 2005 an additional dimension of Energy was recognized, which relates to forward momentum of a brand. BAV measurements have been successful in predicting stock market performance, and a theoretical portfolio has exceeded the S&P performance for every year in the last decade. Collaborative work with academia is ongoing to develop a worldwide valuation of brand’s contribution to capital. The U.S. work has expanded to include over 200 categories, representing over 3000 brands which are measured each quarter. Several well acclaimed academic publications, including the Brand Bubble and Spend Shift, have been based on BAV data, and the study is continuously referenced in many international marketing textbooks.