GLOBAL 2016: Welcome
by David Roth
Brand value rises steadily, 133% over past 11 years
Reaches $3.4 trillion despite disruptive forces
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 uctuations during and immediately after the global nancial 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 lled with the original research, thought leadership commentary, insights and prescriptive advice from WPP company experts from around the globe. I will brie y 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)
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 di erent 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 di erentiators. On a recent trip to New York, I visited the new agship 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 rst in-depth look at B2B brand leaders this year, leveraging our BrandZ research with market knowledge from LinkedIn. You will nd 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-to- consumer 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 e ectively for these customers by leveraging the perception that local brands can better understand and fulll 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 BrandZTM 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 nancial data and strip away everything that doesn’t pertain to the branded business. Then we take a critical step that makes BrandZ unique and de nitive 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, di erentiated brands that deliver lasting shareholder value. To learn more about how to apply our experience and expertise to bene t 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.