The ROI of branding: an investment, long-term, in the brand.

February 21, 2022 | di paolo

The ROI of branding: an investment, long-term, in the brand.

How to measure the strength of a brand.

The first thing for a company to know is how valuable a strong brand is. For it is not just a name and logo, but a real business tool that generates business value year after year while serving as a barrier to the entry of future competitors into the market, creating, in effect, a legal monopoly. Which explains why companies with above-average growth have invested heavily in building their brand. These are the ten factors on which Interbrand, the world’s leading brand consultancy, measures a brand’s strength in its annual Best Global Brands report:

  • Clarity
  • Commitment
  • Governance
  • Responsiveness
  • Authenticity
  • Relevance
  • Differentiation
  • Consistency
  • Presence
  • Engagement

Here’s how Interbrand’s Best Global Brands portfolio performed from 2000 to 2017 against the most important North American Standard & Poor’s 500 stock index.

The ROI of branding: an investment, long-term, in the brand.

It is clear how, while brand may be intangible, its value is anything but. That is why-as Interbrand cautions-the market performance of strong brands is “enduring evidence that investments in long-term brand building enable companies to thrive over time and survive market volatility.” Investing in a well-designed and well-managed brand is therefore one of the most effective ways to create preference and loyalty and transform any company from simply a creator of products and services into a creator of experience.

The power of a strong brand price.

According to a large study by Millward Brown, a leading global research agency that analyzes consumer habits, strong brands can capture, on average, three times the sales volume of weak brands. The same study showed how strong brands overpriced weak brands by 13 percent. Results “all the more remarkable considering that consumers do not set the price for their purchases; it is the brand owners and retailers who do.” Not surprisingly, pricing power is one of the most valuable assets of a strong brand.

The long-term value of the brand.

Brand value matures over a longer period of time than the value generated by marketing; the former can in any case significantly contribute to enhancing the value given by the latter.

The ROI of branding: an investment, long-term, in the brand.

For a successful business, it will make sense to take a balanced approach that leverages both short-term marketing and long-term branding initiatives. Their linkage will enhance the value of both activities. As well exemplified in the Media in Focus report, optimal effectiveness is achieved when about 60 percent of a company’s marketing budget is devoted to brand building and the remaining 40 percent to marketing activation. In short, investing less than 60 percent in branding precludes the accumulation of the brand equity needed for future sales growth.

Branding to the digital test.

In recent years, the method of designing brands that represent digital companies and products has changed, with a focus on technical aspects. Indeed, if before a brand mark was designed to be printed mostly on a billboard or business card, today it must be designed, in most cases, to represent the company or product within the icon of an app on a smartphone. Ready, if necessary, to make itself even smaller when tested by the favicon: the tiny icon at the top left of a site page. Like the size, equally important are the colors, to be chosen in the palette best suited to the web, the font, which is well readable online, and the pictograms, which are a clear and concise summary of corporate values. In short, the design of a brand identity for digital companies and products is not limited to the creation of a good brand mark, but must include all application use cases. This is a change to which major brands have adapted, designing a version of their brand marks applicable to digital channel-oriented communication.

Why invest in branding.

If brand value is so strong, why don’t 23% of entrepreneurs invest in branding? Here are the most frequent objections.

  1. “I’d rather invest in marketing.” Okay, but marketing, before stimulating sales, promotes the brand. If the company does not have a strong brand, marketing will have much more difficulty in carrying out the activities necessary to promote and sell products and services.
  2. “My brand is perfect as it is.” Every business owner is fond of their brand, but style and design evolve over time influencing consumer choices. That is why it is necessary for the brand to evolve along with the market and society.
  3. “My company works for PR.” While remaining a mainstay in the world of communications and promotion, PR is changing and evolving, relying on building strong brands to increase the perception of company value.
  4. “I have seen a site that does branding for €300.” “Anyone can design a logo. But not everyone can design the right logo,” said David Airey. Behind a brand there is indeed a lot of research, study and design work done by professionals that involves significantly different costs.
  5. “I am afraid that my clients no longer recognize my brand.” Restyling or rebranding operations are certainly not abrupt activities; they are implemented, on the contrary, in a gradual way, precisely so that customers are not displaced by a new identity.

How to achieve excellent results.

Branding is an ongoing and constantly evolving activity. Having a strong brand is the sum of activities closely related to both the creative and graphic design phases and the branding strategy activity, in which the target market is analyzed, the company’s core values are identified, mission and vision and Unique Value Proposition are defined. Among the activities preparatory to brand design is the identification of the reference archetype through the methodology of Archetypal Branding and Tone of Voice. An identity that, once designed, must still be built and evolved over time. Indeed, a company’s visibility does not boil down to a brand, but is a constantly switched-on focus on its identity, image, notoriety, reputation, and positioning.

Tutte attività che in Baasbox portiamo avanti giorno per giorno, accompagnando ogni azienda nel These are all activities that in Baasbox we carry on day by day, accompanying each company on its growth path, with a Branding team as a service. To give your brand the value it deserves, too.

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Aurelia Vittoria Branconi, Head of Visual Design at Baasbox, applies the philosophy of shapes and colors to every aspect of life. From a brand mark to a beautiful coat.


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