Transparent innovation pushes Google back to the top of BrandZ Top 100 Global Brands ranking

Continual innovation, increased revenue from advertising, and growth in its cloud business has helped Google reclaim from Apple the no.1 position in the 2016 BrandZ Top 100 Most Valuable Global Brands ranking, released today by WPP and Millward Brown.

The brand increased its value 32% to $229bn, while last year’s leader Apple dropped to no.2 after declining -8% in value to $228bn. Microsoft remains at no.3, growing 5% to $122bn, while Facebook (+44%, no.5) and Amazon (+59%, no.7) entered the Top 10 for the first time. The total brand value held by the Top 100 rose 3% year on year to hit $3.4 trillion.

The BrandZ data and analysis indicates that this was a stable year for the world’s most powerful brands in the face of global financial pressures, including the economic slowdown in China. However the brands that innovated, and then showcased their innovations to consumers through the brand experience, have achieved standout growth with Google, Amazon and Facebook acting as prime examples.

Disruption was the dominant trend, with brands changing the status quo with their offerings in a number of ways, often beyond the use of digital technologies. Brands of all kinds moved to build a multi-faceted ecosystem around the consumer’s needs and desires, often by diversifying into new categories. Amazon built its own logistics network using independent contractors, which enabled it to offer flexible and one-hour delivery options, and started producing its own content. Facebook began hosting publishers’ original content to keep members active. Starbucks (+49%, no.21) moved into the ecommerce space with a ‘tap and go’ app, and enhanced its cold drinks and savoury ranges and offered beer and wine to extend its relevance.

Says David Roth, CEO, EMEA and Asia, The Store WPP: “The brands that thrive, regardless of sector, are those that behave like challengers and adopt disruptor models and mindsets. They’re shaking up other categories with innovation that goes beyond new products or technologies – transforming the way a service is delivered, enhancing the consumer experience or changing a format. The power these brands already hold, combined with the strength of their platforms, is enabling them to quickly and successfully move across sectors.”

Key trends highlighted in this year’s BrandZ Top 100 study include:

• Strong brands outperform the market.  Brands that appear in the BrandZ Top 100 Most Valuable Global Brands ranking consistently deliver a better financial performance than brands that are not included, thereby generating a superior return for shareholders.

• Disruption is a catalyst for value growth. The categories that increased in value were all either shaken up by challenger brands founded on a unique and meaningful proposition, such as Under Armour and Victoria’s Secret in the apparel category (+14%), or innovated to a high degree in response to a new trend, such as the brands in the fast food category (+11%) which successfully responded to global demand for healthier products.

• Innovation is the main growth driver – but it must be seen and felt by consumers. The brands that are the strongest innovators have increased their value the most over the 11 years of BrandZ Top 100 rankings. However, to have an impact on brand value, innovation must be clearly communicated and delivered through the brand experience: the brands that are perceived as innovative by consumers – which include Disney (no.19) and Pampers (no.37) – grew nine times faster than those seen as less innovative.

• Apparel is the fastest growing category, rising 14% to $114bn. There is an emphasis on high performance, with brands including Nike (+26%) and Under Armour (a new entry) launching specialist premium lines, incorporating technology such as heart monitors into their clothing, and integrating sportswear with free apps to provide a total consumer experience.

• B2B is a category of efficient businesses but inefficient brands. They are perceived as more responsible than B2C brands, better to work for, good value and stable, but not as exciting or dynamic. B2B brands are in fact highly innovative; ensuring they are credited as such requires strong and meaningful brand communication. SAP (no.22) and Adobe (a new entry at no.100) are among the B2B brands being perceived as innovative by customers.

• Disruption extends to the ranking itself. Close to half (46) of the brands in the 2016 Top 100 entered the ranking after it was first launched in 2006; 54 have been there since the inaugural ranking. This shows how a strong brand can sustain its value over time, but also illustrates the potential that exists for new brands to successfully shake up the status quo.

• Strong emotional connections are boosting local brands. With a clear understanding of their consumers’ needs, local brands are gaining market share at home and, with improved functionality and marketing, are also winning share in new regions. China’s Huawei (no.50, +22%), for example, has rapidly globalised and taken market share from both Apple and Samsung.

Says Doreen Wang, global head of BrandZ, Millward Brown: “By stretching their brands in innovative ways and expanding into new categories, the strongest brands in the Top 100 are increasing their penetration and their relevance in people’s day-to-day lives. There is a risk in doing this, however: it blurs the lines between categories and can leave brands struggling for identity. Defining and articulating a very clear positioning and purpose will play a more crucial part than ever in building a strong, distinct brand.”

The BrandZ Top 100 Most Valuable Global Brands report and rankings, and a great deal more brand insight for key regions of the world and 14 market sectors, are available online here. A new suite of interactive smartphone and tablet applications is available for free download for Apple IOS and all Android devices from www.brandz.com/mobile or search for BrandZ in the respective iTunes or Google Play app stores.