How’s Your Brand Running?
The annual Best Global Brands ranking from Interbrand and Business Week has been released, and not surprisingly, the Coca-Cola brand remains No. 1 with a value of $68.7 billion. That’s up 3 percent from last year.
Coke was one of the few gainers, however, and for the first time in its nine-year history the study revealed an overall decline in value among the top 100 brands, which dropped by a collective 4.6 percent. In addition to Coca-Cola, individual gainers included IBM (No. 2), McDonald’s, Amazon and Google, while losers included Microsoft, Toyota, Intel, Disney, and GE, among many others. Harley-Davidson saw the biggest decline outside of the financial sector, losing 43 percent of its brand value.
I must say that I wasn’t surprised, given the year we’ve had, that the value of the world’s top 100 brands has declined. Interbrand uses a sophisticated methodology to calculate its ranking, and it can’t help but incorporate the dismal numbers many of these companies have turned in over the last several quarters. What did surprise me, however, was the conclusion I drew from it: little more than a yawn.
Why? Well, while the relative value of non-competing brands is fascinating (e.g. IBM is worth more than Toyota), it’s not terribly relevant to either company. And while the absolute value of any one brand–especially those with values in the tens of billions of dollars–is stunning, the most significant measure is how one brand stacks up relative to its competitors in a given category. If a brand is losing ground while its competitors are gaining, then it has something to worry about.
Brand values are not like stock values; there’s no ready market of exchange, and it’s not as if a company is going to dispose of its brand when its value temporarily declines. If anything, such a decline should encourage the brand’s stewards to step up their efforts, a message than can’t be emphasized enough during a time when too many companies are cutting their investments in brand building.
I suspect if Interbrand ran every brand through its valuation analysis, most of ours would be showing some decline right now. But every race has its pace, and the most important measure is how you’re running against your competitors. As for my company, we’re redoubling our efforts to stay ahead of our pack. How about yours?
i agree, steve — that's why the category lists are more illuminating than the total list.
also it's important to look at sheer market cap and distribution — some brands seem to fare better due to size alone vs. real brand strength — i find it interesting that the survey excludes airlines because "it's hard to separate brand impact from routes and schedules" — isn't the same true with distribution in other categories?!
Comment by Denise Lee Yohn — Monday, September 28, 2009 @ 3:35 PM
Absolutely I agree that the most important measure is a company's brand value versus their competitors' performance.
I also agree with Denise that the "fuzzy dice" are at play here in excluding the airlines, and undervaluing telcos and business-to-business companies.
But you lost me at the yawn. The branding practices that lead to greater value are the same across industries, so in the Interbrand list, you can see the brands that are smart about building their brand for their customers (Coca Cola, Apple, IKEA, even Hyundai) simply do better in hard times. You can also compare how the companies like Starbucks fare both against the whole list and their food industry rivals (badly in both cases, but especially since almost all other food-related brands were rising in the ranks relative to the harder-hit businesses).
Comment by Dennis Van Staalduinen — Monday, September 28, 2009 @ 8:00 PM