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Brand boosts the bottom line

Strong brands do far more than win industry awards and climb rankings such as these. The value of a brand has a clear, measurable link with the share price of the company behind it.

Over the 12 years in which we have been tracking the BrandZ™ Top 100 Most Valuable Global Brands, the companies behind the top-ranking brands have  far outperformed stock market benchmarks. The value of the BrandZ™ Strong Brands Portfolio increased 172.1 percent between April 2006 and April 2018, outperforming both the S&P 500 and the MSCI World Index. (The MSCI World Index is a weighted index of global stocks.)

In concrete terms, $100 invested in 2006 would be worth $150 today based on the MSCI World Index growth rate, and $202 based on the S&P 500 growth rate. But that $100 invested in the BrandZ™ Strong Brand Portfolio would have far more than doubled in value, to $272.

In difficult economic times, having a strong brand does not make a business immune to a change of fortune, but it can help soften the blow. In 2008-2009, the most valuable brands in the world took  a hit due the global economic downturn, but their value was somewhat protected. Their value did not fall by the same extent as other brands, and their recovery came more quickly as conditions improved.