Vivaldi Partners CEO Erich Joachimsthaler

I was asked to speak at the Corporate Image and Branding Conference yesterday about “Strategic Brand Management: Reaching your Stakeholders with a Comprehensive Strategy.” I thought about what it is that an audience of CMOs would want to hear about, and so I asked myself what is it that every CMO is asked to achieve. CMOs are often tasked with driving top line growth and market share while better defining the brand and value proposition and optimizing the marketing process in order to maximize business performance.  Read More »

Mark Mulcahey from Vivaldi Partners speaking at the Corporate Image and Branding Conference.

“Can we afford to ignore social media?”
“The answer to that is Syria.”

This is how Mark Mulcahey from Vivaldi Partners, speaker at the Corporate Image and Branding Conference, answered an executive worried about how social media affects business strategy. Read More »

About 20 years ago, companies realized that the biggest value creation was to identify, nurture and protect the intangible asset value of the firm. Then, there was a recognition that this intangible asset value was not only important, it was growing faster than tangible assets. Back then companies and executives put their focus on management of the intangible assets, even though many of them could not be shown on the balance sheets in some countries, due to accounting regulations.

I took this as a cue to begin studying how to manage better brands, which for many companies was the biggest intangible asset value. Back then, branding was a tactical discipline within marketing. Brand managers were junior employees who made tactical decisions for the brand. This all changed when a British consulting firm developed a valuation of a large consumer goods brand as part of a mergers and acquisitions (M&A) activity. The valuation of the company’s brands far exceeded the value of the firm as it was assessed otherwise (book value).

From that year on, every executive I met told me that they were looking to build a brand. Not just brands for products that you could put on the shelf but also corporate brands, range brands and ingredient brands. Branding became one of the most significant value creation opportunities for two decades.

Today, I see a new way that companies create value and it reminds of 20 years ago. The new form of value creation is also focused on leveraging and managing intangible assets. But the assets are different now. Take a look at this chart.

It describes the Internet evolution in two dimensions. One dimension is the connection between information and the other is the connection between people. Taken together, I call these two connections something like collective intelligence.

If you were to put your fingers on the biggest value creation opportunities for companies today, it is the identifying, nurturing and leveraging of collective intelligence. I am not sure about the predictions inside this chart and how they explain the evolution of the web. Web 2.0 is here and we are now entering Web 3.0. Whatever is inside the chart is actually less interesting than the dimensions themselves (the x and y axis), because the dimensions describe the journey we are on, of ever-faster speed and acceleration.

I predict we will see enormous acceleration in 2012 as various technologies become increasingly available. David Reed, one of the early thought leaders of the Internet, groups these technologies into three clouds, the connectivity cloud that facilitates the transfer of information. There are a host of applications in this group – from networking technologies such as global broad adoption and penetration – to the device proliferation and availability of smart phones. Then there is the resource cloud, which includes the ability to store massive amounts of data at very low costs. And finally there is the social cloud, which includes the networking and collaboration technologies that currently appear like wildfire.

I think it is this latter set of technologies — the social media applications, social technologies, and networks that were the missing piece so far to fully leverage the Internet. Through these technologies, value creation shifts from merely leveraging the connections between information, as Google has done, to value creation from leveraging the connection between people. This new form of value creation leads to entirely new business models, new ways of leveraging the Internet (the social media model), and new ways of building strong brands.

As far as branding is concerned at Vivaldi Partners, we have a name for this form of value creation: the building of social currency. Building social currency involves managing the collective intelligence (the connection of information and the connection of people), and social currency is the extent to which people share the brand or information about the brand with others as part of their social lives.

My advice? Understand the connections between people as they share a brand and information about a brand. This will be one of the biggest opportunities in value creation for companies in the years to come.