1. The document analyzes brand relationships and their contribution to market value for Google, Apple, Facebook, YouTube, and LinkedIn. It finds that brand relationship equity accounts for about 40% of market value on average. 2. Google derives most of its market value from strong brand relationships like identification and reinforcement, while Apple's market value is dominated by operating profits. LinkedIn's value came entirely from brand relationships as it had no profits. 3. Google has the strongest brand relationships overall, particularly for identification which enhances customer self-expression through Google's variety of tools. Reinforcement relationships also contribute significantly to market value.

1. Case History :
Consumer Brand Relationships
with Digital Brands
Google
Apple
Facebook
YouTube
LinkedIN

2. Executive Summary -
1. Factors contributing to Brands’ Market Value
• The BlackBar model fits the Market Value of
branded businesses - as published - to three
contributing variables:
– Brand Relationship Equity, as measured in BlackBar’s
consumer database
– Size of brands’ stable franchise, as measured by
BlackBar
– Published operating Profit

3. Factors contributing to Brands’ Market Value
In a major study covering 48 brands in 9 different product
categories, Brand Relationship Equity accounted on average for 40%
of the Market Value of the brands

4. Executive Summary -
1. Factors contributing to Brands’ Market Value
(*all financial data relates to 1/1/12)
• The four branded businesses for which financial data is available show very
different distributions of the contribution of the three variables:
– As LinkedIN had* no profit and had a relatively small stable base of users, virtually all
of its Market Value is accounted for by Brand Relationship Equity.
– Facebook had* yet to show any Operating Profit. It’s value was therefore accounted
for in roughly equal measure by Brand Relationship Equity and the size of its user
base. Now that lack of Operating Profit has ceased to be a drag on its Market
Value, we would expect to see Operating Profit account for a substantial proportion of
an increased Market Value – with a proportional reduction in the influence one or both
of the other two variables.
– For Apple, Operating profit is the dominating factor, accounting for over 50% of Market
Value. Being able to continue to justify higher prices and margins in the future, is thus
a critical factor for the maintenance of the brand’s Market Value.
– In contrast, Google’s Market Value is much more reliant on Brand Relationship Equity
and the Size of its user base, which together account for over 70% of that value.
Google’s Market Value is much less vulnerable than Apple’s to changes in Operating
Profit.

5. Executive Summary –
2. Sources of Brand Relationship Equity
• All five brands derive most of their Brand Relationship Equity from three
Relationships, in descending order of importance:
– Identification
– Reinforcement
– Role Model
• Google’s Identification and Reinforcement relationships are stronger than all of
the other brands’
– Identification - Google is more loved and experienced as a stronger means of self-
expression than other brands – including both Apple and Facebook. Evidently, self-
expression is enhanced by Google’s broader pallet of personal tools, compared to
Facebook’s more narrowly defined offering.
– Reinforcement – Both FaceBook and Apple provide a stronger boost to Self-Esteem
than Google, probably because their use has a more “public/social” value while
Google’s is more “inner-directed”. None the less, Google’s superior performance –
again probably due to its broad offering – gives it the edge overall.
• For both key Brand Relationships, breadth of offering seems to be a key factor –
for enhancing means of self-expression (Identification) and perceptions of
performance (Reinforcement). For Apple, the launch of a new game-changing
product (Apple TV ?) might strengthen both these Brand Relationships more
than yet another iPhone, while FaceBook needs to add functionality beyond the
purely social.

6. The Importance of Brand Relationships
• Brand Relationships have a double impact
on financial value of a branded business
– In creating Relationship Equity they directly
influence Market Value (on average 40% of
Market Value can be explained by Relationship
Equity)
– They help grow brands’ customer franchises –
impacting trial and retention, frequency of use
and brand preference – which accounts on
average for an additional 13% of Market Value

7. Reinforcement [= Performance x Self-Esteem]
Google, is seen as having superior performance
and providing greater customer satisfaction than
Apple, Facebook and YouTube. For Apple and
Facebook, using or purchasing these brands
makes the customer feel better and smarter – in
his/her own eyes and in those of others.
Overall, however, Google’s performance gives it
the edge.

8. Identification [= Love/Fit x Self-Expression]
There is a very strong affection for
Google, Apple, YouTube and FaceBook.
Google and FaceBook in particular are
experienced as expressing the customer’s
own values and aspirations. Loving a brand
that helps you express yourself is a way of
loving oneself.

9. Role Model [= Charisma x Mentoring]
Brands like Apple and Google are not
only admired for their charisma –
leadership and innovation - but
customers also feel challenged and
encouraged by these brands to up their
own game.

10. Self-Differentiation [= Differentiation x There for Me]
Apple and Google are seen as
distinctive and unique – but not in a
distant or iconoclastic way. These
brands’ difference is inclusive of the
customer, who therefore feels distinctive
and unique too.

11. Playful [= Relaxed & Stylish x Gives Pleasure]
YouTube is liked for its relaxed style – as
are FaceBook, Apple and Google; but
YouTube is pure pleasure – it expects
nothing of the consumer other than to
experience the pleasure it gives.

12. Brand Relationship Equity
• Brand Relationship Equity (BRE) summarizes
the brand’s equity based on its strength on all of
the 5 Universal Brand Relationships.
• The BRE index is calculated in relation to the
brand’s familiarity, in order to discount the effect
of brand “size”.
• The magnitude of Brands’ Relationship Equity
indices is directly proportional to the ratio of
Market Capitalization to Sales
Brand Relationship Equity

13. Brands’ Relationship Equity indices are proportional
to the ratio of Market Capitalization to Sales

15. Brand Relationships and Brand Value
• Google has the highest Brand Relationship Equity,
due primarily to its strong Identification value - it is
loved and associated with self-expression.
• Both Google and Apple have strong Reinforcement
value– they perform well and make customers feel
smarter.
• Google and Apple also derive value from being Role
Models- they lead in innovation and encourage
customers to innovate too.

16. Contribution of Brand Relationships to Franchise
Development in the Digital Category
18.4%
24.7% 23.4% 22.1%
55.0%
27.9%
72.5%
46.7%
18.0%
19.8%
3.4%
10.8%
3.4%
0.6%
-0.6%
2.3%
5.1%
27.1%
0.1%
18.2%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Relevance Non Users'
Consideration
Users'Preference Good Value
Playful
Self-Differentiation
Role-Model
Identification
Reinforcement

17. Contribution of Brand Relationships to Franchise
Development in the Digital Category
• In consumer packaged product categories, Reinforcement plays a major
role in creating relevance, perceptions of value and building brand loyalty;
however – relative to other Brand Relationships – it is of less importance in
the digital category.
• In this category Identification is the single most important Brand
Relationship: it is the major contributor to creating relevance and
perceptions of good value, and - almost exclusively – creates increased
preference and loyalty.
• Role Model plays a significant role in creating relevance and encouraging
trial in this category.
• Self-Differentiating plays no significant role in franchise development in this
category
• Playful is a major contributor in this category to creating an interest in trial
and also builds perceptions of good value.