The return over investment (ROI) of custom fonts

Yesterday I've had a conversation with the CFO of a major design agency in Brazil and he brought some thoughtful questions on why is it good business for many companies to have a custom typeface designed.

I have read many and thought of some myself and would love to hear from those with more extensive experience in selling this service.

Usually all arguments fall into brand value and/or money. But how to measure both?

Is the return over investment of a custom typeface measurable? Here's my thoughts:

If we compare the company's spending in perpetual (desktop/server) and renewable licenses (webfonts, hosting services, etc.) today and in the future (say a 10 year period), we'll probably have a high number that may be higher than the investment required for creating a custom font. Considering that most savvy companies wouldn't get a 400 people, multi-platform license out of a foundries website, that number may be far too exaggerated, so one should ponder that number a bit.

Can the type-as-brand-asset argument be measured in numbers?

Just like a logotype may have a certain money value attached to it (Coke, Nike, etc.), can typefaces have the same?

There's some PR attached to the design of a new font, some of it are bad PR, other wonderful. Is it something that could be accounted for in the ROI? I think this may well be disregarded because such an event only gets known/cared for by a niche audience.

Are there other aspects in the work that could be transformed (asset management, ease-of-use, peace of mind) into a cold hard number?

Thanks, and look forward to your answers!

Comments

  • Hi Rodrigo,

    We live in a world where EVERYTHING has been put on a balance sheet in financial terms, including the value of human life, so whilst I'm not an economist, I'd say that there's a good case for custom type.

    The value of intangible assets such as intellectual property, contracts and brands varies with the sector in which the business is trading.

    You mention the value of a logotype and smartly cite Coke and Nike, both consumer facing businesses, and it is this kind of business that holds most value in its brand (not logo). Software, Automobiles, Food & Beverage, Banks, and Communications are the sectors where brand holds most value, and it is these sectors that we at Newlyn do most of our custom work. Finance is another sector that relies heavily on brand for differentiation, though Technology Hardware has become more reliant in recent years.

    I'm digressing from your question about precise ROI and focussing on the value of intangible assets, which are accounted for when valuing a business. When a business owns the IP, or has an exclusive license on a custom typeface, it should and will be accounted for in the value of the businesses. This is not the case with retail type.

    Of course putting a figure on that value will always be a case of what people are prepared to pay, but the point here is that ROI will vary according to many things, one of which is the business sector. There are some clients that have come to us for custom type, and if we don't think they will get a respectable ROI we let them know upfront. 





  • Good points and I agree with you, @Miles Newlyn. Yet the same intangibility has been said about design in general and yet McKinsey recently launched a research white paper (design index) with tangible numbers and findings about the value of design in companies in industries very similar to these you’ve pointed out.

    Indeed it seems like there could be a way to measure it more precisely. For example, how do you define the ROI so that you warn your client that he/she won’t get the value.

    When we speak to other designers, they understand it intuitively, but the decision making also involves money people who sometimes don’t get how this could cost close to or even more than a branding program, for example.
  • I would argue that it IS the brand program. Certainly in several of the custom typefaces that we've designed. Macmillan, Tate or sky are good examples.
Sign In or Register to comment.