Betting on Blue

25/09/2015 11:54 BST | Updated 24/09/2016 10:12 BST

Recently it was brought to my attention just how many individuals and businesses still fail to understand the potential value of colour as an asset. Last year I published a small but concise book titled Chaisson Blue: Trademarking a Colour, which focused on what exactly the nature of colour is and how that nature fits in with the trademarking process and why it is so important. The very nature of what colour is raised many philosophical, physiological and psychological questions, and hopefully I share some insight on the matter.

Many businesses have colour trademarks but they are intrinsically worthless. If one were to write down and show you the RGB coordinates 89, 44, 109 and 96, 223, 229 it is likely you would not appreciate their value. Yet it is these colour sets that make up Cadbury's universally recognised purple, the former, and Tiffany & Co's robin egg blue, the latter. In fact, there is a whole list of companies that are synonymous with their trademark colour. Only when we can directly perceive the colour, and recall all of our associations we have with that colour, does it gain value.

Aswath Damodaran, professor of finance at New York University's Stern School of Business, stated that brand value is an illusion. So why should you get one? Here's why, the right colour could increase your businesses intellectual property value by billions and increase your margin by 10%. For example, Coca-Cola is valued at $79.6 billion, while the value of Cott, producers of RC Cola, was limited to $15.4 billion. Damodaran calculated the pricing premium by subtracting Cott's total value from Coca-Cola's value, the total was $64.2 billion, which was equal to about 80% of the value of Coca-Cola. Coca-Cola achieved a margin of 15.57% while Cott's achieved 5.28%, an average margin for a company in that industry. What this shows is that the extra 10.29% on top of the average margin was as a direct result of marketing.

People see colour before they see anything else, in fact, research indicates that over 80% of visual information is related to colour. Colour communicates signals such as quality, subliminally. Microsoft's search engine, Bing, for example uses a certain shade of blue (#0044CC) which they claim to have a potential value of $80,000,000'; "Based on user feedback, the team estimated the best blue [colour] could generate $80 million to $90 million in ad sales", something to seriously consider when choosing your next set of brand colours.

But it goes much further than that when a company uses a colour it uses it to communicate. We assign definitions to words and we assign meaning to conscious experiences. Just as the events over twenty-four hours are called the happenings of a day, so it is all the mental reactions and experiences experienced by a colour could be associated to a singular colour that can then be implemented into a logo or marketing, be it good customer service, a high quality product or an emotional experience.

Being able to identify and associate these experiences is essential. Colours can act as identifiers and this is something that is highly important both for customers but also for brands. If I have a positive experience that I associate with a brand I want to be able to identify that colour and know that I will have the same experience, I want that feeling and experience protected from potential competitors that might try to mislead me by using the same colour.

Given that the argument that experience should be protectable seems natural to accept I must also ask that we consider it as a commodity. Just as intellectual property can be bought and sold so too can our experience. If Coca-Cola wished to sell its intellectual property onwards then the buyer would have the exclusive right to produce that colour in its sector and invoke the associations attached to that colour. My suggestion then is this, any application to trademark a colour should be furnished and supported by evidence that is substantial in favour of the application being recognisable and directly associated with a particular brand, which is already the case.

Fundamentally then the colour they are trying trademark represents the collective experience associated with that colour as created by the brand through marketing and association with that colour as the primary centre point of focus in which all associations are anchored to. For example, if one could identify everything they feel and experience about Coca-Cola with by presenting you with what is commonly known as 'Coke red' then the colour functions as it should do and the trademark is permissible. Where an individual fails to do so then the colour is only an element that is associated with another anchor or form part of the greater holistic web of brand association. Where this is the case the trademark is impermissible.

This guideline would help protect the commodity of experience from arbitrary applications without cause and be a benefit to customers placing an onus on companies to ensure their trademark is awarded on utilitarian merit; the colour will be released from the public domain into the private domain in exchange for assurance that the colour continues to function in this way and will be continuously associated with what it represents including, but not limited to, the brand's values, vision, promises, quality, products, services and all other comprising elements that make up the association's projected and invested into the colour by individuals that directly associate the colour and brand. Where the nature of associations substantially changes the contract should be considered broken and the colour should once again return to the public domain.

It is now more important than ever to pay attention to the key details, all too often we overlook the obvious. What is key to understand is that colour is one of the most important parts in what makes up our experience and if an individual or business can refine their understanding of the subject then they can build a very successful brand.