Linking Advertising and Brand Value

Brand equity is one of a firm's most important assets. Unfortunately, such intangible assets have received little attention from the financial and accounting communities. This view may now be changing. The focus of the research is on valuating the effect of advertising on brand equity, not only for external reporting but also for internal management and control. Pros and cons of various brand valuation models are examined. Brand asset measurements should address the success of the firm in creating a product, providing marketing support, retaining customers, building brand value, and reducing return volatility. The authors use a calculation called "advertising turnover" to describe the relationship between advertising expenditures and brand value. It indicates how efficiently the firm converts advertising dollars into brand value, and is similar to methods used in financial analysis for determining the productivity of capital assets or receivables. Plotting this calculation over time can distinguish between high-efficiency brand enhancers, low-efficiency brand enhancers, unknown brand future, and brand deterioration. Brand ROI can be broken down into "brand turnover" and "return on sales." Kellogg's brand performance is used as an example of applying the model to evaluate the ability of advertising and market share to enhance brand value.

• Marketing strategy
• Marketing management
• Advertising strategy
• Brand management