Where brand value lives?
In 1252, the Florin, the first Gold coin minted after the Dark Ages, contained its worth in Gold. It was a direct 1:1 representation of value. (Actually, the cost to produce the coin was greater than its value.) While China had already been using paper money for 300 years, it wasn’t until 1661 that Sweden introduced the idea to the West. This was a marker in the continuing human movement of separating value from objects and the introduction of symbols to represent value.
Brands are a continuation (and possibly) ultimate example of this same movement. This great chart from the FT shows the increasing role of brand as a percentage of corporate value.
Brands today comprise a staggering percentage of a company’s value. While this might lead one to the conclusion that value will become entirely based upon symbols, there are some signs that the reverse appears to be happening in currency and in branding.
The main visual for this post is the latest presidential dollar coin. As it says on the Government site, it was created to honour our nation’s presidents. I think it’s interesting that either consciously or subconsciously that honour required the creation and minting of something tangible rather than another paper note.
In order to signify that this isn’t just any old dollar – but one that has extrinsic value – it has been necessary to create a dollar that has intrinsic value.
I see a similar thing happening with branding. Increasingly creating brand value is not about occupying mindspace or deepening symbolic value, instead it is about doing tangible things that create value.
I found this latest story about Etsy (via: Influxideas) quite telling in that regard. It clearly saw as the logical next step for the development of its business the need for an old-fashioned retail experience. To build greater extrinsic value in their brand they have chosen to build intrinsic value. Further, they have chosen to take a step that makes little business sense from one perspective; they have taken a fully virtual business and tied it to the world of atoms.
I think there is something very important happening here because our models of branding are based on the notion that a brand exists in the minds of customers. That they are entirely symbolic. Those of us with classic brand training are ingrained with the notion that brands exist entirely divorced from any physical or tangible manifestation.
It is ironic that as our lives and worlds become increasingly virtual, some of the concepts that were entirely virtual are migrating towartds the physical.