Introduction

12 Percent Brand Value Rise Crosses all Categories

In a year of real growth, brands experience transformation, consolidation and disruption

The BrandZ™ Top 100 Most Valuable Global Brands 2014 added $310 billion to reach $2.9 trillion in brand value, a 12 percent increase.

Prior to the BrandZ™ Global 2014 results, the Top 100 had increased an average of about 6 percent, $125 billion, annually since the financial crisis of 2008 and 2009.

This year, led by apparel, with a 29 percent overall increase, all categories rose in brand value. And 10 of 14 categories experienced double-digit growth, indicating that brands across the economy have moved beyond recovery into a period of new growth.

Only 18 of the Top 100 brands lost value compared with an average of 31 brands in each annual BrandZ™ Global Top 100 report since the financial crisis.

The resurgent economies of North America and Europe drove brand value growth as the BRIC markets slowed. Only 14 brands from fast growing economies made the 2014 BrandZ™ Global Top 100 ranking compared with 17 brands a year ago.

Despite the BRIC slowdown, Chinese brands increased their impact. The number of Chinese brands in the Top 100 declined by one to 11, but that's up from only two in 2006. In addition:

  • With a 40 percent rise in brand value, Google claimed the number one rank from Apple, which held the position since 2011 when it surpassed Google.
  • Twitter, LinkedIn, and PayPal appeared in the BrandZ™ Top 100 for the first time.
  • Tencent, the Internet portal and social network, led the fastest risers, almost doubling in brand value. Baidu, the search engine appreciated 46 percent, indicating the growing influence of Chinese brands.
  • Facebook was the second fastest riser with brand value increasing 68 percent. Amazon entered the BrandZ™ Global Top 10 for the first time, with a 41 percent brand value increase to $64.3billion.
  • Technology continued to dominate with nearly a third of the total brand value and around a fifth of the brands, including the top four – Google, Apple, IBM and Microsoft.

Growth brings new challenges

The two key factors that influenced the 12 percent growth surge – technology innovations and consumer confidence – also created some of the challenges categories experienced.

Consumers were willing to spend money and they did, even on high-ticket items like cars and luxury. But chastened by a period of relative frugality and empowered by rapidly changing technology, particularly mobile, consumers changed how they shopped and purchased. They waited for the best prices and purchased more mindfully, with concerns about health and the environment.

Retail experienced perhaps the most dramatic impact, as consumers conflated the physical and online shopping worlds, expecting a new kind of convenience that delivers the wide range available online with best prices and the immediate gratification of physical stores.

Clear that retailing would no longer be about physical stores alone, retailers scaled back their portfolios of locations, repurposed existing space and invested in technology to make the shopping online and in physical stores a seamless experience.

In luxury, some brands learned that they'd become too accessible in an effort to drive sales during the economic slowdown. They worked on achieving the best balance of accessibility and exclusivity in stores and online.

Carmakers loaded the newest models with technology for safety and entertainment. But conditioned by their mobile devices, car buyers sometimes expected even more technology to be available in cars with the speed of a download.

Categories feel impact of Millennials, social media

This effort to understand and meet the demands of customers touched financial institutions, not always known for customer centricity. Global banks increased services and warmed their messaging, although levels of trust remained low. Insurers developed systems to respond to customers one-to-one in relevant ways rather than with mass, product driven efforts.

Even categories affected by consumer health concerns appreciated in brand value, but at a slower pace. Fast food, which continued to work through the pressure of health concerns, improved 10 percent. Soft drinks grew 4 percent although the consumption of CSDs (Carbonated Soft Drinks) declined for the ninth consecutive year in the US.

Telecoms experienced consolidation and price disruption pressure but brand value improved 8 percent. The oil and gas category experienced the lowest brand value growth, 3 percent, because of slowed investment in exploration. In every category, brands increased activity in social media to engage consumers in innovative ways. (Please see the BrandZ™ Verve Index, a special report on social media on page 46).

In addition, the attitudes of Millennials, individuals born roughly between 1981 and 1999, also touched most categories. These consumers are more likely to prefer a craft beer, bank and shop on a mobile device, choose vitamin water over cola and eat healthier fast food, but not exclusively. And they're less likely to buy insurance or own a car, either because they prefer sharing or don't have the money.

Key Results

$2.9tn

The BrandZ™ Top 100 Most Valuable Global Brands increased 12 percent, to $2.9 trillion, following a 7 percent rise a year earlier.

Doubled in 8yrs

The combined brand value of the BrandZ™ Global Top 100 has almost doubled in eight years, since its inception in 2006.

81.1%

Since 2006, the stock market values of the BrandZ™ Strong Brands Portfolio, a subset of the BrandZ™ Global Top 100, has appreciated 81.1 percent, significantly outperforming the 44.7 percent rise in the S&P 500 over the same period.

No.1

Google claimed the number one rank in the BrandZ™ Global Top 100.

29%

Apparel led all categories in overall brand value growth with a 29 percent rise, following 21 percent a year earlier.

Double -digits

All 14 categories increased in brand value, 10 of them with double-digits.

Only 18

Only 18 of the Top 100 brands lost value this year, compared with an average of 30 brands each year since the BrandZ™ Global Top 100 rankings started in 2006. An average of 31 brands annually lost value since the financial crisis of 2008.

97%

Tencent, the Chinese social network and Internet portal, led the list of fastest risers with a 97 percent increase in brand value, overtaking China Mobile as China's most valuable brand.

Facebook

Facebook (up 68 percent), Baidu, China's leading search engine (46 percent) and Yahoo! (44 percent) also made the Top 20 Risers.

71 & 78

Twitter and LinkedIn entered the Top 100 for the first time, at numbers 71 and 78, respectively. Amazon entered the Top 10 at number 10, the first retailer to achieve this distinction.

Top four

With Microsoft up several slots, after a 29 percent brand value increase, the top four brands in BrandZ™ Global Top 100 are in the technology category – Google, Apple, IBM and Microsoft.

1/5

Around a fifth of the BrandZ™ Global Top 100 are technology brands and these 18 brands account for $827 billion in brand value, nearly a third of the Top 100 total value.

$45.2bn

Google increased the most in dollar value, $45.2 billion, in the 2014 ranking. The brand also increased significantly since 2006, $121.4 billion, second only to the gain of $131.9 billion by Apple during the same period.

Europe

Brands based in Continental Europe increased 19 percent in brand value overall, more than any other region, following a rise of only 5 percent a year ago.

North America

North America dominated in regional representation. Half the brands in the BrandZ™ Top 100 and two-thirds of the Top 100 total brand value originate in North America. All of the Top 10 brands are based in the US.

Slower economies

Slower economies in fast growing markets reduced the number of brands from those counties in the BrandZ™ Global Top 100, from 17 a year ago to 14, 11 from China, two from Russia and one from Africa.

High-value brands

Other brands from China and Russia, and also brands from Brazil, Colombia and Mexico appear in the category rankings, which include some high-value brands below the Top 100 brand value threshold.

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