eMarketing Blog

One of the biggest changes affecting business over the past 50 years has been the rise in importance of intangible assets, including brands. They typically account for between 30% and 70% of company’s market value, but in certain market sectors, such as luxury goods, this figure can be higher. Experts agree that value of intangibles has trebbled over the past 30 years. There is according to these experts, an ‘Intangible Revolution’ so company’s should prepare to  demonstrate the value of their brand-building activities.

What are Intangible assets?

• Technological assets (patents, copyright, know-how)
• Strategic assets (licences, natural monopolies)
• Reputational assets (Company, product and service brands)
• Human resources (skills and flexibility of employees)
• Organisation and culture (values that shape commitment and loyalty of employees)

Source: Value-Based Marketing, by Perter Doyle. (Wiley 2000)

And now new accounting practices such as the IFRS3 on ‘Business Combinations’ requires listed companies to break down the value of intangible assets into 5 categories to highlight value of brand acquisitions, rather than group them under ‘goodwill’. Some time soon we may see ‘Brand Equity’ in the Profit and Loss to highlight the marketplace i.e. the place where the profit arrived, rather than what to spend its money on.

So where do you start?

1. Clearly articulated market overview showing opportunities, view of competitors and perceived advantages
2. The Strategy
3. Critical value creating activities; brand, innovation, customers, people, supply chain, environmental
4. Financial performance

‘Most companies start at (4) and work backwards, with very few articulating at the front end, what drives their financial performance.‘ according to David Phillips, senior partner at PwC.

Summarised Courtesy of Gomer Williams CIM (HML Marketing 2007) 
Acknowledge: Jane Simms, The Marketer Apr 2007

Spending on UK internet advertising surged in 2006, overtaking newspaper ads for the first time, a report says.

Online advertising expenditure jumped 41.2% to £2.01bn during the year, the report by the Internet Advertising Bureau and PricewaterhouseCoopers said.

In contrast, spending on national newspaper ads grew just 0.2% to £1.9bn, taking a 10.7% share of the market.

By BBC News Online 28 March 2007 

But despite online ads taking an 11.4% market shares, internet ad spending was just over half that for TV adverts.

TV advertising itself experienced a 4.7% fall in spending to £3.9bn.

“With almost all expenditure on traditional media in decline, the upward momentum of the internet reflects a new era … which is driven by high-speed broadband take-up and user-generated content,” the report said.

Popular medium

The report added that online advertising actually grabbed a record market share of 12.4% in the second half of 2006, as expenditure topped £1.098bn.

As a result of such heavy spending on online adverts, the UK’s online ad market share is almost double the global average of 5.8%, the report added.

Recruitment spent the most on web advertising - increasing expenditure by 2.7% - followed by finance and technology.

“The internet is a hugely popular mass medium now, and advertisers are continuing to switch more of their budgets online to build their brands and interact with their customers,” said IAB chief executive Guy Phillipson.

“2006 was a tough 12 months for the advertising market as a whole, but once again the internet bucked the trend, recording a 41% increase in ad revenues.

“With consumers now enjoying even faster broadband and installing wireless routers in their homes, the growth of online advertising in the UK is set to continue unabated,” he added.

The market plan is described as a ‘map to help you develop your business’ in ‘the marketer’ (March 2007, p38). It is used as a dynamic tool to help identify business opportunities to penetrate, capture and maintain market position ‘not a weighty document’. The parts of a marketing plan can be summarised by:

step 1: set organisation’s mission & company objectives
*What are the company Objectives?

step 2: the marketing audit
*Where are we now?

step 3: Set draft marketing objectives
*How do we get there?

step 4: plans and set marketing budgets
*What are the details?

step 5: monitor and controls the plan
Are we on the right track?

The plan is implemented at the beginning of the fiscal year and monitored; it is subject to change based on a continuous cycle of development, with planning running one way and feedback the other.

So what are the main benefits?

• it clarifies direction
• motivates people
• improves resource efficiency
• provides metrics and controls for examining progress

Planning is defined as ‘the task of setting objectives, specifying how to achieve them, implementing the plan and evaluating the results.’ Boddy (2005, p169). To meet these goals or objectives requires allocating financial and people management resources and evaluating the costs.

By HML for business. Useful links:
http://www.hmlbusiness.com
http://www.hmlmarketing.co.uk/site/marketing-consultancy.htm

    A A A          What can you see?

AN ACCESSIBILITY AGENCY that has been investigating how easy websites are to access by users with disabilities, has concluded that the majority of web designers are failing to produce sites in line with the minimum levels of accessibility for all. Commissioned by the United Nations as part of its International Day of Disabled Persons, Nomensa investigated many of the world’s leading sites, taking a sample from five different sectors in 20 countries. The sectors studied included: travel, retail, banking, government and media. In the UK, the brands under scrutiny were:
British Airways, Marks & Spencer’s, Lloyds TSB, the British PM’s site and The Guardian. The report states that across all 100 sites probed, only three (including Tony Blair’s) achieved the minimum standards, along with Blair’s Spanish and German counterparts.

Among the portfolio of statistics it was revealed that 93 per cent failed to provide adequate text descriptions for graphics, 78 per cent used colours with poor contrast causing issues for colour blind sufferers, 97 per cent denied the ability to resize pages and 89 per cent offered poor navigation. “It’s important for commercial, legal and moral reasons that websites put in place a strategy for accessibility,” urges Alex Metcalfe, Nomensa’s head of client services.

By webdesignermag.co.uk Issue 127

The Act in full - Disability Discrimination Act 1995

Sarah Bridge explains why giving your company or product the right image is of crucial importance 
  
Starting off with the right brand for your product or company can be crucial to a your business. “You should never underestimate how important it is to get it right at the very beginning,” says Olly Raeburn, managing partner of creative agency Liquid Communications.
“You are only new once, so you have got to think things through. What is at the core of the business and does your branding reflect that?”

Perry Haydn Taylor, founding partner of the brand experts Big Fish, agrees: “It is a priority to get branding right at the very beginning. If you have the best product in the world but you don’t have the best brand, then it is not helping your business. Branding is a way of getting people interested in to what you’re all about.”

The most important thing to spend on branding is time, he adds: “Entrepreneurs tend to rush in and make decisions quickly but prevention is definitely better than cure with branding. Get it right and it pays dividends — if not, it’s a lot of effort to change things halfway through.”

Read more

By Sarah Bridge Feb 2007 (c) Sunday Times
www.business.timesonline.co.uk

 
Without a doubt, 2006 has been an exciting year within the realm of internet search. Not only has the number of internet searches per year hit record highs, consumers themselves are becoming more demanding and sophisticated in how they use search engines.

Additionally, natural language, or Semantic Search – which enables users to pose queries as a properly phrased question, not with a couple of words – may come to the fore.

This next generation search engine obviously poses as many opportunities for advertisers as it does for consumers. However, for advertisers to maximise the revenue potential of these new opportunities, search companies must, in turn, evolve their campaign management applications.

In early 2007, Yahoo! will do this with its new search advertising platform. Future-proofed to evolve with new and existing trends in online advertising, the new platform will provide advertisers with enhanced capabilities and tools such as Geo-targeting and advanced analytics.

This will enable search marketers to work more like traditional marketers – not simply keyword specialists – by providing them with the capabilities and insights that will truly help them be more strategic and efficient in how they drive results.

New advertising platforms will also play a key role in what will be a major trend in online advertising during 2007 – mobile.

Like the year just past, 2007 will be another big year in online advertising. But whilst it will be a year of maximising revenue opportunities, we should not forget about maintaining a positive user experience – as they, after all, are the cornerstone of our industry.

By Richard Firminger, Regional Sales Director, Northern Europe at Yahoo! Search Marketing

Recent research conducted by Hitwise and Yahoo! Search Marketing has revealed a growing trend amongst marketers to use internet search for more than just direct response.

By analysing the search usage of three leading UK organisations – Orange Retail, Sky and The AA, over a six-month period – we found these organisations used search as a powerful branding tool and as a yardstick for measuring the effectiveness of their offline campaigns, taking search beyond the realm of direct marketing.

Additionally, the analysis found these organisations achieved superior results by integrating their search campaigns with their offline and alternate online campaigns.

This research has proven very valuable in demonstrating the growing role search plays in the overall marketing and communications mix and highlights the effects of increased offline marketing activity on search as an acquisition channel.

Read more

By Nick Jones, Category Development Director at Yahoo! Search Marketing

Online retailers experienced a Christmas boom with Christmas spending online soared by 40 percent. Here’s the movers and shakers.

* TOP 10 ONLINE CHRISTMAS SHOPPING *

1 - Flights/holidays
2 - Hotel stay
3 - Book
4 - DVD/video
5 - CDs
6 - Clothes
7 - (Joint) Computer games and toys
8 - (Joint) iPod/MP3 player, flowers, mobile phone accessories and alcohol and food
9 - PC or laptop
10 - Shoes/trainers

Source: Retail Decisions

There’s more in the Christmas Newsletter - look out for our ‘Tips to Safe Shopping’ online to ensure.

Brands are the key intangibles in most businesses. Survey after survey shows that intangibles typically account for between 30% and 70% of a companies market value. Intangibles such as brand, are transforming management and reporting practice. The Institute of Practitioners in Advertising (IPA) outlines a number of inititiatives coming into force to account for intangibles. The IFRS3 is an international reporting standard to be introduced on 1 Januray 2007 that will require companies to breakdown the value of intangibles when valuing a company; no longer lumping them together in the catch-all ‘goodwill‘ phrase. 

Read more..

by Jane Simms (Marketing News 2006)