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Brandalytics® a world first

AUTHOR: Lachlan Colquhoun   DATE: 13.04.06   ISSUE 1, 2006

Building on 15 years of work by academics including Professor Jordan Louviere from UTS and Professor Timothy Devinney, the Director of AGSM’s Centre for Corporate Change, the new service – called Brandalytics® – is the first to combine consumer input through market research techniques with brand equity to identify the key drivers which impact on brand values.

Brandalytics® will offer a tracking service for clients who want to understand the impact marketing decisions may have on their brand, before they implement changes. This will allow them to come closer than ever before to measuring the value of real and potential marketing decisions. Clients will also be able to understand the brand value of their competitors in different competitive situations.

Brandalytics® will offer a tracking service for clients who want to understand the impact marketing decisions may have on their brand, before they implement changes.

Illustration: Gregory Baldwin

“While the well-established Interbrand valuations for brands are a classic accounting formula which looks at balance sheets, ours is the first to use consumer based input and equity,” says Professor Louviere.

“The way to think about it is that it measures the value – the premium or dis-premium if you like – that consumers are willing to pay just for the brand, holding everything else constant.

Clients will be able to understand the brand value of their competitors in different competitive situations.

“We tell people that you can’t have a theory of brand equity without including a choice component, but while this is very theory driven the only thing the clients will see are the numbers they need to tie together any changes they make or marketing dollars they spend on something easy to interpret such as an index, tracked over time.”

Professor Louviere gives the example of an airline that might be simultaneously cutting costs and its services.

“There isn’t an airline on the planet that has a clear understanding of what that is going to do to the equity of their brand,” he says.

“With Brandalytics® we can actually design studies that will systematically manipulate permutations of what the airlines are doing and then see how people’s choices would change in response to that so we can immediately understand the impacts on the premium people are willing to pay for that airline.

“We are also able to ‘dollarize’ the value of a brand to consumers, which is an easily understandable way of measuring brand equity and any changes.”

"The Brandalytics venture has come about through the maturity both of the theory and market research technology."

Photo: Professor Timothy Devinney

AGSM’s Professor Timothy Devinney says the Brandalytics venture has come about through the maturity both of the theory, which has been developed over a period of fifteen years, and market research technology that enables the smooth input of consumers through the online channel.

“You really have to have an online panel to be able to this successfully, and we’ve only had serious large scale online panels available since around 2002,” he says.

“So it’s an issue of timing to some extent. The theory was ready, and suddenly there was a vehicle you could use to implement the theory in a way that it could be done routinely in an automated fashion and allow us to produce this information.”

Professor Devinney explains that the Brandalytics® venture is in three parts, exemplified by the different roles different people play in the organisation.

“There is Brian Fine, the chief executive of AMR Interactive, and his team whose job it is to bring in the commercial market research angle,” he says.

“Then there are the academics, like Professor Louviere and Paul Burke at UTS and myself, whose job is to bring in the theory and the underlying technology along with the strategic management applications.

“Finally, there’s Associate Professor Sandra Burke at Macquarie University whose job it is to coach the companies on how they can take this information and make it useful.”

One of the major problems with brand research up until now, according to Professor Devinney, is how companies can use the information that is generated to “make an impact on the brand.”

Brandalytics® is able to help companies understand brand equity of different products in their portfolio.

Picking up his point, Professor Louviere says Brandalytics® will “tell you all the things that will happen to a brand over time as a function of what you do.”

“It will predict how value changes as a function of changes and track it against a historical base and that – as far as we know – is something that people have never done before.

“Everything that’s out there now is a snapshot of what is happening today, but what Brandalytics® is doing is taking account and extracting everything that’s happened up to this point and giving a prediction of what will happen in the future.”

Brandalytics® is also able to help companies understand the brand equity of different products in their portfolio.

“Senior managers in a company talk about managing the brand whereas the reality is that its actually about managing brands plural,” says Professor Devinney.

“NAB, for example, means different things in different product categories. They might say their brand is stronger in this area than it is in another area but they don’t really know what that means.

“Brandalytics® enables us to come in and say, this strategy is worth 30 cents more on every dollar transaction in this environment than it is in another environment, and this might help them understand or quantify what they are doing in different markets.”

Brandalytics® will be launched to service a number of foundation members, and will then be launched as a subscription service. Once proven in Australia, it could be equally applied internationally.