The Tangible Value of Branding: A Financial Exploration

Branding transcends the realm of marketing, design, and aesthetics, embodying tangible economic value.

This is especially pronounced in rapidly growing and competitive sectors, such as the self-storage industry.

Here, the demand is driven by smaller living spaces, business downsizing, and a mobile population, making the valuation of a brand not just theoretical but a financial necessity.

Consider an Ontario-based storage company aiming to compete with giants like Public Storage. By using Public Storage as a benchmark—thanks to its financial transparency as a publicly traded company—we can approximate the potential value of our hypothetical brand.

Suppose Public Storage has a market cap of $50 billion USD. If our Ontario-based company is envisioned to be 1/30th the size, its market cap would approximate $1.67 billion USD.

To estimate Public Storage's brand value, we delve into its financials, focusing on intangible assets and goodwill. Public Storage reports about $387 million USD in intangible assets.

By applying a midpoint estimate of brand value from the accepted range of 20% to 70%, we simplify our approach:

• Public Storage's market cap: $50 billion USD.

• Intangible assets listed: $387 million USD.

• Assuming 50% of these intangible assets represent the brand value, we estimate Public Storage's brand value to be ~ $200 million USD, which is 0.4% of its market cap.

Applying the same 0.4% ratio to our hypothetical Ontario company's market cap of $1.67 billion USD, we estimate its brand value at approximately $6.68 million USD. To offer a range, considering brand value could realistically represent 0.25% to 0.75% of the market cap, we find a potential value between $4.17 million USD and $12.5 million USD.

…I guarantee you the CEO of Dymon Storage would peg the company's brand value far beyond $4 million USD.

Financial valuation can't capture a brand's multifaceted value.

This 0.4% of market cap may seem modest, but it's crucial to recognize that brand value. A brand isn't just an asset you can isolate on a balance sheet. This type of analysis is simply one piece, but it also demonstrates positive ROI.

A brand is also a fundamental part of the business that drives the creation of new assets and propels new market capitalization... assets all working together... thats why companies exists, to generate a recurring return greater than assets on their own...



This thought experiment provides a lower end estimate of what a brand is valued at and captures none of the value that stems from brands: all the human connections, experiences, knowledge, IP, and more.
Just to compare and contrast look at bad branding exercises - we all know what happens when done wrong.