Brand Energy Part One: A New Way Of Understanding The Reality Of Brands

Brand Energy Part One: A New Way Of Understanding The Reality Of Brands

Chris Harrison explores the recent discovery of a precise mathematical formula for brand energy.

Chris Harrison
  • 19 october 2010

Marketers love jargon, don’t they? Most of the time you have no idea what they are talking about, but it sounds clever. Sometimes they have no idea either.

Jargon binds groups together in a somewhat self-satisfied way. Stockbrokers talk about PE ratios, CFO’s talk about EBITDA, and lawyers talk about ‘tag along, drag along.’ I am sure nuclear physicists have a secret language, but I’m too tired to find out after talking to all those lawyers and CFO’s and stockbrokers. I also have a good friend in the sugar industry – so I know much more about that business than is strictly healthy.

Jargon is also a defensive weapon, a barricade used to exclude others, to obfuscate issues. As I am in the communications business I am (you may be surprised to hear) anti-jargon.

So when I hear expressions like Unique Selling Proposition, competitive advantage, brand buzz or fairy dust… I clench. Not because their intention is wrong. Their intention is to define a unique benefit for brand, something that makes it stand out. I clench because in 95% of cases, the outcome is going to be banal, anodyne, and predictable.

This is because in the real world most food brands perform identically in blind tests against own label products. A competitor will trounce any promise made by an electronics brand, within months. And many of the front line staff who deliver a service’s ‘unique’ benefits will be working for a competitor within a year.

It is also because defining a brand’s uniqueness is very hard to do from inside the factory, or the bank, or the telecoms head office.

And yet the world refuses to commoditize. Brands still mean things – sometimes great things – to the people who buy them. Brands continue to command their desired price point – and consumer loyalty – through thick and thin. Strong corporate brands generate higher shareholder value.

People seem to gravitate towards brands that, for want of a better word, seem to radiate a certain energy. But the funny thing is, very few marketers base their plans on this energy.

Perhaps because energy is so hard to define. Perhaps because it is less tangible than taste preference, or customer satisfaction scores. Perhaps because no one has ever tried to measure brand energy.

Until now.

Recently Professor Robert Jacobson of University of Washington Business School, and Professor Natalie Mizik of Columbia Business School cracked the problem. They took data from BrandAssetValuator (the world’s largest database of brand health). They crossed it with Standard and Poor’s Compustat data tapes for accounting performance measures, and factored in data from the University of Chicago’s Centre for Research in Security Prices. Have I dropped enough names yet? I know how important they are to you.

To cut a long story short, they looked at the many brands that are listed on the New York Stock Exchange. Brands like Disney, Coca –Cola, Apple and McDonalds. And they looked at their stock performance over time against brand imagery. Not the imagery the marketers wish to project, but the imagery held in the hearts and minds of consumers. And they came up with a precise mathematical formula for brand energy.

Don’t ask me what that is. I deal in plain English, and I only just stopped myself using the words ‘regression analysis’. And anyway, it’s proprietary, so no one is going to give us that level of detail.

But in plain English, let me share with you that brand energy is a perception that a brand is moving in a particular direction, and has a clear purpose in the world.

Now just think about that for a minute. Think about the many ‘brands’ you know. If you are a CEO, think about your own brand. Ask yourself if you can describe the direction in which it is moving, and its purpose in the world. Not your Company, your brand.

It’s surprisingly difficult. And I’ll give you a clue. Unless you really understand what consumers think and feel about your brand, you will be wide of the mark.

Next week, I’ll have a go at describing the seven energy levels identified by the study. I’ll talk about how brand energy is now being measured around the world. And how soon we can expect such critical information in Africa.

And I promise, it’ll be an easier read!

Chris Harrison is Chairman of Young & Rubicam Brands, Africa. This article has been republished with his kind permission

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