The Information Content of Brand Attributes

46 Pages Posted: 3 Jun 2007

See all articles by Natalie Mizik

Natalie Mizik

University of North Carolina (UNC) at Chapel Hill; University of Washington

Robert Jacobson

University of Washington - Michael G. Foster School of Business; Diogenes Consulting

Date Written: December 14, 2006

Abstract

We assess which brand asset metrics provide incremental information content to accounting performance measures in explaining stock return. Our analysis focuses on the five "pillars," i.e., central brand attributes, that form the basis for the newly updated Young and Rubicam Brand Asset Valuator (Y&R BAV) model. Analysis shows that perceived brand Relevance and Energy provide incremental information to accounting measures in explaining stock return. Esteem and Knowledge do not, i.e., their effects are reflected in current-term accounting measures and in brand Relevance and Energy. We find that the financial markets do not view Differentiation as having incremental information content, when, in fact, they should. Changes in Differentiation are indicative of future-term accounting performance, which, in turn, affects stock return. These conclusions are invariant to the use of alternative accounting performance measures, risk adjustments, and to the inclusion of additional brand attributes into the analysis.

Keywords: brand, valuation, BAV, brand differentiation

JEL Classification: M39, M49

Suggested Citation

Mizik, Natalie and Mizik, Natalie and Jacobson, Robert and Jacobson, Robert, The Information Content of Brand Attributes (December 14, 2006). Available at SSRN: https://ssrn.com/abstract=961859 or http://dx.doi.org/10.2139/ssrn.961859

Natalie Mizik (Contact Author)

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

University of Washington ( email )

Seattle, WA 98195
United States

Robert Jacobson

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States
206-543-4780 (Phone)

Diogenes Consulting ( email )

2002 1st Avenue North
Seattle, WA 98109
United States

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