Think about some of the brand names you’ve come to know and love: Apple, Amazon, Nike, Coca-Cola. Just saying these names can evoke images, emotions and sometimes even cravings. You get instant satisfaction just thinking about the brands you enjoy buying from or working with.
But these brands weren’t built with a single marketing campaign. It took years of investment in the brands themselves to get to the point they’re at now.
This is something I’ve personally struggled with while building my business. It’s easy to focus on the return on investment in every marketing campaign you deliver, but rarely does that small-scope attitude translate into big-name brand building. For seriously high returns, you need to invest in the brand itself.
What does it mean to invest in brand identity?
Your brand’s identity is more than just what you sell customers. It’s not even the benefits you can provide your clients or the results they can expect from working with you. A brand identity is something much more personal than just benefits and solutions. It’s who you are.
Let’s take Disney, for example. Disney’s brand is not movies or theme parks. It’s the magical storytelling abilities that create emotional connections with consumers. With each marketing campaign Disney runs, it is not focusing on selling just a movie, a ride or a product. Instead, it is selling the experience.
In other words, Disney is using its marketing to invest in its brand identity – not just to sell more products.
Why is investing in your brand so important?
When you invest in your brand, rather than just a product or campaign, you’re giving your audience a long-term connection with your business. This means you’ll have a preset group of interested buyers each time you introduce something new.
Let’s go back to Disney. While Disney spends loads of money on marketing and product development, having its logo connected with what it’s putting out to the market gives it an instant boost. Its audience knows what they’re getting – a high-quality, magical experience.
When the campaign stops or the products are purchased, the consumer’s relationship with the business doesn’t end. That’s because Disney has a brand, not just a business.
Investing in your brand can bring similar returns. When you have a brand to back what your business provides, your brand image can give your marketing campaigns, products and other business endeavors instant validation.
A high-quality brand can also bring you better customers. When customers feel a connection with your business, they’ll buy time and time again. Because it costs less money to convert past customers than convince new ones to purchase, investing in your brand can save you money in the long run.
Customers who value your brand will also pay a premium for your products. When you have a powerful brand attached to your products or services, customers will know they’re getting a quality item and will be willing to pay higher prices.
Not only will they pay a premium, but they’ll be faster to buy. With a great brand, you’ll need to do less convincing to sell. This gives your sales team an advantage and allows you to sell more products, again boosting your bottom line.
How does a great brand impact your return on investment?
Marketing or selling without a brand means you’re constantly starting and stopping campaigns. With each new campaign you run or sales strategy you try, you’re starting from scratch. You need to find and convince an entirely new audience that your products or services are worth what you’re asking for.
However, when you have a high-quality brand, your campaigns build off the last. Each campaign is an investment in getting to know your audience better and giving them what they’re looking for. When you’re able to make that connection, you’ll spend less money over time on marketing and sales.
To truly get the most of your investment, focus on building a brand – not just selling a product. To bring consistent branding throughout your various channels, start with your visual brand. Select colors, a logo and other visual standards that help your audience identify when something belongs to you.
Next, focus on your language and messaging. Using the same tone, understanding and perspective throughout your written content can evoke the brand feeling you’re hoping to create. By consistently using the same language and messaging, your audience will develop their expectations of your brand and resonate more strongly with your business.
Through weaving your brand identity throughout everything you do, you can make more money over time and reap all the benefits that a high-quality brand can provide.
China still holds the cards for global supply chains, whether or not Covid lockdowns frustrate businesses in the near term. An employee works on the production line of the screens for 5G smartphones at a factory on May 13, 2022 in Ganzhou, Jiangxi Province of China.
Standardizing ESG reporting, and making it mandatory, would be a start toward reliable ESG investing
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“Scam” or “dangerous placebo” are some of the terms used by critics to denounce Environmental, Social and Governance (ESG) investing. Yet others see it as one of our last chances to pivot our financial world to a more sustainable and environmentally-friendly model.
ESG, a form of sustainable investing, is increasingly being used as a measure of how well a company is using its investment money. For investors looking to instigate change, ESG scores help them decide if a company is worth their money.
This is despite ESG dating back to 2006, when the U.N. launched the Principles for Responsible Investment at the New York Stock Exchange. The initiative was backed by leading institutions from 16 countries, representing more than $2 trillion in assets owned at the time.
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ESG critics and optimists have called on the government to use its power to fine tune ESG metrics and finally standardize it, in order to give it more credibility.
ESG not what it seems?
In 2021, ESG investment saw issuance exceeding US$1.6 trillion, bringing its total market to more than US$4 trillion. Not only that, but Bloomberg expects ESG assets to exceed US$53 trillion by 2025.
Fierce critics like Tariq Fancy — who worked as the chief investment officer for investment management firm BlackRock before leaving in late 2019 — made headlines with his disillusionment over ESG’s true impact.
“That $4 trillion isn’t really $4 trillion,” Fancy said, in reference to the widely-circulated figure.
For Fancy, the “vast majority” of what’s happening is that companies are “recategorizing existing funds and moving money and shares around from one basket to another…
“They’ve figured out that socially conscious investors will gladly pay more in fees for something with a ‘green’ label,” he said, adding that ESG funds have 43 per cent higher fees on average.
“Also, they don’t fund carbon capture and new innovations, for the most part they publicly overweight tech companies (Microsoft) and underweight oil companies (Exxon),” he added.
Also, regular investors mainly have access to secondary shares that are sold and purchased on a daily basis, which have little impact, argued Fancy.
“The changes we need immediately to flatten the [greenhouse gas] curve are collective actions led by the government — experts have been telling us this for decades,” he said.
As ESG investing rises, so do emissions
Like elsewhere, Canadian ESG investment is increasing, but, again like elsewhere, the nation hasn’t reduced its emissions in the past year.
A March, 2022 report from the International Energy Agency said that global energy-related carbon dioxide emissions rose by six per cent in 2021 to 36.3 billion tonnes — a new record — as the world bounced back from the pandemic.
ESG does make a difference
Art Lightstone, climate activist and host of the Green Neighbour Podcast, acknowledges ESG has its critics. But for him, this class of investing is still making a difference.
“The fact that ESG investing has not only helped to launch several green tech companies, but also encouraged less socially-minded companies to compete in ESG spaces is now pretty much undeniable,” Lightstone said. “Tesla is invariably the best case in point. The amount of investment directed toward Tesla and other EV startups has been mind boggling.”
While money can be moved from one shareholder to another, “that’s not where the story ends.” He cited the example of Tesla when it was “able to raise large amounts of capital [at market prices] with rather little dilution to its stock.”
“Tesla did this three times in 2020, and with that money they were able to build more factories, scale up their production, lower their per-unit costs, increase their profit margins, and therefore increase the economic viability of their entire operation,” he explained.
This expansion created a domino effect for legacy automakers such as GM and Ford, who are investing more in their electric vehicle programs.
Investing intentionally and collectively
Tim Nash, founder of Good Investing, a company with a goal to help at least one million Canadians invest intentionally, argues that informed decision-making can make the impact needed.
“People spend more time choosing an avocado in the grocery store than they spend when choosing a mutual fund for their RRSP,” Nash said.
Instead, he urged people to think more about their portfolios and ways to diversify, including carving out part of their portfolios for investment just “for doing more good.”
“This is where we can invest part of our money into things like community bonds and impact investments,” he explained.
Community bonds, a debt financing tool, are issued by non-profit, charity or co-operative organizations. They allow these groups to take loans from community backers. The backers will eventually get paid interest for investing in an impactful project, while the organization enjoys access to capital.
During the interview, Nash noted that he was located at the Centre for Social Innovation, a non-profit that owns two buildings in downtown Toronto.
“How does a non-profit own two buildings in downtown Toronto?” he asked. “Community bonds. That’s how they were able to access capital.”
Then there is also shareholder activism, and this is where Nash highlighted how shares that are publicly traded on a secondary market can be used as a powerful tool if used collectively.
“If I sell my shares, someone else is going to buy them. However, if enough people sell their shares that will impact a company’s cost of capital,” he said. “This is a very important metric when it comes to how a company operates.”
One example Nash cited as proof of effective shareholder activism is the increased cost of capital for fossil fuel companies. At the same time, there has been an unprecedented shifting of investment capital into greener energy.
Better knowledge needed
The financial industry needs to delve into the environmental sciences, sustainability, and systems thinking to have a more well-rounded view on how to make a full impact, Nash says.
“I do think that a lot of the criticisms come from the financial industry, people who don’t have a background (in these topics),” he said. “ESG is a very broad concept… We need everybody rowing together in the same direction.”
While the government is in a position to lead, it’s still caught up in a four-year election cycle, he added.
“It’s even shorter if it’s a minority government, which we’re in right now,” he noted.
Time to start mandating metrics on ESG
Nash put the onus on the Ontario Securities Commission, which regulates companies listed on the Toronto Stock Exchange, to start mandating disclosures of ESG issues, as other regulators have done.
For example, the SEC in the U.S. is focused on the climate aspect of ESG. It mandates that all publicly traded corporations publish their environmental compliance costs, and proposed new rules in March to standardize climate-related disclosures to investors. The rules would require businesses to disclose information about their direct greenhouse gas emissions, as well as the indirect emissions from the energy the business consumes.
In Europe, the trend tends to lean more toward the corporate governance aspect of ESG. Under the 2018 Non-Financial Reporting Directive of the European Union, companies are expected to disclose information on environmental, social, and employee-related problems, such as anti-bribery, corruption, and human rights performance.
In Nash’s view, Japan is ahead of the curve with its Financial Services Agency actually mandating climate risk disclosure.
“Investors, I think, to some degree are demanding more data and information and disclosure than what governments are requiring,” he said. “This is an area where investors are asking tough questions and pushing that forward. That said, investors can ask, and companies get to decide how they respond. Many of them are responding in different ways.”
ESG optimists and critics alike want to see those regular investors emboldened to make the difference the world is waiting for.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
(Bloomberg) — Real Madrid Football Club is set to receive about 360 million euros ($381 million) from Sixth Street Partners, providing much-needed funds as its stadium undergoes an 800 million-euro renovation.
Sixth Street will get the right to profit from certain operations at Real Madrid’s Santiago Bernabeu stadium for twenty years, the investment firm said in a statement on Thursday. The U.S. investor will get a 30% stake in the stadium operations and will receive revenues from all its activities except for season-sale ticket sales, according to a New York Times report.
Real Madrid, which won its 35th Spanish league title last month, can use the funds however it sees fit, including to sign players. Real is the most successful European team of all time, with 13 champions leagues, and it is set to play the final that may give it a record 14th later this month.
The deal announced Thursday includes the Legends, an American sports and live events management company that’s partly owned by Sixth Street, and which has overseen Real Madrid’s retail business since 2020.
Real Madrid has been raising money to help pay for the ongoing refurbishment of its stadium, including a removable pitch that will allow the club to shift the grass surface into storage to host other revenue-generating events such as concerts or tennis matches.
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