Brand Strength, Resurgent Economies Lift Brand Values
The resurgent economies of North America and Europe helped accelerate brand value growth, especially among strong,clearly differentiated brands.
The brands that appreciated most in value, the Top 20 Risers, represent 10 product categories, reflecting the diversity of strong brands and the broad impact of economic growth.
With four brands in the Top 20, technology led the categories, followed by apparel with three brands. These five other categories appear in the Top 20 Risers with two brands apiece: credit cards, fast food, insurance, retail and telecoms. Cars, entertainment and logistics are represented with one brand apiece.
Technology brands – Tencent and Facebook – occupy the first and second rank in the Top 20 Risers, reflecting the influence of the category. The presence of Tencent, the social network and Internet portal, and Baidu, the online search brand, indicates the growing value and presence of Chinese technology brands.
Two of the Top 20 Risers also appeared in the ranking a year ago and just kept climbing. Tencent almost doubled in value, with a brand value increase of 97 percent following a 52 percent increase. Disney, which increased in brand value 44 percent, also appeared a year ago, when value rose 40 percent. These other key trends emerged:
The Top 20 Risers grew an average of 54 percent in brand value compared with 44 percent a year ago.
Growth vs. recovery
The brand value appreciation mostly represents new growth compared with a year ago, when some of the increase was due to rebound from the recession.
A combination of brand strength and financial performance drives brand value. For the Top 20 Risers, brand strength increased in most instances and financial performance consistently improved.
Technology brands appreciate in value
The presence of Tencent and Facebook indicates the global force of social networking and the speed with which the world has become connected over the past 10 years. Both Tencent and Facebook claim around one billion members, and many more when their messaging services are included.
Their rise in brand value reflects not only this growth and scale, but also how effectively the brands are monetizing this stature and also how they're moving into new areas. Facebook purchased WhatsApp, the messaging service similar to Tencent's WeChat. Tencent bought China's second largest ecommerce mall, JD.com.
The Chinese online search brand Baidu, which is similar to Google, also expanded into related businesses, with the purchase of Nuomi, a location-based group buying service. The acquisition drove a strong revenue increase. Yahoo! owns 24 percent of Alibaba, the Chinese ecommerce giant. Yahoo! stock surged in anticipation of Alibaba's IPO (Initial Public Offering).
Other brands experience technology lift
Brands across many product categories used technology to add consumer benefits and to differentiate.
Adidas introduced a new shoe cushioning innovation it calls Boost technology. Nike's leadership in wearable technology included refinements to its FuelBand, a bracelet that monitors exercise and fitness activity.
Ford experienced one of its most profitable years ever, driven in part by the resurging US economy. But consumers shopping for cars had a choice, and Ford's leadership in offering mid-market cars with entertainment and navigation technology provided a competitive, brand-defining advantage.
Global growth and the strengthening Japanese economy helped Uniqlo, the global apparel brand based in Japan. The brand also benefited from its promotion of fabrics designed with technology to maintain comfort regardless of the temperature, and from its clear focus on in-style essentials in fashionable colors at good prices.
Brand clarity remains key
The combination of a strong brand proposition aided by an economic tailwind propelled many of the Top 20 Risers. As a global home furnishings leader, present in 42 countries, IKEA enjoyed the economic revival in the US and Europe, where the majority of its 345 stores are located. The brand proposition of making home furnishing more widely available suited both the needs of single Millennials and young families in developed countries, and the aspirations of the expanding middle class in fast growing markets.
With the US in the midst of a national healthcare conversation, CVS asserted its brand credentials as a healthcare provider by phasing out its lucrative tobacco business in favor of the longterm benefit of brand clarity.
In the fast food category, as some brand leaders struggled with changing consumer expectations, Chipotle and Starbucks increased in brand value by satisfying consumer preference for a more refined décor and quality menu options.
Disney renewed its brand legacy, releasing its highest-grossing animated film ever, Frozen. American Express met key financial targets and, based on brand strength, introduced products that stretched the brand beyond its relatively affluent core customers to reach new potential markets. MasterCard expanded its relationships with several key large banks.
The combination of brand strength and global presence lifted the value of large Europe-based insurance brands Alliance and AXA. Recovery in Europe helped Spain's Movistar telecom and BT, which strengthened its well-established UK telecom brand by moving into entertainment and obtaining exclusive rights to popular sports content.