Chief Data Scientist
Towards negligible brand value: the relentless decline of data-poor brands
What do the most valuable brands in the world have in common with those in Australia? At first glance it would seem very little. Technology companies dominate the top-end of the global list. At the start of the century, companies like Facebook didn’t exist or others, like Google, were still considered innovative start-ups.
In contrast, bank and telco brands are prevalent down under. Australia’s largest bank, Commonwealth Bank, and biggest telco, Telstra, are both former state-owned enterprises. Telstra’s roots can be traced to the mid-1970s, whilst Commonwealth Bank is more than a century old.
(DESIGNER: Graphic depicting ages of top 10 brands)
Despite the all too apparent differences, the most valuable global brands tend to have one key point in common with their local counterparts; the companies behind them capture vast amounts of personal data. A decade ago, consumer goods and automotive brands featured far more prominently at the top-end of the list of the most valuable global brands. The decline of many of these brands has been protracted and pronounced.
This raises the question: are brands that don’t capture consumer data at scale destined to slide further and further down the list? The answer is almost certainly yes. As hyper-personalization progressively takes over from mass marketing, companies that don’t collect personal data at scale will face a severe competitive disadvantage when it comes to building brand relevance, and therefore brand value.
Psychographic and purchase history data is the fuel for creating personalized communications. Whilst marketing automation currently tends to be focused on tactical and offer-oriented communications, Artificial Intelligence (AI) will transform this over the next decade. AI-curated branded content will be tailored to resonate with individuals based on deep profiling of their interests and preferences, as will recommendations from voice-activated virtual assistants. Sequenced, personalized branded-content will progressively build affinity and preference, driving long run growth in brand value for the companies with high caliber consumer data assets.
Where does this leave brands that don’t collect large amounts of personal data, particularly consumer goods companies that face the added challenge of a highly concentrated retail environment in Australia? An obvious response is for producers of branded goods to prioritize developing direct-to-consumer sales models, such as e-commerce channels. In addition to facilitating consumer-level data capture at scale, this would reduce reliance on their traditional sales avenues. However, successfully developing DTC channels without provoking a backlash from grocery retailers is a challenge few consumer goods businesses are likely to pull off.
Consumer goods brands are by no-means the only brands threatened by data deficiency. The most successful automotive brands of the last half century, which were once amongst the most valuable brands globally, now face disruption from electric and driverless technology in addition to the challenge that they only capture relatively small-scale consumer data. The consequence is that they, like many other prominent but data-poor brands, are on a slippery and inexorable trajectory down the brand value rankings, destined to be replaced progressively by those with the deepest and highest quality data assets.