CoreBrand Equity Construct – Familiarity & Favorability Metrics

Provider:  CoreBrand, LLC

(Acquired by Tenet Partners in 2014; not audited since acquisition)


CoreBrand Equity is a modeled construct composed of CoreBrand Familiarity and Favorability metrics and financial information obtained from external sources.[1]

Source Data

CoreBrand Equity is calculated from 3 data sets:

  1. Using a sample of 8000 interviews among senior business executives (400 per company per calendar year) Familiarity and Favorability measures are collected for over 800 companies across 49 industries to create an on-going database of image and reputation data. The Corporate Branding Index is derived from this database. [6]
  2. Financial performance data is obtained from public sources – Value Line, Hoovers and Yahoo! Finance
  3. Communications investment data is obtained from Kantar media or Competitrack

How Derived

The CoreBrand Equity model was derived from the observed relationship between brand performance measures (Familiarity, Favorability) and financial performance measures (reported financial metrics). The CoreBrand Equity algorithm weights factors that drive financial performance as percentage-contributors to total market capitalization. [4]

How Used/Activities

CoreBrand Equity estimates the existing and potential contributions the brand can have to total market capitalization which lead to specific activities. [5]
These include:

  • Increasing/decreasing total communications to optimize brand familiarity
  • Changing communication focus or content to optimize favorability
  • Evaluating the impact of other activities in relation to brand performance (CSR, partnerships/alliances/M&A, brand stretch, etc)
  • Evaluating competitive performance
  • Monitoring market conditions to evaluate the necessity for brand change


  • Unbiased – data collected is market view and not adjusted or interpreted
  • Company/industry measures are collected on the same respondents with no differential respondent biases
  • Time-tested – the same methodology has been used to collect and tabulate data since 1990
  • Adaptable – metrics can be analyzed to address specific company questions [5]


Syndicated data is limited to the U.S.

Relationship to Financial Metrics

The CoreBrand Equity model is a financial model at its core. Brand elements are added to the financial model and have proven to increase its predictability and improve the accuracy of its forecasts. The model utilizes reported financial data as well as brand measures as its input and predicts expected improvements in stock price from changes in brand communications strategy or investment. [4]

How Does It Meet the MMAP Characteristics of an Ideal Metric?

  1. Relevant . . . addresses and informs specific pending action
    – Identifies the percentage of stock price that can be attributed directly to brand (as measured through familiarity and favorability)
    – Evaluates a brand’s strength (Familiarity/Favorability)
    – Provides guidance on how to optimize strength and value [5]
  2. Predictive . . . accurately predicts outcome of pending action
    The CoreBrand Equity model accounts for 87% of the variance in share price on average, 5% – 7% of which is the premium due to corporate branding explained by Familiarity and Favorability. [2,4]
  3. Objective . . . not subject to personal interpretation
    All model inputs are “market view” metrics, not adjusted by CoreBrand. Familiarity, Favorability scores mean the same across companies and industries. [6]
  4. Calibrated . . . means the same across conditions, categories & cultures
    Familiarity, Favorability and Equity value scores are independent of industry bias. The data and its meaning are consistent.[6]
  5. Reliable . . . dependable and stable over time
    Split-Sample intra-class correlation coefficients:
    Familiarity = 0.99; Favorability = 0.74; Brand Power = 0.99
    Familiarity and Brand Power are highly correlated (.98), while Favorability is less correlated to Brand Power (.42), likely due in part to its lower reliability. However, Familiarity also has twice the variance of Favorability. Since BrandPower is a function of these two metrics, its reliability is more similar to that of Familiarity. [7]
  6. Sensitive . . . identifies meaningful differences in outcomes
    The CoreBrand Equity model accounts for 87% of the variance in share price on average, 5% – 7% of which is explained by Familiarity and Favorability. [2,4]
  7. Simple . . . uncomplicated meaning and implications clear
    Familiarity leads to Favorability. People who know your company are more likely to feel positively toward your company than toward a lesser-known entity. The more favorable people are toward your company, the more likely they are to buy your stock, resulting in a premium price per share that is driven by brand strength.
  8. Causal . . . course of action leads to learning/improvement for decision making in competitive context
    Varying media spend levels relative to the current level in this model is used to estimate the potential for further gains from increased spending or a potential reduction in spending without loss of current contribution to stock price.
  9. Transparent . . . subject to independent audit
    Examined and proprietarily reviewed by practitioners (Cisco Systems, Waste Management, Pitney Bowes and others) and Academics (Columbia University, University of Houston and others) and published (HBR, ANA, others) [2,3] This is an independent audit performed by the MMAP Center.
  10. Quality Assured . . . formal/ongoing processes to assure 1-9 above
    No on-going processes documented.

How Does It Fit Overall Guidelines?

Measures of return on marketing investment should:

A. Provide a specific link to financial performance; no measure or measurement system is complete without one.
CoreBrand Equity is able to identify brand’s contribution to stock price (market capitalization).

B. Reflect the standard financial concepts of return, risk, the time value of money, and the cost of capital.

C. Provide information for guiding future decisions by predicting future economic outcomes as well as provide retrospective evidence of the impact of marketing actions.
Predicts effect on stock price of change in marketing investment. Reflects changes in stock price in marketing actions made in past by changes in CoreBrand Equity estimates.

D. Recognize both the immediate, short-term effects of marketing actions and longer-term outcomes, as well as the fact that short- and long-term effects need not be directionally consistent.

E. Recognize the difference between total return on investment and return on marginal return on investment.
Marginal return can be calculated by determining how marginal cost will create marginal Brand Power and in turn how marginal Brand Power will generate marginal market cap.

F. Recognize different products & markets produce different rates of return.
Our models and analysis can identify the brand’s ability to create different rates of valuation based on variations in products and markets. For example, brands in consumer package goods such as Beverages have brand valuation as high as 20 – 21% of their market cap, in Electric Utilities the highest ranked brand is 4.2% [6]

G. Distinguish between measures of outcome and measures of effort.
CoreBrand Equity is related to stock price outcome [1]

H. Provide information that is meaningful and comparable across products, markets, and firms.
Familiarity and Favorability are calibrated the same across brands, categories, and industries.[6]

I. Clearly identify the purpose, form and scope of measurement.
See “Other References”

J. Be documented in sufficient detail to allow a knowledgeable user to understand their utility & make comparisons among alternative measures.
See “Other References”

K. Be assessed relative to generally accepted standards of measurement development and validation.
MMAP audit

L. Be recognized as necessary investment for assuring sound decision-making, accountability, continuous improvement, and transparency for all stakeholders.
Not documented elsewhere


Source Documents

1. Gregory, “See the whole picture: Everything you need to know about brand accountability.” The Advertiser, February 2008, pp. 46-47.

2. Gregory, Driving brand equity and accountability, Association of National Advertisers, 2005.

3. Gregory and Sexton, “Hidden Wealth in B2B Brands.” Harvard Business Review, March 2007, p. 23.

4. Gregory, “The Impact of Advertising on Stock Performance.” New York: AAAA, 1997.

5. “Metrics that Matter: An overview of CoreBrand’s measurement tools.”

6.“Directory of Brand Equity, 1Q 2011.” CoreBrand internal document.

7. CoreBrand internal reliability document, August 2011.

Other References

Gregory and Wiechmann, Branding across borders: a guide to global brand marketing, Chicago, IL. McGraw-Hill, 2002.

Gregory and Wiechmann, Leveraging the corporate brand. Lincolnwood, IL. NTC Business Books, 1997.

Gregory and Wiechmann, Marketing corporate image: the company as your number one product. 2nd ed. Lincolnwood, IL: NTC Business Books, 1999.

Gregory, “AFLAC the Clever Duck Adds Significantly to the Company’s Valuation.” The CEO Refresher, <>.

Gregory, “Brand Equity and Accountability: Putting the Corporate Brand on the Balance Sheet.” ANA Insight Briefs 2 2010, pp. 1-8.

Gregory, “Retail of the Tape: Shoppers Swayed by Corporate Image.” Brandweek, 2007, pp. 36.

Gregory, “The Board’s Responsibility for the Corporate Brand.” The CEO Refresher, <>.

Gregory, The best of branding: best practices in corporate branding. McGraw-Hill, 2004.