There must have been something in the air last week when two articles came out from two very different sources about brand naming. The first from Ad Age, Introducing the Fifth P of Marketing: Proper Name, and the second from Harvard Business Review’s The Daily Stat called Investors Will Like Your Company Better if You Shorten Its Name. What both articles propose is that brand likeability is, for better or worse, deeply tied to a proper brand name.

We couldn’t agree more, and well-designed quantitative name research can really help in selecting the best name. But the best name may not be simply the name liked best. In addition to likeability, an effective brand name is one that communicates one or more elements of the brand strategy to consumers. So, although broad evaluative measures like overall liking, appropriateness, memorability, and uniqueness confer consumers’ immediate reaction to a name, measures of how well the name communicates the brand’s benefits – or better yet, its unique point of difference – are critical. In the case of Al Jazeera, there is a lot of built-in brand equity, but are the associations in sync with the brand’s proposed benefits of more depth and greater perspectives for Americans? Sometimes it is better to have an awareness problem (that is, a name nobody has heard before) than a positioning issue (a familiar name that’s not positioned properly in consumers’ minds).

The study referenced by the Harvard Business Review found that “companies with short, simple names attract more shareholders, generate greater amounts of stock trading, and perform better on certain financial measures than companies with hard-to-process names.” It is not surprising that investors, like consumers, have instinctive reactions when introduced to a new name or a variation on a brand name. We’d go a little further and argue it may not be the length of the name, as much as it is the effectiveness of its communication of the company’s strategy. The trend toward using initials, like FWD, for a Silicon Valley advocacy group started by Mark Zuckerberg, Bill Gates, and Jack Dorsey, may be a hip way of saying “forward,” and is clearly very short and simple, but does it effectively convey the organizational strategy?

In the end, companies can create brand names with existing words or word parts or made-up words (like pharma companies usually do), but the brand name is such a huge marketing element it is hard to be successful with a lousy one. So, yes, along with price, product, promotion, and place, we say give great heed when picking a brand name – the stakes in the consumer and financial marketplace can add up to millions.