How to Measure Brand Value

Raul Tiru
Raul Tiru
Mar 5, 2021 · 5 min read

There are some things within a company that are easy to measure. At quarterly meetings and investor updates, executives can point to concrete items like personnel, new customers, revenue, and profits to illustrate the company’s progress and growth. Other things, like brand, are more slippery, but no less important. Brand value is difficult to measure, but that doesn’t mean it can’t be done. Indeed, it not only can be done — it must.

What Is Brand Value and Why Should You Measure It?

So why is it so important to measure brand value? Firstly, it can be an important part of an argument building a business case for branding. Because the idea of a brand is intangible and not directly connected to sales, it can sometimes be difficult to convince other team members to invest in branding activities. When you can attach monetary values to your current and future brand, you start to speak their language, and it becomes easier to gain buy-in.

What’s more, brand should be measured because one of the most fundamental principles of business success is that you must set goals and track your progress toward them. No matter how intangible or difficult to define something is, if you’re investing real money into it, you need to have a solid sense of what you hope to get out of it. There is no way to know if your brand investments are working — or worth it — if you’re not measuring your brand value along the way.

So, this all begs the question: what, exactly, is brand value? The definition is, of course, part of the challenge, because brand is nebulous: it’s a feeling, an impression, a reputation, a “vibe.” However, there are ways to define it in terms of specific, material elements. In this vein, brand value can be thought of as anything that consumers associate with your brand or that influences consumer behavior: your trademark, logo, tagline, visual assets, marketing and advertising strategy, digital assets, customer retention, social media engagement levels, and so on.

How to Measure Brand Value

Having a definition helps nail things down a bit. But, because the definition of brand value is so broad and fluid, the challenge of measurement is still a big one. What’s more, brand value will mean different things to different people in different contexts. This doesn’t mean that it’s useless to calculate your brand’s value. What it does mean is that there are a number of different possible approaches to measuring brand value, and that your company should pick the one that makes the most sense for your identity, circumstances, and goals.

While there are many more possible ways to measure brand value, here are 6 common approaches:

  • Cost-based valuation: This method calculates brand value based on how much it cost to build the brand. So, you’d add up all the expenses incurred in brand-building from the very beginning: things like contracts with branding agencies, promotions, trademarks, salaries of employees who focus on brand, marketing, and more. This measurement gives a value based on what you put into your brand, but it’s important to remember that it doesn’t necessarily reflect the current brand value in the public sphere. Based on the success of your branding investment, as well as other industry changes or attention your company has gotten, your brand value could be higher or lower than this number.

All of these methods have strengths and weaknesses, and all of them will likely arrive at different numbers when it comes to a brand’s value. This is natural, given the intangible and subjective nature of a brand and its value. But regardless of what method you choose, the exercise of measuring your brand’s value will clearly illustrate its monetary impact on your company, and help you set goals and adjust brand strategy going forward.

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