Brands matter

In what appears the Golden Age of branding, it is surprising to hear of managers' difficulties in securing funds for investments in their brands. Yet in today's harsh economic climate, with zero-growth prospects and mounting cost pressures, the first budget cuts most likely come from allocations dedicated to brand building goals. A lingering, unanswered question seems partly to blame: do brand-building investments really pay off? Lacking conclusive evidence concerning branding and the bottom line, brand "investments" remain "expenses," and the promise of the brands remains unfulfilled. This paper attempts to address this significant shortcoming by providing empirical evidence of the value to stockholders of a firm's brand building activities, using time-honored concepts and models from the discipline of finance.