Hi Kemble! I worked closely with Coca Cola, for four years, as they were my #1 account in local radio. I avoid Pepsi to this day, out of loyalty. Also, my Dad has been buying shares of KO since I was very little, so Pepsi is a bad word in my family! :) But working closely with Coke, gave me a great respect and education for branding. They are leaders in this and they have been my standard for branding. Dell, has done an excellent job at creating Market Awareness, and much of that credit has to go to Michael. :)Leigh
"Brand is a big part of the equation for tech darlings and consumer stocks alike."
marketwatch.newsalert.com
Connecting brands to share prices
Ads irrelevant to stock performance? Think again
By Steve Gelsi, CBS MarketWatch
Last Update: 11:19 AM ET Feb 19, 2000 Commentary
Letters to the Editor
NEW YORK (CBS.MW) -- Although Wall Street analysts rarely chart advertising and overall brand strength, these key marketing components play a big part in the stock worth of major players.
So says author and brand guru David Aaker, who spells out the connection between brand strength and share prices in his new book, "Brand Leadership."
Although ad campaigns rarely show up in analyst bulletins, Aaker says they're a lot more important than some folks realize.
Aaker cites a study linking share prices of Apple (AAPL: news, msgs), Hewlett-Packard (HWP: news, msgs), Compaq (CPQ: news, msgs), Dell (DELL: news, msgs), Microsoft (MSFT: news, msgs), Novell (NOVL: news, msgs) and Oracle (ORCL: news, msgs) to their brand strength.
"Brand equity pays off in the high-tech context, where many argue that brands are of minor import," he said. "The conclusion is clear: Brand equity, on average, drives stock return."
Aaker also looked at brand ratings by EquiTrend, which ranks the strength of big consumer names, and compared them to share prices.
In the case of American Airlines (AMR: news, msgs), AT&T (T: news, msgs), American Express (AXP: news, msgs), Chrysler (DCX: news, msgs), Exxon (XON: news, msgs), Kodak (EK: news, msgs), IBM (IBM: news, msgs), Pepsi (PEP: news, msgs), Sears (S: news, msgs), Reebok (RBK: news, msgs), Coke (KO: news, msgs) and others, Aaker said share price reflects brand strength.
"The relationship between brand equity to stock return may be in part caused by the fact that brand equity supports a price premium which contributes to profitability," he said.
All this is tremendously gratifying, especially after listening to the silence on the other end of the phone when asking analysts about the impact of a new ad campaign or marketing push by members of the S&P 500.
Of course ad campaigns and brand strength are a lot harder to measure than earnings and revenue. But you can't just dismiss them either.
Brand is a big part of the equation for tech darlings and consumer stocks alike.
Aaker's book shines light on a phenomenon that's too often overlooked.
Steve Gelsi is a reporter for CBS MarketWatch |
