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october2011•issue1|BRANDFINANCEJOURNAL|3Brandvaluationbeganlifein1988wheninterbrandweighedintothebidbattleforranksHovisMcdougall.theconsultancyinventedthedisciplineofbrandvaluationovernightbutleftmanyraggededgesinthemethodology,whichothershavesubsequentlysmoothedout.toitscreditinterbrandmadethepointthatbrandsarehighlyvaluableassetsthatareofteninvisibleandundervalued.Butin1988interbrandwasentirelyindependentandeveryonelistenedtoitspointofview—longliveJohnMurphy,thevoiceofindependentdissent.Scrollforwardnearly25yearsandinterbrandhasbeensubsumedintoamassiveglobaladvertisingagency.andalthoughbrandsarenowwidelyrecognisedasmassivelyimportantcorporateassets,typicallyrepresentingbetween10and30percentoftotalcorporatevalue,manyboardsstilltreatthemasCinderellaassetsandregardbrandvaluationasadarkartorajoke.BrandFinanceplchaspromotedthedisciplineofindependentbrandvaluationforover15years.WehavecreatedtheBrandFinance®institute,theBrandFinance®JournalandBrandFinance®Forumstopromotelearningandbestpractice.WehaveparticipatedinthedevelopmentoftheinternationalvaluationStandardsCouncil(ivSC)andinternationalorganisationforStandardisation(iSo)standardsonbrandvaluation.Weconstantlypushforwardtheboundariesofthisvitallyimportantprofessionalactivity.Yetwenowfaceacrisisofconfidenceinthepracticeofbrandvaluationitself,acrisiscausedbythepublicationofannualbrandvalueleaguetablesthatdon’tappeartocomplywithiSo10668andthat,asaconsequence,bringthedisciplineofbrandvaluationintodisrepute.We’vebeenawareofthisphenomenonforseveralyears,yet,ontheprinciplethatyoudon’tfoulyourownnestwehaveremainedsilent.However,inthefaceofgrowingcriticismofbrandvaluationwebelievethetimehascometospeakup.Markritson’srecentill-informedcommentsinMarketingWeekmagazine,thegistofwhichweretoquestionwhetherbrandvaluesreallymeananythingatall,werethetippingpoint.tothisend,wearenowlaunchingtheCampaignforindependentBrandvaluationtopromotebestpracticeinbrandvaluationtechniques,transparency,independenceandprofessionalism.Weholdnogrudgeagainstanyoneinthefield.Butwefeelstronglythatitistimeforthosewhocareabouttheintegrityofthebrandvaluationprofessiontospeakupandspeakout.transparencyandindependence(bothactualandperceived)havebecomemajorissues.thefactthatinterbrandandMillwardBrownpublishleaguetablesofpurportedbrandvalues,yetfailtodefine‘brand’,failtostatethevaluationdateandpersistinusingopaqueproprietarybrandvaluationmethods,isamajorproblem.allbrandvaluationsshould,accordingtotheiSostandard,becompletelytransparentintermsofmethods,dataandassumptions.inaddition,theiSostandardrequiresthatbrandvaluationappraisersmustbeindependentandbeseentobeindependent.Webelieveconsultanciesthatarewhollyownedbymajorbrand-buildingandmarketingcommunicationscompaniescannotcrediblyprovidearm’slengthbrandvaluationopinionsonbrandsthatthey,ortheirparentcompanies,createandmaintain.inseekingtodoso,theyinevitablycompromisetheirindependence.Perceivedconflictsofinterestinevitablytaintthisnewestofallprofessionaldisciplinesatatimewhenintangibleassets,includingbrands,aremakingupaneverbiggerproportionofcompanies’totalworth.JohnStuart,theformerCEoofQuakeroats,oncesaid:“ifthisbusinessweresplitup,iwouldgiveyouthelandandbricksandmortar,andiwouldtakethebrand,andiwouldfarebetterthanyou.”Hewasright,andthisiswhyorganisationsneedtobeabletorelyoncredible,independentvaluationsofthesepreciousassets.Wehope,therefore,thatallreadersofthiseditorialwillbackourCampaignforindependentBrandvaluationbyarguingthecaseforindependenceandtransparencytoaccountingandvaluationstandardsetters,togovernmentalaudiencesandtothemarketingprofession.■Editorial“TheISOstandardrequiresthatbrandvaluationappraisersmustbeindependentandbeseentobeindependent”DavidHaighCEOBrandFinanceplc30|BRANDFINANCEJOURNAL|issue1•october2011CampaignWheredothefigurescomefrom?Astheworldeconomyentersanincreasinglytroubledperiod,financialmarketsarefeelingtheimpactofcontinuingeconomiccrisesineurope,politicaldeadlockinAmerica,andfearsofaslowdowninAsia.tomeasuretheimpactthatthedouble-diprecessionhashadonthevalueofglobalbrandsthisyear,BrandFinancepublishedareportinseptemberthatmeasuredthechangeinbrandvalueofthetop100brandsintheworld(asidentifiedinourJanuary2011BrandFinance®Global500report).BrandFinanceusedtheroyaltyreliefmethodtodeterminethevalueofthesebrands.Unsurprisingly,brandvaluesfellduring2011,butnotasdramaticallyasmighthavebeenexpected.Indeed,mostoftherevaluedbrandsappeartoberidingouttherecession.themostobviousreasonforthisresilienceisthatthetop100brandsare,bydefinition,thestrongestintheworld.Brandequityandcustomerloyaltybuiltupoveryearsservethemwellindifficulttimesascustomersseekthereassuranceofbrandstheyknowandtrust.Nevertheless,thereweresomeinterestingchangesinbothbrandvalueandleaguetablepositionbetweenJanuaryandseptember.oneofthemostnotableexampleswasApple,whichjumpedfromeighthtosecondplacewithariseinbrandvalueof33percent($10billion)to$39.3billion.thereareanumberofreasonsforthis,notleastbumperrevenuesfromthelaunchoftheiPhone4andiPads1and2.Applehasalwaysbeenaninnovativebrandnoted