Brands In Real Time

Michael Hedges September 20, 2010 Follow on Twitter

When it comes to business, success means customers. The media sector is no different. There’s a conversation going on, if broadcasters and publisher choose to listen in.

Interbrand, the brand development division of Omnicom, produces each year its Best Global Brands list, the top 100 global brands with value estimates. The rankings and values come from research models familiar to business school graduate students and the big consulting firms, robust and quantifiable but limited to publicly available financial data. Omnicom Group owns major international ad agencies, media buyers and marketing services companies.

Coca-Cola is again, for the 11th year, the world’s most valuable brand. That would be US$70.4 billion. Being on top comes from the “ability to adapt to whatever changes the marketplace throws in its way,” said the Interbrand narrative.

Coca-Cola was noted for sponsoring the unofficial song of last summer’s football World Cup in South Africa “Wavin' Flag.” Offered in 17 countries on iTunes, Coca-Cola’s profit was $30 million, passed through to its Replenish Africa Initiative that promotes clean water in South Africa.

“The brand is likely to face challenges as consumers grow more health conscious in the coming years,” said Interbrand. Coca-Cola’s Glacéau vitamin water is the official soft drink at London’s Fashion Week for the next three years. It’s small, in relative global terms, but successful branding initiatives carefully exploit opportunities.

Among the top ten brands there is one beverage (Coca-Cola), one food brand (McDonalds) and one media brand (Disney). The rest are geeky: IBM, Microsoft, Google, GE, Intel, Nokia and Hewlett-Packard. Interbrand categorizes GE as ‘diversified’ and its products range from aircraft engines and healthcare equipment to light bulbs and financing for them all.

Technology observers – certainly followed by investment bankers – jumped on the brand strength of the tech sector. Google moved to 4th place from 7th in 2009. HP moved into the top 10. Apple is the fastest brand value gainer, ranking 17th in the world from 20th last year, increasing 37%. Google’s brand value rose 36%. The smartphone Blackberry brand rose to 54th from 63rd.

“The geeks are inheriting the earth,” proclaimed techie blog TechEye (September 17). “We believe Coca-Cola only got into first place because the geeks like sugary drinks.” On Disney’s move to 9th rank from 10th last year: “We hear geeks like cartoons, too.”

“Apple is a brand that customers immediately understand,” said the Interbrand narrative. “They know what they get out of adopting and associating with it. Its products are seen as innovative and creative.”

Brand strength in the banking sector is fully recovered, almost. Last year, ten financial institutions made the top 100. Today it’s 14. American Express remains the leading brand in the financial sector but it dropped to 24th from 22nd in a year. It was JPMorgan that moved to 29th from 37th, “one of the banks the least shaken by the crisis,” said the Interbrand survey. JPMorgan was voted “ideal employer” by Business Week. Oh, it has an iPhone app. New to the top 100 among banks are Santander, Barclays, Credit Suisse and Zurich Financial. UBS and Citi were big losers.

Only three media brands, in Interbrand’s classification, made the top 100 Best Global Brands list this year. Disney (9th), Thomson Reuters (39th) and MTV (55th) have been the only media brands making the list since 2002. Both Disney and Thomson Reuters rose one rank since the 2009 report and MTV fell one rank.

“MTV is facing an identity crisis,” observed identity-oriented Interbrand. “The growth in the advertising market has led to and adjustment in MTV’s programming, which has been advertiser-led as opposed to truly audience-focused. As a result, the music content that the brand was built on is no longer central and its positioning is unclear.”

“The media industry continues to undergo dramatic change,” says the Interbrand narrative. “More no-traditional players are entering the space, while established companies are struggling to adapt their business models and brands to keep up wit the rapidly changing times.” Who, for example, doesn’t see Google and Apple as media brands today? In the 2001 Interbrand Best Global Brands ranking both Time and the Wall Street Journal made the top 100 list. Gone now!

While neither Facebook nor Twitter make the Interbrand top 100 list – making a lot on money is essential – social media marketing is on the minds of Interbrand team. Coca-Cola has 11 million Facebook fans and nearly 100,000 Twitter followers.

“To capitalize on all the opportunities, brands must begin to use social media as more than just an outreach platform,” said the report, which is subtitled “The Age of Real Time”. “Having a Twitter feed, Facebook account or hosting a blog has become par for the course. While a presence on these outlets can have a positive impact on a brand, most companies are not using these powerful tools strategically.”

The Interbrand experts – and they are not alone – see great brand building advantages with social media. All brand managers – and their CEO’s – need to do is embrace risk, not a popular boardroom strategy. Having a conversation with customers, in that post-modern marketing sense, means much more. “Brands need to find ways to tap into these conversations to listen and learn, but then also act on the information they gather, allowing customers to shape the brands in ways that are most meaningful for them.”

“Consumers like to feel good about the brands they choose, and have valid reasons to be loyal,” wrote Alyce Lomax on the investor blog Motley Fool (September 17), musing on the Interbrand rankings. “The increasing prevalence of social media makes these issues more important than ever, since customers can spread good or bad opinions about a company with unprecedented speed and scope.”

The biggest losers, by percentage of value year on year, in the Interbrand survey suffered that age-old “perception” problem. Energy company BP fell off the list: “The majority of the company's brand value has been destroyed.”

Nokia, still in the top ten, lost nearly US$30 billion in brand value since 2009. Interbrand attributed Nokia’s problem to ambiguity, often leading to brand mortality. CEO Olli-Pekka Kallasumo is gone, replaced by a guy from Microsoft. The scourge of recalls, all widely reported, sent Toyota out of the top ten. The Japanese automaker’s brand value lost 16%. The Lexus brand, part of Toyota, fell off the list.

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