The Brand Bubble

Brand Troubles

Big brand names risk being devalued and losing their financial muscle. Experts track a brand’s strength with the BrandAsset® Valuator (BAV), a database and research tool that calculates brand reach and marketplace valuation. Based on data going back to 1993, researchers have found that consumer attitudes toward brands are falling in such pivotal areas as awareness, loyalty, trust and admiration. Brands are not contributing to their companies’ balance sheets and the public’s perception of brands is declining. These events are happening because of brand clutter and new consumer behaviors. Trust and awareness are no longer the sole determinants of how customers perceive brand value. Instead, consumers now focus on fewer brands, primarily exciting ones with new features. These brands distinguish themselves with a concerted effort called “energized differentiation.” Brands with this energy capture public attention, causing a demonstrable improvement in their firms’ financial results. Consumers no longer value brands as highly as they once did. This has opened a gap between the value Wall Street gives brands and the value consumers give them. In effect, this valuation...