John Gerzema's new book has many things to be said for it (not least the opening up of Y&R's fabled BAV survey which provides the evidential backbone for the book) but for me the most important thing is the idea which gives the book it's title:
Customer surveys show that the number of high-performance
value-creating brands is diminishing across the board. Yet at the same
time, businesses and financial markets keep raising brand valuations.
The result? A brand bubble that could erase large portions of
intangible value in your company and send another shockwave through the
For my money, this is so striking a finding that I'd have like to have seen more time and energy put in to understanding this. Is the shrinking of the set of brands which generate high balue bourne out by other data sources? Do for example the guys at Interbrand agree? Does anyone in Wall Street have a point of view on this? what are the real implications for "other brand" companies (beyond being interesting)?
What's the real opportunity cost of rectifying it?
I'd also like to know what really is the cause of this phenomenon: is it the over-professionalisation of marketing with all its benchmarking, best practice and going-through-the-motions-mediocrity? Or, is it perhaps a survey effect (we all know research co-operation has slipped in recent years)?
I think it's really important to get to the bottom of this, even without thinking about the valuation trend (thought that, too, could do with some unpacking) because without knowing what the real causes are, we're going to struggle to correct things.
That said, even if the valuation thing wasn't true, there's probably still enough here to really spur brands into action: what if you discover that you're on the outside of the "brand" base? What are the practical and financial implications for brand owners?
Few of us would disagree with the general sentiments on offer here (being interesting, energetic etc) and it's a pleasure to read a marketing book based on sound data plots but for me the really interesting stuff are the big questions we might have to get our heads around if John and his co-author are right. Questions such as maybe the brand idea isn't such a panacea after all – for companies and their marketers? Or, that maybe the brand (and what we do to build it) aren't the key drivers of the valuation but rather, other valuations? What should we do instead?
Do go have a read, though. Nice work.