EDITORIAL: PR assets finally get a price tag

The phenomenal response to Freeserve’s flotation last week has concentrated many minds in the business world on the more intangible factors of profitability.

The phenomenal response to Freeserve’s flotation last week has

concentrated many minds in the business world on the more intangible

factors of profitability.



Here is a company whose shares, in addition to attracting a record level

of subscriptions, rose by 37 per cent within the first few hours of

trading, yet whose assets exist primarily in cyberspace.



But it isn’t just this new breed of .com corporations whose most

valuable assets are proving hard to pin down on a balance sheet. Public

relations itself is a good example of an industry whose value consists

mainly of its ability to manage its intellectual property.



But when the DTI decides to focus its attention on these intangible

elements of an organisations operation it is a pretty clear indication

that these factors are having a tangible impact on performance.



As the Management Today study What Price Reputation? proved last year

(PR Week, 9 January, 1998), while the vast majority of brand leaders

recognise the importance of reputation, few actually know how to put a

value on reputation as an asset.



Admittedly the DTI has balked at any claims to unearthing that

particular holy grail, but what it does promise to do is to isolate the

various elements that go to make up reputation. And it is making a real

effort to establish methodologies that can be used to value

environmental, ethical and social impact, brand evaluation and

intellectual capital.



Whether these methodologies will prove to be transferable, enabling the

DTI to create a single method for valuing reputation, has yet to be

seen.



And as this is a long term project the industry had better not hold its

breath.



What this project will do immediately, however, is to open up for debate

an area traditionally marked by jealously guarded secrecy. In the spirit

of the CBI Fit for the Future (and PR Week’s own Best Practice campaign)

the DTI has brought on board those organisations such as Interbrand and

leading management consultancies, who have created their own

formulas.



And, by involving accountancy bodies, the DTI will give a new

credibility to attempts to value reputational elements of business.



By drawing the attention of financial directors to the company’s

invisible assets, the DTI will place issues relating to reputation

centre stage. This provides an opportunity for corporate communicators

to use the information and impetus provided by the DTI to open up a new

dialogue regarding not only the value of these elements, but also the

value of their management.



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