World brands: Who’s up … Who’s down?

brand finance logoEach year, the brand valuation consulting firm Brand Finance produces a report on the strength of the world’s Top 500 brands.

It’s an interesting study in that Brand Finance calculates the values of brands using the so-called “royalty relief” approach – calculating a royalty rate that would be charged for the use of the brand name if it weren’t already owned by the company.

In the 2015 report, just issued, Apple remains the world’s most valuable brand based on this criterion.  The Top 10 listing of world brands is as follows:

brand finance global 500 2015#1  Apple

#2  Samsung

#3  Google

#4  Microsoft

#5  Verizon

#6  AT&T

#7  Amazon

#8  GE

#9  China Mobile

#10 Walmart

Of these, all but China Mobile were in the Top 10 listing in Brand Finance’s 2014 rankings.  Of the others, all maintained their rank except for AT&T and Amazon, which rose, and GE and Walmart, which fell.

The most valuable brands differ by region, however.  In fact, Apple is tops only in North America:

Most valuable brand in North America:  Apple

… in Europe:  BMW

… in Asia/Pacific:  Samsung

… in the Middle East:  Emirates Air

… in Africa:  MTN (M-Cell)

… in South America:  Banco Bradesco

As for which brand’s value is growing the fastest, top honors goes to … Twitter?

That is correct:  According to Brand Finance, Twitter’s value has mushroomed from $1.5 billion in early 2014 to nearly $4.5 billion now.

Other social platform firms that have experienced big growth are Facebook (up nearly 150%) and the Chinese-based Baidu (up over 160%).

What about in non-tech or social media sectors?  There, Chipotle racked up the biggest growth in brand value:  nearly 125%.  At the other end of the scale, the McDonald’s brand has lost about $4 billion in value over the past year.

Most Powerful Brands 

In addition to its brand value analysis, Brand Finance also publishes a ranking of most powerful brands based on its “brand strength index” (BSI).  This index focuses on factors more easily influenced by marketing and brand management activities — namely, marketing investment and brand equity/goodwill.

In this analysis, Brand Finance comes up with a very different set of “top brands” – led by Lego:

Lego logo#1  Lego:  BSI = 93.4

#2  PWC (PricewaterhouseCoopers):  91.8

#3  Red Bull:  91.1

#4 (tie)  McKinsey:  90.1

#4 (tie)  Unilever:  90.1

#6 (tie)  Burberry:  89.7

#6 (tie)  L’Oréal:  89.7

#6 (tie)  Rolex:  89.7

#9 (tie)  Coca-Cola:  89.6

#9 (tie)  Ferrari:  89.6

#9 (tie)  Nike:  89.6

#12 (tie) Walt Disney:  89.5

According to Brand Finance, Lego’s brand power stems from it being a “creative, hands-on toy that encourages creativity in kids and nostalgia in their parents, resulting in a strong cross-generational appeal.”  Lego also has a big consumer marketing presence, thanks to its brand activities in film, TV and comics.

Last year’s top brand was Ferrari, which has now slipped in the rankings.  Brand Finance cited the brand’s 1990s-era “sheen of glory” as wearing a bit thin 20 years on.

For more details on these brands and other aspects of the 2015 evaluation, you can review Brand Finance’s 2015 report here.

Do any of the results come as a surprise to you?  Please share your observations with other readers as to why certain specific brands are coming on strong while others may be fading.

Celebrity endorsements in advertising: All that glitters is not gold.

David Duchovny - Baume & Mercier Celebrity EndorsementWe love our celebrities, don’t we?

Christina Applegate takes motherhood … to celebrity status.

Zsa Zsa Gabor is a fabulous celebrity … and a panel of experts has been commissioned to find out why.

 His very existence … makes Prince William a celebrity.

Because the public goes so (Lady) gaga over celebrities, celebs have been used to hawk products and services for decades. Often, they can add pizzazz to what is otherwise a pretty routine advertising campaign. But how effective are the added glitz and glamour in ringing up additional sales?

I’ve long suspected that the value of celebrity endorsements might be over-hyped. Now we have some quantifiable proof. Ace Metrix, a California-based ad measurement firm, evaluated ~2,600 television ads shown during 2010. The company tested 263 unique national ads featuring celebrity endorsements, spanning 16 industries and 110 separate brands. All ads were tested within 48 hours of breaking nationally in order to capture immediate rather than “cultivated” ad effectiveness.

The celebrity ads were then evaluated against a control group of non-celeb ads in order to determine their comparative effectiveness in generating ad “lift” (better performance).

What the Ad Metrix analysis found was that only ~12% of the ads using celebrities showed more than 10% lift over average advertising norms in their respective industries. Even more startling, ~20% of the celebrity ads yielded 10% or worse (net negative) performance over the average advertising norms.

Here are some of the celebrities who had a “net negative” effect on their clients’ TV advertising effectiveness during 2010 – worst listed first:

Tiger Woods (Nike) – I guess this hardly comes as a surprise!
Lance Armstrong (Radio Shack)
Kenny Mayne (Gillette)
Dale Earnhardt, Jr. (Nationwide Auto Insurance)
Donald Trump (Macy’s)

Which celebrities managed to generate better-than-average scores? Queen of the heap is Oprah Winfrey for her 2010 spots for Liberty Mutual and Progressive Insurance. Ed Burns (iShares) and Carl Weathers (Bud Light) took the other top honors in positive lift.

Peter Daboll, head of Ace Metrix, had this to say about the findings: “This research proves unequivocally that, contrary to popular belief, the investment in a celebrity in TV advertising is rarely worthwhile. It is the advertising message that creates the connection to the viewer in areas such as relevance, information and attention, and this remains the most important driver of ad effectiveness.”

Interestingly, Oprah’s ads weren’t pitching products per se, but rather addressing current issue topics – in this case, warning against texting while driving. So one way to get through to the consumer via a celebrity is if the content is informational rather than a sales pitch.

But if the goal of the advertising is product sales, chances are the more the celebrity is truly “connected” to an advertiser’s product or service, the more successful he or she will be in engaging the target audience beyond simply the “curiosity factor.”

You can read detailed findings from the Ace Metrix analysis here.