The Brand Bubble

About the Author

John Gerzema is the Chief Insights Officer for Young & Rubicam Group, bringing a wealth of experience in marketing and brand management. He holds a master's degree in integrated marketing from the Medill School of Journalism at Northwestern and a B.S. in marketing from The Ohio State University. Gerzema's profound understanding of consumer behavior and brand dynamics is evident in his analytical approach to brand valuation.

Ed Lebar, the co-author, is the CEO of BrandAsset® Consulting and oversees brand strategy and research for Young & Rubicam Group. Lebar's background includes a tenure as a professor of economics at The City College of New York and Finch College. His deep-rooted expertise in economics and brand strategy complements Gerzema's insights, making them a formidable team in exploring the intricacies of brand value.

Main Idea

"The Brand Bubble" explores the imminent crisis of overvalued brands in the market, akin to financial bubbles like the subprime mortgage crisis. Gerzema and Lebar argue that while financial markets continue to inflate brand valuations, consumer trust and value perception of these brands are declining. This discrepancy threatens to erase significant portions of corporate intangible value, potentially causing a shockwave through the global economy.

The book introduces the concept of "energized differentiation," a measure of a brand's motion, creativity, and continuous evolution. Brands possessing this quality are deemed irresistible to consumers and more valuable to businesses. The authors guide readers through a five-stage process to reorganize their organizations around the brand, aiming for sustainable and profitable brand performance.

Table of Contents

• Introduction: Tulipmania and Inflated Brands
• The Impending Brand Bubble
• Can You Say 'Irresistible'?
• Wall Street, Meet Main Street
• The Postmodern Craving for Creativity
• Welcome to ConsumerLand
• Stage One: Exploration - Performing an Energy Audit
• Stage Two: Distillation - Identifying the Energy Core
• Stage Three: Ignition - Creating an Energized Value Chain
• Stage Four: Fusion - Becoming an Energy-Driven Enterprise
• Stage Five: Renewal - Active Listening and Constant Refreshing of Brand Meaning
• Epilogue: A Brand May Be Famous, But Is It Creating Returns for Shareholders?

Introduction: Tulipmania and Inflated Brands

The book opens with an analogy to "Tulipmania," a historical event in 17th-century Holland where tulip bulbs were traded at exorbitant prices, only for the market to collapse, leaving investors with worthless assets. This serves as a metaphor for the current overvaluation of brands.

“A bubble is a curious thing. In hindsight, it seems so obvious and predictable, while anyone caught up in the middle of one is blind to its potential for disaster.” - John Gerzema

Brands today are at risk of a similar fate. The authors argue that while financial markets continue to inflate brand valuations, the actual consumer sentiment towards these brands is waning, creating a dangerous bubble that could burst at any moment.

The Impending Brand Bubble

Gerzema and Lebar delve into the impending crisis, highlighting how financial markets are irrationally overvaluing brands. They provide evidence from extensive research, including 15 years of data from Young & Rubicam's BrandAsset Valuator, which shows a growing divergence between brand valuation and consumer sentiment.

“Consumers are falling out of love with many brands, leading to a potential collapse in brand value that could have significant repercussions for businesses and the economy.” - Ed Lebar

This situation poses a significant risk to companies that rely heavily on their brand equity. If the bubble bursts, it could lead to a drastic loss in market capitalization and a reevaluation of how brands are valued and managed.

Can You Say 'Irresistible'?

The concept of "irresistibility" is introduced, focusing on brands that create exceptional attitude changes and drive financial numbers upward. These brands possess energy, a mix of creativity, innovation, and continuous evolution that makes them compelling to consumers.