Strong brand equity Brand equity is the true indicator of how hard the brand is working to create value. And despite considerable negative press
in recent years, Bristol-Myers Squibb maintains extremely strong brand equity. The BMS name contributes 14.42 percent to the
company's market cap, which was $18.46 billion at the time of the study—this means that the corporate brand equity represents
$2.67 billion of value.
So how does BMS get so much more value in terms of familiarity and favorability than others for their communications spend?
It could be the quality of their advertising. In addition to the Lance Armstrong Live Strong ad campaign, the company has
released another effective campaign called "Remember Me, Cancer?" By actively managing their brand even in difficult times,
BMS is able to manage the perception of the brand among key audiences, which impacts market cap in a measurable way.
Name recognition Wyeth is the only company in the study that met the $10 million spending threshold and increased its corporate advertising
spend over the last few years, yet declined on all brand measures. Although the company has run into its fair share of legal
battles, our research indicates that most people don't equate specific problems—like drug safety—to individual companies.
Rather, Wyeth is an outlier as a result of low levels of familiarity and favorability. Currently, consumers seem to recognize
Wyeth's product brands—Advil, Chap Stick, and Robitussin—rather than the parent brand. Much of this may have to do with the
company's name change from American Home Products to Wyeth in 2002. Sometimes, companies just need time to build a new corporate
brand name.
Cheap Tricks Very often, companies can only gain what they are willing to invest. That being said, there are companies that have been
able to maintain a strong corporate brand image without the big bucks. Novartis, St. Jude Medical, Rohm & Haas, Kimberly-Clark,
and Quest Diagnostics were able to build their brands despite low investment in communications. St. Jude, in particular, is
noteworthy because it has not bought any corporate advertising since 2003, yet it remains a leading brand, rating high on
familiarity and favorability metrics. (See "Popularity Contest,".) One thought is that St. Jude might use other communication
channels to spread its message. For example, the hospital uses actress Marlo Thomas, the daughter of the founder of St. Jude,
and her husband, Phil Donahue, as spokespeople.
Be in the Know
The pharmaceutical industry has been getting beat up for a long time—and it doesn't appear that companies are getting any
better at developing the right strategies to better manage their reputations or differentiate themselves from their competitors.
It is here that corporate advertising can be especially helpful. In the same way advertising works to help consumers reach
for the brands they know and trust, like Johnson & Johnson's baby shampoo, company-image advertising can help distinguish
a company from the pack. This speaks to improving favorability through greater familiarity. And very often those positive
feelings generate action—like purchasing products or investing in stock—that leads to measurable business results, such as
stronger cash flow and even measurable improvements in market valuation.
The secret is out, so don't be the last to know: Corporate advertising just may be what the pharmaceutical industry needs
to more positively shape the way it is viewed by a variety of audiences. Companies that continue to ignore the very real business
case for investing in the corporate brand are not maximizing their assets—in fact, they're just stalling their growth and
reputation over the long haul.
James Gregory is the CEO of CoreBrand. He can be rached at jgregory@corebrand.com
Nicholas Giacopelli is the manager of brand intelligence at CoreBrand. He can be reached at ngiacopelli@corebrand.com
|
PharmExec Blog
Follow Us
RSS
Bookstore
