The concept of city brand equity has caught attention of many marketing scholars, but because of complex nature of cities it remains one of the difficult concepts to quantify. In this article, we develop an approach to measuring city brand equity by evaluating city quality. According to signalling theory, city branding is the signal for consumers that communicates the city quality. The signal credibility creates city brand equity. This cannot be measured directly but can be evaluated through the city quality, which, in turn, represents the ability to fulfil residents’ needs. This study uses the conjoint analysis technique to measure city quality as a driver of consumer-based city brand equity. The approach is applied to the case of city branding campaign in Perm, Russia, to examine the roots of the city’s brand failure and propose the ways to strengthen consumer-based city brand equity.