BrandZ’s analysis shows that the most successful brands in the ranking have a recognisable point of difference, which is meaningful and therefore salient. It is argued that these three aspects can predict and ensure that brands have the best opportunity for future growth, which BrandZ labels as the ‘brand potential’ metric.
Looking at 167 common brands valued in both 2015 and 2016, those with a higher brand potential have grown most over the past year.
Breaking the list into three groups based on their level of brand potential reveals that the top third has grown by an average of 5%, while the middle group’s value has dropped by 1% and the bottom third has fallen by 2%.
A further study of 95 common brands valued in both 2006 and 2016 finds the value of the brands in the top third has grown by an average of 200%, compared to 93% for the middle group and 31% for the bottom third of brands based on brand potential.
“Brands with high potential grew more than six times in value compared to low potential ones,” says global BrandZ director, Peter Walshe. “It shows the importance of that relationship with the consumer, how powerful and sensitive a brand can be and how important it is to stay meaningful, different and salient.”
Brands need to be useful and compelling
Google is classed as having high brand potential, for example. Clarifying what the business does and how it benefits people has made Google more meaningful to consumers – in other words useful and compelling enough to stick in their minds.
There are many theories for what makes a brand stand out. Ritson recently highlighted the divergent claims made by Jim Stengel, former global marketing officer at Procter & Gamble and marketing professor Byron Sharp.
The former believes in the kind of differentiation that exists at the top of the benefit ladder and sees this differentiation as the core of everything. The latter reckons differentiation is rare and challenges marketers to lower their expectations and aim at the more realistic and valuable objective of brand distinctiveness. Ritson sits in the middle.
MasterCard, which retains 20th place in the ranking having grown its value by 15% in a payments environment that is being disrupted by the likes of PayPal, launched its Fare Free Friday campaign in a bid to be meaningful to consumers. The aim was to get consumers to try contactless travel for the first time on the London Underground.
Nicola Grant, head of marketing for UK and Ireland, says: “There is a point of flux in the industry so it’s important to be supporting consumers and encouraging people to make a change in behaviour in the way they pay. [It’s about getting] people to go on a journey to do something that is different, cooler and makes their lives easier.”
Grant also says that the brand’s ‘Priceless’ initiative, which has been going for 20 years across 35 markets, has “evolved to a point where the brand positioning is about connecting people to priceless possibilities”. She says: “We do that for the things that consumers love and the brand strategy is about tapping into passion [points].”
Innovation in isolation is not enough
Innovation is also key to growth considering those brands perceived as ‘innovative’ have grown at nine times the rate of those viewed as less innovative.
Looking at 95 common brands that were valued in 2006 and 2016 and splitting them into three groups this time based on innovation, the top third have grown in value by an average of 154%, compared to 64% for the middle group and 17% for the bottom third.
But innovation cannot be viewed in silo, it has to be understood by consumers and experienced. “An innovation isn’t anything unless somebody recognises that the brand is innovative; it doesn’t exist otherwise,” argues Peter Walshe, global BrandZ director at Millward Brown. “You can have a massive research and development budget but if people don’t realise or feel that in a way that is relevant to them it hasn’t cut through.”
Microsoft is an example of this. It retains third place in the top 100 with a value of $122bn. It is also the top ranked B2B brand, a new list for 2016.
The brand revealed a more emotive side to its internal workings when it launched Windows 10 last July. Its communications moved away from showcasing the new operating system – the innovation – and instead opted for a people-centric ad series. Walshe argues that previously although the brand went through a period of innovation it was still “low on love”, so people did not recognise the meaning behind the developments.
Microsoft’s corporate vice-president of global advertising and media, Kathleen Hall, said the launch of Windows 10 signalled a move away from “falling in love with its own stuff” to highlighting “what Windows 10 represents to people in terms of their potential and how they can achieve the things they want to achieve”.
The ‘brand love’ created through the type of communication that shows the meaning behind an innovation can also help sustain brands during periods when they aren’t innovating. This makes the approach valuable to brands such as Microsoft, Google and Apple that go through times of investment and development to build on product offerings.
But brands need to ensure this is conveyed at all levels, not just through advertising as Walshe believes brands “can advertise as much as they like but unless it’s supported by brand experience they won’t succeed”.