the importance of brand equity

After years of focus on performance metrics and AI advancements, there seems to be a shift in tone across the marketing world, with many industry commentators talking about “the return of brand”.

Ask any trained marketer, though, and they’ll tell you brand never really went away. It was simply pushed down the pecking order while shiny new tech and short-term performance tactics had their moment in the spotlight. The problem wasn’t that brand stopped mattering, it’s that it was often misunderstood as an expensive vanity mission.

As we look ahead to 2026, it feels like brand is once again sitting neatly on top of the marketing trifle.

This shift is echoed in McKinsey’s State of Marketing Europe 2026 report, which highlights brand-building and trust as key priorities for marketing leaders in the months ahead. In a world of AI-generated sameness, infinite choice and declining attention, trust and differentiation matter more than ever.

With brand firmly back on the agenda, now feels like a good moment to return to basics. “Brand” is easy to talk about, but harder to define, and in my experience, it’s still frequently misunderstood, particularly in scaling businesses.

This piece revisits the fundamentals:

• What brand actually is

• Why brands behave differently from commodities

• How brand equity creates value for businesses and consumers

If you’re reassessing your brand strategy or deciding where your marketing spend will have the biggest long-term impact, this is a useful place to start.

What exactly is ‘brand’?

A brand is more than a logo or a name; it’s the entire experience someone has with your company or product. Put simply, it’s the identity you create in the minds of your audience.

There are countless definitions of brand. Jeff Bezos famously summed it up in a simple sentence:

“Your brand is what other people say about you when you’re not in the room.”

Whilst brand and marketing expert Joanna Seddon goes a step further, framing brand as a business asset:

“Brand is a valuable asset of the corporation and should be treated like any other asset. This means it must be invested in, put to work to generate value, and held accountable for the results.”

Essentially, brand isn’t just about recognition. It’s about perception, how people think and feel about your business, and how strengthening that perception through brand equity creates lasting value over time.

In markets where products and services are increasingly similar, a strong brand often becomes the deciding factor. It’s why someone chooses Apple over Samsung, Nike over Adidas, or Coca-Cola over Pepsi. These decisions are rarely purely rational, they’re driven by trust, perceived quality, values and emotional connection. All things brands build through consistency.

Brand vs commodification

In commoditised markets, think milk, sugar, or basic utilities, there’s little to distinguish one option from another. When everything feels the same, price becomes the primary decision-maker.

However, brands behave differently. A branded product or service goes beyond function. It taps into identity, meaning and experience. It gives people a reason to choose you that isn’t purely transactional.

When I set up my business and needed a new laptop, I had a choice between a Mac and a Windows alternative. Objectively, the Windows options were cheaper and more than capable. But for me, the Mac was an easy decision. Its design, ease of use, integration with my phone, and its place within the creative community all mattered. I was happy to pay more because the brand meant something to me.

That willingness to choose, and to pay more, is brand equity in action.

The concept of consumer brand equity

Consumer brand equity doesn’t always get the attention it deserves, yet it’s one of a business’s most valuable assets. Numerous studies show that stronger brands drive better long-term returns than weaker ones.

At its core, brand equity is the value a brand adds beyond functional benefits. It’s what separates a commodity from a premium choice. While it shows up in many ways, it’s largely built on two key foundations:

• Brand awareness/salience: How easily people recognise or recall your brand when they’re in buying mode. If you’re not remembered, you’re rarely chosen.

• Brand associations: The thoughts, feelings and values people connect with your brand. These are shaped by experience, consistency, behaviour and communication over time.

Together, awareness and associations give brands pricing power, loyalty and resilience. Apple’s brand equity, for example, isn’t just about being well known. It’s about what people associate with the brand: innovation, quality, simplicity and a certain lifestyle. That’s what allows them to command a premium.

Why brands work for consumers

From a consumer perspective, brands play a practical and psychological role, particularly when choice feels overwhelming.

1. Familiarity
   We’re drawn to what we know. Familiar brands, who leverage their distinctive brand assets reduce the effort required to make decisions. Faced with a crowded shelf or search results page, recognition provides reassurance.

2. Reduced search time
   Brands act as shortcuts. Instead of comparing every option in detail, a trusted brand simplifies the process and speeds up decision-making.

3. Perceived quality
   Well-established brands signal consistency and reliability. Even when functional differences are small, perception often tips the balance.

4. Meaning and status
   Brands also offer meaning. Patagonia represents environmental responsibility; Rolex represents status and success. These associations help consumers express identity, values or aspiration.

A note for scale-ups: brand isn’t just about big budgets

One common misconception I see in scaling businesses is the belief that brand-building requires large, always-on ATL campaigns. In reality, brand equity is built through consistency across many touchpoints, not just mass media spend, especially if it can’t be maintained.

When resources are limited, the answer isn’t to do everything, everywhere. It’s about choice.

That often means:

• Identifying your most valuable customer segment

• Focusing on the channels where they actually engage

• Showing up consistently with a clear position and distinctive brand assets, that will build memories in the minds of your consumers

Brand equity can be built through advertising, product experience, sales conversations, customer support, content, partnerships and performance activity, as long as it’s coherent and consistent. You don’t need to win everyone at once; you need to win the right people first.

Final thoughts

With McKinsey highlighting the renewed importance of brand in 2026, understanding brand equity and how it’s built has never been more important. As competition increases and attention fragments, the brands that succeed will be those that invest in clarity, consistency and trust over time.

Brand equity isn’t built overnight, and it doesn’t require endless budget. It requires focus, discipline and a clear understanding of who you’re building it for.

If you’re scaling and want to build brand equity in a way that supports long-term growth, without relying on mass-market spend, I’d love to help. Get in touch.