Why Creative Capital is an investment and not a cost

Brands that invest in Creative Capital can provide more than 2x the average shareholder return, according to a new global index from WPP.

Why creative capital matters

In a time of great uncertainty and shrinking marketing budgets, there’s increasing pressure for creativity to deliver. A new global index, launched by WPP at the inaugural SXSW Sydney conference, shows that to have creative capital, brands must have both strong influence and high creativity – but it is creativity that supercharges brand difference. Creativity captures the extent to which a brand breaks the mould. It can help brands pull away from peers, and even disrupt and transcend categories.

The methodology 

• Influence and creativity combined provide a measure of ‘Creative Capital’. 
• WPP benchmarks a brand's relative level of influence and creativity by analysing thousands of cultural perceptions among millions of people worldwide. 
• The top 50 performing brands make up the Creative Capital Index. 
• WPP collects brand equity data from around 60,000 brands, delivering more than 16 billion data points, and deploying 75 metrics, which the company uses to calculate influence and creativity for each brand. 

The business impact of creativity 

• Using the BAV Australia data, brands with higher Creative Capital drive 1.4x consumer usage compared to all other brands.
• After studying an array of brands over seven years, WPP saw 2.4× income growth among brands with high creativity, regardless of their size or level of influence. This is calculated using the BAV US market-based global data. 
• Brands with high creativity and influence drive greater advocacy and deliver stronger business performance, resulting in 2.3x net income and a 27% higher pricing power, according to the BAV US market-based global data.
• In addition, brands with higher creative capital provide 1.2x consumer advocacy, and 1.4x brand love, according to the BAV Australia data
• The top global brands span many sectors, including Slack, Vimeo, IKEA and Beyond Meat. Top Australian brands include Canva, Bunnings, Mecca, and the Sydney Opera House. 

Key quote

“Creativity is an investment, not an expense. The Creative Capital Index allows us to quantify the return on investment of creativity. Australian brands in the top 5% of the Creative Capital Index outperform the average brand in the BAV Australia study by 157%."  – Katie Rigg-Smith, Chief Strategy Officer, WPP Australia and New Zealand.

Author: Duncan W Craig