• brucemckinnon

This way up. How to value a brand.



Shipping containers. Very clever. At the last count there’s over 20 million1of them circulating around the world, and what makes them very useful is they all share the same dimensions so can be fitted on a ship, a train or a truck - you can even stack them too. That means a container can be placed on a ship in Japan, sail over to San Francisco where it’s put on a train down to San Diego, before being loaded onto a truck to go down to Los Mochis in Mexico where it’s unloaded and stacked with other containers in readiness for its next journey. It all fits. It’s amazing, and the reason it’s possible is ISO 6346, issued between 1968 and 1970, containing the global standard dimensions for shipping containers2. ISO stands for International Standards Organization. Set up in 1947 and based in Geneva, its aim is to help the world function more easily and safely by developing and publishing standards across everything from agricultural products to telephone country codes. In fact, it has issued over 20,000 standards3, and for us brand strategists, ISO 10668, published in 2010, is of great interest as it lays out the requirements for the procedures and methods of measuring the value of a brand4. But how do you value something like a name or a set of brand values that by definition, is intangible? ISO defines the term brand as an intangible asset (as opposed to tangible assets like machinery, buildings and inventory); a non-financial asset with no physical substance5 – we are talking logos, symbols, names, values, etc. The reason why ISO felt the need to create a common method for valuing these intangible assets is that they are worth vast sums of money. For example, according to Forbes, in 2018, the Apple brand was valued at $182.8bn. That’s around 20 percent of the total net worth of the whole company6. So, how does ISO go about valuing something that you can’t get hold of? 1. Like all the items it measures, ISO provides a precise definition of what a brand is – it’s very thorough and very long, so instead, here’s mine: a brand is a product or a service that delivers a consistent and distinctive benefit to a customer. It will contain a set of characteristics that it will use to differentiate itself from its competitors and ensure it remains relevant to its customers7. 2. It then defines what the purpose of the valuation is – it may aid internal planning, inform a prospective purchase or be needed for tax and compliance reasons, for example. This is significant as different purposes will give different valuations – what ISO refers to as the Promise of Value. 3. Once the purpose of the valuation is established, it can go down three different methods to define value: Income, which measures the earnings the brand could generate in the future, Market, which compares the brand to the value of similar brands in the market and Cost, which captures either the cost of building the brand or the cost of replacing it8. I am clearly paraphrasing here, but this is broadly the process, and once complete it all goes into a Valuation Report that details the valuation itself and all the steps taken in the process. There are other methods and other organizations providing valuations; the point here is to simply say that brands have enormous value and there are objective and well-established methods for measuring that value. So, there it is, a whistle stop tour of the mathematical world of brand valuation.

Of course, for most of us, we are not sitting on brands worth $18b, but each of us with a business will have a brand and we will want that brand to deliver value. To read my previous blogs on what value a brand delivers to your business, click here, and why customers value brands click here. Or even better why not read my book? It’s on sale at Amazon at the moment - a price (If I may) vastly below the value it delivers!


Bruce M McKinnon is a Brand Strategist and author of the award-winning book ‘What’s Your Point?’ which can be purchased from Amazon. The book explores how brand strategy can fuel business growth, referencing some of the world’s most successful brands as well as sharing case studies from his own global consulting practice.

[1] Jane. “Facts about shipping containers”. Billie Box. 2012. Available at: https://www.billiebox.co.uk/facts-about-shipping-containers [2] ISO Containers Information”. Engineering 360. Available at: https://www.globalspec.com/learnmore/material_handling_packaging_equipment/material_handling_equipment/iso_containers [3] “All about us”. ISO. Available at: https://www.iso.org/about-us.html [4] ISO 10668:2010 - Brand valuation – Requirements for monetary brand valuation”. ISO. Available at: https://www.iso.org/standard/46032.html [5] ISO 10668:2010 - Brand valuation – Requirements for monetary brand valuation”. ISO. Available at: https://www.iso.org/standard/46032.html [6] Badenhausen K. “The World’s Most Valuable Brands 2018”. Forbes. 2018. Available at: https://www.forbes.com/sites/kurtbadenhausen/2018/05/23/the-worlds-most-valuable-brands-2018/#4c59f8b3610c [7] Bruce M. McKinnon. “What’s Your Point: The Brand Arrow - Define Your Point. Grow Your Brand”. Available at: https://www.amazon.co.uk/Whats-Your-Point-Define-Point/dp/1912863235/ref=sr_1_1?keywords=what%27s+your+point&qid=1652282199&sr=8-1 [8] Overview of ISO 10668: Brand Valuation, Requirements for Monetary Brand Valuation, 10 August 2011”. Australian Marketing Institute. Available at:

https://brandfinance.com/images/upload/iso_10668_overview.pdf

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