Would you be surprised to learn that banks had increased their brand value this year more than any other sector – even food? Or that the brand worth of an internet business has overtaken the world’s favourite soft drink?
These are just some of the revelations to be found in this year’s 2010 Brand Finance Global 500 list of the world’s most valuable brands.
Among individual companies, Google has risen to second position, up from third place in 2009. It sits just behind Wal-Mart, the US retailer which has retained its crown as top global brand for the second year running.
The search engine’s brand value has risen by 23% to $36bn in the 2010 league table, while its enterprise value has almost doubled, from $79.1bn to $158bn.
David Haigh, chief executive of valuation consultancy Brand Finance, says the internet business has taken the second spot “by being the ubiquitous source of search”. He adds: “The clever thing about Google is that it has monetised the business in all sorts of different directions and that’s why its brand value is so high.”
Haigh suggests that the power of the Google brand has potential to combat global leaders, such as Microsoft in software or Vodafone in mobile, should it decide to invest further in these business areas.
Google’s director of marketing for UK and Ireland, Torsten Schuppe, says he thinks that the brand’s success is a result of its innovative streak. He says the company will continue to invest in search, advertising and applications in order to develop the business.
“We always strive to surprise and excite our users and help our partners increase revenues – something that has remained a constant over the years and we’re committed to it in the future,” promises Schuppe.
There are signs that the company is looking to take its brand even further into new areas in the coming years. Google says there are plans to launch a phone that will translate languages in real-time. Google’s translator software will run during a call, according to an article in The Times.
While Google is climbing up the ranks, Coca-Cola has dropped into third position in 2010, down from second last year. The drinks giant held the top spot in 2007 and 2008, but Haigh says its lower position reflects the fact that emerging markets haven’t developed a taste for the fizzy drink brand. “Coke is on a long-term decline unless it can reinvent itself,” he argues.
However, Haigh does admit the company is diversifying by taking a “house of brands” approach and investing in other soft drinks, such as its flavoured water range Vitamin Water. This, he says, will help to strengthen the business globally as it moves into markets such as China.
“The brand’s success is a result of its innovative streak. Google will continue to invest in search, advertising and applications to develop the business”
Coke’s rival Pepsi has also fallen from 21st to 30th position in the 2010 global brand list. Mobile brand Vodafone, by contrast, has climbed up a rung in the global 500 list, from eighth position into seventh this year.
Haigh says the mobile brand is “back on the growth path”. Its brand value is up from $24.6bn in 2009 to $29bn in 2010’s league table. Analysts predict a strong sales increase for Vodafone this year now that the iPhone is available in markets such as the UK on its tariffs, and this is reflected by the higher positioning in the league table.
Apple is also looking in fine health in this year’s brand list. It has continued to rise up the rankings into 19th position from 27th in 2009, and its brand value is up to $19.8bn from $13.6bn. While there has been a tepid response by many analysts to the recently launched iPad, strong presales of the tablet computer in Europe suggest Apple will continue to strengthen its brand throughout 2010.
While certain brands continue to grow in defiance of the economic climate, other sectors have bounced back after suffering over the past few years.
Governments around the world bailing out the banks has had a positive effect, putting the sector in the strongest position overall in terms of regaining brand value. While business is recovering, Haigh notes that “banks are slightly chastened by the experience and are trying harder”, spurring many banking brands to refocus on their customers.
HSBC retains the top banking spot in eighth position; Santander comes in second place, in the 12th spot overall. Last year it came in at number 41, meaning that it claims the title of the fastest growing banking brand.
Santander has used its global might to communicate security and push forward with the renaming of Abbey, which it acquired in 2004. It has also been hoovering up some floundering banking brands along the way, buying British mortgage lender Alliance & Leicester and Bradford & Bingley’s branch network.
Haigh says the giant banking corporations have been able to communicate their security as the weaker banks have disappeared. “Most of the really bad ones have gone bankrupt. Brands like Santander and HSBC have been making hay because they have been reinforcing the things that they have been doing well before.”
Insurance has also rebounded as a sector. Confidence is returning to the financial industries, with AXA managing to use the last year to strengthen its brand.
Haigh attributes the brand’s growth in the 500 table to its strong brand positioning in the global market. “AXA is 15 years in advance of Aviva in creating a global brand and it is now reaping the benefits. By contrast, Aviva is still in the process of trying to do it.”
Overall, the car industry is also looking much healthier. Last year, sales forecasts were fairly flat but this year the outlook is more positive. The entire industry is going through fundamental changes which have been long overdue, says Haigh.
“There’s a whole new generation of electric cars, low fuel cars and sustainable cars, and this offers the industry a big opportunity. The car industry had become a dinosaur that refused to change, but the economic climate has finally made it realise that it has to change.”
Toyota features in tenth position but Haigh believes that its recent global car recall crises will put a large dent in its brand value. He explains: “Toyota was much too slow off the mark to face the problem and the price of that is a destruction of brand value.”
Toyota is in danger of losing 35% of its brand value because of its handling of the recall, Haigh estimates. He says that Toyota’s dramatic fall from grace is a warning to even the most valuable brands not to fall into the trap of complacency.
While sectors such as the automotive industry look to be on the way to recovery, retail continues to be a victim of the recession. The sector is the biggest loser on the Brand Finance Global 500 list, signalling that analysts believe that the high street is not going to bounce back in 2010, with lower levels of retail sales predicted by analysts. This is in stark contrast to the banks, which have increased their overall brand value enormously.
While some sectors have still got a long way to go before they can signal a return to full strength, performances of individual brands show that it is possible not only to survive through recessionary periods, but to thrive.
Haigh attributes Wal-Mart’s top place position on the chart to its repositioning from a large, faceless corporate retailer to being a “consumer champion” during the recession.
And while most sane businesses wouldn’t welcome recessionary times, it appears that this tough economic climate has resulted in many brands re-evaluating what they stand for. Those which have succeeded look set to perform even better in 2011.
AXA group marketing and communications director Cheryl Toner explains why she believes the brand has moved up 16 places from 45 to 29 on the Global 500 League Table.
Our brand positioning was being looked at long before anyone knew the financial crisis was coming. One of our key findings was that trust was key to the relationship with our customers – that has been proven more relevant because of the crisis.
We have been looking at all the areas where we need to be seen as reliable, which is a key driver of trust in our industry. It’s basically about keeping our promises.
We think we have been quite ambitious with our Redefining Standards brand positioning as far as our industry is concerned. Any repositioning takes time but we have started to see improvements on our brand tracking in terms of customer satisfaction.
Our brand positioning has two angles to it. First, we have been looking at how we can improve customer service and the brand experience overall. And then we’ve been really strict with ourselves when it comes to advertising. All of our marketing around Redefining Standards is based on concrete propositions or elements of these.
Our latest campaign [up to 90% no-claims discount] is a good example of taking a specific proposition based around wanting to reward experienced drivers. We’re concentrating on the fact we’ll reward drivers who have never had serious claims.
It’s about having products that appeal to our target segments. We feel that drivers aged 45-plus want to be rewarded for being more reliable. They tend to be more loyal as well. The proof-point in that campaign is that it’s the best no-claims discount in the market.
Other examples of this strategy in the past year include introducing a dedicated claims handler for water damage claims and a dedicated nurse for cancer patients from AXA PPP Healthcare. For each one, we looked at the target segment and then undertook research to find what’s really important to them.
The brand team works closely with the rest of the business to find these “concrete propositions”. Building a relationship with the customer is really at the heart of what we’re trying to do. We’re continuing to invest in our brand.
Case study: Disney
The company built around the success of a cartoon mouse called Mickey sits in 18th position in the Global 500 table, making it the top media brand for the second year in a row.
But while Disney may have its heritage in hand-drawn animations, the company claims it is now just as comfortable having a presence on digital platforms as on the silver screen.
Tessa Moore, corporate brand vice-president for The Walt Disney Company EMEA, says the business realises that it has to understand all the ways in which its consumers use entertainment.
“We’ve got a lot of what we call ‘content engines’,” she says. “We generate characters and stories that appeal broadly. Our philosophy is platform agnostic, which means we need to deliver on the platforms that people want, and where and when they what.”
Letting the brand roam across platforms and channels is what the firm calls the “Disney difference”, says Moore. It is what allows the same brand to move its franchises such as the Pirates of the Caribbean from theme-park rides to movies to online virtual worlds.
The idea of being channel agnostic doesn’t just apply to new characters and stories. The entertainment brand has just launched Digicomics, which will allows fans to download comics, taken from its archive, through their video game console or mobile phone.
These comics feature traditional Disney characters such as Mickey Mouse and Donald Duck. “We take each property and character and look at where we think the consumer target market is. Or we look at the consumer and think about how we can create content,” Moore explains.
Disney’s content has become much more bespoke to local markets in recent years. While many characters have global appeal, it has also recognised franchises that work in specific markets. The media company has just launched its first Indian animation, for example.
And while The Princess and The Frog is a global film launch, Disney’s latest release has been locally voiced in more 30 different languages, rather than dubbed.
Moore says that some of the company’s recent activities show “we can go in so many different directions for our customers”. She cites the diversity of the launch of the new Disney XD channel, which is skewed towards boys and the more adult Marvel comic brand acquisition.
She claims it is this ability to create global franchises and make them work across multiple platforms that will keep Disney at the top of its game for another 87 years.
She adds: “At our heart is connecting with families and children by providing compelling and relevant entertainment.”
Case study: Santander
While other banking brands disappeared during 2009, Spanish brand Santander has been increasing its presence. This is recognised in this year’s Brand Finance Global 500 list where Santander is revealed as the fastest growing bank.
Santander was not a name familiar to most British consumers just a few years ago, but now it has fully introduced its name across UK high streets, replacing its subsidiary Abbey branches with its own moniker.
Abbey is not the only bank that has been added to the Santander empire; other more recent purchases by the Spanish company include Bradford & Bingley and mortgage lender Alliance & Leicester.
But it is not just about eating up the competition; Santander says it hopes that introducing its name to more people outside Spain will help it to build an affinity with UK consumers.
Santander UK brand director Keith Moor says the Abbey rebranding process was treated with great care to ensure that it didn’t put off British people used to seeing Abbey on their streets.
“The [name change] timeline was predicated on customer insight. We are a very customer-focused retail-based business,” he claims. “We have 25 million customers across the group in the UK so we can’t afford to alienate those customers.”
Moor says the economic climate enabled the brand to speed up the rebranding process. Research in 2008 indicated that consumers were ready for the change. The large size of the Santander was perceived as a strength among customers who felt comforted that size represented safe banking.
The Santander rebrand isn’t just about changing the name; it’s also about “developing propositions to build relationships with customers,” argues Moor.
The Zero Account, which launched in January, is an example of Santander’s attitude towards customers, he adds. The account, which is available to Abbey and Bradford & Bingley mortgage customers, won’t charge customers when they use their debit cards abroad and won’t charge fees for slipping over an overdraft limit. Santander will be introducing more products in the coming months that will demonstrate its commitment to customers, claims Moor.
He says the Santander brand promise is about recognising the relationship with its customers and also rewarding people who do more business with the bank. He believes Santander and other banking businesses will have to do more for their customers than simply state they are a bank.
“Banks have historically paid lip-service to being customer-focused. But the interruption in the economy served to endorse what customers always thought about banks – that they are arrogant. So the financial crisis has bought banks back down to size,” he says.
Moor says that Santander is aware that it is on a continuous journey to reassure its customers that it is a safe bank – something that the industry had forgotten to communicate prior to the recession.
He claims: “That’s how our communications have changed and will continue to change. Part of our message is saying that our customers have made the right choice.”
Timeline: Santander rebrand
- November 2004: Santander purchases Abbey.
- November to May 2005: Santander introduces the company’s flame symbol and typeface to the Abbey logo.
- March 2007: The tagline “part of Santander group” is introduced underneath the Abbey logo. Communications about Santander are introduced into Abbey branches.
- 2007: Santander announces the global sponsorship of the McLaren team in Formula One. In the UK, Santander sponsors the British Grand Prix and uses British driver Lewis Hamilton to bring the sponsorship to life in the UK.
- During 2008: In response to the credit crisis, Santander starts advertising about the strength and security of the Santander Group.
- Towards the end of 2008: The strapline “together we are Santander” is introduced during advertising to bring the company’s brands together.
- January 2009: Santander’s research claims the majority of customers have a higher consideration rate for doing business with Santander than with the incumbent business.
- September 2009: Santander announces that it will sponsor the Ferrari team in Formula One, in a five-year deal.
- January 2010: The Santander name is introduced to the high street, removing the Bradford & Bingley and Abbey brands. Santander will replace the Alliance and Leicester name during 2010.
Brand Finance Global 500: Methodology
The Brand Finance Global 500 ranking examines the effect of the brand on the company’s bottom line in financial value.
The company uses the “royalty relief” method to determine the size of a company’s brand value as part of its overall enterprise value. For more on methodology, visit www.brandfinance.com
Click here to download a PDF of the Top 50 Global Brands