| TONY’S LAST WORD | BRANDS LOSE GROUND IF YOUNG & RUBICAM is to be believed there are serious flaws in the traditional way most brands are valued - and those flaws could be more costly for the world’s economy than the sub-prime disaster. After years of struggling to persuade big business to put brand values on their balance sheets, the brand measurement business has now succeeded too well. Like a thunderbolt in 2004, Y&R’s BrandAsset Valuator made a worrying discovery: while brand own- ers were recording record values for their brands, consumers were losing faith, trust, awareness and admiration for thousands of brands. Not a few - thousands. And those consumers are the true repositories of brand value. Brands reside in the perceptions of the peaple who buy, consume or use them. If they think a brand is more valuable than its competition then itis. In this field, perception is reality. “We found that most brands weren't adding to intangible value of their enter- prises... at the same time, however, brands were creating more and more walue for their shareholders; write John Gerzema and Ed Lebar in The Brand Bubble. “Because bullish investors believed that brands were grow- ing, they expected more revenue growth and higher share prices in the future. “When all the facts were put together we discovered that, yes, there is an increas- ing expansion of intangible value, but this is actually the by-product of fewer and fewer brands” There's credible evidence companies think brands are worth more than consum- ers do. The number of high-performance, value-creating brands is diminishing across the board. Yet at the same time the financial markets keep raising brand walu- ations. The result? A brand bubble that could erase large portions of corporate intangible value and send another shock- wave through the global economy. And the trouble with bubbles is that they burst. Inevitably. o