Big Brands Are Getting Bigger

June 11, 2018

BrandZ has released its Top 100 Most Valuable Global Brands 2018 report [pdf], and perhaps more interesting than the leading brands (which are dotted with oh-so-familiar names) is the additional value that the top 100 have accrued in the past year. Indeed, the report indicates that the value of the top 100 brands soared by 21% in the past year, adding $748 billion to reach a total of $4.4 trillion.

That marks the largest single-year increase in numeric value in the 12-year history of the report, and also matches the largest percentage increase in the report’s history. In fact, the top 100 brands’ collective value has more than tripled since the report’s inception in 2006 (when their combined value was $1.4 trillion).

The study notes that Retail led the way in category growth for the second consecutive year, as top brands in the Retail category grew in value by 95%. Driving those increases were two Chinese e-commerce giants – (+94%) and Alibaba (+92%) – which were the fastest-growing of all brands in the top 100.

Chinese brands have been making waves of late: 14 now rank within the top 100, as opposed to just a single one back in 2006. And this year a Chinese brand – Tencent – cracked the top 5 for the first time.

Nonetheless North American brands still dominate the list, accounting for the largest number of brands (57) and the largest share of combined value (71%). North American brands – all but 2 of which are based in the US – saw slightly above-average growth in value, of 23%. US brands with the fastest year-over-year growth in value include PayPal (+85%), Netflix (+73%), Tesla (+60%) and Adobe (+53%).

B2B Brands Grow in Value

B2B brands have had a strong showing, per the report, with those in the top 100 outpacing the overall top 100 in growth (+26%). That’s more than double the B2B brand growth rate from a year earlier (+11%), and comes after a decline in value the year prior to that.

Half of the top 20 B2B brands are technology brands, led by Microsoft (#1 among B2B; +40%) and IBM (#2; -6%), with SAP (#4; +23%) also in the top 5. Adobe was the fastest-growing B2B brand of the top 100, followed by Microsoft and Salesforce (+39%).

Google Edges Apple

Half of the 10 most valuable brands overall are tech brands, per the report. (It’s worth noting that different brand valuation metrics lead to different outcomes in terms of these rankings.)

Google leads the way with an estimated brand value of $302.1 billion, just ahead of Apple, at $300.6 billion. Amazon is in third ($207.6 billion), ahead of Microsoft ($201 billion) and Tencent ($179 billion).

Nine of the top 10 brands grew in value, each by an above-average amount. The lone top-10 brand to decline in value this year was AT&T, down 7% (and 4 ranks) to $106.7 billion.

Eight Brands Are New to the List

There were 8 brands new to the list this year, hailing from 7 categories. The US’ Spectrum came in at #27, the highest-ranked of the new brands, with in at #59 and Uber at #81.

Instagram was also a notable entrant at #91, with a brand value of $14.5 billion.

Pampers Leads in “Brand Contribution”

The methodology for calculating brand value (at least in BrandZ’s case) rests on several measures, one of which is the extent to which the brand alone – independently of market and financial factors – drivers purchase volume and is able to command a brand premium.

This particular component is called “Brand Contribution” – and it’s led by Pampers. In an interesting note, 6 of the top 15 by brand contribution are beer brands, led by SKQL.

Brand Imprint is About Shapes and Patterns

BrandZ developed a new metric for this year’s report – the Brand Imprint Index – which looks at the collective impact of brand assets on consumers.

The analysis found that brand imprint scores were highest in the Fast Food and Soft Drinks categories, as “categories associated with short-term decision making were more likely to contain brands with stronger assets than those involving longer-term decisions.”

The study also revealed that shapes and patterns, along with logos, were much more evocative of brands than celebrities, slogans and sponsorships. That brings to mind earlier research from Kantar Millward Brown, in which consumers around the world said that logos are the most important cue to link ads across formats.

The full BrandZ report can be viewed here [pdf].

About the Data: BrandZ arrives at its brand value by multiplying the brand’s financial value (the amount of corporate earnings attributed to a particular brand) by brand contribution (a percentage of financial value). Brand value is defined as “the dollar amount a brand contributes to the overall value of a corporation.”

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