In Measuring Brand Temperature we introduced our “Brand Temperature” barometer – an assessment of how brands are faring in terms of appeal and desirability. Is a brand “hot” or (stone dead) “cold”? In this report, we update our analysis on the back of 1H14 indicators.
It is important to think of brand temperature as a ratio
As there is no single way to measure brand temperature, we rather think of it as a ratio. Looking at the ratio between editorial press coverage vs. marketing spend, we try to identify brands that are becoming more desirable vs. “cooling” brands. Ultimately, one should find that – at equal levels of marketing effort – a “hot” brand can reap significantly higher returns than a “cold” brand.
--> Measuring “brand temperature” – as well as temperature dynamics – can reveal a number of investable opportunities. As we update for 1H14 indicators, we identify a number of ‘challenger brands’ that have ‘heated up’ over the first six months of the year: Fendi, DKNY, Saint Laurent, Miu Miu. While the marketing efforts and repositioning strategies around their mega-brands are yet to result in stronger brand momentum, groups like LVMH, Kering and Prada could benefit more from rising temperature at their smaller brands. Some “hot” brands like Cucinelli and Valentino
seem instead to be cooling down, after being the darlings of the industry in the past couple of years.