Assessing Corporate ID Assets

Article excerpt

Corporate ID is poised for a comeback as companies realise the value of their reputational assets, says Dave Allen

The inevitable throwing up of hands in horror that is the press response to announcements of large-scale corporate identity on has fanned the fires of identity scepticism in this country. Doubting Thomases abound, willing to invest only if they are sure that they will see results in increased profits.

Although to the uninitiated, paying to maximise you intangible assets can sound something akin to buying shares in the Eiffel Tower, there are plenty of examples of companies which understand and value their intangible assets highly enough to put them squarely on the balance sheet. Grand Metropolitan's purchase of Pillsbury for example, included a 50% premium on Pillsbury's pre-bid value and several times the value of its tangible assets. Nestle paid more than five times book value for Rowntree, and when Philip Morris bought Kraft, the buying price was four times that of the tangible assets.

If, in these examples, most of the premium paid resulted from a recognition of the very real value of the famous brands in the product portfolios of the target companies -- surely then the same is true for a company itself?

The fact is that tangible characteristics (new products, new market strategies, pricing policy and promotions) can be quickly imitated by competitors -- but the emotional take-out of a company, made up of a witches' brew of history, personality and associations, is inimitable, and therefore potentially extremely valuable. Managing and nurturing these assets and communicating them visually is a necessity in these hyper-competitive times.

Persuading companies of the value of their visual assets in conveying the character of an organisation as well as its facts and figures, is not difficult in itself. Persuading them to spend the time and money to do it properly is. This doesn't mean just paying the design fees, and expecting it all to happen. …