Brand value

Received (in revised form): 14th November, 2005

ADAM ARVIDSSON
teaches sociology of media and communication at the University of Copenhagen. Since attaining his PhD at the European University Institute in Florence, he has worked extensively on the theory and history of marketing and advertising. His new book, Brands. Meaning and Value in Media Culture, which develops the argument put forth in this paper, has just been published by Routledge. Adam is also involved as a senior social scientist in the ActicsTM Ethnics Management System.

Abstract
This paper enquires into the nature of brand value. It argues that what contemporary trade mark law actually protects is the right to appropriate a value stream from a socialised production process in which consumers create symbolic and affective wealth around brands in their everyday communicative interaction. It argues that the autonomous nature of this communicative production process also causes legitimacy problems for trade mark law. The more brand managers outsource the production of brand value to the social life of consumers, the more difcult it becomes to legitimise their exclusive rights to derive value from it.

The predominant thinking of the worlds most successful brand builders these days is not so much the old game of reach (how many customers see my ad?) and frequency (how often do they see it?), but rather nding ways to get customers to invite brands into their lives.

Adam Arvidsson University of Copenhagen, Department of Media, Cognition and Communication, Njalsgade 80, Copenhagen DK 2300, Denmark Tel: +45 35 32 81 24 Fax: +45 35 32 81 10 E-mail: arvidsson@hum.ku.dk

This quote from Business Weeks recent special report on global brands (12th May, 2005) neatly summarises what goes as the prevailing wisdom within brand management today. The recent decade has produced an array of pop management books that encourage managers to take the brand beyond its existence as a mere symbol of the product and to make it interact with customers in a multiplicity of sensory, intellectual or even quasi-religious ways. Similarly, brand management practice has moved beyond a simple (or even primary) reliance on advertising to make active use of a multitude of channels, such as product placements, sponsorship and event marketing, that engage customers in different ways, and sustain a more or less intense

experience around the brand. Together with this increasing focus on the brand as something above and beyond the product, there has been an interesting shift in trade mark law. Recent legal practice has moved from a denition of trade mark infringement as confusion to dilution.1 It used to be the case that trade mark law protected brand owners from actions that were likely to confuse consumers as to the origins of the branded product. The paradigm case of infringement was X trying to pass off his/her product as that of Y. Today trade mark law also protects brand owners from actions that might dilute or weaken the complex of meaningful associations that have been created around the brand as such, and not just its referential link to a particular product or producer. Infringement might occur if consumers are reminded of one brand while seeing another brand, even though they know that the two brands and the products that carry their mark are distinct. In other words, there has been a growing legal awareness of the value of the brand in itself,

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above and beyond the products or producers that it might represent. This growing recognition of the brand as an entity that is valuable in itself is not strange, considering the increasing weight of brand values in determining overall corporate wealth. However, it opens up a tricky ontological question: What is it that is valuable in brands? What does trade mark law protect when it protects brand owners from the dilution of their brand assets? From a legal point of view the answer is simple, almost banal. Trade mark law protects the trade mark: its name, logo, particular combination of colours and sometimes even sound or smell, from being diluted through the establishment of inappropriate associations. But what exactly is being diluted? The CocaCola can is no less recognisable because someone other than Coca-Cola starts using the same combination of white and red. And what, exactly, constitutes the value of a trade mark? Why is a McDonalds arch worth more than three times as much as a Nike swoosh?2 To answer that question one has to leave legal discourse to dive into the literature of accounting and management. In contemporary managerial thought the value of a brand is thought to reside in its brand equity. Brand equity stands for its capacity to generate a future value stream, either through its ability to extract a premium price from consumers (for example, being prepared to pay more for a Rolex watch than for an unbranded, if functionally equivalent, watch) or through its ability to attract capital (for example, investors prefer to place their funds in a company that they know and sympathise with), or other-

wise facilitate relations with interested parties (distributors, producers etc). In recent times the rst dimension, or customer-based brand equity, has grown more important.3 Customerbased brand equity is generally dened as the set of associations or attitudes that consumers have in relation to the brand, and that contribute to its value for them. An important part of the value of a brand thus resides in the minds of consumers. What trade mark law protects from dilution is primarily the property over a specic set of attitudes and associations entertained by consumers; a property over a specic share of mind. To a sociologist, however, the expression share of mind often employed by marketing writers is too simplistic. It is known that consumption is a collective rather than an individual practice. In a consumer society most goods derive their use value from their ability to construct and reinforce social relations and shared meanings and experiences.4 So one would suppose that the value of a brand does not so much reside in its share of (individual) minds, as much as in its share of the common framework of action in which social life transpires. And, in so far as this common framework is in itself collectively produced (rather than given once and for all by tradition or social structure, as might be the case in social formations that are more stable than modern industrialised societies), then what trade mark law actually protects is the brand-owners property over a collective production process. How is this property right exercised? The factory owner might want to control the collective production process as it unfolds on their premises
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in its entirety. They might want to control what the workers do during their working hours, see to it that they do not sing, dance, drink or irt. The brand manager has no similar ambition of controlling the whole life of consumers. Brand managers are free to do what they want with the brand (indeed, the more they do with it, the better). What they seek is to make the brand enter into each consumers life in such ways that what they do with it and how they experience doing things with it adds to its brand equity. Brand management is about working on the context of action, in order to ensure that certain actions performed with a particular brand become different and (for some consumers) more valuable to ensure that typing on a Macintosh is different from typing on an ordinary computer, driving a BMW is different from driving any old car, wearing a Rolex is different from wearing a watch etc. To a large extent this entails working on the precognitive, affective dimensions of action. Brand management is a form of what Brian Massumi calls affect modulation, by which he means the shaping of the very basic, precognitive bonds that make up the foundation for social life.5 Affect modulation is not new as such. Early 20th century aesthetic politics is a prime example of the programming of affect, as is early 20th century advertising theory, where the affective reactions triggered by a poster if well executed were thought to be enough to produce certain forms of behaviour.6 The difference that contemporary brand management presents is primarily this: it is not about the programming of individual affect in order to trigger individual actions. Rather it is about maintaining a
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particular pattern of mass affect, which is repeated through a wide variety of actions performed by a multitude of different actors in different situations. The value of the Nike swoosh is not only or even primarily based on its capacity to trigger purchasing decisions on the part of consumers, as much as it is based on the fact that the particular patterned affect that it embodies is reproduced across a wide segment of practices. And this consistency of its affective pattern is what is thought to support brand equity in terms of loyalty, awareness, associations and even metaphysical meaning. Contemporary brand management thus recognises the autonomy of consumer action but seeks to work on the context in which it unfolds. How is this done? Affect is not the same as emotion. It is not something individual as much as it is something collective. To Spinoza who has become the most important reference for theories of affect it is rather about the capacity of a body to affect or be affected by others, to open up to other bodies.7 Affect is something that is constituted in communication. It is the most basic form of the communication that stands as the basis of the construction of a common social world. The modulation of affect works on the technologies that mediate this communicative construction of a common world (from human technologies like speech, touch and gesture, to the sensorial or affective biases that come with oral, written, printed, or electronic media). Brand management thus works on the assumption that the brand constitutes a sort of medium for the communication of affect, and brand management is about giving the medium of the brand certain particular

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properties so that when it mediates social life it does this in a way that makes it likely that a certain affective pattern will be maintained. Historically the recognition of the autonomy of consumer action, and the corresponding shift in the objective of marketing from consumer action to the context in which action unfolds has been a response to the increased mediatisation of consumer culture. It was with the post-war arrival of a new media ecology, centred on television, transistor radios, short-play records, supermarkets, styling and mass fashion and the corresponding explosion in new consumption styles that marketing recognised the autonomy and hence potential value of consumer agency. And it has been with the second wave of mediatisation, centred on contemporary information and communication technologies, that brand management has risen to its contemporary prominence within advertising and marketing.8 Media culture works as a commonly available resource; it is a sort of general intellect that effectively empowers the communicative productivity of consumers.9 While this communicative production process cannot be directly commanded, the fact that the media environment in which it unfolds is almost entirely commercial there are few non-commercial institutional actors in the public sphere, and those that are there (like public service television) are mostly under the hegemony of a commercial logic means that this environment is plastic, malleable and singularly open to efforts that aim to guide, pre-structure and program the communication processes that unfold within the environment of media culture. Brand management

exploits this plasticity of the context of action, which comes with mediatisation, to inscribe particular potentialities or particular affective loops directly within the productive resource of media culture. It constitutes a sort of programming of the social, by means of an intervention on its plastic mediatised framework. Indeed, the brand can be understood as an operational medium: it does not so much represent a reality (of production, of the commodity) as much as it produces a reality in which the virtual and the material coincide.10 What trade mark law protects is thus the right to farm out a particular pattern of affect, to make it grow stronger and more real as it feeds off the communicative productivity of a mediatised consumer culture: to put the brand to pasture in the social. In this way, contemporary trade mark law as well as intellectual property legislation in general begins to show some similarities with pre-capitalist relations of production. The progressive element in capitalist production was that the capitalist intervened directly into the production process. Unlike the feudal lord, capitalists actively organised and rationalised the ways in which wealth was produced. To both Karl Marx and Adam Smith this was the particular progressive contribution of capitalism, and its historic raison de tre. But brand managers do not intervene, or intervene only very marginally in the production of brand value. They simply invest in a particular pattern of affect, which is then put to pasture in the social by means of entering into the media contexts in which life unfolds. When Nike puts its swoosh on Berlin playgrounds, the idea is that the brand can feed off the sociality, meanings and
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experiences that people produce on those playgrounds. The contribution of the Nike Corporation to that production process is very limited. Brand value is produced in a myriad of autonomous practices that transpire in a branded context: eg buying a friend a Coke, having a quick coffee at Starbucks before running back to the ofce or buying a piece of furniture on eBay. But the branded context has a very limited effect on the unfolding of these practices. Rather than brands manipulating consumers, the branded context of everyday action constitutes a secondary layer. It presents a number of vampiric points via which everyday practice can be siphoned off as value. This condition also puts a new light on counterfeiting. To copy a branded product is not so much to steal as it is to establish an illegal vampiric point. The more brand managers encourage consumers themselves to produce shared meanings and experiences around their brands, the less they contribute to the end product, the use-value that consumers derive from brands. Consequently, it becomes more difcult for them to legitimise why just their vampiric point should be legally sanctioned. Like medieval peasants, consumers consider one feudal lord, one vampire, as good as another. Whether Microsoft Corporation or some South-East Asian counterfeiter prots from one sending e-mails and interacting online is morally irrelevant

to most people. Here, then, stands an important contradiction in contemporary relations of production: the more consumers are encouraged to make brands enter their lives, the more difcult it is to legitimise the exclusive property over the branded context of action that trade mark law seeks to protect.
References
(1) See eg discussion in Lury, C. (2004) Brands: The Logos of the Global Economy, Routledge, London, UK, pp. 108109. (2) Valued at $mm 25.289 and 7.589 by Interbrand (2001) Worlds Most Valuable Brands, available at: http://www. brandchannel.com/images/home/ranking_ methodology.pdf (accessed February 2004). (3) Kellner, K. L. (1993) Conceptualizing, measuring and managing customer-based brand equity, Journal of Marketing, Vol. 57, No. 1, pp. 123. (4) See Miller, D. (1998) A Theory of Shopping, Polity, Cambridge, UK. (5) Massumi, B. (2002) Parables for the Virtual: Movement, Affect, Sensation, Duke University Press, Durham, UK. (6) Arvidsson, A. (2001) Between fascism and the American dream: Advertising in inter-war Italy, Social Science History, Vol. 25, No. 2, pp. 151186. (7) Negri, A. Value and affect, Boundary 2, Vol. 26, No. 2, pp. 7788. (8) Arvidsson, A. (2005) Brands. Meaning and Value in Media Culture, Routledge, London, UK, pp. 4165. (9) Virno, P. (1996) Notes on the general intellect, in Makdisi, A., Casarino, C. and Karl, R. (eds) Marxism Beyond Marxism, Routledge, London, UK, pp. 265272. (10) Crandall, J. (2005) Operational media, CTheory, Vol. 1, No. 6, available at: www.ctheory.net/articles.aspx?id=441 (accessed November 2005).

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