Reading between the lines of the BrandZ Top 100 report
Apple, Google, Microsoft, IBM and VISA are the top 5 most valuable brands in 2015 according to the BrandZ Top 100 Most Valuable Global Brands report released in late May. As usual, the list is dominated by large consumer companies in the technology, banking, retail, oil & gas, and consumer goods industries. But, if you look closely, you’ll see that business-to-business companies are holding their own.
Published by Millward Brown, a global research company, the BrandZ report provides brand perspectives, trends, industry and regional breakdowns, 10-year comparisons, and lots of charts. Unfortunately, like so many of these rankings, it does not break out the business-to-business sector in its analysis leaving those companies to ask "What are we? Chopped liver?"
So, our team at Brand Incite rifled through the BrandZ website and the 95-page report looking for interesting B2B insights to share. We identified the B2B companies on the list, evaluated the change in their brand value, and did some of our own research to see what we could find in the numbers.
Here are a few things we found interesting:
The B2B presence is strong and steady
Of the 100 companies on the list, 19 are primarily business-to-business entities. This is down from last year when there were 20 B2B companies on the list (UBS dropped out), but it is up from the 14 companies on the original list produced in 2006.
The combined brand value of those 19 companies is more than $607 billion dollars, up 9 percent from the 2014 report. And they comprise about 18 percent of the $3.3 trillion total brand value of the BrandZ Top 100.
Technology companies rule
Overall, technology and telecommunications companies represent 44 percent of the total brand value on the Top 100 list. The technology presence is even more pronounced in B2B where three companies (Microsoft, IBM and SAP) are in the top five and the technology sector accounts for 60 percent of the total B2B brand value.
Revenue performance and brand value are not directly connected
This was by far the most interesting thing we found. While the brand value of B2B companies increased a healthy 9 percent, the revenue of those same companies actually declined by 3 percent! In looking at the individual companies (see chart below), we found some interesting subplots:
- Nine companies experienced a revenue decline, yet all of them grew their brand value
- HP’s revenue decreased 1 percent while its brand value grew 18 percent, the largest spread (19 points) for a U.S. company that had a revenue decline
- IBM had a nice revenue gain of 7 percent, yet lost 13 percent of its brand value
- Intel grew revenue 6 percent while its brand value skyrocketed 58 percent
These numbers illustrate the fact that the value of the brand is not necessarily connected to revenue performance in a given year. Brand value is a long-term measure of how well the company distinguishes itself in the market and connects with the customer over time.
Even in a down revenue year, that value can remain strong and steady, positioning the company for better financial performance down the road. Or, as IBM experienced, you can have a good revenue year but lose brand value with your customer – which is a much more difficult (and expensive) hole to climb out of.
Northwest companies are well represented
Considering that the Northwestern U.S. has 2/1000ths of the global population, the region is doing pretty well to have six companies in the Top 100. Two companies – Microsoft and Intel – were among the strongest B2B performers on the list. (We counted Intel since it is the largest employer in the State of Oregon and a big reason why high tech is thriving here. But, we’ll let California count them too :-). And Costco joined the ranks of the consumer companies which also includes Amazon, Nike and Starbucks.
The takeaway for the small-to-medium sized business that will never appear on the BrandZ 100 list is that a B2B company of any size can have untapped value in their brand. It is simply a matter of identifying the brand assets that set you apart and working to increase the contribution they make to the business.
If you would like to learn more about the BrandZ Top 100 report, visit the Millward Brown website where you can read about the methodology and download the 95-page PDF report.
For more articles on brand strategy and management for growing companies, visit the Brand Inciter blog.