by Preetesh Sewraj (@iPreetesh) Recently, the DA used Nelson Mandela’s voice in an election ad that caused massive debate as to whether Mandela, a lifelong ANC member, should have been used in an opposition ad. The DA argued that he was an ANC member but his brand represented a larger cause than simple party politics. The ANC, and the Mandela family, refuted this and said that he was an ANC member, which meant that the DA was essentially trying to expropriate the legacy he had worked for. The reality is that there is a larger challenge in trying to decide how the brand legacy of Mandela may stand the test of time and to understand whom the real owner is.
The brand is not as straightforward as the political parties try to make it. Madiba’s unique position in the history of South Africa means that there is a need to delve deeper to understand the position, value and usage of his brand.
Politician or celebrity?
Mandela’s brand identity is unique on the global stage. He seemed to have crossed over from just a politician to someone who had celebrity status thrust upon him. For many celebrities, their post-death brand value is linked to an extensive catalogue of artistic work that their estates may draw upon for continued revenue generation. The Mandela brand, however, is linked to the equity that was created through a lifetime of political struggle. He therefore exists in a grey space where he both enjoys celebrity status that is based upon his political career. Public memory and constant reinforcement of this via his books and speeches, as well as branded items, place a crucial role in maintaining his celebrity status.
Celebrity brand valuation
A little internet research will bring up the earning power of deceased celebrities. According to Forbes, the top-three celebrity 2015 earnings include: Michael Jackson (US$115m), Elvis Presley (US$55m) and Charles Schulz (US$40m). Mandela doesn’t make the top-10 list and no official brand valuation is in the public domain. In 2013, there was an attempt to estimate the Nelson Mandela brand value and commentators equated his value to that of the British Royal family, which had a value of £45.5bn (R800bn) — an astronomical figure that lacked any real scientific basis but was a good indicator of the brand equity embodied in Mandela’s name.
A realistic assessment would be to judge the value of the name through the earning power of the Nelson Mandela Foundation (NMF). In 2015, the NMF generated R45.2m, with assets of R335m. Assuming a price-earnings ratio of eight and these figures would indicate a value of around R700m (including assets). The reality is that this doesn’t adequately cover the revenue generated by the multitude of Nelson-Mandela-branded charities or factor in the true commercial potential of his brand. The true figure would be significantly higher.
Nelson Mandela for sale!
In the first three days of his death, bidorbuy.co.za reported daily sales of 378 Mandela memorabilia vs its average of 60. It seems that everything the brand touches turns to gold and that includes a portfolio of gold coins sold at retail outlets across SA. The brand doesn’t exist on its own and has been developed into a number of sub-brands, including a 46664 clothing line and metal bracelets. There is a rich supply of Mandela merchandise for the public via various channels.
The challenge with this approach is that, as soon as he was linked to merchandise, the need arose to ensure that products that bear his name and image deliver upon the brand promise expected by consumers. A key example is the controversial sale of coins that bear his name and image. The promise made by the retailer is that these coins are investment items that will grow in value significantly over time. Critics, however, are quick to point out that these coins are produced in such large numbers that it is unlikely to ever be worth more than their bullion value. There are cases of individuals who have tried to sell these coins soon after purchase, only to find that they are unable to even obtain the price that they paid for them.
This is a prime example of consumers purchasing based upon a brand promise and then being disappointed when the brand doesn’t deliver upon expectations. In another scenario, consumers could go and purchase a competing product but here they’ve experienced a sizable loss and there isn’t a true competitor in this sector, considering the Mandela brand appeal.
Overly high brand promises with an inability to deliver erode the equity of the brand that is making the promise. In this case, it’s the Nelson Mandela brand that is taking strain from every product transaction that fails to deliver of the hyped-up promises of the manufacturer.
The challenge for the NMF is to understand that it has moved from a space of maintaining the legacy of Nelson Mandela into the space of asset managers who need to manage the reputation of their powerful economic brand. It is inevitable that it will enter into licensing of the brand but it also needs to understand that licensees who do not embody the spirit of Mandela, through their offerings, need to be brought to task and, if needs be, have their licences revoked. Such action will not only ensure the prolonged interest in the brand but also continued revenue generation that is coupled with a brand legacy that embodies the values of its founder.
Preetesh Sewraj (@iPreetesh) is the CEO and chief innovation analyst at Product of the Year South Africa. He is passionate about the various facets of innovation that touch our lives and improve our life’s journey. He contributes the regular column, “Innovator’s Toolkit”, looking at innovation trends and the impact of innovation upon our ability to capture the hearts and minds or consumers, to MarkLives.