Downturn doesn't faze strong brands

Like the world’s biggest companies, freelancers all have a tool unique to them that can keep them safe during times of economic downturn or uncertainty: their brand.

Such is the implication of a league table that ranks the world’s 100 most powerful brands as measured by their dollar value, unveiled this week by Millward Brown Optimor.

It shows that despite choppy waters in the US and the UK since August, the value of corporate identities in the BrandZ league table has grown at twice the rate it did last year.

In fact, the combined value of the world’s top 100 brands, led by Google, GE, Microsoft, Coca-Cola and China Mobile, increased their worth by 21% from £1.6trillion to $1.94trillion in 2008.

Google tops the list again with a brand value of $86.1bn, its growth emblematic of the tech sector, which accounts for 28 of the top 100 brands and is worth a total of £187.5bn.

“This year’s brand ranking demonstrates the importance of investing in brands, especially in times of market turmoil,” said Joanna Seddon, the chief executive of Millward Brown Optimor.

“Strong brands generate superior returns and protect businesses from risk.”

“Our data shows that strong brands continue to outperform weak ones in terms of market share and share price during recessions.”

Evidencing the claims about the strength of choosing a strong brand for investment potential, MBO pointed out that firms in the top 100 have outperformed the S&P500 index.

Where a portfolio of stocks on the index invested for the last three years would have made a 3 percent return, an investment in the top 100 brands would have netted 14.8 percent over the same period.

Calculations by the firm, obtained by the Independent, also reveal that an investment weighted according to a particularly brand-responsive business would have grown by 22.1 per cent.

Elsewhere the league table reveals seven brands in the top 100 are from mature Asian economies – Japan, Korea and Hong Kong, while four brands originate from China.

Although these Chinese-owned brands added 51% to their value in the last year, much of their success has, so far, been exclusively in the domestic market. Expansion plans would rocket this value and put the country more in competition with the US.

In contrast to China, the UK brands that made the top 100 feature because of their success internationally – Vodafone (11th) came top, followed by Tesco (25th), HSBC (50th) and Marks & Spencer (60th).

Other UK brands making the league table included Barclays, Standard Chartered Bank, BP, Royal Bank of Scotland and Natwest.

MBO reflected on the100 power brands: “We'd like to congratulate these companies for their extraordinary performance and commitment to the power of great brands and the role that effective marketing plays in building them.

“Particularly in a challenging global economy, we were delighted to see such high growth, reconfirming our assertion that sustained marketing support is a winning strategy, even in tough business conditions.”


1st May 2008

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