By Claire Spaargaren, Millward Brown’s European Brand Director
The combined value of the BrandZ™ Top 100 Most Valuable Global Brands has nearly doubled since the ranking launched in 2006, and when compared with the Standard & Poor’s (S&P) 500 index their share price is growing twice as fast. Investing in building a brand really does pay off. A strong brand unlocks growth potential — enabling companies to increase sales, command a price premium, gain new users and stop churn.
So how have these brands done it?
Valuable brands don’t just meet their customers’ needs. They make a difference in their lives, and promote that difference through multi-channel marketing in a way that inspires affection and motivates customers to enthuse about the brand to others.
The world’s most valuable brand, Google, grew its value a massive 40% in the last year. Its contribution to our lives is enormous: it’s easily accessible, costs nothing, and delivers what people want. It has even become a verb; the term ‘Google it’ is recognised around the world. And search is only small part of the story — Google has a whole portfolio of tools to help people make the most of their digital lives. People love the brand, seeing it as fun, creative, trustworthy, playful and yet in control, and these positive associations will help it extend into new products and services.
There are three key brand equity aspects that Google displays extremely strongly — and which drive the success of every brand in the Top 100 to a greater or lesser extent.
1. Strong brands are meaningful.
Valuable brands are functionally and emotionally relevant. They empower people in some way, and they are loved — consumers choose them because they’re more appealing than the competition. ‘Meaning’ can be based on many things, tangible or intangible, and is influenced by people’s personal experience of the brand as well as its marketing.
Some brands create a strong sense of personal relevance by developing a belief in their product’s efficacy — Colgate (no.56 in the Top 100) for example. Others go beyond functional benefits to establish a strong emotional connection, as Pampers (39) does with mothers of young babies, or allows people to define themselves; the ‘badge value’ conveyed by owning a BMW (32) is enormous.
In 2008, Samsung (29) lacked strong meaning. It was selling well, but wasn’t playing an optimal role compared with Nokia and Blackberry. A few years later Samsung has climbed dramatically in value thanks to a focus on becoming more meaningful. Today, people trust it to deliver great products at a reasonable price, while competitors suffer from lack of innovation and a failure to keep up. Samsung’s marketing spend regularly exceeds Apple’s, and it has gained share by pushing awareness and clearly communicating messages about its product features and how they’re superior to the iPhone.
2. Strong brands are different from the competition.
To be able to command a price premium a brand must be seen as unique in a positive way, for the benefit of its consumers. Differentiation helps a brand stand out from the crowd in a fast-paced world. Differentiation also makes it easier for consumers to choose between close alternatives, justify paying more, and justify the purchase — making them feel more satisfied with their choice.
Apple (2) is famed for its differentiated innovation, while always maintaining clarity and simplicity of design. Ikea (50) stands apart on the basis of its stylish and low-priced furniture, while Red Bull (92) is renowned for its trend-setting marketing.
Audi is not yet in the Top 100, but grew a huge 27% in brand value in the last year. Behind this success is its difference, which it single-mindedly emphasises in its communications. Outstanding technical innovation (Vorsprung durch Technik), the unique styling of the TT and the Le Mans-winning R10 diesel prototype have all helped it drive up its price premium and gain new, highly satisfied users.
3. Strong brands are salient — coming rapidly and spontaneously to mind.
Salience means the brand comes first to mind when consumers think about what’s important to them, and what their needs are from a particular category. The widespread availability and visibility through strong marketing of brands like Facebook, Coca-Cola, Microsoft, Visa, Nike and McDonalds make them immediately recognisable. Saliency triggers instinctive positive associations, and means consumers are more likely to think of that brand when making their shopping decision, giving it an immediate advantage over competitors, who may not even enter the shopper’s mind.
Combined, these three factors influence purchase decisions — driving sales now and in the future by creating a highly attractive brand that consumers are predisposed to buy. This leads to high brand value: brands with strong meaning, difference and salience capture five times more volume, command a 14% price premium and are four times more likely to grow value share over the next year.
The scores of the BrandZ Top 100 Most Valuable Global Brands on those three equity aspects rise every year. The brands that have remained in the ranking since 2006 have higher overall scores than those that have dropped out, but the highest scores of all belong to the newcomers entering the ranking in the years since it launched, who are challenging hard and raising the bar. These new entrants are not always new brands — they have included long-established names such as Prada, KFC, Visa, Pampers and Shell, showing it’s never too late for a brand to boost its value.
Whether a brand is big, small, regional, global, growing or declining, a focus on building meaning, difference and salience will grow value. Start by identifying the meaning you bring to customers, then make that point of difference as salient as possible. This requires a sound understanding of what your consumers value and how they really see your brand today — and what might make it meaningfully different in the future. Once you’ve identified something that resonates with target consumers, align the business to deliver on that promise and amplify it through motivating and engaging marketing campaigns to build the brand across different media channels.