Anyone who has studied British history will remember the South Sea Bubble and the catastrophic effect it had when it burst.
Less cataclysmic was the demise, after a meteoric rise, of boo.com. What these two offerings had in common was enviable brand awareness that allowed them access to markets far beyond what could have been expected. The South Sea Bubble would have appeared on any list of great brands, had they had them in its day, yet, like boo.com, it was shown to be more hype than substance.
So when companies produce lists of top brands, should anyone take any notice or are the results just a mish-mash of current tastes, brand awareness and advertising spend? In the annual Superbrands survey, a list of supposed best brands, Merrill Lynch came in at 120, Royal Bank of Scotland at 131 and AIG at 327. How can companies responsible for some of the greatest financial mishaps of modern times be seen as branding success stories?
The survey, commissioned by the Centre for Brand Analysis, a London-based research agency, is based largely on the thoughts of more than 1,000 "business managers" and the Superbrands steering council.
Jasmine Montgomery, the managing director of brand consultancy FutureBrand, a rival to Superbrands, believes many surveys are merely measurements of brand awareness, determined by a company's advertising spend. FutureBrand claims to offer a more prosaic approach to research and includes other matrices and the resulting brand value is accepted on the balance sheet by revenue authorities, accountants and the courts.
But is it justified to include something as flimsy as brand value among a company's assets? Some believe the growth of branding agencies is linked to the need for ad agencies to justify the mounting disparity between ad spend and sales – the resulting shortfall being conveniently attributed to brand awareness and development.
Jo Parker, the chief executive of the financial marketing and PR agency Teamspirit, says that the trust between brand and consumer has radically shifted. "Reputation is now the most significant differentiator for a brand; it helps retain talent within a business while also creating loyalty among consumers."
But what is the rationale when companies with damaged reputations such as AIG and HSBC are ranked 98 and 35, respectively, in Millward Brown Optimor's Brandz Top 500 survey? The study does combine analysis of financial data with primary research, but then the value of a company's financial data is not always totally reliable, as the Government's banking bailouts have shown. Nonetheless, Joanna Seddon, the chief executive of Millward Brown Optimor, defends the importance of its poll. "Brands can only impact on part of the value of a company such as sales and margins, but what companies do with their money is not a brand's fault," she says.
The jury is still out as to whether brand lists are worth any more than a cursory glance. But one thing is sure; branding agencies are going to need to be more robust if they are to avoid contributing to more South Sea Bubbles.