LIVE ISSUE/THE BBC BRAND: The BBC puts its brand value under the spotlight - Auntie has shown her true colours, but is it worth the wait, Richard Cook asks?

By RICHARD COOK, campaignlive.co.uk, Friday, 26 June 1998 12:00AM

Some things, it seemed, were still sacrosanct at the BBC. Chief among them was its ability to dip in and out of the commercial sector as its whims dictated, much to the annoyance of its bona fide commercial rivals. Cross-promotion of its magazines on TV, the ’Perfect Day’ promotion, the cavalier attitude towards programme sponsorship rules in broadcasts such as the Smash Hits Poll Winners Party, have all conspired to blur the distinction between public interest and commercial considerations. But no longer.

Some things, it seemed, were still sacrosanct at the BBC. Chief

among them was its ability to dip in and out of the commercial sector as

its whims dictated, much to the annoyance of its bona fide commercial

rivals. Cross-promotion of its magazines on TV, the ’Perfect Day’

promotion, the cavalier attitude towards programme sponsorship rules in

broadcasts such as the Smash Hits Poll Winners Party, have all conspired

to blur the distinction between public interest and commercial

considerations. But no longer.



There is nothing new about commercialism at the new BBC. The BBC

Worldwide arm is responsible for the commercial exploitation of

programmes, magazines and merchandise around the world. It has already

moved to embrace a multi-channel future with a pounds 340 million joint

venture with the Denver-based cable giant, TCI.



Indeed the corporation’s dogged pursuit of the commercial sphere has

appeared to be merely a more effective means of deflecting attention

away from its anachronistic licence fee arrangements than a real

abandonment of its public service heritage. So when proposals to

establish its engineering and technical division as a separate profit

centre emerged earlier this year, the good sense of the Beeb operating a

separate entity that could compete more effectively in the commercial

market for independent production deals seemed unanswerable. Except it

isn’t working out quite that way.



The Government has chosen to make this the issue on which the BBC is

forced to stand up, look its interlocutors straight in the eyes and say,

’Yes, I am a commercial being.’ BBC directors have been told by the

culture secretary, Chris Smith, to do something that has never before

been attempted (Campaign, last week). It must appoint management to put

a figure on what the BBC brand is worth and hope then to start to do

what the likes of Coca-Cola, Marlboro and IBM have been doing for years

- namely to charge subsidiaries and consumers a realistic price based on

these findings.



However, this process is by no means going to be as easy or as rewarding

as it might at first appear.



’We have something at Young & Rubicam called the brand asset valuator,’

explains the Y&R managing partner and planning director, Tim Broadbent,

’which is the largest ever study of the common perception of brand

values and attributes, based on 90,000 interviews conducted in 27

countries.’



Unfortunately, the BBC doesn’t emerge from this kind of global

examination with quite the dominant positioning that might be supposed

’We looked at perception of the BBC as a global brand in these 27

countries,’ Broadbent adds. ’The brand, as you might expect, was

strongest in the UK but globally CNN was perceived as a stronger brand.

The BBC is differentiated but it lacks relevance. CNN is seen as more

dynamic, up to date and progressive.



The BBC represents Britain and is seen as more traditional and

unapproachable.



The BBC’s chief advantage lies in its back catalogue. And convergence

technology offers limitless exploitation of the intellectual

property.’



In practice, that means the opportunities for the BBC to prosper

financially from its brand valuation lie with the sort of digital deals

that it can do, and whether it can command a premium pricing when it

comes to the joint venture programming arrangements it has already

started to make.



It might be helped in this task if there is some sort of unanimity

arrived at among consultants about how much the BBC brand is actually

worth. First impressions by consultancies have concentrated on the

problems associated with trying to place a normal commercial value on

something with as complicated a structure and difficult a remit as the

BBC. The problem is that the BBC is at bottom still a not-for-profit,

government-controlled organisation.



’People say that the BBC brand is difficult to value,’ points out Maggie

Mullen, a partner and the head of the European Valuations Practice at

Coopers & Lybrand Corporate Finance, ’but I don’t agree. I liken it to a

prestigious office block in Mayfair - its value is not affected because

you are letting someone work there rent free. The value of the brand is

not necessarily linked to the success of the current management team.

I’ve often valued brands as being worth more than the company’s market

capitalisation.



’The BBC has a very strong brand that it could exploit in its core areas

such as news, media and reporting, and it doesn’t have to be in the

English language. A strong brand means that you can compete in other

markets and demand a quality, premium pricing for your services. You

also have the flexibility to decide whether you want to invest in the

growth yourself or whether you want to license others to invest the

capital.’



But not all consultants are convinced of the validity of this brand

valuation exercise, or how the corporation can hope to exploit the

findings once it has made them.



’I look at it a different way,’ Mike Sommers, the former marketer and a

partner at Price Waterhouse, says. ’I think when you measure brand value

what you are really measuring are simply the echoes of past good product

performance. All this business of valuing brands is nonsense - a dodgy

way of propping up a struggling balance sheet. All you are measuring is

the aftershock, what’s really important is to keep having the

earthquakes.’



This article was first published on campaignlive.co.uk

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