The methodology used to quantify brand value does not follow principles similar to those adopted in financial operations involving valuation of brands and intangible assets.
This article presents some of the main financial quantification methodologies for brandsa practical application in the Klabin case and how these concepts also underlie the ranking of the most valuable Brazilian brands, prepared by TM20 Branding, Brazil Panels and Elos Ayta — a company led by Einar Rivero.
Methodologies for quantifying brand value
There are several brand valuation methodologies, described in greater depth in my book Valor do Branding (Editora Senac RJ, 2024). In this text, I focus on two of the most used approaches in the market: economic use and royalty rates.
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1. Economic Use Methodology
The economic use methodology starts from the economic value of the company, whose main proxy is associated with the ability to generate future results — normally represented by Net Operating Profit after Taxes (NOPAT), adjusted by the cost of capital.
The central principle is relatively simple: the The value of a company corresponds to its ability to generate future profitsdiscounted at a rate compatible with the business risk.
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One of the great advantages of this approach is its high adherence to financial models used in M&A operations, goodwill assessments, corporate reorganizations and other corporate valuation processes.
From quantitative market research, factors such as:
- the brand’s contribution to generating future results;
- the competitive advantage provided by the brand;
- and the strength of the brand compared to competitors, reflected in a discount rate compatible with its level of risk.
2. Royalty Rate Methodology
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In the royalty methodology, it is assumed that the use of the brand generates a financial remuneration equivalent to a licensing fee.
Specialized consultancies and large audits use proprietary databases, sectoral benchmarks and statistical models that correlate brand value to financial, marketing and competitive criteria. In many cases, market research They are also incorporated to support the measurement of the brand’s role in purchasing decisions and revenue generation.
The main financial premise of this model is the future revenue projectionon which a royalty rate compatible with:
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- the sector;
- the competitive strength of the brand;
- and references observed in comparable transactions.
Far from being exclusive methodologies, I consider that both are complementary. When used in an integrated manner, they can offer greater robustness and security for financial operations involving intangible assets.
The Klabin case and the ethical use of brand value in financial operations
For many years, the debate about brand value remained restricted to the marketing universe. Brands were often treated as symbolic assets, important for reputation, communication and competitive differentiation, but still far away core of corporate financial decisions.
The evolution of intangible asset valuation methodologies, however, began to demonstrate that brands can play a concrete role in complex financial structures.
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One of the most emblematic cases in Brazil involves Klabin and was implemented in April 2020, and illustrates in a very objective way how brand value can transcend the field of perception and become an effective support element in relevant corporate operations.
The case occurred in the context of the incorporation of Sogemar Royalties by Klabin S/A. As disclosed in public CVM documents, the operation involved hiring independent consultants to measure the economic value of the Klabin brandoffering technical parameters to support decisions related to the equity structure and royalties involved in the operation.
Klabin itself produced an institutional video explaining the process:
Two distinct methodological approaches were used.
Deloitte valued the asset from the perspective of future royalties paid by Klabin S/Areaching an approximate value of R$ 1.046 billion. Kantar — for which I was technically responsible for the project at the time — applied a methodology based on the economic use of the brand, estimating a value of approximately R$1.103 billion.
The proximity between the results obtained by different methodologies brought robustness to the process and contributed to generating greater comfort and transparency between the shareholders involved in the negotiation.
More relevant than the values found was the way in which the process was conducted.
The operation became a rare example of technical balance, governance and transparency. Instead of using brand valuation as a merely convenient instrument to support a financial transaction, the process sought to build legitimacy through independent methodologies, public parameters and cross-validations.
This aspect is particularly relevant because operations involving intangible assets often face questions related to the subjectivity of the criteria used.
By adopting independent methodologies that converged to similar resultsthe operation reduced perception asymmetries and strengthened trust between the parties involved.
The case demonstrates that brand value should not be understood only as a marketing abstractionbut as an economic asset capable of influencing:
- revenue generation;
- pricing capacity;
- risk perception;
- negotiation with investors;
- and financing structures.
The evolution of brand valuation methodologies
The evolution of valuation methodologies has contributed significantly to increasing the tangibility of intangible assets.
Models based on royalties, discounted cash flows, economic contribution and brand strength began to offer greater analytical robustness for elements previously considered excessively subjective.
In this context, international frameworks such as the ISO 10668 consolidated technical parameters for the monetary evaluation of brands, integrating financial, behavioral and legal dimensions.
This methodological advance is also present in the one published by InfoMoney, developed in partnership between TM20 Branding, Brazil Panels and Elos Ayta.
The model follows principles compatible with ISO 10668, incorporating financial, marketing and behavioral dimensions in measuring brand value.
More than producing rankings, this type of methodology contributes to increasing the transparency and comparability of brand evaluations in the Brazilian market.
As highlighted by InfoMoney’s own publication, the study combines financial analysis and market research to measure:
- perception;
- brand strength;
- trust;
- preference;
- knowledge;
- rejection;
- and brand contribution to the business.
An important point in these rankings is that they are prepared exclusively based on public information and without interaction with the management of the companies evaluated, avoiding potential conflicts of interest.
On the other hand, rankings do not constitute independent valuation opinions. Financial and corporate operations require specific studiesdeveloped on demand, with in-depth access to the financial and strategic information of the companies involved.
Branding, finance and governance
The advancement of valuation methodologies reinforces an important change in the contemporary corporate environment: Brand value is no longer just a conceptual marketing discussion.
Increasingly, brands begin to occupy a relevant space in decisions related to:
- corporate governance;
- valuation;
- asset management;
- corporate structures;
- and investor relations.
The Klabin case exemplifies precisely this transformation. By using independent brand valuation studies to support a corporate operation, the company highlights how the branding no longer occupies only the territory of communication to also integrate the universe of corporate finance and corporate governance.
Perhaps the contemporary question is no longer whether brands are intangible assets.
The central question becomes how organizations can measure, utilize and govern these assets in an ethical, transparent and technically consistent manner.
As intangible assets assume increasing weight in the value generation of organizations, the ability to measure them with methodological rigor It is no longer just a marketing debate. It becomes a central issue of corporate governance, transparency and corporate finance.
