Most executives like to know how valuable their brand is relative to other brands. What is its ranking, and has that ranking changed during the last year or so? Positive answers to those questions lead to accolades to the CMO, and negative answers lead to embarrassed silence, at best. The problem is that the data that appears to answer that question really cannot do so. What we actually have is an illusory quantification that means little in the context of these questions. Those that use the valuation numbers and rankings in that way are making a big mistake. Those that act on them are making an even bigger one.
To simplify, the value of the brand is based in large part on two numbers: The value of the business and the percent of impact of the intangible assets attributed to the brand. When a brand controls the business of the firm as is the case for GE, Microsoft and Ford, for example, the value of the business is its market cap. But the market cap is driven by many factors other than the brand including the economy, the stock market and competitors. So if the market cap goes up by 20 percent, maybe because the stock market surged, it is unwise to think that brand building was extraordinary during that period.