Brand value has become a buzzword in recent times and many managers, consultancies, and companies have started to pay closer attention to it. The fact that Madden, Fehle, and Fournier (2006) mention various published analyses that found a positive relationship between branding and the financial performance of a firm makes the application of a brand asset valuation model for any brand even more crucial. Here the analyses mentioned by Madden et al. (2006): Kerin and Sethuraman (1998); Barth, Clement, Foster, and Kaszkik (1998); Simon and Sullivan (1993); and, Conchar, Crask, and Zinkhan’s (2005). That is motivation enough for us to choose an established brand valuation model and apply it to a football club in the context of an exercise. We choose Everton F.C. because we have not used the Liverpool-based club in any of our exercises yet.
Brand Asset Valuator (Young & Rubicam): consumer awareness is the key to brand value
Tim Ströbel (2012:47) analyses the factors of brand valuation in sport and introduces the Brand Asset Valuator by Young & Rubicam (Y&R) as a model that does not generate a monetary brand value, but can be used as a brand management tool, which might remind users of the growth-share matrix, the portfolio analysis tool by the Boston Consulting Group. Y&R explains that their Brand Asset Valuator shows realistic prospects for brands, because it measures the value of a brand where it is created: in people’s hearts and minds (young-rubicam.de, retrieved 17 May 2015). The brand asset comprises the brand strength and brand stature. Brand strength represents differentiation multiplied by relevance and means that a brand must have both characteristics in order to be strong (Aaker 1996:307). According to Y&R, “Esteem and knowledge indicate the involvement with a brand: the Brand Stature. It is the decisive gauge of the goodwill which a brand enjoys. Properly managing these relationships is the key to successful brand building and to retention of brand value. (young-rubicam.de)” Aaker (1996:306-7) explains that Y&R put forth the hypothesis that brands are built sequentially along the following four dimensions:
Application of the Brand Asset Valuator to the Everton F.C. brand
At this point we must emphasise that the methodology is solely based on the author’s one-day research and occasional subjective observations in regard of the found information. Nevertheless, it is ‘good enough’ for the demonstrative nature of this exercise.
If there is no point of difference, a brand’s value will be low (Aaker, 1996:306). Kotler (2003:315) defines differentiation as the process of adding a set of meaningful and valued differences t distinguish the company’s offering from competitors’ offerings. In the case of Everton F.C. the question is, what differentiates the club brand from other clubs? Or, why should anyone become a fan of Everton F.C. and not of their crosstown rivals Liverpool F.C. or any other team? Bridgewater (2010:6) underlines that the identification of fans with their cherished club is more emotional than rational, and that in most instances, the emotional ties, which could be father or mother-child, regional affiliation, or support of a star player, are in large measure emotional rather than rational. We decide upon the following differentiation attributes: history and regional affiliation. As follows, a summary to emphasise the mentioned attributes:
Everton were founded as St Domingo’s in 1878 so that people from the parish of St Domingo’s Methodist Church Everton could play sport year round —cricket was played in summer. The club was renamed Everton a year later after the local area, as people outside the parish wished to participate. The club has a large fanbase and among the highest average attendance in the Premier League in recent years. The majority of Everton’s matchday support comes from the North West of England, primarily Merseyside, Cheshire, West Lancashire and parts of Western Greater Manchester along with many fans who travel from North Wales and Ireland. Everton hold the record for the most seasons in England’s top tier (Division One/Premier League), at 111 seasons out of 114 as of 2014–15 (the club played in Division 2 in 1930–31 and from 1951–54). They are one of seven teams to have played all 22 seasons of the Premier League since its inception in August 1992. (Summarised from Wikipedia, retrieved 17 May 2015)
In addition, Everton F.C. has had moderately priced season ticket prices compared to their city rivals Liverpool F.C. or other football clubs (dailymail.co.uk, 2014). Also, the fact that their average season attendance has been growing in the past 4 seasons is a further factor that can prove their strong differentiation attribute (evertonresults.com). Given the above information and further subjective observations of the Everton F.C. brand, we conclude that the club’s brand has developed a point of real differentiation in recent times.
Unless a brand is relevant to a significant segment, it will not attract a large customer base (Aaker, 1996:307). In regard to brand content, Solis (2012: 101) claims that investing in relevance reinforces this new era of social consumerism, and that doing so improves the network, your place within it, and the reach and velocity of your role in the greater network effect. For this dimension, we will consider the factors ‘average attendance over the past few seasons’ – as in the differentiation dimension – and the ‘relevance score’ assessed through the Social Media in the Premier League document produced in 2014 by Accepted Socially with Matthew Carlton, Jonathan Madden, and Network London. As observed above, the average attendance at Everton F.C.’s home turf, Goodison Park, has been constantly growing for the past 4 seasons (evertonresults.com). This can be translated into a strong relevance amongst local fans. In terms of Everton F.C.’s online relevance, the Social Media in the Premier League document states: “Feeds go beyond the first team to keep fans abreast of news from youth and women’s sides and players out on loan, as well as highlighting Everton’s commendable community programme. Matchday commentaries on Twitter are lively, entertaining and go way beyond factual updates.” The documents grades the club’s relevance at 4.5, which equals 90% and the second highest only behind Manchester City and Arsenal. This equates to a rather high relevance on our scale.
Esteem combines perceived quality with perceptions of a growth or decline in popularity (Aaker, 1996:307). For this dimension, we look at the performance on the pitch and at the financial performance during the last few seasons. The tables show (Wikipedia, retrieved 17 May 2015) that Everton F.C. has constantly improved their Premier League position since the 2009-10 season, even though it will have to be content with a lower/non-UEFA Europa League position at the end of the seasons 2014-15. In regard to International competitions, the club has finally been able to qualify for a knock-out stage for the first time since 2009-10 and reached the 8th final in the 2014-15 season. Maybe the financial benefits that the club reaped from their UEFA Europa League campaign, as well as the additional football excitement, might offset the disappointment of the lower ranking. The club’s financial performance can also be regarded as a success. The Swiss Ramble blog (2014) states,
[I]t is fair to say that Everton’s financial performance has been improving. Up until the last two years’ profits, Everton had been consistently loss-making. In fact, they only managed to record a meaningful profit once in the previous eight years – and that was only due to Wayne Rooney’s big money transfer to Manchester United in 2004/05. Since the sacrifice of their youthful prodigy, the club suffered £45 million of cumulative losses between 2006 and 2012 before they found a solution to their financial woes – or, perhaps more accurately, Sky/BT signed a new television deal.
According to the performance of the above-mentioned factors, we can attribute a high grade to Everton F.C.’s esteem.
Knowledge indicates that the customer not only is aware of the brand but also understands what the brand stands for (Aaker, 1996:307). Bridgewater (2010:47) postulates that in professional sports awareness is largely down to the extent to which the club is covered by television and other media. Given that the Premier League is the world’s most watched league (premierleague.com, retrieved 17 May 2015), it is safe to claim that there is a good degree of awareness of the Everton F.C. brand spread globally. Furthermore, as we have discussed above, the club is doing a good job at sharing content through social media, which potentially increases the knowledge of their following about all-things Everton. Furthermore, Everton F.C.’s top20 ranking in the Deloitte Football Money League 2015, proves that the club is to be regarded as a serious and established brand within the sports world. Assuming that there is a correlation between a resourceful engagement by the Everton F.C. brand in social media and the knowledgeability of its followers, we claim that there is a high degree of knowledge in this regard.
Conclusion: Power-Grid and status of the brand
In the above exercise we have assessed that the Everton F.C. brand is strong in all four dimensions of the Brand Asset Valuator model. Hence, the brand ranks high in brand strength (differentiation & relevance) and brand stature (esteem & knowledge). This makes Everton F.C. a power brand with leadership characteristics.
To keep its stance as a power brand, the club needs to maintain its differentiation attributes or else it will become less relevant, and therefore its brand will slowly erode. Such a decline might result in an unfocused brand that eventually will have to reinvent and reposition itself in a niche, before aspiring for new heights.