The value of co-branding can be elusive

Back in March, Ira Mayer and Mike Pellegrino addressed the concept and process of valuing brands. One of the factors to look at to get the sense of the overall brand strength is collaborations or co-branding initiatives.

Marketing specialist Debbie Laskie has put together a Pinterest page showing examples of co-branding. The objective of any co-branding arrangement is to somehow capture the gestalt of the two brands to increase the premium consumers are willing to pay for a product or service. Valuators will look at the strength of co-branding partners as part of their analysis.

Laskie warns of the downsides as well. “If one brand experiences a crisis, the negative events or negative publicity can damage the second brand – even if it was not involved directly. This is why it is critical to carefully evaluate the goals and objectives for a co-branding partnership in advance.” In that publicity makes up a large portion of celebrity brand, when a celebrity falls, brand owners which have attached to that publicity have strategic decisions to make on the overall impact of that fall.

In fact, at Brandstroke is an article suggesting a brand’s ties to celebrity is not worth the risk. Citing a study by Ace Metrix, the article suggests celebrity endorsement may actually depress an ad’s response.  As a leading example, even before the current baseball doping scandal, Nike has had to deal with crises surrounding Michael Vick, Oscar Pistorius, Joe Paterno, Marion Jones, Lance Armstrong and Tiger Woods (they retained Tiger Woods).