February 5, 2023

Is there a return on investment for branding?

Yes, there is.

Return On Investment, a.k.a ROI is possibly the most talked about metric in business. 

The concept is simple: spend a (hopefully) small amount of money on your business’ product, service, or project to gain a maximum return. A small percentage of that return is re-invested into the company to repeat the process.

A simple example would be investing $1000 in ABC stock and closing your position at $1200.00 two months later. 

While you could say you made $200 in two months and be correct, we calculate ROI as a percentage, so you made 20% on your investment.

Not a bad return, but this article is about something other than financial planning.

It’s about branding and why you, the CEO of your business, should consider it carefully.

Why? Because when you invest in branding, the payoff can be substantial.

What is Brand Value? 

How do we measure a company’s brand value? Since we know a brand is a feeling the consumer feels towards your product, service, or business, it’s not something they hold in their hand; it’s something that occupies a space in the consumer’s mind. In other words, it’s not a tangible asset.

Let’s change our perspective a little – what’s the difference between a strong brand and a weaker one?

A strong brand attracts many customers who are happy to pay more and usually more often, which has favourable effects on your business, such as lower costs per acquisition. This creates brand loyalty which, over time, translates to higher revenue and profits consistently for the long haul—strong brands command pricing power. Warren Buffet believes this is essential when investing in a company’s stock.

A weaker brand becomes part of the noise and usually struggles to compete. That may be harsh, but it’s true. 

Study after study proves this. Here are two of my favourites to illustrate my point. You’ll like them too.

Ocean Tomo, a leading Financial Expert, Management Consulting, and Advisory firm that provides intellectual property (IP) services and other intangible assets, came out with a landmark study that made quite the mark.

In the study, they determined that, over time, Intellectual Capital or “intangible assets,” which, as they put it, “generally refers to traditional Intellectual Property assets – patents, trademarks and copyrights,” has grown from 17% representation in 1975 to 90% in 2020 in market cap on the S&P 500. 

Wait. What? What does that even mean?

It means that, over time, companies went from having tangible assets to intangible assets represented in the market. A company’s brand value is worth quite a bit.

How much? Here’s another study that is my absolute favourite.

Interbrand is a brand consultancy firm that has been around for 40 years, so they know a thing or two about branding. According to their website, the Best Global brands are worth over $2 trillion, with tech being the leading sector (the top 10 make up 62.3% of the total brand value).

The best part is that they come out with a “Top 100 Global Brands of the year” with the latest 2022 year available now. 

Who is number 1?


What is Apple’s Brand Value?

$408 251 000.00

Close to half a billion.  

Take as long as you want to reflect on this. I’ll wait.

Interbrand believes that brand is more important than ever before. I concur (you can download their full report here).

And the trend agrees with this. In the past, many CEOs thought that marketing tactics alone were enough to propel them forward. However, more small, medium, and large corporations are investing in branding than ever before to be more relevant.

Marketing is a critical component in any business. However, when you add branding to the mix, the sky is the limit. 

Strong brands prove this over and over.

Ok, what are the KPIs of Branding? 

If you’re to invest in your brand, there needs to be something we can use to measure its performance and course-correct if necessary. I hate to burst your bubble, but measuring brand value or equity is not easy. Different companies across many categories use many Key Performance Indicators (KPIs), and it is beyond the scope of this article to go through all of them.

However, I don’t want to leave you empty-handed, so here are (just) a few that go beyond revenue and profit:

Branding Power

  • Brand Culture – growth happens from the inside out. Business employees are critical to expressing a brand’s philosophical value to clients. Just how engaged are your team members in your business?
  • Brand awareness is a KPI that calculates customer awareness or perception of your brand.

Business / Financial

  • Customer Lifetime Value (CLV) is an essential metric for some businesses. Depending on who you ask, it can cost anywhere from 4 to 6 times more to acquire customers than retain them. Remember, strong brands create brand loyalty, quickly bringing the Cost Of Acquisition down.
  • Cost Per Acquisition (CPA) – While we’re at it, let us look at CPA. How much are you spending to acquire leads and convert them to paying customers? Depending on your campaign, it may be too little or too much. 

As I said, these are just a few. In future articles, I will touch on one or two and elaborate more on them.

So what now?

I hope to describe why developing your brand is the best investment you can make for your business (especially for the long haul).

But here’s a sneak peek on future articles:

  • Brand strategy – You need a plan to become relevant and stand out from the crowd. We’ll cover some of the critical concepts needed when developing your brand.
  • Brand Identity – We are discussing logos, colour palettes, and more. From posters to your website, every single touchpoint should be easily identifiable in your customer’s journey.
  • Brand development – Time to craft a story that involves you and your customer. It’s time to build a relationship—hopefully, a long-term one.


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