News Article Published:
Tuesday, 10 July 2007
Category:
Financial Services
HSBC is one of four firms to use brand measures as a chief performance beanchmark, according to a new study from the Institute of Practitioners in Advertising (IPA).
The IPA revealed that only the banking giant, British American Tobacco, National Grid, and Reckitt Benckiser recognised the importance of marketing in their financial reporting out of all the FTSE 100 firms.
Despite the fact that 22 per cent of key performance indicators are based on sales, which must be directly influenced by marketing, just one out of 388 key measures used by companies to ascertain their performance took this into consideration, Brand Republic reports.
"A tiny minority monitored brand assets, even though brands now account for 12 per cent of a company's value," Moray MacLennan, president of the IPA, said. "Boards need to better understand how advertising and marketing enable business growth."
Financial reporting legislation will be affected by the new Enhanced Business Reviews from this October. The new regulations will mean that companies will be obliged to publish information on factors which are likely to affect performance - of which the strength of a firm's brands will be a factor.
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