The Australian Marketing Institute brand
– does it have real value?
Last month, in discussing the issue of valuing brands, I raised the question of the value of the Australian Marketing Institute (AMI) brand. Reflecting on this, I realised that it raises some quite interesting questions about the role of brand in our association and about what we would need to measure if we were to value ‘AMI’. Further, addressing the second question may also help us to understand where the AMI is at present and where it is going.
When valuing a private sector brand there are several methods that can be used, but the one I prefer parcels out the unique contribution to value that the brand makes by trying to assess the ‘royalty’ rate that the ‘market’ will pay to use the brand under licence. For many product areas there are benchmark royalty rates derived from actual market transactions (sales as well as licensing) that allow an informed estimate to be made.
But, of course, there are several aspects of the AMI brand that rule out such an approach. In the first place, we are not an organisation that seeks to make profit in the sense of generating dividends for our shareholders (members), although we do seek to generate surpluses to invest in new initiatives. Second, it is hard to conceive of a licensing market for the brand.
However, in the broader sense of brand equity, which includes the total set of attitudes, emotions, associations, etc. of all affected stakeholders, there may lie something that we can value. As an example, if you print your AMI postnominals on your business card, you presumably do so because you see this statement of your membership and your status as beneficial in some way. Perhaps it is to affirm your status as a professional, but, however we characterise this, it must have some ‘value’ to you. Indeed, if you work as a consultant, you might perceive actual monetary value in terms of it helping you to win and retain new clients.
Role of brand in decision making
On the other side of the equation, while we do not seek to make a profit as an organisation, we need funds to deliver services to members and to develop and represent marketing. Although one of our strategic objectives is to reduce the proportion of revenue from membership fees, it is still a major part of our cash flow. Attracting new members is therefore important. There is little doubt that the strength of the AMI brand plays a role in people’s decision to become a member and also in existing members’ decisions to renew their membership.
The measurement of these effects and the construction of some assessment of brand value and brand equity could be achieved by some thoughtful social research, which might be able to parcel out the role and contribution of the brand in the two situations I described above. It might be done by using social and attitudinal measures to construct proxy value measures of all the perceived benefits of membership as well as some overall membership benefit. Then if we calculate any difference between the totality of the benefits of tangibles, such as events, information, etc., and find there is still some ‘residual value’, then that is the contribution of the brand and the ‘value’ of the brand.
While there will necessarily be some judgemental aspects of assigning ‘value’, provided that the methods are rigorously applied it should be possible to track the health and value of the AMI brand over time. And it might be noted that all the main commercial methods of valuing private sector brands require some judgemental input at some stage in the process.
In the past two years, the AMI’s Marketing Metrics Project has undoubtedly lifted our profile and hopefully our standing in the marketing community and in the wider business community. If this is so, the value perceptions for marketers and for members have likely been enhanced. It would be fascinating to construct some measures like those described above that would allow us to track our brand.
Finally, it may be possible that similar methods could be developed to evaluate a range of not-for-profit and public sector brands. If you have any thoughts about this, do write to me at roger.james@ami.org.au
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