|
Brand value rises steadily, 133% over past 11 years
Reaches $3.4 trillion despite disruptive forces
David Roth
CEO
The Store WPP, EMEA & Asia
David.Roth@wpp.com
Twitter: davidrothlondon
|
The value of the BrandZ™ Top 100 Most Valuable Global Brands
has increased steadily over the past 11 years, rising 133 percent
between 2006 and 2016, despite fluctuations during and
immediately after the global financial crisis.
This pattern of reliable growth,
modulated by global economic and
geopolitical forces, continued with 2016
BrandZ™ Global Top 100, which rose 3
percent in brand value in a year marked
by a historic plummet in oil prices and
slower economic growth in Brazil and
Russia, and even China, where GDP
expansion slackened relative to the
robust rates of a few years ago.
These factors especially impacted the
oil and gas, and the banks categories.
Absent those categories, the BrandZ™
Global Top 100 improved around
6 percent. We studied the results
closely to gain insight into what gives
brands their resilience and ability to
steadily improve regardless of market
conditions.
Answers are contained in this report,
which is filled with the original research,
thought leadership commentary,
insights and prescriptive advice from
WPP company experts from around the
globe. I will briefly expand on just two
of the many factors critical for building and sustaining strong and valuable
brands – Brand Purpose and Brand
Experience.
Before I do that, however, it is worth
restating that brand value growth is
important for two key reasons. First,
brand value correlates with business
success; brands with high value are
more likely to increase sales and market
share going forward. Second, brand
value correlates with high shareholder
returns. Companies that invest in
brands grow their topline faster.
Organic topline growth is the biggest
determinant of total shareholders
return. (Please see the BrandZ™ Stock
Portfolio story in the Introduction.)
Purpose and Experience
The importance of purpose is evident in
our BrandZ™ Top 20 Risers. This ranking
of brands that grew the most in value
includes brands as diverse as Amazon,
Starbucks, JD.com, The Home Depot,
Domino’s Pizza and Chanel. These
are very different brands that share in
common clarity of purpose.
Brands do not need a higher purpose,
but they do need to be seen as doing
more than just making money; they
need to be seen as improving the life
of the consumer in some way. This is
especially relevant when appealing
to millennials and when competing
in fast-growing markets where
consumers expect brands to act as
partners in their quest to achieve the
good life.
Purpose needs to be clearly expressed
in the brand experience, which
remains one of the most powerful
differentiators. On a recent trip to
New York, I visited the new flagship
store of one of the BrandZ™ Top 100
Global brands. It was disappointing.
Unfortunately, the brand experience
of the store did not match the quality
and excitement of the brand’s
products. The store lacked buzz. The
brand lost an opportunity.
And on the subject of opportunity...
We took our first in-depth look at B2B
brand leaders this year, leveraging
our BrandZ™ research with market
knowledge from LinkedIn. You will find
extensive details in a new B2B section
of the report. Here’s the topline: B2B
brands score well above average
in all aspects of Brand Potential, a
BrandZ™ metric that predicts future
brand success. But they have a large
opportunity to reach the Brand
Potential levels of business-toconsumer
brands.
Our research revealed another
important opportunity, actually more
of a challenge, for multinationals.
Competition from local brands
is increasing across fast-growing
markets because of several factors:
(1) local brands have gotten better
over time; (2) as the economies slow,
consumers are searching harder for
value-for-money options; and (3) local
brands are competing effectively for
these customers by leveraging the
perception that local brands can better
understand and fulfill local market
needs.
Serving you with our expertise
All of these challenges and
opportunities require unrivaled
global expertise in the art and
science of building and sustaining
valuable brands. That’s where we
come in. Almost 200 brand experts
from around 50 WPP companies
contributed to this report. They
participated in over 25 focus groups
that delved into the dynamics shaping
the 14 product and service categories
we cover in the report. By linking all
this talent, creativity, and wisdom,
we amplify global trends and insights
that help our clients in useful and
unique ways. We call this powerful
perspective “horizontality.”
Our unrivaled expertise includes the
BrandZ™ resource library, which we
invite you to access. Along with the
BrandZ™ Top 100 Most Valuable Global
Brands, the library includes these titles:
the BrandZ™ Top 100 Most Valuable
Chinese Brands; the BrandZ™ Top
50 Most Valuable Indian Brands; the
BrandZ™ Top 50 Most Valuable Latin
American Brands; the BrandZ™ Top
50 Most Valuable Indonesian Brands;
and Spotlight on Myanmar – The
“Leapfrog” Nation. To download these
and other BrandZ™ reports, please visit
www.brandz.com.
The backbone of all this intelligence
remains the WPP proprietary BrandZ™,
the world’s largest, customer-focused
source of brand equity knowledge
and insight. It is big data at its biggest,
with 4.5 billion individual data points.
Using the BrandZ™ brand valuation
methodology of Millward Brown, a
WPP company, we analyze relevant
corporate financial data and strip away
everything that doesn’t pertain to the
branded business. Then we take a
critical step that makes BrandZ™ unique
and definitive among brand valuation
methodologies.
We conduct ongoing, in-depth
quantitative research with more
than 200,000 consumers annually,
across more than 50 markets, to
assess consumer attitudes about,
and relationships with, over 100,000
brands. Our database includes
information from over two million
consumers. It reveals the power of the
brand in the mind of the consumer
that creates predisposition to buy
and, most importantly, validates a
positive correlation with better sales
performance.
At WPP, we’re passionate about using
our creativity to create and build strong,
differentiated brands that deliver
lasting shareholder value. To learn more
about how to apply our experience and
expertise to benefit your brand, please
contact any of the WPP companies that
contributed expertise to this report.
Turn to the resource section at the end
of this report for summaries of each
company and the contact details of key
executives. Or feel free to contact me
directly.
Go to www.brandz.com to learn more.
|