Brand value rises steadily, 133% over past 11 years
Reaches $3.4 trillion despite disruptive forces
David Roth
CEO
The Store WPP, EMEA & Asia
[email protected]
Twitter: davidrothlondon
| The value of the BrandZ™ Top 100 Most Valuable Global Brandshas increased steadily over the past 11 years, rising 133 percentbetween 2006 and 2016, despite fluctuations during andimmediately after the global financial crisis.
This pattern of reliable growth,modulated by global economic andgeopolitical forces, continued with 2016BrandZ™ Global Top 100, which rose 3percent in brand value in a year markedby a historic plummet in oil prices andslower economic growth in Brazil andRussia, and even China, where GDPexpansion slackened relative to therobust rates of a few years ago.
These factors especially impacted theoil and gas, and the banks categories.Absent those categories, the BrandZ™Global Top 100 improved around6 percent. We studied the resultsclosely to gain insight into what givesbrands their resilience and ability tosteadily improve regardless of marketconditions.
Answers are contained in this report,which is filled with the original research,thought leadership commentary,insights and prescriptive advice fromWPP company experts from around theglobe. I will briefly expand on just twoof the many factors critical for building and sustaining strong and valuablebrands – Brand Purpose and BrandExperience.
Before I do that, however, it is worthrestating that brand value growth isimportant for two key reasons. First,brand value correlates with businesssuccess; brands with high value aremore likely to increase sales and marketshare going forward. Second, brandvalue correlates with high shareholderreturns. Companies that invest inbrands grow their topline faster.Organic topline growth is the biggestdeterminant of total shareholdersreturn. (Please see the BrandZ™ StockPortfolio story in the Introduction.)
Purpose and Experience
The importance of purpose is evident inour BrandZ™ Top 20 Risers. This rankingof brands that grew the most in valueincludes brands as diverse as Amazon,Starbucks, JD.com, The Home Depot,Domino’s Pizza and Chanel. Theseare very different brands that share incommon clarity of purpose.
Brands do not need a higher purpose,but they do need to be seen as doingmore than just making money; theyneed to be seen as improving the lifeof the consumer in some way. This isespecially relevant when appealingto millennials and when competingin fast-growing markets whereconsumers expect brands to act aspartners in their quest to achieve thegood life.
Purpose needs to be clearly expressedin the brand experience, whichremains one of the most powerfuldifferentiators. On a recent trip toNew York, I visited the new flagshipstore of one of the BrandZ™ Top 100Global brands. It was disappointing.Unfortunately, the brand experienceof the store did not match the qualityand excitement of the brand’sproducts. The store lacked buzz. Thebrand lost an opportunity.
And on the subject of opportunity...We took our first in-depth look at B2Bbrand leaders this year, leveragingour BrandZ™ research with marketknowledge from LinkedIn. You will findextensive details in a new B2B sectionof the report. Here’s the topline: B2Bbrands score well above averagein all aspects of Brand Potential, aBrandZ™ metric that predicts futurebrand success. But they have a largeopportunity to reach the BrandPotential levels of business-toconsumerbrands.
Our research revealed anotherimportant opportunity, actually moreof a challenge, for multinationals.Competition from local brandsis increasing across fast-growingmarkets because of several factors:(1) local brands have gotten betterover time; (2) as the economies slow,consumers are searching harder forvalue-for-money options; and (3) localbrands are competing effectively forthese customers by leveraging theperception that local brands can betterunderstand and fulfill local marketneeds.
Serving you with our expertise
All of these challenges andopportunities require unrivaledglobal expertise in the art andscience of building and sustainingvaluable brands. That’s where wecome in. Almost 200 brand expertsfrom around 50 WPP companiescontributed to this report. Theyparticipated in over 25 focus groupsthat delved into the dynamics shapingthe 14 product and service categorieswe cover in the report. By linking allthis talent, creativity, and wisdom,we amplify global trends and insightsthat help our clients in useful andunique ways. We call this powerfulperspective “horizontality.”
Our unrivaled expertise includes theBrandZ™ resource library, which weinvite you to access. Along with theBrandZ™ Top 100 Most Valuable GlobalBrands, the library includes these titles:the BrandZ™ Top 100 Most ValuableChinese Brands; the BrandZ™ Top50 Most Valuable Indian Brands; theBrandZ™ Top 50 Most Valuable LatinAmerican Brands; the BrandZ™ Top50 Most Valuable Indonesian Brands;and Spotlight on Myanmar – The“Leapfrog” Nation. To download theseand other BrandZ™ reports, please visitwww.brandz.com.
The backbone of all this intelligenceremains the WPP proprietary BrandZ™,the world’s largest, customer-focusedsource of brand equity knowledgeand insight. It is big data at its biggest,with 4.5 billion individual data points.Using the BrandZ™ brand valuationmethodology of Millward Brown, aWPP company, we analyze relevantcorporate financial data and strip awayeverything that doesn’t pertain to thebranded business. Then we take acritical step that makes BrandZ™ uniqueand definitive among brand valuationmethodologies.
We conduct ongoing, in-depthquantitative research with morethan 200,000 consumers annually,across more than 50 markets, toassess consumer attitudes about,and relationships with, over 100,000brands. Our database includesinformation from over two millionconsumers. It reveals the power of thebrand in the mind of the consumerthat creates predisposition to buyand, most importantly, validates apositive correlation with better salesperformance.
At WPP, we’re passionate about usingour creativity to create and build strong,differentiated brands that deliverlasting shareholder value. To learn moreabout how to apply our experience andexpertise to benefit your brand, pleasecontact any of the WPP companies thatcontributed expertise to this report.Turn to the resource section at the endof this report for summaries of eachcompany and the contact details of keyexecutives. Or feel free to contact medirectly.
Go to www.brandz.com to learn more. |