A return to positivity, but not to more of the same
CEO The Store WPP EMEA and Asia
This has been a year in which economies across the region have moved back into positive territory. And, in climbing out of recession, they have taken consumer confidence up at the same time.
But this does not signal a return to business as usual. In fact, it signals the start of a new era, in which much of what we previously thought of as normal has changed. Normal consumer behavior, normal communications strategies for reaching them, and normal ways to get goods and services to market. All are being redefined.
This is a recovery that is inconsistent across the region and is being felt by different consumer groups to varying degrees. This variation is reflected in our BrandZ brand valuation rankings, which show overall growth in the BrandZ Top 50 Most Valuable Latin American Brands 2018 of 18 percent. Look behind this strong, top-line figure, though, and there are brands that have increased their brand value by as much as 99 percent in the past 12 months, while others have suffered a 33 percent decline, and there are brands at every point in between.
Average brand value growth among the top Brazilian and Chilean brands has been over 20 percent, while Mexican brand value growth is up just 4 percent, and the leading Argentinian brands have grown in value by 45 percent. This volatility is indicative of the new normal.
Even within categories, there are significant inconsistencies; while some retail brands, communications providers and financial institutions have made great strides, for example others in those categories have seen significant losses in brand value over the same period.
In this report, we strive to make sense of the current state of play for brands, drawing on nearly a century of WPP company expertise in LatAm, working with some of most valuable and iconic brands in the region. Our network of talented and experienced colleagues have an intimate knowledge of the countries in which they work, and a deep understanding of what motivates the changing consumer.
We couple this market knowledge with more than a decade of BrandZ global brand valuation research, which has tracked over 100,000 brands in more than 50 markets to identify the key drivers – local, regional and global – of long-term growth in brand value.
In the pages ahead, we analyze the unique demands and opportunities for brand builders in each of our featured markets. While each market has unique conditions, challenges and cultural nuances, there are some common themes to the new normality in which brands now must operate. And it is largely the extent to which individual brands have grasped these themes that has influenced how they have fared in the past year.
Shopping habits have shifted, and are still on the move
Several years of strain on household budgets have led shoppers to be more fragmented in the way they shop. They’re using different store formats for different shopping occasions, depending on their priorities at the time when it comes to value, convenience and a different shopping experience. This has all led to a rise in discounters, online shopping and convenience stores.
Consumers are sceptical and increasingly sophisticated
Corruption scandals and strikes have led to a consumer weariness with promises, whether they’re from politicians, business leaders or brands. People are tech savvy and willing to trust only the promises that are substantiated. They’re also increasingly open to trying something new, whether that’s a new category, brand or a private label alternative to the big brand names. And when money is tight, they’re economizing in one category so they can indulge in another.
Connectivity creates intimacy, but needs to be respected
Mobile connectivity is reaching a critical mass across the region, and brands are finding digital media usage provides an ideal route to both broad reach and targeted advertising. But consumers are being so frequently bombarded with brand messaging, they’re hitting back against the intrusion with ad blockers. Use caution, and offer something of genuine interest.
The big idea is key
Many of the brands posting the strongest value growth over the past year are those that have taken a powerful creative idea and used it in clever ways both on and offline. Big campaigns can still have a big impact, provided they do more than create a big noise. A clever idea, that resonates with the audience, needs to be at the heart of everything.
We know, through experience in this region and around the world, that brands that invest in maintaining and building relationships with consumers during turbulent times generate the highest levels of closeness and loyalty. Strong, valuable brands also deliver superior shareholder returns.
I hope this report helps brands in LatAm get to grips with the new normal landscape in which we operate, and helps them build for the future at a time when many brands are looking to expand beyond national and regional boundaries.
This report is a collaborative effort by leading brand experts from WPP companies around the LatAm region. Their insights and Thought Leadership essays provide strategic understanding and tactical advice for brands seeking to grow their presence and improve their brand value.
WPP companies have been working in Latin America for close to 100 years. Within these companies are specialists in advertising; insight; branding and identity; direct marketing, digital, promotion and relationship marketing; shopper marketing and e-commerce; media investment management and data investment management; and public relations and public affairs. All share a passion and determination to use their creativity and resources to establish and build strong, differentiated brands that deliver lasting shareholder value.
Collectively, our experts bring global knowledge based on our WPP experience in 113 countries. By connecting this talent and wisdom, we explore global trends and insights that help our clients in unique and useful ways.
The backbone of all the intelligence in this report is the WPP BrandZ database, the world’s largest, customer- focused source of brand equity knowledge and insight, and the BrandZ brand valuation methodology of Kantar Millward Brown, a WPP company.
Other titles in our industry-leading BrandZ resource library include: The BrandZ Top 100 Most Valuable Global Brands, the BrandZ Top 100 Most Valuable Chinese Brands 2018, the BrandZ Most Valuable Spanish Brands 2017 and the BrandZ Top 50 Most Valuable French Brands. To download these and other BrandZ reports, please visit www.brandz.com. For the interactive BrandZ mobile apps, go to www.brandz.com/mobile.
Our BrandZ chatbot, RoZie, is ready to answer your questions about BrandZ global rankings at rozie.wppbrandz.com. She’s also happy to chat with you via Amazon Alexa-powered voice devices. Just download the RoZie Alexa skill.
To find out more about how we can help brands across the LatAm region, please contact any of the WPP companies that have contributed expertise to this report. They are listed in the resources section at the end. Or, feel free to contact me directly.