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ANA/Guideline Study finds Brand Equity a Top Line Objective for Marketers

New Report Presents Best Practices for Building and Maintaining Brand Health And Discusses Warning Signs of Brand Deterioration

NEW YORK — Even the strongest brands cannot "rest on their laurels" in today's competitive market place. The findings in a new report released today by the ANA (Association of National Advertisers) in conjunction with Guideline, show that brand equity is now a major component of a company's overall valuation. According to the report, "Brands need to be tended and protected, as well as flexible and agile in order to respond to the marketplace, the next generation and the next big product innovation."

This survey was initiated by the ANA Brand Management Committee and led by Committee Chair Roger Adams, Senior Vice President, Marketing, The Home Depot, to provide the industry with key insights and best practices related to building brand equity and combating brand deterioration. Adams will be moderating a panel discussion on the results of the survey at the April 24, 2007 ANA Brand Innovation Forum.

"Brand equity is a key component of a company's value and its future success. In today's marketplace, brand marketers need to be aware of the potential challenges their respective brands face. They must also keep an eye out for the warning signs that a brand is beginning to deteriorate," said Bob Liodice, President and CEO of the ANA.

In February 2007, the ANA and Guideline polled the ANA's Brand Marketer Leadership Community, an exclusive peer community of marketing and brand marketing professionals, to understand how companies view the warning signs of brand deterioration. To better understand the issue, the survey also examined brand health and brand development in its broader sense.

Brand equity was clearly viewed as important. On average, 75 percent of all respondents viewed brand equity as very important to their company's success. Most of the respondents agreed that "brand equity is the intangible ingredient that differentiates them and set them apart in a highly competitive marketplace.

Additionally, the survey found that brand marketers are using a number of media channels to help build equity in their respective company's brand. Most of the respondents felt that more traditional media channels were the most effective in brand building, specifically television at 76 percent. On the other hand, the survey found that internet advertising is emerging as a channel for brand building. Particularly effective for young and emerging or strong brands, internet banner advertising, ranked third overall (56 percent).

What exactly indicates a brand may be deteriorating? The ANA/Guideline report delves deeper to find out the warning signs for waning brand equity. Most respondents agreed that when customer conversion or repeat rate versus the competitor slips, it is a clear warning sign that the brand is at risk. The top five warning signs that companies should be attentive to include:

  1. Customer conversion or repeat versus competitor slips (70 percent)
  2. The percent of customers who rate the brand as "excellent" slips (68 percent)
  3. Net promoter score slips (67 percent)
  4. Growing disparity between what customer's rate highly about a company's brand and its brand goals (62 percent)
  5. The product in being sold on promotion, deal or at a price reduction (62 percent)

The trend report also highlighted the many strategies for combating brand deterioration. Of the 14 potential strategies for brand revitalization, the ANA/Guideline survey found that a majority of marketers agreed that product innovation could effectively combat brand deterioration. The top five actions for combating declines in brand health are as follows:

  1. Product Innovation (87 percent)
  2. Exploring new targets (68 percent)
  3. Conducting a root cause analysis (67 percent)
  4. Deeper qualitative research such as focus groups on brand issues (66 percent)
  5. Refocusing of marketing efforts (64 percent)

The 2007 ANA/Guideline trend report was comprised of survey results of the ANA's Brand Marketer Leadership community. The respondents included just under 300 brand marketing professionals who represent brands that have been a house hold name for some time. ANA members can request a full 2007 Brand Deterioration Trend Report from the ANA Marketing Insights Center at: /michome


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Rachael Adler
CooperKatz & Co.
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Lesley Weiner
CooperKatz & Co.
212.455.8079
lweiner@cooperkatz.com