The new BrandZ Top 100 Most Valuable Global Brands ranking was released today. The top story is that Google has once again overtaken Apple to claim pole position and become the most valuable brand in the world. However, a more important story for marketers might be the finding that brand attitudes do help anticipate long-term growth.
As I noted in this post about Millward Brown’s Digital Behavioral Analytics one of the issues common to attitudinal and behavioral data is that trends identified in the past do not always play out in future. However, one learning that we can apply to the future of brands is that if a good proportion of people find a brand to be meaningful and different today (relative to how many are familiar with it) then the odds are higher that it will grow market share in future.
Growth646x366.jpg
We capture this relative measure of brand strength with a metric we call Potential. The new BrandZ analysis confirms that this metric has a good relationship with brand value growth. In the short-term, looking at 167 brands valued in both 2015 and 2016, BrandZ finds that the top third of brands ranked by Potential grew their value by 5 percent. The remaining two thirds tended to lose value on average.
Over the long-term the difference becomes even more apparent. Brands with higher ‘Potential’ in 2006 grew far more over the following 10 years than their peers. Among the 95 common brands valued in both 2006 and 2016 the top third grew their value by 200 percent compared to only 31 percent for the bottom third.
An important thing to remember about Potential is that high scores are not a guarantee of growth. A brand must activate its Potential in order to take advantage of it. Potential is an indication that people familiar with your brand today believe it is different in a way that they find relevant and likeable compared to other brands. So what marketers need to do is make the brand salient to new consumers, ensuring they are familiar with what the brand has to offer and making it meaningful to them.
Aldi, PayPal, Starbucks, Toyota, Google are some of the brands that have grown well over the longer-term and their success rests in two important factors. First, they created a product that had the potential to be meaningfully different from the competition: high quality groceries at a good price, a convenient online payment system or a hybrid that reflects well on the brand in general. Then they made that product as widely available and salient as possible.
A related finding from the BrandZ analysis points to the importance of innovation when it comes to creating the opportunity for growth. Brands which consumers perceived to be innovative in some way – different, shaking things up or creative – grew nine times the rate of brands perceived as less innovative.
Witten by Nigel Hollis,Executive Vice President and Chief Global Analyst at Millward Brown
