The Marketing Accountability Standards Board (MASB) has announced that Brand Finance’s Brand Value Rankings have been certified through the Marketing Metric Audit Protocol (MMAP), the formal process for validating the relationship between marketing measurement and financial performance. The audit is now included in the MMAP Metric Catalog.
Brand Value Rankings are a global study of brand strength and value, across more than 40 sectors and 40 countries, based on a transparent methodology and using publicly available data.
The valuation methodology used is the Royalty Relief method, which models the expected royalties that a business would have to pay to license the brands it uses. These brand royalties are forecast and discounted to give a net present value of the brand.
The valuation assumptions are influenced by the Brand Strength Index (BSI), which is a balanced scorecard of brand strength metrics in three main areas – Marketing Investment, Stakeholder Equity and Business Performance – and includes Brand Finance’s proprietary consumer market research.
According to the audit, “Brand Finance’s Brand Value Rankings create an easily understandable measure that quantifies the importance of a brand to the business, its size and influence, while also facilitating tracking over time and competitor comparison.”
Brand Finance puts approximately 5,000 brands to the test each year, tracking the movements, trends and response to events. The Brand Value Rankings are used to compare the most valuable and strongest brands globally, across sectors and geographies, and between nations.
“The Brand Finance assessment was among the most extensive to date,” said Frank Findley, MASB Executive Director and Chief Advisor of the MMAP Center. “Of particular note was the inclusion of both brand strength and brand value metrics. Not only did this allow Brand Finance to bridge the gap between marketing metrics and financial metrics, they showed an emerging relationship to share price.”
“I am delighted that the methodology we use to produce our annual rankings on the most valuable and strongest brands has been certified by MASB,” said David Haigh, CEO of Brand Finance. “At Brand Finance, we strive towards providing a mutually intelligible language for marketing and finance teams. We look forward to working together with MASB in the future to support the development of accountable marketing standards and practices.”
The MMAP assessment provides vendors and users of marketing performance metrics with a systematic way of thinking about specific metrics with criteria for assessing their usefulness, their relationships with one another, and their relationships to measures of financial performance. For more information, contact [email protected].