Adogy Glossary


Definition of Goodwill

In the context of digital marketing, goodwill generally refers to the positive reputation and value that a brand has accumulated over time due to its favorable customer interactions and relationships. This intangible asset can enhance brand loyalty, driving repeat business and referrals. Goodwill can be influenced by factors such as quality products, exceptional customer service, and strong brand identity.


The phonetic transcription of the keyword “Goodwill” using the International Phonetic Alphabet (IPA) is: /ˈɡʊdwɪl/

Key Takeaways

  1. Goodwill is a nonprofit organization that focuses on providing job training, employment placement services, and other community-based programs for individuals facing barriers to employment.
  2. Donations and purchases of gently used items at Goodwill stores help fund these programs, diverting millions of pounds of materials from landfills and contributing to a more sustainable environment.
  3. Through its efforts, Goodwill helps empower individuals to achieve workplace success, strengthening families and communities with every job placement.

Importance of Goodwill

Goodwill is an important term in digital marketing as it refers to the positive reputation, trust, and credibility a brand has garnered over time through its strong customer relationships, quality products or services, and excellent communication.

Goodwill is significant because it directly impacts customer loyalty, brand image, and a company’s overall success.

In the digital space, a brand’s goodwill can be nurtured and leveraged through valuable content, engaging online interactions, prompt customer support, and ethical digital practices.

By consistently maintaining and enhancing goodwill, a brand not only increases its customer base but also sets itself apart from the competition, leading to long-term growth and sustainability.


Goodwill is an intangible asset that plays a crucial role in the realm of digital marketing, as it refers to the positive reputation and relationships that a brand has built over time with its customers. In today’s rapidly-evolving digital landscape, where customer trust and loyalty are paramount, the purpose of goodwill is to not only differentiate a company from competitors, but also to foster a sense of value and attachment towards the brand.

By nurturing goodwill, businesses can not only retain existing customers, but also attract new ones, as a positive reputation can spread organically through word-of-mouth and various digital platforms. While the term goodwill is not strictly confined to digital marketing, it is indispensable in this context, given the numerous channels through which a brand can engage with its target audience.

This asset is used to cultivate trust and create a positive online presence, by providing exceptional customer service, addressing customer concerns, acknowledging feedback, and delivering valuable content through social media, blogs, and other digital platforms. Furthermore, a company demonstrating goodwill is perceived as genuinely caring for its customers and consistently striving to improve their experience.

Goodwill thus serves as a foundation not only for establishing credibility, but also for fostering long-term engagement and customer loyalty in a digital landscape teeming with competition.

Examples of Goodwill

Patagonia’s “Don’t Buy This Jacket” Campaign: In 2011, outdoor clothing brand Patagonia ran a widely successful digital marketing campaign called “Don’t Buy This Jacket,” encouraging consumers to think twice before making a purchase during the holiday season. By focusing on sustainability and reducing waste, Patagonia demonstrated goodwill by putting their values and concern for the environment above profits. The campaign created considerable buzz online, strengthening the brand’s image as a responsible and socially conscious company.

Dove’s Real Beauty Campaign: Dove, the personal care brand, launched its digital marketing campaign “Real Beauty” in 2004, with the aim of promoting self-esteem and celebrating natural beauty. The campaign showcased real women of different shapes, sizes, and ethnicities in their advertising, challenging the traditional representations of beauty in the media. By advocating for body positivity, Dove portrayed goodwill by demonstrating their commitment to empowering women and fostering a community that supports inclusivity, boosting their brand image and social standing among consumers.

TOMS Shoes’ One for One Model: TOMS Shoes, the popular shoe brand, is known for its digital marketing campaigns promoting its One for One business model. For every pair of shoes purchased, the company donates a pair to a child in need. Since 2006, TOMS has given more than 60 million pairs of shoes to children in over 70 countries, and they continue to spread their message of goodwill through social media, influencers, and other digital marketing efforts. This altruistic approach has not only increased brand awareness and loyalty but has also positioned TOMS Shoes as a socially responsible company dedicated to making a positive impact on the world.

Goodwill FAQ

What is goodwill?

Goodwill is an intangible asset that arises when a buyer acquires an existing business, and the purchase price exceeds the net fair market value of the identifiable assets and liabilities of the company. Goodwill represents the value of intangible factors such as a company’s reputation, brand recognition, customer relationships, and employee talent.

How is goodwill calculated?

Goodwill is calculated by subtracting the fair market value of a company’s identifiable assets and liabilities from the total purchase price paid to acquire the company. The formula for calculating goodwill is: Goodwill = Purchase Price – (Fair Market Value of Identifiable Assets – Fair Market Value of Identifiable Liabilities).

How does goodwill affect a company’s financial statements?

Goodwill affects a company’s financial statements by appearing as a non-current asset on the balance sheet. Once recognized, goodwill remains on the balance sheet unless it becomes impaired, at which point the company must write down the value of goodwill, resulting in a decrease in total assets and potentially a decrease in the company’s equity.

What is goodwill impairment?

Goodwill impairment is the result of a decline in the fair market value of a company’s goodwill. Companies are required to perform periodic reviews of the value of their goodwill and determine if there has been any impairment. If the value of goodwill is lower than its carrying amount on the balance sheet, a company must recognize an impairment charge, which leads to a reduction in the value of goodwill and a corresponding decrease in total assets and equity.

Can goodwill be sold or transferred?

Goodwill cannot be sold or transferred independently, as it is an intangible asset that is intrinsically linked to the business it represents. However, the value of goodwill can be transferred as part of the sale of a business or merger with another company, in which the acquired goodwill becomes part of the acquiring company’s balance sheet.

Related Digital Marketing Terms

  • Brand Reputation
  • Customer Loyalty
  • Positive Word of Mouth
  • Corporate Social Responsibility
  • Customer Satisfaction

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