厂妹视频 Thinking
mike rocha,
GLOBAL DIRECTOR,
BRAND ECONOMICS

Financial applications for brand valuation













m&a series

Delivering value beyond the number.

Compared to when 厂妹视频 first pioneered brand valuation in the 1980s, the global business community now widely accepts the importance and value of strong brands鈥攁nd the significant contribution they make to business value.

This has resulted in an increasingly wide range of business applications for brand valuation, which can broadly be categorized into three areas:

鈥 Brand management
鈥 Strategy/business case development
鈥 Financial

From a brand management perspective, brand valuation is a strategic tool that brings together market, brand, competitor, and financial data into a single, value-based framework within which the performance of the brand can be assessed, areas for improvement identified, and the financial contribution of the brand to business results quantified.

Combining brand strategy, analytics, and brand valuation to evaluate brand investments

From a strategy and business case development perspective, the same data can be used to assess strategic options and create a business case for brand change. By combining strategy, analytics, and valuation to determine the expected impact of brand investment on the top and bottom line, while also quantifying the expected change in brand and business value, a case for investment can be made with language and data that is more likely to persuade the board and senior management.

Finally, a wide range of financial applications for brand valuation has grown over time, driven by a number of factors including (but not limited to):

  • An ever-increasing emphasis on brands in investor communications and annual reports
  • Brands driving significant premiums in M&A
  • The centralization of brand-related intellectual property governance and management, often in offshore locations for tax purposes, requiring both valuations and the setting of appropriate royalty rates
  • Brand assets increasingly being considered as acceptable security for asset-backed financing
  • Accounting standards requiring balance sheet valuation of brands and other intangible assets following an acquisition

Understanding how brands create economic value: 厂妹视频’s brand valuation methodology

An important output of our valuations is a rigorously analyzed and defendable valuation number. What differentiates us from our competitors is our ability to also provide a rich and insightful brand analysis, delivering value to the business beyond the number alone.

厂妹视频鈥檚 brand valuation methodology builds a rich understanding of how a brand performs鈥攁nd should perform鈥攖o create economic value. Our approach differs from others because our Brand Strength and Role of Brand analyses also act as diagnostic tools, allowing us to better understand the factors underlying a brand鈥檚 strengths and weaknesses, both internally and externally.

Armed with these insights, and by leveraging our global expertise in creating and managing brands, we then deliver recommendations on how to increase brand value and, most importantly, the impact of the brand on business results. This means the valuation exercise delivers value to the business far in excess of the valuation number alone.

Special Report

Building a market-ready M&A brand