Google retains place as top brand as tech sector confirms its dominance
Tuesday, 22 April 2008
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Google has retained its spot as the world's most valuable brand in a league table that reveals the ever-growing power of technology companies and emerging economies.
The search engine's marque is worth more than $86.1bn (£43.5bn), up 30 per cent on last year, according to the Brandz list from Millward Brown Optimor published yesterday, which calculates the proportion of sales driven by brand.
The top five is unchanged from 2007, with Google followed by GE, Microsoft, Coca Cola and China Mobile. Wal-Mart, Citi and Toyota dropped down the rankings. Vodafone is the UK's top performer, in 11th place with a value of $37bn, followed by Tesco in 25th, HSBC in 35th and Marks & Spencer in 60th.
Not only are the brands themselves reckoned to be worth a fortune – and rising, up by 21 per cent from $1.6trillion to $1.94trillion – they are also worth a considerable amount to investors. Where a portfolio of S&P 500 stocks invested for the last three years would have made a 3 per cent return, an investment in the top 100 brands would have produced growth of 14.8 per cent. An investment weighted according to particularly brand-responsive businesses would have grown by 22.1 per cent, according to Millward Brown Optimor.
"The fact that the yield is more than seven times better illustrates the power of brands' engagement with consumers," said Peter Walshe, the company's global brands director.
A key trend in this year's league is the growing number of brands from Asia. Seven of the top 100 are established international groups from the mature economies of Japan, Korea and Hong Kong. But there are also four Chinese brands, with a combined value up by 51 per cent to $124bn. While these companies' strong performance so far is largely based on domestic scale, they have plans to expand. In contrast, the successful UK brands are those with the strongest international presence.
"Our little island has had to look outwards earlier because the home market is smaller," Mr Walshe said. "Vodafone is a great example of a UK business exporting its brand, as is Tesco, but when massive brands like China Mobile start to look outside their markets they will be a huge force to be reckoned with."
But the really big winner is the technology sector. Not only has Google ret-ained pole position, having knocked Microsoft off the top spot in 2006, but the top 10 includes another five technology companies. And the two biggest gains of the year are Apple, up 123 per cent to $55bn, and Blackberry, up a massive 390 per cent to $13.7bn.
At least part of that success is because technology is particularly well-suited to some of the basics of a successful brand strategy, such as leadership in new markets, an engaging product experience and distinct brand clarity. Google is now so closely identified with the activities of its users, the company name is used as a verb. Others are following suit.
"With Apple, we have seen a great resurgence – and while it is about the technology, it is also fundamentally about the powerful brand image," Mr Walshe said. "Equally, Blackberry has come from nowhere to number 51, and it's becoming common to hear people saying they will 'blackberry' somebody."
But the newcomers are not taking over entirely. Long-established names such as Coca Cola and BMW are still enormously valuable – at $58.2bn and $28bn respectively. And the prec-ipitous rise of technology companies may prove less resilient over the long term.
Richard Alford, the managing director of M&C Saatchi, the advertising agency, said: "A truly great brand is one that can launch anything and people will buy it. The technology brands are frightfully powerful at the moment, but ... what would happen if Google tried to sell home insurance."
There are also greater risks associated with first mover advantage. Shailendra Kumar, a partner at Equilibrium, a brand consultancy, said: "The speed of transfer across the global market is so swift that technology can reach a certain degree of resonance with consumers much faster than, say, a soft drink, but these things can also be outdated quickly."
The luxury goods sector is also showing resilience. It accounts for nine out of 10 of the brands with the most momentum, led by Porsche, Hermes and Christian Dior.
