Global 2015: HIGHLIGHTS | INTRODUCTION
BrandZTM Global Top 100 increases 14 percent in value to $3.3 trillion
Value rises 126 percent during past decade, despite market turbulence
The BrandZTM Top 100 Most Valuable Global Brands 2015 increased 14 percent to $3.3 trillion in total brand value, its highest level ever, following a 12 percent rise a year earlier.
Over the 10 years since WPP launched the BrandZTM Global Top 100 in 2006, total Brand Value rose 126 percent. The Asia-Pacific region now generates almost one-fifth of that value, and China alone accounts for 13 percent, although North America still comprises two-thirds.
Reflecting the growth octane of high value brands, even through disruptive periods, an average of only eight or nine brands per year entered or dropped out of the ranking between 2006 and 2015, 89 brands in total.
Five categories outperformed the BrandZTM Top 100 in brand value growth during the 10 years since the BrandZTM Global Top 100 ranking began. Fast food rose 252 percent in brand value; technology, 226 percent; beer, 183 percent; apparel, 139 percent; and telecom providers, 136 percent.
The technology and retail categories led the year-over-year brand value rise in the 2015 BrandZTM Global Top 100, with both increasing 24 percent. Insurance and telecom providers also experienced strong value growth, 21 percent and 17 percent, respectively. Two categories declined – global banks and luxury – and apparel remained even year-on-year. In addition:
Apple displayed remarkable brand strength, returning to the number one position in the ranking based on consumer regard for the brand and its devices. The brand’s iPhone 6 success contributed to an $18 billion quarterly net profit, the largest quarterly profit for a public company ever recorded.
The Chinese e-commerce brand Alibaba entered the BrandZTM Top 100 for the first time, rising immediately to first place in the retail category, following its record breaking IPO, which raised $25 billion on the New York Stock Exchange.
Facebook’s brand value almost doubled. The 99 percent increase followed a 68 percent rise a year earlier. The other Top Risers in brand value included Apple, up 67 percent and Intel, up 58 percent.
These category and brand value fluctuations in the BrandZTM Global Top 100 2015 reflect the dominance of technology as well as the impact of other trends and disruptive forces, including greater frugality and the uncertainty of geopolitical events like the drop in oil prices and economic sanctions against Russia.
Categories and Brand Value fluctuations
The category leaders in brand value appreciation, technology and retail, experienced periods of transition. Both
rose 24 percent in Brand Value, but for different reasons. The brand value rise of the technology category reveals how effectively both business-to-consumer and business- to-business technology brands adjusted to change.
Brands with large business-to-business operations, such as Intel and HP, grew in Brand Value following years of reinvention in the transition to cloud computing and new business models. The Apple and Microsoft brands experienced confidence in new leadership. The iPhone success silenced skepticism that Apple post-Steve Jobs would sustain innovative leadership. In the first year under its new CEO, Microsoft refreshed its culture and exhibited greater willingness to be more open and collaborative with its partners and customers.
In contrast, the retail category Brand Value rise reflects the inclusion of Alibaba rather than the overall brand value health of the category. Without Alibaba, the category rose just 2 percent as e-commerce and changing shopping attitudes continued to transform retail. Walmart, with over 11,000 stores worldwide, ranks third in the category following two brands that operate no physical stores – Alibaba and Amazon.
Just about every category experienced the pressure of changing consumer attitudes, in part driven by growing influence of the millennial generation. In the soft drinks, fast food and personal care categories brands responded to consumer concerns about healthier ingredients. Categories leaders like Coca-Cola and McDonald’s introduced new products and communications to address these issues.
Increasing importance of brand
This 10th Anniversary edition of the BrandZTM Top 100 Most Valuable Global Brands reveals that brand became more important during the past 10 years as a way to survive and flourish through difficult times and amid heightened competition.
The global financial crisis of 2008 and 2009 bisected the decade. It impacted certain categories more than others. The global banks and cars categories still have not rebounded fully to their pre-recession level. However, no category was spared from the post-recession shift to less conspicuous and more conscious consumption.
Some brands were better than others at navigating these challenges. These brands typically were Salient, coming readily to mind as consumers made purchasing decisions. In addition, but most succinctly, Difference made the difference. Brands able to communicate a genuine and meaningful difference experienced greater Brand Value success.
Difference became more important as categories projected more sameness. Sameness was partially a function of success. Cars performance and safety is better than ever, for example. Mid- level models offer driving and comfort technology features similar to those of luxury cars. Car brands worked to define areas of difference, and they weren’t alone.
Over the past 10 years, the BrandZTM Global Top 100 brands rose steadily in being seen as Different, Meaningful and Salient, the three components of Brand Power, the BrandZTM metric of band equity. Recently, however, the Different and Meaningful scores leveled while Salience continued to rise.
Along with Difference, purpose was important. Across categories, brands that enjoyed strong value increase often were able to show that they improved the life of the consumer in some way. In some cases, brands articulated a higher purpose that involved improving not only the life of the consumer but also the wellbeing of the world.
In fast food, Chipotle advanced its promise of healthier ingredients by removing items with genetically modified food from its menu. Chipotle rose 44 percent in brand value. Personal care brands continued to emphasize healthier ingredients. Dove continued its campaign to redefine beauty more inclusively.
Brand Value growth shifts to Asia
The greatest brand value growth came from Asia, specifically China. Ten years ago only one Chinese brand ranked in
the BrandZTM Global Top 100 – China Mobile, a state-owned telecom. Today 14 Chinese brands rank in the Top 100. Most of them, not surprisingly, are state-owned enterprises in financial services, oil and gas and telecommunications.
However, four of the brands are market- driven companies without state ownership, and they’re in technology – Tencent, Alibaba, Baidu and Huawei. Tencent and Baidu grew in brand value 43 percent
and 35 percent, respectively. Alibaba and Huawei are newcomers to the BrandZTM Top 100 Most Valuable Global Brands.
Since 2006, the value of Chinese brands in the BrandZTM Global Top 100 has grown 1,004 percent. The shift in brand value growth to Asia, the emergence of valuable publicly-owned brands even in China, and the dominance of technology indicate a lot of about the future of brands and brand building over the next 10 years.
BrandZTM Portfolio outperforms the S&P 500 Index and the MSCI World Index
Valuable brands deliver superior shareholder returns
The BrandZTM Strong Brands Portfolio increased 102.6 percent over 10 years, between April 2006 and April 2015, outperforming both the S&P 500, which grew 63 percent, and the 30.3 percent gain of the MSCI World Index, a weighted index of global stocks.
The strong performance of the BrandZTM Strong Brands Portfolio, relative to two
well- regarded indexes, affirms that valuable brands deliver superior returns in a sustained way over time and despite significant market disruptions. It also demonstrates the positive return on money invested to build meaningfully different salient brands.
In concrete terms, $100 invested in the 2006 would be worth $130 today based on the MSCI World Index growth rate, and $163 if it grew and the same pace as the S&P 500. That $100 invested in the BrandZTM Strong Brand Portfolio would more than double in value to $203.
BrandZTM Strong Brands Portfolio outperforms S&P 500 and MSCI World Index
The BrandZTM Strong Brands Portfolio increased 102.6 percent over 10 years, between April 2006 and April 2015, outperforming both the S&P 500, which grew 63 percent, and 30.3 percent gain of the MSCI.
The BrandZTM Strong Brands Portfolio is a subset of the BrandZTM Top 100 Most Valuable Global Brands