Professional Documents
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GLOBAL BRANDS
FINANCIAL TIMES SPECIAL REPORT | Wednesday April 28 2010
Don’t imitate Toyota
if your reputation
is under fire, says
Stefan Stern
Page 4
www.ft.com/globalbrands2010 | twitter.com/ftreports
F
or companies whose
financial value depends
heavily on the health of
have led the recovery,
their brands, the sever- writes Andrew Baxter
ity and abruptness of the reces- 46.9
sion was a challenge.
The abruptness with which A year ago financial brands
many consumers stopped spend- were still reeling from the after-
ing, and large companies effects of the global banking cri-
reduced capital investment and
BrandZ top 100 portfolio sis of autumn 2008, so it was
wound down capital investment, little surprise that the category
caused a shock to the system. was one of the worst performing
Many companies experienced
not only the financial crisis, but 18.5 in the April 2009 Top 100, beaten
to the wooden spoon only by the
also a crisis of confidence. lamentable performance of cars
Marketers and advertising and insurers.
agencies preach the gospel that But, after falling 11 per cent
the companies that emerge best
out of recessions are those that
0 2006 09 in last year’s ranking, the finan-
cial institutions category has
maintain their marketing 07 08 10 bounced back, rising 12 per cent
budget and protect brands when in the 2010 list – more than any
the going gets tough. In prac- of the other 16 categories.
tice, few companies were certain -11.5 The bald figures are flattering,
enough of the future to comply. however. The recovery is due in
Yet some of the Doomsday large measure to a very strong
scenarios about the value of performance by brands that
brands in a new, less leveraged have been relatively well insu-
world, have not come to pass. lated from the credit crisis
Emerging from the recession, S&P 500 because of their business model,
luxury goods companies and conservative approach to lend-
many other consumer brand ing or location. Four of the 20
companies are enjoying a are in this year’s list of top 20
rebound.
The underlying value of any
-47.3 risers by brand value (see table
on Page 2).
brand – the premium com- Pride of place goes to the two
manded by products and serv- big card payment companies,
ices with strong reputations and MasterCard and Visa, whose
identities – has not been elimi- brand values rose 57 and 52 per
nated by the crisis. Even those cent respectively. Cristiana
companies that did not invest Pearson, an MBO director,
heavily in their portfolio in the attributes this in part to the
worst times are regaining some brands’ growing presence
confidence. beyond credit cards, with the
Indeed, this year’s BrandZ expanding use of debit cards for
brands survey suggests that, small payments, and pre-paid
even if the value of brands is Based on the Top 100 brands for each year, with the cards. “In emerging markets in
below its 2007 peak, it has portfolio amended at the start of the corresponding year Sources: Millward Brown Optimor, Bloomberg particular, you are seeing a rise
rebounded more sharply than in the way that people pay for
the S&P 500. Millward Brown value fell by 25 per cent from despite the com- companies such as Pet- effect, with BP being allo- damage to its reputation for things like utility bills and other
Optimor, the WPP subsidiary $59.8bn in the list published a plaints of iPhone users about roChina and Petrobras combin- cated a brand value of $17bn quality. sorts of basic bills, which used
that compiles the ranking, calcu- year ago, due mainly to its diffi- AT&T’s 3G coverage. ing both financial value and a and entering the top 100 at 34 Toyota’s brand value fell from to be by cheque or cash,” she
lates that a portfolio of the top culties with GE Capital, the Although mobile phone com- large domestic market. while ExxonMobil comes in just $29.9bn in the 2009 ranking to says.
100 brands – updated each year technology and infrastructure- panies are struggling to upgrade One reason for the two latter behind it in 39th place, with $21.7bn in the latest one, and Joanna Seddon, MBO’s chief
as a new list is compiled – is 18.5 related parts of its business their data networks, the trend groups’ debut in the latest brand value of $15.5bn. It is an the effect of the product recalls executive, adds that in China,
per cent up from its level four retain their strength. towards the mobile internet is BrandZ Top 100 is that MBO has illustration of how brands mat- may not yet have fully worked workers are receiving their pay
years ago, compared with an 11.5 The resurgence in Apple giving them valuable revenue used new research to reflect the ter not just to customers but in its way through. Toyota joined
per cent fall in the S&P 500. under Steve Jobs, through the opportunities. “Everyone is twit- upstream brand value of oil a business-to-business context. Home Depot, another well-estab-
The premium for the top 100 iPod, the iPhone and now the tering and sending pictures on companies for the first time. As ever, the year included lished brand that lost its way, An increasing number
brands was squeezed as many iPad, continues unabated and, iPhones, and data is what Previously, only the down- examples of famous brands hav- falling from a brand value of of US airlines have
countries went into recession on present trends, it could be makes money,” says Ms Seddon. stream distribution arms of ing difficulties – the most nota- $18.3bn in 2007 to $9bn this year.
but it opened up again coming pressing Google for first place Yet technology can also dis- energy groups such as BP and ble being Toyota, the Japanese Many analysts expected prob- switched from cash to
out. In other words, the outlook
for brands has not been funda-
within a year or two. That is a
tribute to a company that
turb traditional brand values
and make it easier for young
ExxonMobil were fully reflected
in the brand rankings.
car company. Problems with the
brakes on some models led to
lems for luxury clothing and
goods makers, which faced a
cards for small
mentally altered as a result of inspires devotion among cus- competitors to break into mar- This has had a significant product recalls in the US and wave of discounting by retailers onboard purchases
the recession; instead, it looks tomers. kets. The best example of that at the end of 2008, and fears
familiar. It may also be a reflection of at the moment is the media about whether consumers would
Global Brands
to capture big
2 Exxon Mobil 15,476 1 2
3 Shell 15,112 1 3
4 Petrochina 13,935 1 5
5 Petrobras 9,675 1 8
6 Chevron 7,254 1 3
Bloomberg)
ment is at least as impor- brand value as the present
Oil and gas brands tant, if not more, in the value of the brand royalties
business-to-business envi- that the business would pay panies have very valuable successful in cultivating
Joanna Seddon on ronment than it is on the if it had to license the brands. This is not just their brands in ways that
a key change in retail side.
A government, for exam-
brand from a third party
instead of owning it.
because they are very big
companies. The correlation
help them address the par-
ticular challenges they face.
this year’s Top 100 ple, will carefully weigh an The licensing rate for the between oil company size Among oil companies,
oil company’s reputation brand within the upstream and brand value is far from ExxonMobil is considered
for having the latest tech- businesses is estimated a straight line relationship. the most innovative, the
F
ive of the 11 new nology and promoting sus- based on two factors: com- PetroChina, for example, best corporate citizen and
entrants into the tainability when granting parable brand licensing is the largest company in the best at communicating
latest BrandZ Glo- drilling rights. rates for upstream oil busi- the world by market capi- with its shareholders. Based
bal Top 100 – BP, However, unlike many nesses, and an adjustment talisation – it is almost on those factors and its
ExxonMobil, Shell, Pet- business-to-business brands, to the average of the com- twice as big as Google – and upstream businesses, it
roChina and Petrobras — oil companies have rela- parable licensing rates it is popular in China pre- would be the brand leader. A worker checks pipelines at a PetroChina oilfield in Sichuan province Reuters
are oil companies. This is tively few customers in cisely because of its size. However, BP has pro-
not because of a sudden their upstream markets, But size does not equate pelled past ExxonMobil to ness imperative to produce depth of national feeling. Eni from Italy and Gazprom
surge in their brand values and these can be very diffi- The correlation directly to brand value, and the number one brand fossil fuels to meet energy Brazil was an energy from Russia are ranked in
last year, but because a new cult to reach through quan- between size and PetroChina comes in only value position with a some- needs. importer until Petrobras the Oil & Gas Top 10 (see
method has been used to titative research. at 51st place in the Top 100. what less valuable Shell is respected for its established a bold strategy chart) but none of them
capture their full value. This year MBO further brand value is far Despite a market capitalisa- upstream brand but a much expertise in dealing with to develop new deep sea made it into the Top 100.
Previously, the BrandZ
rankings measured only the
developed the BrandZ meth-
odology to capture the full
from a straight tion exceeding $350bn, more
than double Google’s
stronger downstream brand
among businesses and con-
local governments and com-
munities and its 45,000 Shell
drilling technology, found
deposits which doubled its
Oil companies have come
to recognise that brand is
value of brands in the retail value of oil and gas brands. line relationship $170bn, its brand value is sumers. Key factors in BP’s branded retail outlets in reserves and made Brazil increasingly important to
fuel station businesses. This The existing methodology only $14bn compared with downstream brand value every corner of the globe. energy self-sufficient. The their industry. In addition
resulted in the undervalua- was retained for the retail $114bn for Google. are its worldwide retail net- Its acquisition and rebrand- company is seen as having to the role of their brands
tion of oil brands, since piece, which values each based on the strength of the And despite being the work – most of it strongly ing of Texaco’s US outlets saved the country. It wins to increase sales to consum-
retail is a relatively small brand via the amount of oil company brand being market cap leader among branded with the green and those of DEA in Ger- on both sides — consumers ers and businesses, brands
part of the business. retail gasoline it generates. valued. The strength of oil companies, PetroChina Helios “sun god” logo – and many make it the world’s love it and investors recog- influence investors, regula-
The major part of oil com- A royalty relief approach — each oil company’s brand in is only the fourth most val- its large investment in largest branded retailer: nise it as one of the best tors, and governments, and
pany business and brand the generally accepted way the upstream businesses is uable oil company brand. advertising and communi- Shell now has more retail brand investments among are important in addressing
value is created in their of determining brand value determined by conducting BP, Shell and Petrobras all cations. locations outlets than companies in the Bric (Bra- the environmental concerns
upstream businesses – for licensing purposes — research among oil and gas have smaller market caps For BP, brand is now McDonald’s. zil, Russia, India and China) of civil society everywhere.
exploration, extraction, was adopted to measure industry analysts and port- than PetroChina, but their playing a complex role. The Petrobras is the most nations.
refining, trading and whole- brand value in the folio managers. brands contribute propor- BP brand must reconcile a trusted oil company with a Five other brands – Chev- Joanna Seddon is chief
sale – not on fuel station upstream businesses. The outcome is that, not tionately greater value. All reputation for environmen- brand strength that flows ron and ConocoPhilips from executive of Millward Brown
forecourts. The brand ele- This approach calculates surprisingly, some oil com- three have been notably tal leadership with the busi- directly from an enormous the US, Total from France, Optimor.
have performed more sedately, Brand value 2008 ($m) brand value to $11.3bn,
Four-year CAGR (%)
Brand contribution
Brand momentum
Brand momentum
business environment, writes group to power its way back
Ranking Change
Ranking Change
Brand
2009
2009
Rank
Rank
Global Brands
Trust the
stores to
get into
banking
BrandZ Top 100 with a
Retailers brand value of $25.7bn, has
pledged to become the “peo-
Andrea Felsted on ple’s bank”. The US super-
ambitious brand market giant Walmart –
four places higher with BV Credit where it’s due: an employee at a Walmart bank store in Mexico – the giant US retailer has long harboured ambitions to offer banking services in its home market Bloomberg
extension plans by of $39.4bn has long har-
the sector’s giants boured ambitions to offer
banking services in its
has gone down by 1 per
cent, according to the
The Futures Company and
Millward Brown, using
Robert Jones of Wolff
Olins, the brand specialist,
crisis, the US authorities
may be more willing to
ing banking operations
leads him to suggest that
In addition, if store
groups begin behaving like
home market after success- BrandZ ranking published BrandZ data, looked at the says that to succeed, retail- extend a banking licence to retailers may have missed banks – repossessing houses
W
hile banks’ fully developing banking today. relationship between trust ers first of all require a the world’s biggest retailer. the optimum time to enter at the most extreme for
brands have outlets in Mexico. In contrast, the brand val- and recommendation – that banking licence. Retailers must also build banking – last year when example – customers may
yet to recover A host of other retailers, ues of banks and insurers is, how well a brand is Tesco has had a banking all the requisite infrastruc- memories of the financial come to view them with the
from the global including J Sainsbury (BV rose, because they suffered trusted, and how prepared licence since 1997. In the ture and information tech- crisis were still fresh in same disdain.
financial crisis, retailers of $2.7bn, outside the Top such a steep deterioration an individual would be to US, Walmart has yet to nology systems, something consumers’ minds. “That is the brand
have emerged relatively 100), Marks and Spencer in the 2009 ranking. How- recommend it. that can be complex and “At a time when banks dilemma,” says WPP’s Mr
unscathed from the down- (BV of $5.7bn, also outside ever, other sectors fared “We found that retailers, time consuming. were in crisis, that was a Roth. “But the customer
turn. the Top 100) and John much worse this time – car in general terms, are highly In spite of the bold Despite the bold ambi- moment of turbulence that centricity of retailers can
This is creating opportu- Lewis (not in the ranking) manufacturers saw their trusted and getting more ambitions stated a tions stated a year ago, could have been exploited,” teach the banks some very
nities for big store groups in the UK, are all pushing, brand value fall by 15 per trusted as the consumer has Tesco has yet to offer a cur- he says. “The really hot interesting lessons, and I
around the world to stretch or eyeing expansion in, cent. a deeper and deeper rela- year ago, Tesco rent account or a mortgage. opportunity last year, they think, overall, there is a
their brands into other
areas, particularly financial
financial services.
Michael Lafferty, of Laf-
“It could have been a lot
worse [for retailers] says Mr
tionship with that retailer.
Once again, [that] allows
has yet to offer a It has indicated it could
introduce a mortgage by
have missed out on, but
that doesn’t mean there is
very strong customer propo-
sition for retailers in finan-
services. ferty Group, a retail bank- Roth. the retailer the ability to current account the end of this year and not still an opportunity.” cial services.”
Tesco, the UK’s biggest ing research house, says Within the retail sector, use their brand across current accounts next year. Retailers also face chal- He adds: “I don’t think
retailer and 17th in Mill- retailers have a once-in-a Tesco, which has set out many different product sec- Store groups must also lenges entering financial any retailer will want to go
ward Brown Optimor’s -lifetime opportunity to get ambitious plans in financial tors,” says Mr Roth. secure a banking licence, enhance existing skills, or services, and the trust in into the banking arena to
into financial services, services, saw its brand However, offering bank- restricting its US financial develop new ones, such as supermarkets must not be then behave like a tradi-
given the blight on banks’ value rise 12 per cent, while ing services, particularly services operations to the management of capital overstated. “Surveys show tional bank. There is no
brands and the credit Amazon’s climbed 29 per current accounts – the key money transfer, cheque and liquidity. Mr Jones says that this lack of trust in value in doing that. They
Contributors drought in parts of the con- cent, and Best Buy (not in relationship account – and cashing, bill payments and they must also encourage banks actually goes across will want to go into bank-
John Gapper sumer finance market. the Top 100) saw its brand mortgages, is very different the pre-paid cards used to the most lucrative custom- big corporations generally, ing to do it in a different
US Business Columnist “Bank brands are seri- value increase by 18 per from putting soap powder, purchase goods. Mr Lafferty ers to switch to their serv- and banks just happen to be way. That may well be a
ously damaged, there is no cent to $5.8bn. or even sweaters, on super- suggests however, that in ices. a special case of it proposition that consumers
Andrew Baxter doubt about it, and there- “There are some very market shelves. the wake of the financial The complexity of build- recently,” says Mr Jones. find very attractive.”
Senior Writer, FT Reports; fore, there is a really major interesting opportunities,”
commissioning editor opportunity for retailers to says Mr Roth. “[Retailers]
get into consumer lending.” can capitalise on consum-
Tim Bradshaw
UK Digital Media There is, he says, a “chance ers’ distrust of other sec-
Correspondent for a new renaissance of tors, and issues that have
retailer based consumer come up in the recession,
Andrea Felsted lending.” and extend their brands
Retail Correspondent At the heart of the oppor- into areas [in which] con-
tunities for retailers lies the sumers currently distrust
Stefan Stern trust in their brands that the players. [Retailers’]
Management Writer has withstood the ravages brands are strong enough,
Steven Bird of the recession. and have that bond of trust
Designer According to research last that can extend across
autumn for Asda, 65 per other categories heavily
Andy Mears cent of people polled trusted impacted by the recession.”
Picture Editor supermarkets more than Mr Roth says consumers’
political parties, while 36 poor opinions of brands
For advertising details, per cent thought supermar- damaged by the downturn
contact: Robert Grange, kets were on their side dur- “will open up space for the
tel +44 (0)20 7873 4418, ing the recession. power retailers with big
fax +44 (0)20 7873 4006, David Roth, chief execu- brands to enter new mar-
email robert.grange@ tive of The Store WPP, the kets and create engines of
ft.com or your usual FT advertising group’s retail growth. Banking is an obvi-
representative practice, says the brand ous one.”
value of the top retailers Another study by WPP’s
Financial institutions
Top 20 by brand value
Rank Brand Brand Brand Brand Brand value Two-year
value $M contribution momentum change (%) CAGR
1 ICBC 43,927 4 7 15 11
2 Visa 24,883 5 9 52 NA
3 HSBC 23,408 4 3 23 6
4 Bank of China 21,960 3 6 4 3
5 China Construction Bank 20,929 3 7 -8 3
6 Wells Fargo 18,746 5 7 16 -5
7 Santander 18,012 3 9 12 7
8 RBC 16,608 5 9 12 -2
9 Bank of America 16,393 2 9 6 -15
10 ICICI 14,454 1 9 NA NA
11 American Express 13,912 3 3 -7 -13
12 Citi 13,403 2 7 -8 -17
13 BBVA 12,977 5 9 3 10
14 Chase 12,426 4 9 17 0
15 MasterCard 11,659 5 7 57 15
16 TD 10,274 5 7 -7 NA
17 Goldman Sachs 9,283 4 9 25 -6
18 Barclays 8,383 1 7 20 4
19 US Bank 8,377 5 8 NA NA
20 Standard Chartered 8,327 2 6 1 5
Source: Millward Brown Optimor (including data from BrandZ, Datamonitor and Bloomberg)
4 ★ FINANCIAL TIMES WEDNESDAY APRIL 28 2010
Global Brands
W
hen first faced with with some form of media buy…
the prospect of Facebook has been shrewd
marketing on social about building a platform that
networks, many makes it very difficult to grow
people ask a reasonable ques- groups organically.”
tion: how many people want to Facebook’s “engagement ads”
be friends with a brand? The are one way for companies to
answer – surprisingly, perhaps – buy traffic for their fan pages.
is: millions do, on a daily basis. Twitter has recently introduced
More than 10m people each advertising in its search results,
day become a “fan” of a brand in the form of “promoted
on Facebook. The world’s larg- tweets”, which have seen Star-
est social network – with well in bucks’ messages appear when
excess of 400m members glo- people search for “coffee”.
bally – plays host to more than But Mr Klein warns against
1.4m branded fan pages on Face- using follower counts or group
book. BrandZ Top 100 brands size as a measure of success in
such as Coca-Cola and Star- social media. “People don’t
bucks, along with other smaller know what they want to get
brands outside the Top 100 such back so they have to hang their
as Adidas (brand value or BV of hat on the number of posts,
$3.3bn in the latest MBO list), friends or comments. We have
have each “befriended” millions tried hard to educate our clients
of people. that even though these aren’t
“A lot of our best brand build- the exact metrics to know some-
ers are also some of the best thing is successful, to focus just
companies using social media,” on the numbers takes your eye
says Joanna Seddon, chief exec- off the ball a bit. Would I rather
utive of Millward Brown Opti- have thousands of people
mor, which compiles the BrandZ believe in my brand than hun-
ranking. “A lot of the leadership dreds of thousands signing up
in social media is really centred because they got a free key
in the top 100 brands.” chain?”
Social media has matured rap- Brand new medium: more than 10m people each day become a ‘fan’ of a brand on Facebook AP Navigating the constantly
idly in recent years. Sites such evolving world of social media
as YouTube, Facebook and have fundamentally trans- few hours is long enough for posts special offers on its com- around, for only the cost of the TV ad officially launching will claim more casualties yet.
Twitter offer scale and reach to formed marketing from a mono- such criticism to spread widely, puters. maintaining the page. Becoming the car. Simon Clift, until recently the
rival Google – still the most logue to a dialogue. Brands can- be chewed over by its denizens Facebook likes to point to the a fan of a brand on Facebook Last year, Burger King’s chief marketing officer at Uni-
dominant single site for online not hide.” and, if it reaches a certain vol- example of Adidas, the sports- means agreeing to allow a com- “Whopper Sacrifice” offered a lever, has warned of a “lost gen-
advertising – and many televi- Eurostar, for instance, faced ume, be picked up and amplified wear maker which has more pany to send messages into that free hamburger to anybody who eration” of marketers who do
sion channels. The best adver- criticism last December for further by the mainstream than 2.7m fans on its Adidas user’s main “news feed” – the deleted 10 of their Facebook not understand the social web,
tisers use social media alongside ignoring Twitter messages – media. Kevin Smith, a film part of the site in which Face- friends. Each sacrificial victim either because they are too old,
these traditional channels for a which, unlike most Facebook director, caused a similar Twit- bookers spend around two was sent a message explaining or too young to learn from their
combination of brand-building, posts, are usually made public ter storm when he complained Seasoned observers thirds of their time. what had happened, and so the children.
direct sales, customer service for anyone to read – from angry to more than 1m followers that say many ostensibly The new forms of social media message spread (at least, until “There is no question that
and PR. The worst simply customers trapped on trains Southwest Airlines threw him are also generating new creative Facebook made Burger King social media of all the chal-
ignore them, blissful only until between Paris and London. off a flight for being overweight. ‘viral’ campaigns have possibilities for brands. Ahead tone down its application after lenges in media is the hardest
they realise the complaints and
accusations that disgruntled
Eurostar had failed to grab its
brand name on Twitter, and its
Southwest later made two pub-
lic apologies on its blog.
had more than a little of the launch of its new Fiesta,
Ford (BV up 19 per cent this
more than 200,000 such sacri-
fices were made).
one,” Mr Clift says. “You have
to listen rather than impose,
customers are telling other main presence on the site – But for every Eurostar or nudge along the way year to $7bn, just short of the But although social media can which is difficult for all market-
would-be consumers. named “little_break” to tie into Southwest, there is a success cut for making the Top 100) be used to achieve high impact ers.”
“Social media have given con- a wider marketing campaign – story that proves social media gave 100 “internet celebrities” with much lower investment Meanwhile, in another sign of
sumers a voice to respond, as was still showing special offers need not be just for moaning Originals page. Each fan is esti- the latest model and gave them than traditional media, sea- the times, Facebook has made
well as hundreds of channels rather than information on the and crisis management. Dell, mated to be worth around $100 a freedom to document their expe- soned observers note that many its own debut in the BrandZ
through which to do so,” says disrupted service for some another Top 100 brand, claims year in footwear, making its fan rience online. Millions of ostensibly “viral” campaigns rankings. With a BV of $5.5bn, it
Debbie Klein, joint chief execu- hours after the problems began. to have generated several mil- page a community worth more YouTube viewings later, they have had more than a little is not yet in the Top 100, but
tive of Engine, a UK-based In the fast-paced, “real-time” lion dollars in sales from Twit- than $200m with which it can had sold 10,000 cars in six days nudge along the way. slips in as 20th in the Technol-
agency group. “These websites environment of Twitter, just a ter alone, where it regularly communicate directly all year and had ready-made content for “The beauty of social media is ogy Top 20.