Research institutions and agencies over the years have come up with rankings of businesses with a view of determining their brand equity, brand perception and brand trust among other ranking objectives. In this report, DAVID AUDU takes a look at the 2015 BrandZ Top 100 Brands
Notable global brand ranking agencies include the Interbrand ranking, Nielsen rankings, Forbes brand ranking, and of cause, the Millward Brown’s Global BrandZ ranking. Each of these agencies applies one or a combination of criteria for rating brands.
According to ranking experts, consumer perception of a brand is a key input in determining brand value because, as they say, brands are a combination of business performance, product delivery, clarity of positioning, and leadership.
One brand ranking that has come to typify trust and respect such that when its ranking is released industry players listen and benchmark for future reference is the BrandZ Top 100 Most Valuable Global Brands published yearly by Millward Brown and WPP. Millward Brown is a global research agency specializing in advertising, strategic communication, media and brand equity research.
It operates in more than 55 countries and is part of Kantar, WPP’s data investment management division. WPP is a communications services group with billings of US$76 billion and revenues of US$19 billion.
Currently, the 100 top global brand ranking is steering industry news. Beside the revelation that the worlds 100 top brands are worth over 3.3 trillion dollars, is also the facts that technology firms are leading the first four positions in the ranking racket.
Apple, with it cutting edge technology in the smart phone and smart watches is sitting in the first spot, with a brand value of $247 billion, a rise of 67 per cent year on year.
Google, in number two position also grew, achieving a 9 per cent value increase to reach $173.7 billion, while Microsoft, now worth $115.5 billion, is the new number three global brand, rising one position with value growth of 28 per cent. The 2015 global Brands ranking also shed light on why Africa brand are less competitive on the global stage.
Commenting on the rankings and the poorperformance of African brands, Regional Managing Director, Millward Brown Africa & Middle East, Charles Foster, said, currency devaluation and the strengthening dollar makes it harder for African brands to maintain or grow their value relative to the global brands, but noted that with the largest growing middle class and continued foreign investment, it’s inevitable that African brands and companies will bounce back.”
Highlights and key findings from the report include the facts that technology is the fastest growing category, up by 24 per cent in the last year.
Cumulatively, the tech brands in the top 100 are worth more than $1 trillion, nearly a third of the value of all brands in the ranking. The report identified e-commerce sector to have boosted retail brand value as Alibaba entered this year’s ranking overtaking Amazon at $66.4 billion, helping to grow the retail category ranking by 24 per cent.
The most valuable retail brands Alibaba and Amazon, which lack physical stores, are now worth more than Walmart, which has 11,000 stores worldwide. The report also noted that Europe continues to dominate luxury sector. “While luxury suffered in 2015 with a total valuation for the Top 10 down 6 per cent at $104.6 billion, however, eight of the top 10 are based in Europe.
It noted that the danger for Europe’s power in this sector is that both the two new entrants Michael Kors and Tiffany are from outside the region”. With the BrandZ Top 100 Most Valuable Global Brands now in its tenth year, analysis of the 10 year trajectory of the brands in the ranking revealed that Europe’s brand powerhouses stagnate as Chinese brands grow and US brands make a comeback.
“The number of Chinese brands continues to grow with 14 brands in the Top 100, up from one in 2006, and an increase of 1004 per cent in value. The value of US brands grew by 137 per cent in the last 10 years, up 15 per cent in the last year compared to just 31 per cent in Europe, down 9.3 per cent in the last year. There are now just 24 brands from Europe in the ranking, down from 35 in 2006.
This represents a shift from West to East, indicating that most of the brands that have been ‘pushed out’ of the Top 100 by China were from Europe. Explaining further the brands ranking, Millward Brown’s Global Head of BrandZ, Doreen Wang, noted that though the Apple Watch has proved extremely popular, it is the success of the iPhone 6 that has been the main driver of Apple’s brand value growth.
“Apple continues to ‘own’ its category by innovating and leading the curve in a way that generates real benefits for consumers. It meets their rational and emotional needs, and makes life easier in a fun and relevant way. Apple is clear on what it stands for, and never stops refreshing its message to sustain the difference that makes it so desirable.”
The fastest riser in the BrandZ Top 100 is Facebook, growing 99% to $71.1bn, achieved through its successful strategy of acquiring other social apps such as Instagram and WhatsApp, and an understanding of how to monetise and cross-sell its acquired platforms by selling optimal advertising solutions to businesses with a specific target audience.
The BrandZ analysis has also identified that the traditional dividing line between business to consumer brands and business to business services has disappeared, as technology tools that were once the sole preserve of businesses become critical to consumers too and vice versa. The transition to cloud computing in particular has dramatically changed business models and caused brands to cross the dividing line.
“Two tech titans that are making this journey are Google and Microsoft, with the former entering the telecoms market to become more valuable to business clients while the latter is now making tools and services such as Windows 10 available for free in order to add value to a consumer audience.
“The dividing line between what services we want to use as consumers and those that businesses need has been steadily whittled away and is now effectively meaningless. Whether we store our pictures or our spreadsheets in the cloud, the product benefit of always-on access is the same.
Tech brands are the first sector to have to recognise that while we may be business decision makers we are also consumers,” said Global BrandZ Valuation Director at Millward Brown, Elspeth Cheung. Someone might ask, what does brand ranking offers?
According to the report footnote, “high value brands provide faster bottom-line growth and shareholder value. For instance, in the last 10 years, a measurement of the strongest brands from the Top 100 as a ‘stock portfolio’ show that their share prices have risen over three times more than the MSCI World Index and almost two thirds more than the S&P500”. The BrandZ Top 100 Most Valuable Global Brands study is the only ranking in the world that uses the views of potential and current buyers of a brand, alongside financial data, to calculate brand value.