The World's Most Significant Brands?

In 2005 Kevin Roberts wrote "Lovemarks" one of the best books on branding ever written. For many marketers, it helped them realise what branding was all about ~ "to create loyalty beyond reason". In the book’s introduction, A. G. Lafley (Chairman and CEO of P&G, the world's largest advertiser), stated that, "The best brands constantly win two crucial moments of truth. The first occurs on the store shelf, when a consumer decides whether to buy one brand or another. The second occurs at home, when she uses the brand - and is delighted or isn't. Brands that win again and again earn a special place in consumers hearts and minds".

Stereotypes aside ("when she uses the brand"), when we fast-forward 10 years we find that there are now a few things fundamentally wrong with Lafley's statement. It is not enough to just win the hearts and minds of a consumer anymore, by helping them choose the right product. Neither can we assume that repeated use of a product is going to generate "loyalty beyond reason", because loyalty is now so fleeting. There are now so many clever brand messages targeted at consumers in fact, that Harvard Business Review recently declared that 77% of consumers don’t want any kind of a relationship with a brand.

So where does this leave the marketing industry? A world made up of professionals whose sole job is to build relationships with consumers on behalf of their clients...?

Well, I believe that it is not enough to deliver a clever brand campaign anymore. Neither is it enough to assume that a healthy balance sheet will guarantee a brand a successful and sustainable future. Making a good profit will keep shareholders happy for as long as they continue to grow, but when that growth slows down (and it always slows down eventually), then brands realise that they need something more. I believe that the “something more” happens when brands create profits with a purpose. Make money is great for the short term, but delivering real value to people and communities is good for the long term.

But there is a problem with this. (There’s always a problem isn’t there)?

Agencies are still trying to tell us that the value of a brand is determined by it’s economic value. That is one component of a brand, but it’s certainly not what the definition of a brand is. I like to say that “your brand isn’t what you say it is, it’s what others tell their friends that it is”, but the official definition reaches a bit deeper:

A brand is a marketing related intangible asset including, but not limited to, names, terms, signs, symbols, logos and designs, or a combination of these, intended to identify goods, services or entities, or a combination of these, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits/value”. [ Internationally recognised definition of a brand, according to ISO 10668].

Putting a value on the “associations in the minds of stakeholders” is an impossible task. Sure we can do market research and make various scientific assumptions about brand preference and consideration in order to come up with a definitive value ~ but any final number is going to be exactly that. An assumption. To prove my point, download these three most recent brand rankings tables, created by the world’s three most respected brand agencies: Interbrand, Millward Brown and Brand Finance.

Interbrand 2014 Rankings 

Millward Brown Brandz Rankings 2015

Brand Finance Global 500 Rankings 2015

If you explore these rankings as carefully as I have, you will start to notice many anomalies. Not only can these three agencies not even agree on the value of Apple, the world’s largest brand, to within $128Bn (!) – but each agency has a different definition of what constitutes a successful brand.

Brand Finance, who probably have the most solid methodology, value McDonalds at $22Bn, but Interbrand for example, value them FOUR times larger at $81Bn. Given that McDonalds is such an established brand, this is not a small discrepancy. In another case, Millward Brown values software company SAP at $38Bn, Interbrand says they are the world's 25th most valuable brand, but Brand Finance doesn’t even include them on their list of the top 100 brands (they're 117th)! By the same token, Interbrand doesn’t have any place for Vodafone, the UK’s most valuable brand (worth somewhere between $27Bn and $38Bn). Interbrand also claim that Amex, the brand with the world's longest running customer loyalty program, is only worth half of what Millward Brown claim that it is ($19Bn v $38Bn). To say this is all a great concern would be making an epic understatement. No wonder so few people seem to trust marketers or any numbers they present.

I compared the methodologies of each agency and they do go some way towards explaining why some of the above discrepancies are true. The main problem lies in the fact that a brand is an association that goes on in a customers head, but the measurements that brand agencies use are heavily weighted towards economic value. Profits do not create loyalty (but loyalty does create profits). The methodology of Interbrand is especially troubling, because it uses twitter activity to account for one small part of the ranking, even though 90% of the world’s internet users don’t even have a twitter account! The only part of the ranking that actually looks at what consumers think, is one small token sample of a very small audience. (Not to mention the fact that many of the world's most valuable brands are not that active on twitter).

But why is all this important?!?

Because 77% of consumers don’t want a relationship with a brand”.

So... what's the answer (and what should we do about it)?

I tried to find the answer myself by writing a book about brand value, hoping to make some sense of my own thoughts. In it I argue that there is a difference between a successful and a significant brand, and that value is based upon a brands purpose, and whatever it stands for, not just what it sells. I end the book with a few examples of significant brands who hold a special place in many people’s hearts. Deep emotional connections that are created by something much deeper than anything a brand valuation could attempt to measure.

I started to make a list of the most significant brands. I even started to measure all the social networks, sentiment, share-of-voice, uplift in unique conversations etc... Playing devil’s advocate, I then pretended to rank and score them, and held various focus groups to discuss the results (gained from measuring over 500,000 pieces of data). It’s amazing how passionate people get about brands when you rank them, because they mean so many different things to so many different people. What might be considered a significant brand to one person, is often completely irrelevant to the next. And since a brand is what exists in our heads, any rankings will always be open to debate since they are entirely subjective. So I gave up.

Your brand isn't what you say it is, it's what other people tell their friends that it is".

So I decided instead to make a list of my favourite brands. 25 brands that I think are significant because they mean something to me. There was no science. And it was a LOT more fun to create than running scripts across social data. If you have a look through THIS SLIDESHARE, you will notice that I find these 25 brands significant not because of how much they have made, but because of what they have done. Brands like Patagonia who give 10% of their revenue to environmental causes and community groups. These words from their founder Yvon epitomise what makes a significant brand in my opinion...

It took me a couple of years to write my book "From Survival to Significance", and a couple of weeks to create this list of significant brands, but I felt that it was my duty as a marketer to try and make sense of this kind of stuff. In a world where it is claimed 41% of people don’t believe executives anymore, it is important that each of us understand what we stand for and why...

Because if we don’t understand exactly what our brands stand for (and why), then how can we expect anybody else to?

Moral of the story?

If the Harvard research is true, then 23% of consumers DO believe that they have a relationship with a brand. So let’s start with those first. And then let's try to figure out as marketers how to build real relationships with the other 77%. The kind of relationships that will really “earn a special place in their hearts and minds”.

• BUY "Survival to Significance" ~ 100% profits to Code.org
• SLIDESHARE "My Top 25 Significant Brands".